Rapporter og resolutioner fra Den Årlige Session i Halifax 2019

162 SESA 18 B
ANNUAL SESSION
HALIFAX (CANADA)
SESSION ANNUELLE
November 2018 / novembre 2018
COMMITTEE AND SUB-COMMITTEE
DRAFT REPORTS AND RESOLUTIONS
PROJETS DE RAPPORTS ET DE RÉSOLUTIONS
DES COMMISSIONS ET SOUS-COMMISSIONS
List / Liste
as of 22 October 2018
Dernière mise à jour : 22 octobre 2018
www.nato-pa.int
NATO''s Parlamentariske Forsamling 2018-19
NPA Alm.del - Bilag 3
Offentligt
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COMMITTEE ON THE CIVIL DIMENSION OF SECURITY (CDS)
COMMISSION SUR LA DIMENSION CIVILE DE LA SÉCURITÉ (CDS)
164 CDS 18 E Draft General Report
Fostering Democracy and Human Rights in the Black Sea Region
164 CDS 18 F Projet de rapport général
Encourager la démocratie et les droits humains dans la région de la mer Noire
General Rapporteur - Rapporteure générale
Ulla SCHMIDT (Germany/Allemagne)
165 CDSDG 18 E Draft Report of the Sub-Committee on Democratic Governance
Civil Protection in the High North and the Mediterranean
165 CDSDG 18 F Projet de rapport de la sous-commission sur la gouvernance démocratique
La protection civile dans le Grand Nord et la région méditerranéenne
Rapporteur – Rapporteure
Jane CORDY (Canada)
166 CDS 18 E Draft Special Report
Countering Russia’s Hybrid Threats: an Update
166 CDS 18 F Projet de rapport spécial
Parades aux menaces hybrides émanant de la Russie : une mise à jour
Special Rapporteur - Rapporteur spécial
Lord JOPLING (United Kingdom/Royaume-Uni)
DRAFT RESOLUTIONS / PROJETS DE RÉSOLUTIONS
215 CDS 18 E Draft resolution on Updating the Responses To Russia’s Hybrid Tactics
215 CDS 18 F Projet de résolution sur Parades aux tactiques hybrides de la Russie : Une
mise à jour
216 CDS 18 E Draft resolution on Security and Cooperation in the High North
216 CDS 18 F Projet de résolution sur La sécurité et la coopération dans le Grand Nord
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DEFENCE AND SECURITY COMMITTEE (DSC)
COMMISSION DE LA DÉFENSE ET DE LA SÉCURITÉ (DSC)
168 DSC 18 E Draft General Report
Reinforcing NATO’s Deterrence in the East
168 DSC 18 F Projet de rapport général
Renforcer la dissuasion de l’OTAN à l’est
General Rapporteur - Rapporteur général
Joseph A. DAY (Canada)
169 DSCFC 18 E Draft Report of the Sub-Committee on Future Security and Defence Capabilities
NATO Special Operations Forces in the Modern Security Environment
169 DSCFC 18 F Projet de rapport de la sous-commission sur l’avenir de la sécurité et des
capacités de défense
Les forces d’opérations spéciales de l’OTAN dans l’environnement de sécurité
contemporain
Rapporteur - Rapporteure
Madeleine MOON (United Kingdom/Royaume-Uni)
170 DSCTC 18 E Draft Report of the Sub-Committee on Transatlantic Defence and Security
Cooperation
Burden Sharing: New Commitments in a New Era
170 DSCTC 18 F Projet de rapport de la sous-commission sur la coopération transatlantique en
matière de défense et de sécurité
Partage des charges : de nouveaux engagements pour une ère nouvelle
Rapporteur
Attila MESTERHAZY (Hungary/Hongrie)
171 DSC 18 E Draft Special Report
Afghanistan: The Nexus of Local and Regional Security
171 DSC 18 F Projet de rapport spécial
Afghanistan : clé de voûte de la sécurité locale et régionale
Special Rapporteur - Rapporteur spécial
Wolfgang HELLMICH (Germany/Allemagne)
DRAFT RESOLUTIONS / PROJETS DE RÉSOLUTIONS
217 DSC 18 E Draft resolution on Burden Sharing: New Commitments In A New Era
217 DSC 18 F Projet de résolution sur Partage des charges: de nouveaux engagements pour
une ère nouvelle
218 DSC 18 E Draft resolution on Reinforcing NATO’s Deterrence in the East
218 DSC 18 F Projet de résolution sur Renforcer la dissuasion de l’OTAN à l’Est
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ECONOMICS AND SECURITY COMMITTEE (ESC)
COMMISSION DE L'ÉCONOMIE ET DE LA SÉCURITÉ (ESC)
173 ESC 18 E Draft General Report
The Future of the Space Industry
173 ESC 18 F Projet de rapport général
L’avenir de l’industrie spatiale
General Rapporteur - Rapporteur général
Jean-Marie BOCKEL (France)
174 ESCTER 18 E Draft Report of the Sub-Committee on Transatlantic Economic Relations
The International Trading System at Risk and the Need to Return to First
Principles
174 ESCTER 18 F Projet de rapport de la sous-commission sur les relations économiques
transatlantiques
Le système commercial international en péril : de la nécessité d’un retour aux
principes fondamentaux
Acting Rapporteur - Rapporteur f.f.
Faik OZTRAK (Turkey / Turquie)
175 ESCTD 18 E Draft Report of the Sub-Committee on Transition and Development
The Energy Security Challenge in Central and Eastern Europe
175 ESCTD 18 F Projet de rapport de la sous-commission sur la transition et le développement
Le défi de la sécurité énergétique en Europe centrale et orientale
Rapporteur - Rapporteure
Ausrine ARMONAITE (Lithuania/Lituanie)
DRAFT RESOLUTIONS / PROJETS DE RÉSOLUTION
219 ESC 18 E Draft résolution on Opportunities and Challenges in a Changing Space Arena
219 ESC 18 F Projet de résolution sur Potentialités et défis dans un domaine spatial en
mutation
220 ESC 18 E Draft Resolution on Energy Security: A Strategic Challenge For The Alliance
220 ESC 18 F Projet de résolution sur La sécurité énergétique, un défi stratégique pour
l'Alliance
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POLITICAL COMMITTEE (PC)
COMMISSION POLITIQUE (PC)
177 PC 18 E Draft General Report
Instability in the South
177 PC 18 F Projet de rapport général
L’instabilité sur le flanc sud
General Rapporteur - Rapporteur général
Julio MIRANDA CALHA (Portugal)
178 PCNP 18 E Draft Report of the Sub-Committee on NATO Partnerships
Security in the Western Balkans
178 PCNP 18 F Projet de rapport de la sous-commission sur les partenariats de l’OTAN
La sécurité dans les Balkans occidentaux
Rapporteur - Rapporteure
Hon. Raynell ANDREYCHUK (Canada)
179 PCTR 18 E Draft Report of the Sub-Committee on Transatlantic Relations
North Korea’s Challenge to International Security: Implications for NATO
179 PCTR 18 F Projet de rapport de la sous-commission sur les relations transatlantiques
Le défi nord-coréen à la sécurité internationale : implications pour l’OTAN
Rapporteur
Gerald E. CONNOLLY (United States/États-Unis)
DRAFT RESOLUTION / PROJET DE RÉSOLUTION
221 PC 18 E Draft Resolution on Reinforcing NATO’s Contribution to Tackling the
Challenges from the South
221 PC 18 F Projet de résolution sur Renforcer la contribution de l'OTAN pour faire face
aux défis émanant du Sud
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SCIENCE AND TECHNOLOGY COMMITTEE (STC)
COMMISSION DES SCIENCES ET DES TECHNOLOGIES (STC)
181 STC 18 E Draft General Report
Russian Meddling in Elections and Referenda in the Alliance
181 STC 18 F Projet de rapport général
L’ingérence de la Russie dans les élections et les référendums des pays de
l’Alliance
General Rapporteur - Rapporteure générale
Hon. Susan DAVIS (United States/États-Unis)
182 STCTTS 18 E Draft Report of the Sub-Committee on Technology Trends and Security
Dark Dealings: How Terrorists Use Encrypted Messaging, the Dark Web and
Cryptocurrencies
182 STCTTS 18 F Projet de rapport de la sous-commission sur les tendances technologiques
et la sécurité
Transactions secrètes : l’usage des messageries cryptées, du Dark Web et des
cryptomonnaies par les terroristes
Rapporteur
Matej TONIN (Slovenia/Slovénie)
183 STC 18 E Draft Special Report
NATO Science and Technology: Maintaining the Edge and Enhancing Alliance
Agility
183 STC 18 F Projet de rapport spécial
Sciences et technologies de l’OTAN : conserver l’avance technologique et
améliorer la souplesse de l’Alliance
Special Rapporteur - Rapporteure spéciale
Leona ALLESLEV (Canada)
DRAFT RESOLUTIONS / PROJETS DE RÉSOLUTION
222 STC18 E Safeguarding Elections in the Alliance
222 STC 18 F Protéger les élections dans les pays de l’Alliance
223 STC 18 E Draft resolution on Maintaining the Science & Technology Edge and Enhancing
Alliance Agility
223 STC 18 F Projet de résolution sur Conserver l'avantage scientifique et technologique de
l'OTAN et améliorer la souplesse de l'Alliance
________________
COMMITTEE
ON THE CIVIL DIMENSION OF
SECURITY (CDS)
FOSTERING DEMOCRACY
AND HUMAN RIGHTS IN THE
BLACK SEA REGION
General Report
by Ulla SCHMIDT (Germany)
General Rapporteur
164 CDS 18 E rev.1 fin | Original: English | 24 September 2018
TABLE OF CONTENTS
I. INTRODUCTION ...............................................................................................................1
II. UKRAINE...........................................................................................................................1
A. SITUATION IN EASTERN UKRAINE........................................................................3
B. SITUATION IN CRIMEA ...........................................................................................4
III. GEORGIA..........................................................................................................................5
IV. THE REPUBLIC OF MOLDOVA ........................................................................................8
TRANSNISTRIA ..............................................................................................................10
V. RUSSIA ...........................................................................................................................10
VI. NATO ALLIES..................................................................................................................13
VII. CONCLUSIONS: ENHANCING THE EURO-ATLANTIC COMMUNITY’S
APPROACH TO THE BLACK SEA REGION ...................................................................17
SELECT BIBLIOGRAPHY ...............................................................................................19
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I. INTRODUCTION
1. In its most recent annual report, Freedom House provided worrying figures that show
democracy is in crisis globally. The watchdog claims that democracy around the world has
deteriorated to the lowest point in more than a decade. Democratic values, such as the right to
choose leaders in free and fair elections, freedom of the press and the rule of law, are under assault
and in retreat. According to the Economist Intelligence Unit’s Democracy Index, less than 5% of the
world’s population currently lives in a “full democracy”, and 89 of the 167 countries assessed in 2017
received lower scores than they had the year before. Even among some members of the
Euro-Atlantic community, which has been traditionally seen as the champion of the global liberal
democratic order, officials see these disquieting trends. Anti-establishment sentiment, political
polarisation and disenchantment with mainstream political parties and media are growing.
2. The global order that seemingly triumphed with the end of the Cold War, prompting some to
announce the “end of history”, is eroding. For the Alliance, an organisation underpinned by liberal
democratic values, this erosion has severe consequences. The General Rapporteur is convinced
there is a need for a genuine discussion among the Allies on ways to strengthen democratic values
and further believes that the NATO Parliamentary Assembly (NATO PA) provides an appropriate
forum for such discussion.
3. As the issue of democratic values is too broad to be covered in one report, the
General Rapporteur chose to focus on the Black Sea area due to the following reasons. First, the
region’s strategic importance for NATO and global security in general has grown considerably.
Russia’s revisionist behaviour, including its violation of Ukraine and Georgia’s territorial integrity, and
the region’s proximity to the ongoing conflicts in the Middle East have prompted NATO to reinvest in
the Black Sea region. Second, the area represents a diverse microcosm of actors important to NATO.
These actors include three NATO Allies, Turkey, Bulgaria, and Romania; two NATO aspirants,
Ukraine and Georgia; one NATO partner, the Republic of Moldova1
; and one country that considers
NATO its adversary, Russia. Adherence to democratic values and the rule of law varies greatly
across these states. Even leading democracies—Romania and Bulgaria—stand out in the
European Union’s context as the only member states subjected to the Cooperation and Verification
Mechanism, an agreement designed to assist the two countries in the fields of judicial reform and
fighting corruption.
4. This general report will provide an overview of political developments in the Black Sea states,
including the efforts (where appropriate) to consolidate democratic institutions, challenges in
protecting human rights and civil liberties and the fight against corruption as well as the
implementation of reform agendas. The General Rapporteur will argue that the Euro-Atlantic
community needs to strengthen its focus on democracy, the rule of law and human rights indicators
in its approaches to the Black Sea region. These improvements are vital for the cohesion of the
Alliance; the Euro-Atlantic prospects of Georgia, the Republic of Moldova and Ukraine; the
normalisation of relations with Russia; and, more generally, the de-escalation of tensions and the
prevention of conflicts in the Black Sea area.
II. UKRAINE
5. More than four years after the Revolution of Dignity, a return to autocracy and censorship in
Ukraine seems implausible. Ukraine’s record of holding free and fair elections is solid, its media
environment is diverse and its civil society scene independent and vibrant.
1 The General Rapporteur chose to include a chapter on the Republic of Moldova because of its
immediate proximity to the Black Sea. The Republic of Moldova’s port of Giurgiulești on the Danube
River de facto makes it a Black Sea littoral state.
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6. While Ukraine has adopted more reform initiatives in the last four years than in the 23 years
preceding the second Maidan revolution, it is now struggling to maintain its reform agenda. The
Ukrainian President, Petro Poroshenko, faces increasing criticism. Reforms have slowed down and
the actual implementation of the adopted reform bills is unsatisfactory. Public administration remains
largely inefficient and lacks the proper administrative culture. The level of trust in the political system
is alarmingly low—support for political leaders or parties rarely exceeds single digits. Most
disconcerting is the apathy among the youth. According to one poll, about two-thirds of young people
are disinterested in politics and only a third of the respondents say that accepting or giving a bribe
is never justifiable (Sasse, 2018).
7. Economically, Ukraine’s situation is slowly improving. Through a mix of spending cuts, tax code
simplifications and reforms to boost economic transparency, the country’s GDP grew over 2% in
2016 and 2017. In the World Bank’s annual Doing Business Survey, Ukraine greatly improved its
business environment, jumping from 142nd
out of 183 countries in 2010 to 76th
in 2018. Following
major restructuring, Ukraine substantially reduced its dependence on Russian energy imports. In
April 2018, the EU announced a new assistance package of EUR 1 billion, conditioned on Ukraine’s
ability to conduct deep structural reforms. In the framework of the Deep and Comprehensive Trade
Agreement with the EU, Ukraine-EU bilateral trade grew rapidly between 2016-2018 (with a
27% increase in the first quarter of 2018 alone). The EU has replaced Russia as Ukraine’s main
trading partner (European Parliament, June 2018). Ukraine’s economic transformation is supported
by the International Monetary Fund (IMF) (with USD 17.5 billion in 2015-2019), the EU (a new
assistance package of EUR 1 billion in loans was adopted in May 2018 for a period of 2.5 years),
the World Bank (through an IBRD guarantee expected to help Ukraine raise about USD 800 million
in the lending market) as well as bilateral assistance.
8. Despite entrenched obstacles, Ukraine has taken some steps to address corruption. The
National Anti-Corruption Bureau of Ukraine (NABU) has spearheaded the fight against high-level
corruption. NABU is aided by a new law requiring public officials to electronically declare their income
and assets as well as those in the name of their family members. After long hesitations and much
political resistance, the law establishing the High Anti-Corruption Court was adopted in June 2018.
The Court will tackle the cases of top-level corruption. The implementation and widespread adoption
of an e-procurement system, ProZorro, is further credited with reducing political favouritism in public
procurement, tripling the number of bidders and suppliers and substantially reducing government
expenses. In April 2018, an electronic healthcare system, eHealth, was launched, sparking hopes
that this might lead to a reduction of corruption in Ukraine’s healthcare sector. The Parliament
recently approved key constitutional and political reforms to curb political influence within the court
system and boost professionalism among judicial appointees. Parliamentarians also approved
several decentralising measures, empowering citizens and activists to take ownership of issues that
affect their communities.
9. However, additional steps must be taken to deepen anticorruption efforts and prevent
democratic backsliding. In 2016, the head of NABU resigned after accusing high-ranking officials of
obstructing the agency’s work. In May 2017, the governor of Ukraine’s central bank quit after
“three years of sustained harassment” for her efforts to regulate the country’s private banks
(Mufson, 2017). By early 2018, out of the 107 cases brought by NABU to the court, only
19 convictions were issued (European Parliament, June 2018). Moreover, cases against powerful
figures remain rare and activists can face retribution for investigating corruption. Members of the
judiciary still lack significant independence. Over half of the 113 recent Supreme Court appointees
have had their professional records questioned by a public watchdog group (UCMC, 2017). Further,
observers have expressed concern over new laws on NGOs that require them and their employees
to publicly declare their assets like public officials (Freedom House, 2018).
10. Security sector reform remains slow. Observers consider the Ukrainian Security Service (SBU)
to be too powerful and unaccountable (European Parliament, DG for External Policies, 2018). NATO
is reportedly dissatisfied – and has been for several years now – with the way Kyiv is fulfilling its
obligations under the Annual National Programme (ANP), a document that defines the range and
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3
pace of reform for Ukraine’s further rapprochement with NATO. Experts note that as spending in the
defence sector has increased, so have avenues for corruption (Higgins, 2018). For instance, the
ambitious project to build a defensive line along the border with Russia has been marred by an
embezzlement scandal.
11. A recent education law, mandating that Ukrainian be used as the primary language of
instruction in secondary schools by 2020, has earned significant criticism both domestically and
internationally, particularly from Hungary, Romania, Poland and Russia, for its potential to undermine
minority rights and freedoms. Budapest insists that progress on Ukraine’s Euro-Atlantic integration
will not be possible until Kyiv changes the law and that no meetings of the NATO-Ukraine
Commission will be scheduled in the meantime. Ukrainian officials argue that children need to
understand the state’s majority language to fully participate in society and point out that the law does
not prohibit education in minority languages as separate classes.
12. According to official sources, in 2016–2017, there were 581 schools with Russian as the
language of instruction, 78 schools with Romanian, 71 schools with Hungarian and 5 schools with
Polish. The Venice Commission has presented its opinion, in which it stressed that “it is a legitimate
and commendable aim for states to promote the strengthening of the state language.” However, the
Venice Commission expressed concern about the scope and pace of the reform, which could
“amount to a disproportionate interference with the existing rights of persons belonging to national
minorities.” The Commission recommended Ukraine make amendments to the law to guarantee a
sufficient proportion of education in minority languages at the primary and secondary levels as well
as to provide more time for a gradual reform. The General Rapporteur urges the Ukrainian authorities
to take due account of the Venice Commission’s recommendations.
13. Observers continue to fear that Ukrainian authorities are not engaging sufficiently in the
prevention of hate crimes (Sturrock and Summers, 2018). Since the beginning of the year there have
been at least two dozen attacks on the Roma and LGBT+ (Lesbian, Gay, Bisexual,
Transgender/Transsexual and related) communities as well as on civil rights activists by
ultranationalist groups such as C14 (HRW, 2018; Millier, 2018).
14. Overall, the Rapporteur shares the conclusion of a study commissioned by the European
Parliament, that “the real Ukrainian ‘reform saga’ revolves around 4D’s: decentralization,
debureaucratization, deregulation and ‘de-oligarchization’. Whereas in the realm of reregulation an
unequivocally significant progress is recorded, decentralization showcases significant but not
politically uncontroversial progress, with de-bureaucratization proceeding at a slower pace.
‘Deoligarchization’ manifests cosmetic and legislative changes, with limited implementation of the
much-needed reform.” Ukraine’s leaders have a choice: their legacy can either be to take Ukraine
down their chosen European path or to take the path of their predecessors. Having come so far and
achieved so much, it would be deeply disappointing if Ukraine were to revert to past mistakes.
A. SITUATION IN EASTERN UKRAINE
15. On-going high levels of casualties in eastern Ukraine continue to cause concern. Since the
outbreak of the conflict, over 10,300 people were killed and almost 25,000 injured while about
1 million internally displaced people are residing in the government-controlled areas of Ukraine. In
January 2018, the Ukrainian Parliament passed a bill that redefined Ukraine’s actions in the Donetsk
and Luhansk oblasts from anti-terrorist operations to “measures to ensure national security and
defence, [and the] deterrence and repression of Russian armed aggression.” The bill gives Ukraine’s
armed forces a legal basis to be in the region and shifts the responsibility of the conflict from the
SBU to all troops and law enforcement groups in the region.
16. Meanwhile, the Russia-backed governance in the temporarily occupied areas of the Donetsk
and Luhansk regions continues to disregard human rights and liberties. The Office of the United
Nations High Commissioner for Human Rights notes “cases of summary executions, enforced
disappearances, arbitrary detention, torture and ill-treatment, and conflict-related sexual violence”.
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Individuals suspected of pro-Ukrainian sympathies, which includes people belonging to the Ukrainian
Orthodox Church - Kiev Patriarchate or with a history of government work, suffer detention or other
forms of oppression. Amnesty International reports show trials are being held against individuals
suspected of opposing Russia-backed illegal armed groups. Most recently, there have been reports
of minors being arrested and detained illegally in Makiyvika, a town in one of the
non-government-controlled areas of the Donetsk Region, on the account of “working for Ukraine’s
intelligence” (Kyiv Post, 2018). While these and other abuses appear rife, international observers
and humanitarian organisations are often unable to secure access to prisoners detained by
Russia-backed illegal armed groups. Ukraine and rebel leaders carried out their largest prisoner
exchange in December 2017, with Ukraine handing over 246 prisoners for 74 prisoners held by
Russia. However, over 60 Ukrainian citizens, considered by Kyiv as political prisoners, continue to
be kept in Russian jails. The most prominent case is that of Ukrainian film director Oleg Sentsov
who, at the time of writing, was on hunger strike in a prison in the far north of Russia.
17. Politically, Russia continues to strengthen its control of the territories by gradually replacing
the leadership of the Russia-backed illegal armed groups. In a notable case, Russian occupation
forces and illegal armed groups belonging to the so-called Donetsk People’s Republic interfered in
power struggles within the self-proclaimed Luhansk People’s Republic, facilitating the removal of the
leader of the “republic”, Igor Plotnitsky. More recently, the leader of the so-called Donetsk People’s
Republic, Alexander Zakharchenko, was murdered. Both the Ukrainian and the Russian government
issued statements accusing the other of the assassination.
18. In addition to the ongoing hostilities in Ukraine’s east, a number of recent developments,
including the assassination of Mr Zakharchenko, Moscow’s refusal to accept its responsibility for the
downing of MH17 airliner – despite the findings of the Dutch investigation – and plans to hold
so-called “elections” on 11 November in the non-government-controlled areas of the Donetsk and
Luhansk regions make the prospect of further negotiations under the Minsk II format increasingly
difficult. Nevertheless, the Rapporteur continues to call on all stakeholders – and particularly Russia,
which has created the conflict – to remain committed to Minsk II as the most viable avenue to de-
escalate the conflict and to seek a political resolution.
B. SITUATION IN CRIMEA
19. Following the invasion and illegal occupation of Crimea by Russian forces in 2014, dissent has
been ruthlessly suppressed. Throughout the occupied territory, authorities have prosecuted public
criticism of Russian policies (HRW, 2018). The right to public assembly has diminished and protests
against the occupation have been outlawed. Ukrainian television stations and newspapers,
meanwhile, have closed, while property and assets are confiscated without compensation, violating
international laws protecting civilians from forced seizures. Cases of enforced disappearances,
murders and torture are common. The lack of reporting or redress mechanisms for victims allows
the authorities to continue these actions with little fear of consequences. Citizens continue to face
harassment and interrogation for allegedly extremist views (European Parliament, DG for External
Policies, 2018). Non-Russian nationals in Crimea also face pressure to renounce their Ukrainian
citizenship in favour of Russian citizenship. Failure to do so has resulted in Ukrainians being denied
access to basic services, contrary to international humanitarian law. The UN has reported several
deaths linked to Ukrainians being refused medical treatment. The international community has
deplored Moscow violating international law by illegally conducting Russia’s Duma (2016) and
presidential (2018) elections on the territory of Crimea.
20. While Crimea is a diverse region with significant minority populations, Crimean Tatars and
other groups face law enforcement raids, arrests, abductions and attacks by state authorities
(UNHCR, 2017). In 2016, the Russian government outlawed the representative body of the Crimean
Tatar people, the Mejlis, for “the use of propaganda and hatred toward Russia [and] inciting ethnic
nationalism”. Several of the Mejlis’ leaders were later arrested and sentenced on separatism and
extremism charges, while other Mejlis leaders were banned from entering Crimea. While some
minority organisations remain, these groups face attacks and prosecution if they fail to support the
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Russian government’s official position on local issues. Most recent cases have involved forced
searches and the detainment of human rights activists and their relatives (RFE/RL, 4 September
2018). The protection of the Crimean Tatars’ cultural heritage in the peninsula is yet another
important issue. The claims of misconduct during the ongoing restoration of the “Khan’s Palace” are
a cause for concern in this regard. According to Mustafa Dzhemilev, the long-time leader of the
Crimean Tatars and President Petro Poroshenko's envoy for Crimean Tatar affairs, Russia is trying
to change the ethnic balance on the peninsula by relocating hundreds of thousands of people from
various regions of Russia to Crimea.
21. Freedom of religion is severely limited in Crimea, as the Russian authorities clamp down on
the Orthodox Christians that are not under the Moscow Patriarchate (Freedom House, 2018).
Following the illegal occupation of Crimea, Russian authorities requested that all religious institutions
re-register, and the Ukrainian Orthodox Church under the Kyiv Patriarchate was raided by the
Russian authorities in 2017. The most recent bid for the Ukrainian Orthodox Church’s independence
from Moscow raises concerns that the already poor state of religious freedom in Crimea could
deteriorate further.
III. GEORGIA
22. Georgia is one of the Black Sea’s freest countries; it has transformed remarkably since the
“Rose Revolution” in 2003 and the first electoral transfer of power in 2012. According to Freedom
House’s Nations in Transit ratings, Georgia’s “democracy score” improved from 4.93 in 2010 to 4.68
in 2018 (slightly down from 4.61 in 2017), with one representing the most democratic and seven the
least. Reforms have enabled democratic elections, modernised and digitalised state services, a
mostly free press and lower corruption than in several EU member states. Civil society in Georgia is
vibrant and largely committed to European values. The country has a clear sense of direction,
pursuing membership in NATO and the EU. Through its contributions to NATO-led and other
international missions, Georgia has turned into a provider of regional and global security. However,
Georgia still faces significant challenges in terms of socio-economic development, improving the rule
of law and overcoming political polarisation.
23. Judicial reform has been a matter of urgency for Georgians, given reports of abuse of power
by the pre-2012 government as well as allegations of political retribution in the wake of the
government change in 2012. Consequently, the government has committed itself to promoting
judicial independence and building public confidence in the courts through reform. These judicial
reforms focused on making the key judicial institution, the High Council of Justice, more democratic
and transparent through the recommendations of the Venice Commission. Georgia also embarked
upon prosecutorial reform, aiming for the full de-politicisation and independence of the state
prosecution service from the executive branch. The Venice Commission’s recommendations
vis-à-vis the judicial sector are reflected in the new constitution. The authorities have made efforts
to ensure the transparency of the court cases against Saakashvili-era officials, including the invitation
of international (from the Organization for Security and Co-operation in Europe’s Office for
Democratic Institutions and Human Rights – OSCE/ODIHR) and domestic observers.
24. However, two leading Georgian NGOs—the Georgian Young Lawyers’ Association and
Transparency International Georgia—argue that the implementation of the judicial reform is flawed
in practice. They claim that the reins of the judiciary are concentrated in the hands of a single group
that ensures the prevalence of old-school, incompetent judges who often lack professional integrity
in senior judicial positions. In their joint letter to the visiting US Vice President, Mike Pence,
22 Georgian NGOs noted that the judicial system “remains prone to undue influences coming from
the government as well as vested corporate interests within the judiciary.”
25. When it comes to indictments of Saakashvili-era high-ranking officials, in November 2017, the
European Court of Human Rights (ECHR) ruled that the pretrial detention of Georgia’s former Prime
Minister, Vano Merabishvili, was based on a reasonable suspicion and justified in the beginning but
164 CDS 18 E rev.1 fin
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not in later stages, when, according to the ECHR, the predominant purpose of detention became to
obtain information on unrelated cases (“ulterior purpose”), including the one against the former
President, Mikheil Saakashvili. In January 2018, Georgian authorities sentenced Mr Saakashvili in
absentia for abuses of power.
26. The political scene on the national and municipal levels is characterised by the overwhelming
dominance of the ruling Georgian Dream-Democratic Georgia Party (GD-DG). The opposition is
divided and thinly represented in the Parliament. The GD-DG supermajority in the Parliament is
somewhat balanced by the centrist President, Giorgi Margvelashvili. His term in office expires in late
2018. The opposition claims that businessman Bidzina Ivanishvili, the founder of the Georgian
Dream coalition, exercises a disproportionate degree of influence over Georgian politics while not
occupying any public office. It is noteworthy, however, that since April 2018, Mr Ivanishvili does
occupy the position of chairman of GD-DG.
27. There are signs of growing public discontent in Georgia, manifested by the eruption of
weeks-long mass anti-government protests in Tbilisi over the summer of 2018. The protests were
sparked by a Tbilisi court’s decision to acquit the suspects of the killing of two teens in a brawl in
December 2017. In June 2018, the Georgian Prime Minister, Giorgi Kvirikashvili, resigned citing
differences with the ruling party chairman on economic and other fundamental issues, and was
replaced by the former Finance Minister, Mamuka Bakhtadze.
28. Georgia largely conforms with international electoral standards. Despite “the entire context of
the elections [being] shaped by the dominance of the ruling party” and “cases of pressure on voters
and candidates,” the OSCE found the 2017 local elections to be fair. Although polarised and
perceived as partisan, media outlets provided voters with an understanding of the candidates and
issues. At the same time, the “winner-takes-all” mentality is reflected in the fact that the ruling party
received approximately 90% of all campaign donations (NDI, 2017). The General Rapporteur shares
the view of those who stress the need for state officials to foster an environment that promotes
inclusive and pluralistic governance with strong opposition as an integral part of a healthy
democracy.
29. More recently, MPs under the Georgian Dream used their supermajority to change the
Georgian Constitution. The original amendments were criticised by the opposition, the presidency
and several NGOs, who alleged that many of the changes weaken checks on the majority party.
Eventually, the ruling party agreed to make certain revisions, incorporating many of the
recommendations of the Venice Commission. The new Constitution entrenches the status of Georgia
as a parliamentary democracy while abandoning direct elections for the President. It provides for a
greater independence of Supreme Court judges. It also envisages the switch to a fully proportional
parliamentary election system, albeit by 2024 only.
30. The Venice Commission issued a generally positive assessment of the new Constitution but
criticised the postponed switch to the proportional system, noting that it was “the most important
aspect of the reform.” It is expected, however, that the negative aspects of the postponement will be
somewhat alleviated by the government’s promises to allow party blocks in the 2020 elections and
reduce the election threshold to 3%. Georgia has also taken into account the Commission’s proposal
of opting for a proportional system for the distribution of unallocated mandates.
31. According to Freedom House, freedom of the press in Georgia has slightly improved when
compared to the pre-2012 era but still remains in the “partly free” category. In fact, the World Press
Freedom Index 2018 ranked Georgia 61st
out of 180 countries, up from the 104th
place in 2012. The
internet is free in Georgia. Rustavi-2, the country’s most watched television broadcaster and a
frequent critic of the government, has been consumed by an ownership controversy after a court
ruled that its ownership be transferred to its previous owner, who alleged that he had been pressured
to sell it by Mr Saakashvili. The European Court of Human Rights ordered that this decision be
suspended sine die to preserve freedom of the media. In their letter to the US Vice President,
Mike Pence, 22 Georgian NGOs noted that “[r]ecent developments on Georgia’s media landscape
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pose a threat to media pluralism in Georgia. Three broadcasting companies are owned by the
individuals closely affiliated with the ruling party. Georgian Public Broadcaster, which enjoys
significant public funding, has a new management politically affiliated with GD-DG. The only
nationwide broadcaster providing alternative critical views – Rustavi 2 – is struggling for survival in
a legal battle for its ownership.”
32. Though economic reforms have strengthened the economy, these changes were unevenly felt
across society. The real GDP growth rate dropped from 12.3% in 2007 to 2.7% in 2016. However,
economic performance was better than expected in 2017 as GDP growth increased to 5% (World
Bank, 2018). The World Bank identified the “stronger external environment, higher private
consumption and the consistent macro-fiscal policy framework” as the key contributors to the
improved GDP growth in 2017. According to the United Nations Development Programme (UNDP),
today, 21% of the population lives below the poverty line. Unemployment, underemployment and
economic inequality are pervasive.
33. Consequently, the government announced a reform plan to improve its economic
development. This plan included liberalising the income tax code as well as governance and
educational reform. The educational reforms will try to address employment-related concerns by
funding professionals who seek education in understaffed fields. The country has also built on its
2016 Association Agreement with the EU. In line with past commitments, the government adopted a
monitoring system for asset declarations by public officials in September 2017 as well as a revised
anticorruption action plan. Reflecting these successes, observers noted an improvement in the
business environment and the country jumped from 24th
in 2016 to 9th
in 2018 in the World Bank’s
Doing Business survey.
Occupied Territories of Abkhazia and the South Ossetia/Tskhinvali Region
34. Years of de facto Russian control of the Georgian territories of Abkhazia and the South
Ossetia/Tskhinvali region have led to state-sponsored persecutions and expulsions, displacing
ethnic Georgians and dramatically changing the region’s demographics. The regions are
increasingly dependent on Russia, which maintains more than 9,000 troops, some 2,600 Federal
Security Service (FSB) border guards and heavy offensive armament in the territories. Russia has
erected fences and other obstacles along the administrative border line, referred to as the
“occupation line” by Tbilisi, displacing residents and disrupting people-to-people contacts. The
leaders of these territories, particularly in the South Ossetia/Tskhinvali region, have lobbied for
unification with Russia.
35. Life in Abkhazia and the South Ossetia/Tskhinvali region is defined by weak institutions,
pervasive poverty, strong control over the press and discrimination against ethnic Georgians.
Patronage systems are reportedly common and law enforcement bodies often lack the necessary
oversight. Reports suggest that local media are heavily controlled and that there are few
opportunities for civil society activity. International observers have struggled to assess the human
rights situation in both regions because the de facto authorities have persistently denied them access
since 2008. Both elections and the judiciary are thought to be heavily controlled by Russian officials.
36. The illegal arrest, torture and murder of a Georgian citizen, Archil Tatunashvili, in the South
Ossetia/Tskhinvali region in February 2018 caused a public outcry in the Georgian society as well
as strong reactions from the United States and the EU. In response, the government of Georgia
approved the so-called Otkhozoria-Tatunashvili list – a black list consisting of 33 persons, mostly
Abkhaz and South Ossetian militants, convicted or charged with grave crimes committed against
ethnic Georgians in the territories of Abkhazia and the South Ossetia/Tskhinvali region since the
early 1990s. These persons will face visa restrictions as well as bans on their financial and property
transactions.
37. Despite these tensions, Tbilisi continues to seek ways of promoting contact with people
residing in these two territories. The Georgian government’s recently-announced peace initiative
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“A Step to a Better Future” aims at fostering trade, education and other links between divided
communities. This initiative is likely to face opposition from Russia and the local de facto authorities.
Support from Georgia’s key NATO and EU partners is important if this initiative is to have any chance
of success.
IV. THE REPUBLIC OF MOLDOVA
38. While the Republic of Moldova was once thought of as a beacon among the EU’s Eastern
Partnership states, it has struggled to keep its European integration prospects alive in recent years.
The country plunged into a deep crisis in 2014, when USD 1 billion, about 12.5% of the country’s
annual GDP, vanished from three Moldovan banks, leading to a sharp fall in the national currency’s
value and a freeze in international assistance by the EU, the IMF, and the World Bank. Following
the scandal, the nominally pro-European government suffered a crushing loss of trust, discrediting
European integration among much of the population. In 2016, the country elected a pro-Russian
candidate, Igor Dodon, as President.
39. As a parliamentary republic, the Republic of Moldova retained its nominally pro-European
government, but it remains to be seen if the pro-European coalition will survive the parliamentary
elections scheduled for early 2019, following a vote in Parliament to reschedule the elections that
were previously to be held in November 20182
. A poll conducted by the International Republican
Institute (IRI) in June 2018 found that 69% of Moldovans think that their country is moving in the
“wrong direction”. In the same poll, when asked what the most important problems that the country
is facing are, 35% indicated low income/pensions, with 31% indicating corruption and 30% indicating
unemployment (IRI, 2018).
40. These developments are symptomatic of the poverty, corruption and weak rule of law that
define the state. Though there are opportunities for improvement, mainly through cooperation with
the EU in the framework of the Moldova-EU Association Agreement (AA) that entered in force in
July 2016, appreciable change requires political will. In an April 2018 report, the European
Commission again highlighted the need for the Republic of Moldova to reform its judicial sector and
increase its fight against corruption. The European Parliament, in a report from June 2018, also
made special mention of the need for further investigation into the bank fraud that took place in the
country in 2014 (European Parliament, 2018).
41. Chief among the Republic of Moldova’s problems is growing oligarchic power consolidation.
Observers suggest that the country is captured by oligarchic interests and that its systems reward
the vested interests of a few politicians and oligarchs (TI Moldova, 2017). The most powerful of these
officials is Vladimir Plahotniuc. In addition to running companies involved in oil, banking, hospitality
and real estate, he owns about 75% of the Moldovan media, including four television channels and
three radio stations (Popsoi, 2018). Observers allege that Mr Plahotniuc has exploited geopolitical
tensions for his benefit. President Dodon’s close relationship with the Russian President,
Vladimir Putin, whom he meets with regularly, allows Mr Plahotniuc and the nominally pro-European
government to present themselves to Western countries as a necessary bulwark against Russian
influence and thus avoid condemnation (Calus, 2018).
42. Following the entry into force of the AA, the government launched a series of reforms designed
to introduce European standards in governance, the economy and the judiciary. These reforms had
some positive effects. The country somewhat recovered from the 2014 banking fraud and its
economy is currently growing by about 4% a year. Inflation has declined, and budget deficits have
reduced to 2% of GDP while the public debt has stabilised at about 40% of GDP. The flow of
remittances has also stabilised. The Republic of Moldova has also established designated
anticorruption institutions and adopted an anti-money laundering law.
2 The new President’s stance towards NATO is illustrated by the fact that the opening of a NATO liaison
office has been delayed for over a year due to presidential opposition.
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43. However, the pace of reforms is not satisfactory by most international standards. In
October 2017, the EU withheld a loan because of the Republic of Moldova’s failure to implement
reforms to its justice system. Moreover, the EU is concerned about the selective use of law
enforcement and selective justice in the country. Transparency International Moldova has noted the
use of law enforcement bodies for political aims as well as irregularities in court proceedings that
favour pro-government officials.
44. According to the EU, more needs to be done to ensure the implementation of the
anti-money-laundering legislation and to continue strengthening the operational capacities and
independence of the anticorruption bodies. In a June 2018 poll conducted by the International
Republican Institute, 82% of respondents reported that corruption was a “very big problem” for the
Republic of Moldova and 42% of respondents said that the greatest cause of corruption was the
“lack of government control and oversights” (IRI, 2018). In Transparency International’s 2017
Corruption Perception Index, the Republic of Moldova ranked 122nd
out of 180 countries, far below
many of its neighbours. The Republic of Moldova has yet to implement the Venice Commission and
the OSCE/ODIHR’s recommendations on party and campaign financing.
45. Although the Republic of Moldova has a good record of holding relatively free and
well-administered elections, its Western partners, including the Venice Commission, are very critical
of the new electoral law establishing a mixed electoral system. The change largely benefits
Mr Plahotniuc’s Democratic Party, which was at risk of losing seats by falling below the parliamentary
threshold in a purely proportional system, and Mr Dodon’s Socialist Party, the Republic of Moldova’s
largest party. Representatives of genuinely pro-European civic movements without links to local
businessmen are likely to find it more difficult to be elected in single-mandate constituencies.
46. Anti-government protests broke out in Chisinau in August 2018 over both alleged corruption
and the mayoral election in the Moldovan capital. The mayoral election was ruled invalid by a
Moldovan court because the winning pro-European candidate urged people to vote via a Facebook
live post on election day. The EU, the United States and Canada have all condemned the nulling of
the election, saying that it posed a threat to Moldovan democracy. In July 2018, the EU also withheld
a EUR 100 million aid package that was to be sent to the Republic of Moldova because of the
controversial mayoral election (Harris, 2018).
47. Meanwhile, observers report improvements in minority rights. The United Nations reports that
anti-discrimination policies are observed in audiovisual communication and mass media and that
judges are trained on how to prevent and combat discrimination. The government approved an action
plan to support the Roma people from 2016 to 2020. Further, LGBTI persons can peacefully
demonstrate and their rights are largely respected.
48. Despite the dominance of Mr Plahotniuc’s media outlets, the media scene in the Republic of
Moldova retains a certain diversity. However, according to Freedom House, the country’s media is
“trapped by the competing interests of political parties and affiliated business groups.” The EU has
urged the Republic of Moldova to speed up the implementation of the reform of the audiovisual code
that would enhance transparency and competition in the sector. The Republic of Moldova has
banned re-transmissions of Russian radio and television programmes as part of the country’s
anti-propaganda efforts – a move that could be explained by the pervasiveness of the Kremlin’s
disinformation in the country, although the EU had doubts about the proportionality of this decision.
49. The idea of a reunification of the Republic of Moldova with Romania has also recently received
attention. In August 2018, thousands of Moldovans rallied in the capital of Chisinau to call for a
reunification with Romania. Those who gathered carried Romanian and Moldovan flags and shouted
“Unity” and “Bessarabia, Romanian land”, the former name of Moldova. (Washington Post, 2018). In
a symbolic vote earlier this year, the Romanian parliament also voiced its support for reunification,
during a special session marking the 100th
anniversary of Moldova joining Romania after World War
One (Ilie, 2018).
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Transnistria
50. The breakaway region of Transnistria hosts about 2,000 Russian troops as a “peacekeeping”
force. The authorities of the Republic of Moldova call on Russia to honour its commitment, made in
1999, to withdraw its troops from Moldovan territory. Chisinau also seeks the transformation of the
current peacekeeping operation into a civilian mission under international mandate. NATO has been
consistent in urging Russia to abide by its international obligations, including respecting the territorial
integrity of the Republic of Moldova. The de facto authorities have periodically championed
annexation by Russia. In the region’s so-called “2016 presidential campaign”, candidates largely
competed to show their loyalty to Russia. The local economy depends on Russian aid. Since 2006,
Transnistria has not paid for Russian natural gas provided by Gazprom. Rather, debt continues to
build for the region, which Moscow expects Chisinau to pay. By 2017, Chisinau’s debt totalled
roughly USD 6.5 billion, of which USD 5.8 billion are a result of Transnistria (Necsutu, January 2018).
51. In August 2018, for the third year in a row, Russia held a joint military exercise with Transnistria
separatist troops simulating an attack on the Dniester River, the de facto border with the Republic of
Moldova. Moldovan authorities said these exercises were unauthorised and utilised unregistered
amphibious vehicles. Both Moldovan and OSCE observers were banned from inspecting the military
equipment used in the exercises. In July 2018, the UN General Assembly passed a Moldovan
resolution asking Russia to withdraw its troops from Transnistria (Necsutu, August 2018).
52. The democracy and human rights situation in Transnistria is unsatisfactory. As is the case in
most frozen conflict zones in the Black Sea region, the government has severely reduced
opportunities for political competition and maintains a justice system where arbitrary and politically
motivated arrests are common. Dominating almost all aspects of life in the area is Sheriff Enterprises,
a monopolistic business conglomerate owned by the region’s richest man. The region’s
self-proclaimed President, Yevgeny Shevchuk, lost an election in 2016 to a candidate backed by
Sheriff Enterprises. While in power, Mr Shevchuk attempted to reduce Sheriff’s economic grip on the
country. After his loss, Mr Shevchuk fled to the Republic of Moldova. Though ethnic Moldovans
comprise a significant minority of the region’s population, they face severe discrimination by ruling
authorities, according to the Freedom House. Crime, including human trafficking, is common.
V. RUSSIA
53. Despite having the formal attributes of a democratic state, such as elections, a Parliament,
political parties and a liberal Constitution, Russia has slid increasingly into a full-scale autocracy
under Mr Vladimir Putin, who has led the country either as President or as Prime minister since 1999.
Having entered his fourth term as president in 2018, Mr Putin has already been at Russia’s helm
longer than any other Russian leader since Stalin. Except for a brief period in 2011-2012, when
mass protests forced the Kremlin to introduce temporary liberalisation measures, such as more
flexible party registration rules, the regime has methodically tightened its grip on power and
subjugated all sectors of state and society, including main media channels, the Parliament, political
parties, oligarchs and federal entities.
54. On basic democracy and human rights indicators, Putin’s Russia fails across the board.
Freedom House identifies Russia as one of the least free countries in the world. Since 1999, all
elections in Russia have failed to meet OSCE standards. The unabashed falsifications and
ballot-stuffing during the 2011 parliamentary elections prompted mass protests on the streets of
Moscow unseen since the early 1990s. In 2018, thousands of protesters joined Alexei Navalny, an
anticorruption crusader and the country’s most prominent opposition figure, in protesting Mr Putin’s
fourth inauguration – later Mr Navalny was one of the 1,600 detained people across the country. In
September, during the regional elections, Mr Navalny inspired nation-wide protests, whilst serving
his 30-day jail sentence, in response to the government’s plan to raise the retirement age by five
years. This resulted in over 1,000 demonstrators being (often forcefully) detained at protests across
the country, in 33 towns and cities (RFE/RL, 10 September 2018).
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55. To buttress the crumbling credibility of Russian electoral institutions, in 2014, the Kremlin
appointed a renowned civil society activist, Ms Ella Pamfilova, as the chair of the Central Electoral
Committee. Under her watch, the technical side of the voting process somewhat improved, but the
overall environment of supressing the opposition and tilting the playing field in favour of the
incumbent remained intact. Most blatantly, the authorities refused to register Mr Alexey Navalny as
a candidate in the 2018 presidential elections. Authorities indicted Mr Navalny on trumped-up
criminal charges. His brother Oleg was given a prison sentence and was effectively held as a hostage
to pressure Alexei Navalny into silence, before being released in June 2018.
56. The Presidential elections were not the only vote in 2018 to be marred by irregularities – the
Kremlin-backed incumbent won the Moscow mayoral elections with 70% of the votes after two
independent liberal candidates were not allowed to run against him (RFE/RL, 4 September 2018).
Meanwhile, the Parliament has been turned into a rubber-stamp institution with no actual power.
Real opposition parties were purged from the Parliament in 2003, while individual parliamentarians
associated with the democratic opposition lost their seats in 2016 elections. The role of the
opposition in the State Duma is performed by the far-right Liberal Democratic Party, headed by
Mr Vladimir Zhirinovsky, and the reformed Communist Party, which unites tenets of Stalinist and
conservative Orthodox ideologies. The pro-Putin United Russia party controls more than two-thirds
of the seats in the Duma and 77 of 85 regional governor positions.
57. Most opposition figures and journalists face constant harassment and attacks by hackers; the
details of their private life are leaked on the Internet. Some regime critics are attacked physically by
unknown men (Ekho Moskvy journalist Tatyana Felgenhauer), poisoned (opposition figure
Vladimir Kara-Murza), imprisoned (Oleg Navalny and head of the Chechnya office of Memorial,
Oyub Titiev), forced into exile (businessman Mikhail Khodorkovsky, journalist Yulia Latynina,
economist Sergei Guriev, and head of Jailed Russia—an organisation that provides assistance to
inmates—Olga Romanova) or even murdered (politician Boris Nemtsov, journalist Anna
Politkovskaya, civil activist Natalya Estemirova, and lawyer Sergei Magnitski). The activities of
independent civil society organisations, such as Memorial, which is devoted to collecting information
on the crimes of Stalinism, and Golos, an independent election monitoring NGO, are regularly
obstructed, including by designating them as “foreign agents”3
, a term which has extremely negative
connotations in the Russian language.
58. The media, especially television, is under the heavy-handed control of the government.
According to a 2016 poll by the independent Levada Center, also labelled as “foreign agent,”
television remains the primary source of information for 80% of Russians. Major television channels
do not permit any criticism of the regime and especially not of Mr Putin. Selected opponents are
occasionally invited to primetime shows, such as that of a prominent propagandist,
Vladimir Solovyov, only to be interrupted as they speak, verbally assaulted, and booed by the
audience. The last bastions of free speech—the Ekho Moskvy radio station, Dozhd TV, and the
Novaya Gazeta newspaper—are kept for façade purposes, but their reach is limited. In 2016, 259
journalists were jailed (US Helsinki Commission, 2017). In 2017, two investigative journalists,
Nikolay Andrushchenko and Dmitriy Popkov, were murdered, and in 2018 the investigative journalist
Maksim Borodin (who earlier reported on the deaths of Russian mercenaries in Syria) died
mysteriously.
59. The internet used to be relatively free in Russia, which greatly helped internet-savvy activists
such as Mr Navalny, but the government has taken steps to exert greater control over this domain.
These efforts include forcing a change in ownership on the popular social media platform vKontakte
and the online news portal Lenta.ru and adopting a law banning anonymous web surfing software
(VPNs) that allows users to hide their IP addresses. Russian social media users also face prison
3 Under the 2012 Foreign Agent Law, non-profit organisations in Russia that receive foreign donations
and engage in “political activities” must register and declare themselves as “foreign agents”. In 2014
and 2015 this law was further expanded to cover a larger range of institutions (Human Rights Watch,
2018).
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sentences for “liking” or reposting messages that the authorities deem inappropriate, such as ones
challenging the legality of the Russian illegal occupation of Crimea or criticising Russia’s actions in
Syria.
60. There exist further concerns over privacy on the internet as, in April 2018, Russia began
procedures to shut down the popular encrypted messaging application Telegram over alleged
terrorism concerns. The blocking of Telegram, which is widely used not only by the public but also
by prominent officials, is difficult to enforce due to Virtual Private Networks (VPNs) which still enable
users to log in. The ban led to over 12,000 Russian citizens taking to the streets on 30 April 2018 to
protest that decision. In August 2018, it was announced that the authorities were considering a
reversal of the ban if Telegram agreed to provide data of terrorist suspects to the authorities.
Subsequently, Telegram updated its privacy policy noting that the company might share user data
with the authorities, provided there was a court decision. The conflict with Telegram is significant as
the Kremlin’s efforts to curtail internet freedom might mobilise those parts of society that were hitherto
uninterested in politics and had no quarrel with the regime.
61. Despite Mr Putin’s claim to have liberated Russia from the clutches of oligarchs and the
criminal anarchy of the “wild 1990s”, Russia remains a profoundly—and increasingly—corrupt state.
According to Transparency International, Russia is the most corrupt country in Europe and one of
the most corrupt countries in the world (ranked 135th
out of 180). The state sector in Russia expanded
from 35% of GDP in 2005 to 70% in 2015 (Aslund, 2017). While the regime cracked down on the
oligarchs of the 1990s, a new class of immensely wealthy people, often owing their wealth to their
personal ties with Mr Putin, has emerged. These officials include Gennady Timchenko, Arkady and
Boris Rotenberg and Yuri Kovalchuk. According to investigations by Mr Navalny, the Prime Minister,
Dmitri Medvedev, has also accumulated wealth measured in billions of US dollars, while Mr Putin is
believed to have created an offshore financial empire managed by a proxy, his family friend musician
Sergei Roldugin. The Putin-era oligarchs lack the independence their predecessors had in the
1990s.
62. Corruption permeates all levels of the administration, and is especially visible in major
infrastructure projects, such as the 2014 Winter Olympics in Sochi and the building of the Kerch
Strait Bridge that will connect the Taman and Crimean peninsulas. There is no systematic approach
to reducing corruption and cronyism. The sentencing of former economic minister Alexei Ulyukayev
for allegedly trying to solicit a USD 2 million bribe, for example, is more a manifestation of inter-elite
fights than a concerted campaign. Moscow’s inability and unwillingness to seriously tackle corruption
fuels public discontent. Many thousands of Russians participated in anticorruption demonstrations
across Russia between March and November 2017 and in April and May 2018.
63. The ideological grounds of Mr Putin’s regime are notoriously flexible, but they generally reflect
the tenets of social conservatism, including the rejection of “decadent” Western liberalism, an
emphasis on “traditional values”, the paternalistic nature of the state, ultra-patriotism, Orthodox
religion and blatant militarism. In practice, this ideology leads to growing obscurantism in Russian
society, the ban of non-mainstream religious movements such as Jehovah’s Witnesses, the
censorship of the film industry and the art scene, as well as laws banning “gay propaganda”4
. The
Russian Parliament recently decriminalised acts of domestic violence not involving serious bodily
harm.
64. It is particularly regrettable that Russia’s appalling human rights record and the absence of the
rule of law have been extended to the regions of Ukraine and Georgia under de facto Russian control.
4 The most shocking case of attacks on the LGBT+ community was reported by Novaya Gazeta journalists
in 2017. They discovered that more than 100 gay men were abducted and tortured, and some even
murdered, by the authorities in Chechnya. The authorities deny all accusations and closed the
investigation. Novaya Gazeta journalists themselves faced multiple threats for their investigation. In
general, the human rights situation in Russia’s North Caucasus is dire: there are numerous reports of
abductions, torture and extra-judicial killings.
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VI. NATO ALLIES
65. Romania has done much to improve on democratic norms, the rule of law and human rights
since joining the EU in 2007, and it is ahead of its neighbours in the region in many areas. It is a
stable democracy with a vibrant civil society and free media. In 2017, the country’s economy is
estimated to have grown by an impressive 6.9%. Nevertheless, in the EU context, Romania still lags
in some areas. An EU member since 2007, Romania has not yet been able to join the Schengen
area or the Eurozone. In its accession to the EU, Romania was subjected to the EU’s Cooperation
and Verification Mechanism (CVM) to address shortcomings in judicial reform and the fight against
corruption. During its ten years under the CVM, Romania created key institutions and enacted
important legislation to address these gaps. In its latest progress report from July 2018, the European
Commission (EC) reported that the “ongoing reform of the justice laws risks undoing progress
achieved in the last 10 years and harming judicial independence”. However, the EC did note a
“positive assessment of the judicial system and the role of the magistracy in pursuing reform”
(European Commission, 2018).
66. Much has been done to stamp out high-level corruption. Since 2013, the National
Anticorruption Directorate (DNA) has reportedly sent to trial 68 High Officials, one Prime Minister,
two Deputy Prime Ministers, 11 Ministers and former Ministers, 39 deputies and 14 senators.
Meanwhile, Romania has improved its standing in Transparency International’s Corruption
Perception Index, going from 43 points in 2014 to 48 in 2017 – with 0 representing highly corrupt
and 100 representing no corruption. The European Commission’s President, Jean-Claude Juncker,
has announced that he expects Romania to be in a position to terminate the CVM by the end of his
term in 2019.
67. Differences regarding corruption remain a large aspect of the political landscape in Romania.
In July 2018, President Klaus Iohannis gave into pressure from the Social Democrat-led government
to remove Romania’s chief anticorruption prosecutor, Laura Kovesi, from office after months of
ignoring calls to do so. The government claims that Mrs Kovesi overstepped her mandate and that
her approach to fighting corruption was selective. Since her appointment in 2013, the EU has
applauded the anticorruption prosecutor’s role in raising the conviction rates for corruption among
top business and political leaders in Romania (Hopkins and Peel, 2018).
68. Much of the country’s progress can be described as two steps forward, one step back.
Periodically, ruling coalitions have adopted legislation that could be interpreted as attempts to create
loopholes for corruption and the reduction of the independence of judiciary. These legislative
initiatives are criticised by the opposition, civil society and the European institutions. On
two occasions, controversial legislation prompted mass protests. Protests in early 2017 were
reportedly the largest in the country’s history since the end of the Cold War. The protesters
succeeded in inducing the government to repeal the legislation, exemplifying participatory
democracy. More recently, tens of thousands of Romanians protested legislation adopted in
December 2017. The European Commission, the US State Department, seven EU member states,
thousands of Romanian justices, and the country’s President, Mr Klaus Iohannis, criticised the
legislation as potentially encroaching on judicial independence. In April 2018, the Group of States
against Corruption of the Council of Europe (GRECO) published a report on Romania, expressing
serious concerns about certain aspects of the laws on the status of judges and prosecutors and
about draft amendments to the criminal legislation.
69. In August 2018, mass anti-government protests – led by members of the large Romanian
diaspora5
– broke out again across Romania against more legislative changes which critics claim
will weaken the rule of law in the country. Protests turned violent, especially after the police used
tear gas and water cannons to disperse crowds, resulting in more than 400 injuries to both protesters
and security personnel. President Iohannis condemned this excessive use of force.
5 Between 3 to 5 million Romanians are working abroad.
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70. According to the Council of Europe, Romania has made progress in promoting minority
cultures and education, but it noted that a coherent legal framework for the protection of minority
rights is still lacking. In particular, Romania was urged to do more to combat discrimination of the
Roma people.
71. While it is an entrenched and free democracy with a fast-growing economy (3.8% in 2017),
Bulgaria has more work to do to tackle corruption. Like Romania, Bulgaria has been subject to CVM
procedures since 2007. The country is making progress towards meeting the requirements for joining
the Schengen area and the Eurozone. Bulgaria has received passive access to the Schengen
information system and a positive assessment of its most recent application for the European
Exchange Rate Mechanism (ERM 2) and the Banking Union within the EU. In the first half of 2018,
Bulgaria successfully managed to accomplish its role in the rotating Presidency of the Council of the
EU.
72. The European Commission’s regular assessments emphasise the country’s progress,
particularly in terms of tackling organised crime, but the country’s record in reforming its judiciary
and fighting corruption is generally seen as less positive than that of neighbouring Romania. The
Commission points out “a clear need to accelerate the pace of reform” and “to create an atmosphere
of open debate and transparency on key decisions”, while the Council stressed that “overall progress
now needs to be further accelerated urgently”.
73. Overall, the new Bulgarian government, which has been in place since mid-2017, appears
determined to put the reform process back on track. A new anticorruption bill was recently vetoed by
the President, only to be re-adopted again by the Parliament, overruling the veto. The bill establishes
a new body charged with investigating top officials and allows that body to use wiretapping. The
critics of the bill are concerned that it does not ensure the independence of the new body or offer full
protection to whistle-blowers.
74. While these recent reforms are expected to have a positive effect, the current situation in
Bulgaria is far from optimal. The Centre for the Study of Democracy in Sofia recently produced a
scathing report on corruption in Bulgaria, going as far as to claim that state corruption has reached
dimensions that can be described as state capture. Bulgaria still lacks a track record of final court
decisions on convictions in high-level anticorruption cases. Anticorruption campaigners also point to
the influence of certain business entities, such as the privately-owned Russian energy company
Lukoil, and the signs of corruption surrounding the case of the collapse of the Corporate Commercial
Bank (Rankin, 2017).
75. Reporters Without Borders currently ranks Bulgaria lower in the World Press Freedom Index
than any other EU member, mainly due to “an environment dominated by corruption and collusion
between media, politicians, and oligarchs”. The watchdog also suggests that the government
allocates EU funding to certain media outlets in a non-transparent manner. Human rights groups
also criticise a member of Government and leader of United Patriots, the junior partner within the
ruling coalition, for making insulting statements vis-à-vis the Roma minority, and it should be noted
that this member of Government was sentenced by a first-instance court to refrain from similar
infractions in the future. The Government has adopted a National Strategy for Roma Integration and
adopts annual reports on specific steps in the integration of the Roma people. Nevertheless,
Amnesty International criticised Bulgaria for not doing enough to address the cases of hate speech
and hate crimes directed at minority groups, including Turks and Roma. In March 2017, Bulgarian
nationalists attempted to block the country’s border to prevent Bulgarian Turks residing in Turkey
from participating in the Bulgarian elections. Sofia accused Ankara of trying to interfere in Bulgarian
elections by using Bulgaria’s sizeable (9% of the population) Turkish minority, while
President Recep Tayyip Erdogan slammed Bulgaria for “putting pressure” on the Turkish minority.
76. More positively, Bulgaria has been praised for its progress in implementing GRECO’s
recommendations on corruption prevention with respect to members of Parliament, judges and
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15
prosecutors. GRECO welcomed the efforts by the Parliament of Bulgaria to better involve civil society
in the legislative process, tackle breaches of ethical rules by MPs and strengthen the obligation for
members of the judiciary to present regular asset declarations.
77. Bulgaria was also one of the first EU Member States to adopt the working definition of
antisemitism that was agreed upon by the International Holocaust Remembrance Alliance (IHRA) in
2016. The Government appointed a Deputy Minister of Foreign Affairs as National Coordinator for
the fight against antisemitism. During its presidency of the Council of the EU, Bulgaria placed the
topics of freedom of speech and expression, freedom of religion and belief and combating
antisemitism high on the EU agenda.
78. Some members of the government as well as the opposition have vehemently opposed the
plans for Bulgaria to ratify the Istanbul Convention on preventing and combating violence against
women and domestic violence. In July 2018, the Bulgarian Constitutional Court ruled that the
Convention does not conform to the Bulgarian constitution, thus making its ratification virtually
impossible. Human rights groups have criticised the Court’s decision.
79. Faced with mounting external and internal pressures, Turkey’s political system has undergone
substantial changes. In July 2016, Turkey was shaken by a brutal military coup attempt that claimed
251 lives and left more than 2,000 people wounded. If successful, the coup would likely have had
disastrous consequences for regional security and led to a civil war. All major political parties united
in their condemnation of the coup.
80. The coup was widely and firmly condemned by the Euro-Atlantic community. However, there
is a prevailing view among Turkey’s Western allies and human rights groups that the government’s
actions in the wake of the coup have been disproportionate. This view was expressed repeatedly by
members of the NATO PA during the Assembly’s Annual Session in Istanbul in November 2016.
81. Reportedly, some 50,000 people have been detained (excluding those who later released) and
150,000 civil servants and academics have lost their jobs, while 1,500 civil society organisations,
19 labour unions, over 2,000 schools, and more than 150 media outlets have been closed. Members
of Parliament from the pro-Kurdish Peoples’ Democratic Party (HDP) have been prosecuted.
Following the passage of a May 2016 law that lifted the parliamentary immunity of 138 MPs, 12 HDP
deputies, including those in party leadership positions, were arrested on terrorism-related charges.
By March 2017, the state of emergency had allowed the government to replace the mayors in an
estimated 82 out of 103 municipalities controlled by an affiliate of the HDP (Freedom House, 2018).
The Turkish government established a so-called OHAL (State of Emergency) Commission for
citizens affected by the purges and, according to the government, the cases of some 40,000
employees have been reviewed to date.
82. For nearly two years after the coup, Turkey remained under a state of emergency, which was
finally ended in July 2018. The government argued the state of emergency was necessary given the
severity of the threat and claimed that the principles of necessity and proportionality were strictly
observed. This view was not shared by President Erdogan’s critics, both domestically and in the
West. For instance, the European Parliament noted that the state of emergency has been “used to
silence dissent and goes far beyond any legitimate measures to combat threats to national security”.
83. European politicians and human rights watchdogs have repeatedly expressed their concern
over the detention of several prominent civil society activists, including Taner Kilic, the president of
Amnesty International Turkey, and the businessman Osman Kavala, an organiser of the Gezi Park
protests in December 2013. Trade union organisations have expressed their protest against the
arrest of Elif Cuhadar, an executive committee member of the Turkish trade union KESK.
Human Rights Watch has collected information on 13 cases of torture and ill-treatment of
coup-related detainees with varying degrees of severity. The Turkish authorities have also been
criticised for their stance on LGBT+ initiatives. Ankara imposed an indefinite ban on any event
organised by LGBT+ organisations following three consecutive bans of the Istanbul Pride march. On
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a positive side, in recent months, Ankara seems to have stopped hinting at the possible
re-introduction of the death penalty, a move that, according to EC President Jean-Claude Juncker,
would effectively block Turkey’s EU accession bid.
84. By most accounts, the space for media freedom in Turkey has narrowed in recent years.
According to the Turkish Journalists’ Association, about 160 journalists are in jail, with most being
detained after the failed coup. The detention of Deniz Yucel, a German journalist accused by Ankara
of espionage activities, has strained the relations between Germany and Turkey. Mr Yucel was
released in February 2018, but German officials claim that five other Germans are still in a Turkish
jail on unsubstantiated charges. In March 2018, the Financial Times reported the sale of Dogan
Media Group, which owned the newspapers Hurriyet and Posta, and the television stations CNN
Turk and Kanal D, to Demiroren Holding (Pitel, 2018). The sale of “some of Turkey’s most prominent
media titles” to Erdogan Demiroren, a majority shareholder of Demiroren Holding with “ties to
President Recep Tayyip Erdogan”, raised concerns regarding the government’s tightening grip on
the Turkish press. Specifically, the sale of Dogan Media means that “over 90 per cent of [Turkish]
media [in circulation] is controlled by those with close ties to [President] Erdogan’’ (Bucak, 2018).
85. The constitutional system became defined by super-presidentialism following the April 2017
referendum, which the government won by a narrow majority. OSCE/ODIHR monitors concluded
that the referendum “took place on an unlevel playing field”. The constitutional changes were
designed to introduce a US-style system where the President also heads the cabinet and the
Parliament is institutionally separated from the executive, with MPs being prohibited from serving as
ministers. However, in practice, the new Turkish system lacks the elements of checks and balances
that are inherent in the US model, including the requirement that the Parliament authorise key
appointments and be able to compel executive branch officials to testify. In Turkey, the President
retains the right to dissolve the Parliament and has increased powers vis-à-vis the judiciary. The
Venice Commission concluded that, by removing necessary checks and balances, the amended
Constitution “would risk degeneration into an authoritarian presidential system”. Nevertheless, the
Parliament retains meaningful powers and has the potential to play a role as guardian of the Turkish
democracy.
86. These constitutional changes officially came into force after Turkey’s recent early presidential
and parliamentary elections on 24 June 2018. Turkish voters re-elected Mr Erdogan by 52.5% of
votes, extending his term for the next five years as President of Turkey. Mr Erdogan’s main
adversary, Muharrem Ince, the candidate of the Republican People’s Party (CHP), won 30.8% of the
presidential polls (Guler, 2018). By winning an overall 53.6%, the electoral alliance between
Erdogan’s Justice and Development (AKP) party and the Nationalist Movement Party (MHP) secured
the majority of the parliamentary seats. Notably, the pro-Kurdish HDP, whose leader
Selahattin Demirtas was running for presidency from jail, passed the electoral threshold and entered
the parliament by securing 11.6% of the votes. The OSCE election observation mission concluded
that “voters had genuine choice in Turkish elections, but incumbent president and ruling party
enjoyed undue advantage, including in media”.
87. Over the course of 2018, Turkish-US relations have deteriorated, mainly over the case of
US pastor Andrew Brunson, detained in Turkey on alleged terrorism and espionage charges. The
US administration dismisses the charges as not supported by the evidence. In August 2018, the US
Department of Treasury imposed sanctions on two Turkish ministers (Justice and Interior) in relation
to the detention of Brunson. The US administration followed up on these sanctions by doubling tariffs
on Turkish steel and aluminium. Currently, pastor Brunson is held under house arrest until his next
trial.
88. From January to September 2018, the Turkish lira lost more than 40% of its value against the
US dollar. This occurred due to a combination of factors, ranging from the consequences of the
credit-fuelled growth, decreased investor confidence and the worsening of relations with the
United States. The government seeks to direct the monetary policy, and, at the time of writing, it is
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17
not clear if Turkey’s central bank will be able to demonstrate its independence and increase the
interest rates above the levels suggested by the government.
89. Developments in Turkey in 2016-2017 convinced Freedom House to change its assessment
of Turkey’s status from “partly free” to “not free”. Consequently, Turkey became the only NATO
country in this category (Albania and Montenegro ranked as “partly free”). According to Transparency
International’s Corruption Perception Index, Turkey ranks 81st
among 180 countries, scoring 40
points—down from 50 points in 2013. Among NATO Allies, only Albania’s score is lower.
90. Political polarisation in Turkish society is deep. According to a public opinion survey by the
Center for American Progress (CAP), supporters of the ruling AKP differ dramatically from supporters
of the opposition CHP and HDP in how they assess political and socio-economic realities in Turkey.
While more than 60% of AKP supporters assess these realities favourably, only 6% of CHP
supporters share that view (Makovsky, 2017).
91. On the other hand, the CAP poll suggests that the alarmist warnings of growing religious
fundamentalism in Turkey are unsubstantiated. The overwhelming majority of Turks continue to
support the secular model. Atatürk, the father of secular Turkey, is viewed positively by more than
80% of the population. The support base of the ruling AKP is also mostly pro-secular: only a quarter
of its supporters support a “Sharia state”, and younger Turks—including AKP voters—are even less
supportive of the centrality of religion in state affairs (Makovsky, 2017).
92. According to Article 2 of the Constitution, Turkey is a democratic, secular and social state
governed by the rule of law. Since the establishment of the Republic of Turkey, there has been a
considerable increase in the rate of women’s participation in areas including education, employment
and decision-making mechanisms. A Strategy Paper and Action Plan on Women’s Empowerment
has been prepared to cover the period of 2018-2023. Nevertheless, initiatives that seem to contradict
the Western secular model are occasionally announced, such as the proposal by President Erdogan
to criminalise adultery. According to the President, “[Turkish] society holds a different status in terms
of its moral values. This is an issue where Turkey is different from most Western countries” (Rezaian,
2018). According to the gender gap index of the World Economic Forum, which assesses access to
health services, educational attainment, economic participation and political empowerment, Turkey
ranks 130 out of 144 countries surveyed. Just 34% of women in Turkey work, by far the lowest
proportion within the OECD, where the average is 63% (Lowen, 2018).
VII. CONCLUSIONS: ENHANCING THE EURO-ATLANTIC COMMUNITY’S APPROACH TO
THE BLACK SEA REGION
93. Many countries in the Black Sea region face substantial obstacles to achieving international
standards pertaining to human rights, the rule of law and democratic governance. Parts of the region
have deteriorated alarmingly, particularly in territories under de facto Russian control, where
authorities use the difficult security situation and/or the threat of terrorism to justify breaches of civil
liberties. This situation creates a vicious cycle and distorts the balance between liberties and
security. The General Rapporteur believes that democratic backsliding in parts of the region
contributes significantly to the current levels of tension and undermines the efforts towards
reconciliation and dialogue among Black Sea states.
94. As an intergovernmental political-military alliance, NATO has been mainly involved in the Black
Sea region through: introducing reassurance measures for NATO Black Sea Allies (Tailored Forward
Presence) and assisting partner countries – Georgia, the Republic of Moldova and Ukraine – in the
fields of defence and security sector reform and public diplomacy. While the NATO Membership
Action Plan states that aspirants must demonstrate commitment to human rights and the rule of law,
NATO lacks a clear mandate and the capacities to carry out comprehensive assessments of
democratic progress in aspirant countries, let alone in its own member states. Political dialogue
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within the framework of the NATO partnership policy has mainly focused on practical cooperation in
a military context.
95. However, the General Rapporteur is convinced that democratic governance, the rule of law
and human rights should be more prioritised in the Alliance’s partnership strategy. Similarly, an open
discussion on ways of promoting the liberal democratic world order within and outside the Alliance
should become a legitimate subject of NATO’s institutional agenda. As the then US State Secretary,
John Kerry, said after the coup attempt in Turkey: “NATO also has a requirement with respect to
democracy, and NATO will indeed measure very carefully what is happening” (Sloat, 2018).
96. The EU, with its immense soft power and institutional and financial capacities, has far greater
tools to promote reforms and democratic standards across the Black Sea, as it has previously done
in Central and Eastern Europe. The EU’s Black Sea Synergy Initiative, launched back in 2007, needs
to become more ambitious and better funded. The General Rapporteur supports the calls that the
EU’s involvement and support be strictly conditional on partners’ progress in improving human rights,
democracy and the rule of law. To improve the quality of reforms and to ensure their implementation,
efforts to strengthen administrative capacities and culture as well as to involve civil society and the
expert community in consultation processes should be prioritised. The activities of the Black Sea
NGO Forum, a ”home grown” platform for debate, communication and cooperation among civil
society representatives, governments and international organisations active in the wider Black Sea
region, including on issues such as democracy and rule of law, deserve special attention and further
support, since this platform also has a role to play in enhancing societal resilience across the region.
European leaders should react swiftly and resolutely whenever concerns arise regarding the
persecution of human rights activists, infringements on media freedom, selective justice, cases of
torture, the oppression of national minorities, election fraud and other violations of human rights and
liberties. There can be no excuses for delaying the adoption and implementation of rigorous
anticorruption policies.
97. Ultimately, the Black Sea states themselves need to do more to promote democratic standards
across their region. Strengthening people-to-people contacts as well as regional organisations such
as the Black Sea Economic Cooperation (BSEC) is key to achieving durable reconciliation and
stability in the region. The international community should continue to be united in calling on Russia
to revisit its revisionist policies in the region and to end the violation of territorial integrity of Georgia,
Ukraine and the Republic of Moldova. The General Rapporteur is also convinced that faster progress
in introducing European standards of democracy and the rule of law by Georgia, Ukraine and the
Republic of Moldova will serve as a powerful pull factor for the populations of their regions under de
facto foreign control.
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______________________
COMMITTEE ON THE CIVIL
DIMENSION OF SECURITY
(CDS)
Sub-Committee on Democratic
Governance (CDSDG)
CIVIL PROTECTION IN THE
HIGH NORTH AND THE
MEDITERRANEAN
Report
by Jane CORDY (Canada)
Rapporteur
165 CDSDG 18 E rev.1 fin | Original: English | 18 November 2018
TABLE OF CONTENTS
I. INTRODUCTION – NATO AND CIVIL PROTECTION .......................................................1
II. CIVIL PROTECTION AND EMERGENCY RESPONSE IN THE HIGH NORTH.................2
A. THE CHANGING ARCTIC ........................................................................................2
B. SAR AND EMERGENCY RESPONSE IN THE HIGH NORTH: CHALLENGES
AND CAPABILITIES .................................................................................................3
C. MULTILATERAL COOPERATIVE FRAMEWORKS IN THE HIGH NORTH ..............7
III. ADDRESSING THE HUMANITARIAN CRISIS IN THE MEDITERRANEAN ....................10
A. THE MEDITERRANEAN: THE WORLD’S MOST LETHAL SEA ROUTE FOR
MIGRANTS AND REFUGEES................................................................................10
B. SAR CAPABILITIES IN THE MEDITERRANEAN ...................................................11
C. AUGMENTED SAR CAPABILITIES – LIFESAVING OR
COUNTERPRODUCTIVE?.....................................................................................15
D. POST-RESCUE CONDITIONS...............................................................................15
IV. CONCLUSIONS ..............................................................................................................16
BIBLIOGRAPHY..............................................................................................................18
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I. INTRODUCTION – NATO AND CIVIL PROTECTION
1. NATO’s involvement in civil protection, namely policies for the protection of civilian populations
against disasters and other emergencies, dates back to the 1950s, with the establishment of NATO’s
Civil Emergency Planning Committee. While not a central task for the Alliance, civil protection
occupies an important place in NATO’s comprehensive approach to security. Over the years, NATO
has developed ways of assisting member nations in preparing for and responding to natural and
man-made disasters as well as addressing the civil effects of terrorism and of the use of WMDs.
Contribution to civil protection has become an important element of the Alliance’s “soft power”,
particularly in relations with NATO partners.
2. The end of the Cold War and NATO’s increased focus on out-of-area operations allowed the
Alliance to place a stronger emphasis on civil protection policies, especially with regard to disaster
response. In 1998, following a Russian proposal to the North Atlantic Cooperation Council (later the
EAPC), NATO established the Euro-Atlantic Disaster Response Coordination Centre (EADRCC) to
coordinate disaster relief efforts among NATO and partner countries, and in countries where NATO
is engaged in military operations. The Centre is active year-round and operates on a 24/7 basis. It
involves NATO’s 29 Allies and all partner countries. Since 2000, the EADRCC has conducted, on
average, one large consequence-management field exercise every year.
3. However, the EADRCC is only used if called upon, and its role is restricted to coordination
rather than operational management. In emergency response, member states as well as relevant
international organizations, particularly the United Nations, play a primary role, while NATO’s role is
subsidiary. Military assets, such as NATO’s Airborne Warning and Control System (AWACS), the
NATO Response Force (NRF) and the Multinational Chemical, Biological, Radiological and Nuclear
(CBRN) Defense Battalion have also been engaged in some civil emergencies. The most prominent
cases of NATO involvement in disaster response include the responses to Hurricane Katrina in the
United States in August 2005 and to the earthquake in Kashmir, Pakistan, in October 2005. It is also
worth recalling the EADRCC’s role in coordinating the multinational humanitarian assistance effort
that supported refugees during the Kosovo war in the late 1990s.
4. In search and rescue (SAR), NATO holds annual Dynamic Mercy exercises that alternate
between the Atlantic Ocean and the Baltic Sea. The exercise aims to develop inter-regional
cooperation and coordination between the civilian and military SAR units of Allied and partner
nations. This coordination is crucial for rescuing lives at sea. NATO is also engaged in developing
capabilities for rescuing submarine sailors. It regularly conducts submarine escape and rescue
(SMER) exercises to improve multinational submarine rescue cooperation and interoperability. The
latest SMER exercise–Dynamic Monarch–took place in 2017 in the eastern Mediterranean and
focused on saving lives rather than warfighting. Allies, including the United Kingdom, France and
Norway, also launched the NATO Submarine Rescue System (NSRS), which consists of
jointly-owned submarine rescue platforms1
.
5. The NATO Parliamentary Assembly's (NATO PA) Committee on the Civil Dimension of
Security (CDS) has developed a strong focus on civil protection. In 2006, it adopted a comprehensive
report on this topic, analyzing the complex network of policies and instruments that give NATO a role
in civil emergencies. However, several new challenges have since emerged, including the changing
geopolitical environment on NATO’s eastern, southern and northern flanks.
1 The NSRS consists of two sub-systems that can be mobilized independently of each other 1) the
Intervention Remotely Operated Vehicle (IROV) that can be rapidly mobilized to a distressed submarine
in order to provide life support and prepare the site for 2) the Rescue System, which consists of a
free-swimming manned submersible, a Portable Launch and Recovery System, a decompression
system and other associated support equipment. The NSRS can be deployed anywhere in the world
and is designed to maximize the use of any potential aircraft and ship. -
https://www.royalnavy.mod.uk/The-Fleet/Submarines/~/media/Files/Navy-PDFs/The-Fleet/Fighting-
Units/Submarines/NSRS%20Factsheet.pdf
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6. This report will focus on two regions where the issue of civil protection has become particularly
acute in recent years: the High North and the Mediterranean. While very different, these regions
present equally daunting challenges for civil protection. Due to climate change, technological
advances and renewed competition between Allies and Russia, there is growing civilian, economic
and military activity in the High North. These factors, in turn, complicate efforts to protect civilians,
the environment and infrastructure – efforts that are already made difficult by the sheer size of the
High North, the harsh climate and the lack of infrastructure.
7. The Mediterranean faces a different type of civil protection challenge: the refugee/migrant
crisis prompted by turbulence in the Middle East and North Africa (MENA) region. The shocking
losses of life at sea have tested the conscience of the world and particularly the Euro-Atlantic
community.
8. This report will provide further assessment of these challenges, take stock of the existing civil
protection – primarily SAR – capabilities in these regions and discuss ways of improving the
multilateral responses to these challenges, including NATO’s potential role.
II. CIVIL PROTECTION AND EMERGENCY RESPONSE IN THE HIGH NORTH
A. THE CHANGING ARCTIC
9. The Arctic region2
is experiencing rapid transformation due to climate change. In the last
70 years, the Arctic amplification effect has caused the Artic to warm up twice as fast as other parts
of the world. Since 1979, the Arctic ice cap has shrunk about 13% per decade, and the trend is
accelerating3
. Meanwhile, the thickness of Arctic ice declined by 65% between 1975 and 2012.
January 2016 was 5°C warmer than the 1981-2010 average for the region. If current trends continue,
experts estimate that the Arctic will be ice-free during the summer months by 2040. Sea ice is
becoming less thick and more likely to break apart causing more mobility. This increased mobility
may lead to more ice-related hazards. The thawing permafrost is also releasing carbon dioxide and
methane into the atmosphere, thus exacerbating the greenhouse effect4
. Thawing permafrost also
causes extensive damage to highways, railroads, airstrips, and other infrastructure. Furthermore,
Arctic ecosystems face significant stress and disruption. Even if the Paris Agreement succeeds in
keeping the rise of the Earth’s temperature well below 2°C above pre-industrial levels, winters in the
Arctic are still expected to be warmer by 5-9°C compared to the period between 1986 and 2005 (The
Economist, 2017).
10. These warming trends as well as technological advances make the Arctic more accessible for
longer periods of the year, offering new opportunities for human activity in the region. New strategic
shipping routes are gradually opening in the north, namely the Northern Sea Route (NSR) along
the Russian and Norwegian coasts and the Northwest Passage (NWP) consisting of several routes
through the Canadian archipelago and along Alaska’s northern shoreline. The NSR holds particular
economic interest. While Russia has introduced high tariffs for transit, the NWP has no fee system
(Melia, Haines, & Hawkins, 2017). It also cuts the length of usual routes between east Asia and
western Europe by about a third. Recognizing growing interest in this route, Russia has also
developed a series of urban centers along the NSR. As the Arctic ice cap shrinks, the Transpolar
2 In this report, Arctic is used interchangeably with High North, which is defined as the area north of the
Arctic Circle (66°33´N).
3 The acceleration is attributed to the feedback loop: as the ice cap shrinks, less sunlight is reflected and
more of it is absorbed by the water. Warmer ocean water further melts the ice from beneath.
4 According to Arctic Council’s Arctic Management and Assessment Programme, near-surface permafrost
has warmed by more than 0.5°C since 2007-2009 and, by mid-century, the area of near-surface
permafrost is expected to decrease by 35%. It is estimated that Artic soils hold about 50% of the world’s
soil carbon. While thawing permafrost is expected to contribute significantly to global warming, the
amount of greenhouse gas released so far has been relatively small.
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Sea Route (TSR) in the central Arctic Ocean may become a third and even more attractive option
than the NWP and NSR.
11. There were 71 transits through the NSR in 2013, up from just four in 2010 (transit numbers
dropped to 19 again in 2016, likely due to renewed tensions between Russia and the West).
Thirty-three vessels crossed the NWP in 2017, up from just five in 2007, including, for the second
time, the Crystal Serenity, a cruise ship with more than 1,400 passengers and crew on board
(Headland, 2017).
12. The Arctic’s wealth of natural resources has also attracted commercial interest. The
US Geological Survey estimates that the region has extensive reserves of up to 90 billion barrels of
oil and 1,699 trillion ft3
of natural gas. While the US and Canadian governments have banned
offshore drilling in the Arctic5
, Russia’s national oil and gas companies, Rosneft and Gazprom, are
expanding their operations and Norwegian authorities have started to issue hydrocarbon exploration
licenses. Some observers predict that some USD 100 billion will be invested in non-renewable
natural resources and infrastructure construction in the region within the next decade (Geiselhart,
2014).
13. Despite the ban on drilling, Canada and the United States have joined Russia in extracting
other natural resources in the North, such as zinc, iron ore and nickel. There is also a discussion in
Greenland on whether or not to mine its vast uranium resources using investments from Australia
and China. The warming waters also offer new opportunities for fishing certain species, such as cod,
in the North.
14. That said, the potential for shorter transportation routes and natural resource extraction should
not be overstated. The extent of ice coverage is still largely unpredictable, preventing shipping
companies from using Arctic sea routes for regular services. Additionally, interest in natural resource
extraction in the Arctic has diminished substantively due to falling global oil prices and the effect of
Western sanctions on Russian companies6
(Zysk & Titley, 2015). For the time being, commercial
activity in the region is likely to grow only modestly.
B. SAR AND EMERGENCY RESPONSE IN THE HIGH NORTH: CHALLENGES AND
CAPABILITIES
15. As human activity in the High North increases, so does the probability of incidents requiring
SAR operations. Vessels and offshore oil and gas platforms create the potential for accidents,
including colliding with ice or catching fire. These incidents can severely threaten not only the
environment but human life as well. In terms of shipping casualties, 55 incidents were recorded in
2016, up from just eight incidents in 2006. Particularly worrisome is the increasing presence of large
cruise ships carrying over 1,000 passengers. An emergency evacuation of a cruise ship of this size
would require a mass rescue operation (MRO), an endeavor that no Arctic country could currently
manage on its own. On a smaller scale, helicopters, small private aircraft, and adventure tourists on
skis and private boats constitute another growing risk group for emergencies (Ikonen, 2017).
16. Emergency management in the Arctic is a complex and risky endeavor because of turbulent
weather, uncertain ice conditions, vast distances, and environmental concerns. The Arctic spans
14.5 million km2
, which is larger than the European continent (10 million km2
), and has a population
of about 4 million people. Average winter temperatures are as low as -34ºC. The harsh environment
makes it difficult to operate aircraft and helicopters while ships face the problem of icing, which can
5 According to a recent report, President Donald Trump seems to be re-evaluating this ban.
https://www.cnbc.com/2018/01/04/trump-aims-to-open-arctic-pacific-and-atlantic-to-offshore-drilling-in-
ambitious-new-plan.html
6 Due to Western sanctions, transit traffic via the NSR has dropped from 1.18 million tons in 2013 to a
mere 39,000 tons in 2015. https://jamestown.org/program/russian-military-build-up-in-arctic-highlights-
kremlins-militarized-mindset/
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lead to the failure of some ship functions. Collisions with icebergs could also create emergency
situations, including the abandonment of the ship. During the long Arctic winters, extended periods
of 24-hour darkness and restricted visibility due to weather further complicate navigation. Due to the
sparseness of the population, infrastructure – such as ports, landing strips and hospitals – is lacking
(Steinicke & Albrecht, 2012). These factors can only be mitigated to a very limited extent.
17. In smaller emergencies, authorities in the High North can largely rely on local responders and
volunteer resources. However, as activity in the region increases in frequency and scale, advanced
SAR capabilities that can handle emergencies of a larger scale and of higher complexity are needed.
Responsible emergency-preparedness authorities must extend their seasonal presence (usually
limited to the summer months) as well as their overall capabilities, situational awareness and
cross-border cooperation. Responsibility for emergency preparedness in the High North is distributed
across different national authorities, with the leading SAR authorities being either civilian, such as
the Icelandic Coast Guard, or military, such as the Danish Navy.
18. In some nations, such as Canada, search and rescue is a shared responsibility. Due to the
country’s immense size, range of terrain and unpredictable weather, many partners and jurisdictions
are involved in Canada’s National Search and Rescue Program, including the civilian Canadian
Coast Guard for maritime SAR, the Royal Canadian Air Force for aeronautical SAR, as well as
provincial and territorial authorities. In the remote North, the Canadian Rangers – a roughly
5,000-strong reserve force from over 200 different northern communities – can also assist in ground
search and rescue efforts. Often referred to as the military’s “eyes and ears in the North”, many
Canadian Rangers are indigenous and bring highly valuable local knowledge to ground search and
rescue operations in isolated areas.
19. The Arctic’s vast expanse and limited infrastructure make helicopter airlifts extremely difficult.
Investing in new helicopter bases is difficult to justify considering the still limited amount of shipping
in the region. At this time, other means of rescue are very time intensive, with little ability to rescue
large numbers of survivors. Icebreakers are especially important to SAR operations. Experts,
however, are concerned about the “icebreaker gap” of the littoral Arctic states, which have small and
ageing fleets. The US fleet consists of only two operational icebreakers (CRS, 2018). A new
icebreaker is planned but limited activity in the region might not justify the costs of USD 1 billion per
ship (Fountain, 2017). Canada’s Coast Guard has 15 icebreakers, including two heavy icebreakers,
but they are reaching the end of their design life. Canada is exploring various options to replace its
icebreakers. In June 2018, the Government of Canada announced that it would be acquiring three
converted medium commercial icebreakers to support interim icebreaking capability. Nevertheless,
increasing demand for icebreaker service support is leaving the fleet stretched (LeBlanc – Senate of
Canada, 2018). Russia is the only country to possess robust icebreaker capabilities with over
40-icebreakers, including six heavy polar, nuclear-powered vessels (Charron, 2017).
20. Because communications satellites do not fully cover the Arctic region, communication
technology in the High North is limited. Building infrastructure for broadband technology is
complicated by short construction seasons and difficult maintenance conditions. Since 1999, large
ships have been equipped with communications, warning and alert systems within the Global
Maritime Distress and Safety System (GMDSS), mainly using the COSPAS-SARSAT7
satellite
program established in 1979 by Canada, France, the former USSR and the United States. However,
due to the gap in satellite coverage, distress alerts can only be detected globally up to about
70-75º north (Steinicke & Albrecht, 2012). SAR officers place high hopes in the new
Medium Earth Orbit Search and Rescue (MEOSAR) system, which will become the dominant
space-segment capability of the COSPAS-SARSAT program. MEOSAR satellites will pick up the
distress signals in near real time with more accuracy than the current system, which can take up to
two hours.
7 COSPAS (К С АС) is an acronym for Space System for the Search of Vessels in Distress in Russian,
while SARSAT is an acronym for Search and Rescue Satellite-Aided Tracking.
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21. Communication between different SAR stakeholders is another cause for concern. All Arctic
states have their own vessel and air-traffic services with different reporting systems (Ikonen, 2017).
Information on military units, which are often the most readily available resources for SAR
operations, might be considered sensitive by military authorities, further complicating cross-border
cooperation. Moreover, language barriers continue to obstruct communication (Sydnes et al., 2017).
22. Norway stands out among the Arctic nations in terms of developing adequate SAR capabilities
in the High North. In May 2018, members of the NATO PA Sub-Committee on Democratic
Governance (CDSDG) visited Bodo, Norway, which hosts the Joint Rescue Coordination Center
North Norway (JRCC NN). Bent-Ove Jamtli, Director of JRCC NN, told the delegation that Norwegian
SAR services are coordinated by two JRCCs – one in Sola (for southern Norway) and one in Bodo
(for northern Norway). SAR services are performed through a cooperative effort involving
governmental agencies, voluntary organizations and private companies. All relevant state and
municipal institutions and services are obliged to participate with all available resources if asked by
JRCC. The Center had to deal with about 3,000 incidents in 2017, most of them in the sea, and this
number increases each year. Norway’s 12 aging Sea King SAR helicopters will be replaced by
16 new AW-101 helicopters by 2020 with an expanded radius of operation. Norway’s SAR
capabilities also include a number of other important assets, such as NH-90 naval helicopters, the
CGV Svalbard icebreaker and the M/S Polarsyssel expedition and research vessel. JRCC NN
cooperates closely with Norway’s armed forces, for instance, by occasionally requesting the
assistance of the F-16 fighters from NATO Quick Reaction Alert air base in Bodo. Voluntary
organizations – such as Norwegian alpine or glacier rescue teams – are instrumental to the success
of Norway’s SAR operations. One must also note a good level of cooperation between Norwegian
and Russian SAR services in protecting human lives and infrastructure in the framework of the
Barents Agreement.
23. Finland and Sweden also have adequate SAR capabilities in their part of the High North,
however they do not have access to the Arctic Ocean. Therefore, their area of responsibility is less
challenging. In Finland, responsible authorities for SAR in the High North are the Finnish Border
Guard and the Air Navigation Services Finland. Additional authorities and organizations also get
involved in SAR operations, such as the Emergency Response Service Administration, the Finnish
Armed Forces, the Vessel Traffic Service, with involvement also of the police and custom authorities.
The Finnish Border Guard conducts joint exercises with the Swedish Coast Guard. In Sweden, the
Swedish Maritime Administration (SMA) is responsible for maritime and aeronautical SAR in the
Arctic (Ikonen, 2017). According to SMA, its helicopter unit is “fully dedicated to nation-wide airborne
search and rescue services”. The large fleet of AgustaWestland AW139 helicopters is stationed in
five stations: Umea, Stockholm, Visby, Gothenburg and Ronneby. Other actors involved in SAR
operations in the Arctic include fire brigades and the Swedish Coast Guard, a civilian authority
supervising rescues and providing assistance at sea 24 hours a day, 365 days a year along the
entire Swedish coastline.
24. The United States keeps most of its SAR assets in southern Alaska, but during summer
months the US Coast Guard (USCG) also opens Forward Operating Bases in more remote locations
to support economic activities there. In terms of air assets, the USCG mostly relies on helicopters
based primarily out of Kodiak Air Station, which stand alert and ready to respond. However, these
helicopters do not have refueling or de-icing capabilities, which limits their scope of intervention.
Often this leads to dependency on the Alaska Air National Guard’s combat SAR squadrons for cases
beyond 300 miles. In terms of maritime assets, the USCG’s fleet of ships provides platforms,
capabilities and resources for marine vessels in distress and for SAR operations in the most remote
areas. Vessels are of great value in SAR missions but “response times for cutters in the Arctic are
slow” (Smith, 2017). Other partner organizations can also be requested to assist in SAR missions,
especially above the Arctic Circle where the USCG and the United States Air Force (USAF) do not
have a permanent presence. These include the North Slope Borough Search and Rescue – primarily
responsible for “provid[ing] SAR services for the Alaskan Natives that live within the Borough” – and
the North Slope commercial operators. Despite the limited capabilities of these organizations, their
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presence in the North Slope enables quick response times and their regional expertise is crucial in
this dangerous area. However, maintenance issues and the lack of infrastructure on the North Slope
often makes it difficult to conduct SAR operations, for aircraft as well as for marine vessels. Practical
collaboration between the different actors involved is also a challenge.
25. Iceland’s Coast Guard operates three vessels, several rescue helicopters and one maritime
surveillance aircraft, which can operate from short airfields. Inside the country, there are about
100 SAR teams, consisting of volunteers, that focus mostly on assisting the rapidly growing number
of tourists. Since 1985, Iceland operates the Maritime Safety and Survival Training Centre which
provides safety and survival training for seamen. According to national law, it is mandatory for all
seamen to attend courses there. Nevertheless, a nation the size of Iceland requires international
support in major emergencies.
26. Canada and Denmark (Greenland) face the greatest SAR challenges due to the vastness of
their area of responsibility compared with the size of the population. Until recently, experts assessed
that Canada had only limited infrastructure in its northern territories and that “any attempt to mount
even a small-scale operation would be difficult” as Canada’s most substantial SAR facilities are
located thousands of kilometers away in the south (Steinicke & Albrecht, 2012). However, the current
government of Canada has taken important steps to improve the situation. In November 2017,
Ottawa launched the USD 1.5 billion Oceans Protection Plan, which, in addition to setting
environmental goals, envisages the provision of new capabilities to the Canadian Coast Guard to
effectively respond to safety incidents. The Department of National Defence and the Canadian
Armed Forces also announced a new policy entitled “Strong, Secure, Engaged” that calls on a
military spending increase of 70% over the next decade. Much of this funding aims to improve SAR
capabilities and surveillance in the Arctic. The government has reaffirmed its commitment to develop
and put into polar orbit a new generation of radar satellites, known as the RADARSAT Constellation,
that will enable Canadian forces to see through clouds at night to track vessels.
27. Greenland, the world’s largest island, has a population of just over 50,000. SAR platforms are
limited to one helicopter operated by Air Greenland. This helicopter is equipped with hoists, so it can
rescue persons in distress from ships and water, including fishermen stranded on drifting ice floes.
Greenland applies a whole-of-society approach to SAR, involving traditional local fishermen and
hunters, recreational boats and hikers. The Danish Arctic Command supports local efforts by
stationing one Arctic patrol frigate with an on-board helicopter and two Arctic patrol vessels in
summer; it only provides one ship in winter. Experts note that, in the case of a mass rescue operation,
local resources would be overwhelmed, while remote locations would hinder a swift arrival of
international assistance (Steinicke & Albrecht, 2012). In October 2013, the Danish state auditing
agency, Rigsrevisionen, concluded that the Danish forces received insufficient funds and equipment
to fulfil their Arctic tasks, including SAR and environmental protection (Wezeman, 2016). The
Danish Navy is advising cruise ships to sail in pairs in Greenland waters in order to have the
necessary capacity to house hundreds of people in the event of an emergency.
28. Russia is the source of both problems and opportunities for civil protection in the High North.
As noted, Russia has the most developed infrastructure in the region, due to both the economic8
and
the military significance that Moscow attaches to the Arctic. As part of a wider military modernization
program, Russia has engaged in a large-scale military build-up in the High North. In December 2014,
Moscow announced the creation of a North Unified Strategic Command based in Murmansk. Russia
also established or reopened six military facilities and deployed additional troops in the region. In
2017, President Vladimir Putin and Prime Minister Dmitri Medvedev visited the modern
14,000 m2
base in the Franz Josef archipelago, thus reaffirming Russia’s foothold in the Arctic.
Furthermore, the Russian Northern Fleet enhanced its capabilities and increased the number as well
as the scale of its exercises in Arctic waters.
8 According to the Council on Foreign Relations, 20% of Russia’s GDP, including 95% of its natural gas
and 75% of its oil, come from its Arctic region.
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29. Russia has an extensive network of urban centers and infrastructure along its vast Arctic coast
to harvest Arctic mineral resources and provide services to the NSR. In 2015, the Russian
government released its Integrated Development Plan for the Northern Sea Route 2015-2030. The
plan stresses the importance of providing safer and more reliable navigation on the NSR as well as
the strategic importance of the NSR for Russian national security. Russia has five SAR centers along
the NSR, manned by some 280 personnel, and the country is building another four (LeBlanc, 2018).
Military assets provide an additional SAR cover for the NSR.
30. However, Russia’s assets in the region are outdated and in critical condition. The country lacks
adequate backup infrastructure, such as repair docks, fueling stations, communication systems and
rescue hubs (Dushkova et al., 2017).
31. This brief overview of SAR capabilities in the High North suggests that these capabilities are
in short supply and unevenly distributed. Multilateral cooperation is therefore a vital precondition to
having adequate civil protection in the area.
C. MULTILATERAL COOPERATIVE FRAMEWORKS IN THE HIGH NORTH
32. Arctic governance is a patchwork of national laws, bilateral treaties and international
agreements. Apart from national regulations9
, the most relevant international conventions applied
in the Arctic include the 1974 International Convention for the Safety of Life at Sea (SOLAS), the
1979 International Convention on Maritime Search and Rescue (SAR Convention), the 1982 United
Nations Convention on the Law of the Sea (UNCLOS)10
and the 2014 International Code for Ships
Operating in Polar Waters (Polar Code).
33. The Polar Code, which came into effect on 1 January 2017, is a major advance in providing
guidelines for Arctic shipping. It establishes safety requirements for ships navigating Arctic waters
and advances environmental protection by banning all discharge of waste. The Code is mandatory,
but its enforcement depends on the member states and it is mute on penalties for noncompliance.
Discussions about whether and how to extend the Polar Code are underway at the International
Maritime Organization.
34. In terms of regional cooperation, the Arctic Council stands out as the key organization
that involves the governments of Canada, Denmark (through Greenland), Finland, Iceland, Norway,
Russia, Sweden, the United States as well as six representatives of indigenous populations. Several
countries are recognized as observers, including NATO members France, Germany, Italy, the
Netherlands, Poland, Spain and the United Kingdom. Founded in 1996, the Arctic Council has
evolved into a regional organization that provides joint analysis on Arctic issues, including SAR, and
facilitates legally binding intergovernmental agreements. In 2013, the Arctic Council’s first permanent
secretariat was set up in Tromso, Norway. Recognizing the Arctic’s global relevance, observer status
was extended to countries as far away as China and India. Government officials of the member
states meet twice a year, while ministerial summits are held every two years. In May 2018, the
Arctic Council launched a best practice web portal, designed to raise awareness of the provisions of
the Polar Code and to facilitate the exchange of information and best practices among all those
involved in or potentially affected by Arctic marine operations.
35. Pan-regional cooperation on SAR was not possible until after the end of the Cold War, when,
in 1993, Russia, the United States and Canada held the first Arctic Search and Rescue Exercise
(SAREX) in Siberia to improve SAR interoperability between these countries. Since then, SAREX
9 Unlike its polar counterpart in the south, the Arctic is divided by the national jurisdictions of the eight
High North states, Canada, Denmark (Greenland), Finland, Iceland, Norway, Russia, Sweden and the
United States.
10 The United States is not an official party to UNCLOS but has engaged in the Arctic according to its
standards.
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and other bilateral and multilateral SAR exercises, such as the 2016 Arctic Chinook exercise, which
simulated a MRO from a 200-passenger cruise ship in Alaska, are held regularly.
36. The Arctic Council’s major achievement is the signing of the Agreement on Cooperation on
Aeronautical and Maritime Search and Rescue in the Arctic in 2011. Also known as the Arctic SAR
Agreement, it is the organization’s first legally binding document and obligates signatories to delimit
zones of responsibility for SAR11
. The eight nations agreed to set up an aeronautical and maritime
rescue coordination center (RCC) under one command and to bear the costs of SAR capabilities in
their area of responsibility. The agreement encourages all parties to cooperate by sharing
information and infrastructure and participating in joint exercises and research initiatives, as well as
through regular scheduling of reciprocal visits by SAR experts. Notably, the Agreement allows
non-Arctic states to be included in the conduct of SAR operations. In 2011, Canada hosted the first
SAR tabletop exercise in the framework of this Agreement.
37. While it may be too early to assess the effectiveness of the Arctic SAR Agreement, some
experts note that the delimitation of zones of national responsibility is not a silver bullet. The lesson
learned from the 2013 SAREX exercise is that any mass rescue operation would necessarily be
international, as no one nation has enough resources to conduct such an operation alone (House of
Lords, 2015).
38. In addition to the Arctic SAR Agreement, the Arctic Council’s second major accomplishment is
the 2013 Agreement on Marine Oil Pollution Preparedness and Response in the Arctic (MOSPA).
The agreement commits signatories to monitor for oil spills within their national jurisdictions, have
appropriate equipment and contingency plans to respond to spills in a timely and effective manner,
notify all affected parties in case of a transboundary oil spill and provide mutual assistance if an
incident exceeds a signatory’s capacities. Since the Agreement came into force in 2013, three joint
exercises have been conducted under MOSPA.
11 It is important to note that, according to the Agreement, “the delimitation of search and rescue regions
is not related to and shall not prejudice the delimitation of any boundary between states or their
sovereignty, sovereign rights or jurisdiction.”
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39. Norway experienced devastating oil rig accidents in 1977 and 198012
, and hence revisited its
policies to emphasize safety and environmental standards and to shift to a risk-based, proactive
regime with working legal requirements. Russia, on the other hand, is seen by its Arctic neighbors
as the most expansive actor in offshore oil and gas production and as the one with the least
regulatory clarity. An oil spill in the Arctic would be particularly damaging given the fragility of the
region’s ecosystem. Therefore, as Canadian scholar Michael Byers put it, “more cooperation is
needed, and quickly, on regional standards for oil spill prevention” (Bouffard, 2017).
40. Other relevant regional frameworks include:
1) The Arctic Council’s working group on Emergency Prevention, Preparedness and
Response (EPPR). The EPPR identifies gaps, collects information, develops strategies
and facilitates coordination among national emergency preparedness authorities. Since
2015 the group’s mandate explicitly includes SAR issues.
2) The Arctic Coast Guard Forum, which was established in 2015. This forum is held
twice a year to foster multilateral cooperation in maritime SAR. Although officially
independent from the Arctic Council, it brings together coast guard officers from the
Arctic Council member states. Designed to coordinate the pooling of information and
resources and the sharing of best practices, the forum held its first joint SAR exercise in
Iceland in September 2017.
3) SAR issues are also discussed in regular meetings of defense officials in the framework
of the Arctic Security Forces Roundtable. Russia has not attended these meetings
since its relations with the West soured in 2014. Russia’s involvement in the activities of
the Arctic Council remains unaffected, however.
4) Cooperation in the Barents Sea is promoted by the Barents Euro-Arctic Council -
composed of Denmark, Finland, Iceland, Norway, Russia, Sweden and the European
Commission. One of its working groups deals with SAR issues. The group has developed
an operational tool, the Barents Joint Rescue Manual, and organizes regular joint
Barents Rescue exercises.
5) In 2011, Canada, Norway and Russia installed a common regional broadcast system for
navigational and meteorological warnings.
41. While four out of five Arctic littoral states and five out of eight Arctic Council members are
NATO Allies, NATO’s involvement in the Arctic, including in the SAR domain, is limited and ad hoc.
In 1996, in the framework of the Partnership for Peace Programme, NATO sponsored a SAREX
exercise involving military units from Russia, Canada and the United States that focused on common
SAR procedures and the delivery of humanitarian assistance (Steinicke & Albrecht, 2012). NATO’s
regular Cold Response exercises focus on improving warfighting skills in Arctic conditions, yet the
exercises also involve the local populations and civil authorities, including environmental officers.
NATO’s Allied Command Transformation also conducts science and technology investigations in the
region using unmanned underwater vehicles and a research vessel to study the predictability of
ocean and acoustic environments. As noted, NATO conducts annual Dynamic Mercy exercises in
regions adjacent to the High North, the Atlantic Ocean and the Baltic Sea.
42. NATO currently has no official mandate or presence in the Arctic and views within NATO differ
on whether there should be explicit Arctic involvement. For years, the overt involvement of NATO in
the Arctic has not been a preferred option for some Allies. Canada, for example, has often
characterized the Arctic as a zone of cooperation – not confrontation. While Canada’s new defense
policy “Strong, Secure, Engaged” suggests that Canada will “[c]onduct joint exercises with Arctic
allies and partners and support the strengthening of situational awareness and information sharing
in the Arctic, including with NATO”, its position continues to prioritize peaceful and cooperative
approaches to Arctic concerns over militarization.
12 The 1980 incident resulted in the deaths of 123 out of the 212 people who were present on the collapsed
rig.
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43. At the 2017 Halifax International Security Forum, NATO Secretary General Jens Stoltenberg
presented the Alliance’s plans to create an Atlantic Command covering the Arctic, an initiative
broadly supported by Allies, including the five High North NATO members. In June 2018, Allied
defense ministers agreed to establish the Atlantic Joint Force Command (JFC) to be hosted by the
United States in Norfolk, Virginia. The new Command will ensure that NATO can successfully
conduct operations in the northern Atlantic.
III. ADDRESSING THE HUMANITARIAN CRISIS IN THE MEDITERRANEAN
A. THE MEDITERRANEAN: THE WORLD’S MOST LETHAL SEA ROUTE FOR
MIGRANTS AND REFUGEES
44. Unlike the Arctic, the Mediterranean Sea is one of the world centers of maritime activity. The
high level of marine traffic naturally entails the risk of accidents that require SAR operations. Most
vulnerable are the refugees and migrants who embark on perilous sea journeys in search of a better
and safer life in Europe. While migratory flows across the Mediterranean are not new, they have
gained particular momentum in the past five years, triggered by the outbreak or deterioration of
conflicts on Europe’s southern flank.
45. In 2015, Europe experienced the largest influx of refugees and migrants since World War II,
with more than 1 million arrivals via the Mediterranean, resulting in a humanitarian and political crisis.
While the number of sea arrivals has significantly decreased since then, the Mediterranean remains
the deadliest migratory sea route in the world. For 2017, the United Nations High Commissioner for
Refugees (UNHCR) counted 172,301 migrant arrivals in Europe by sea and another 3,139 that died
or disappeared before reaching the shore. According to the International Organization for Migration
(IOM), crossing the Mediterranean has claimed about 15,000 lives since October 2013 when the
crisis first made headlines. These figures are shockingly high, and, in all likelihood, the total number
of actual arrivals and fatalities is much higher.
46. Irregular migration via the Mediterranean takes place along three main routes: the Eastern
Mediterranean route from Turkey to Greece; the Central Mediterranean route from Libya to Italy; and
the Western Mediterranean route, mainly from Morocco to Spain. The routes vary significantly in
terms of the number of sea crossings and the composition of nationalities among sea arrivals, as
well as in length and lethality.
47. At the outset of the crisis, most arrivals from conflict-ridden countries in the Middle East came
via the Eastern Mediterranean route. About 885,000 of the roughly 1 million sea arrivals to the EU
in 2015 were registered on Greek islands. In terms of country of origin, the largest group was Syrians,
followed by Afghans and Somalis. Although the journey is relatively short, with some Greek islands
situated just a few kilometers off the Turkish coast, at least 804 migrants lost their lives along the
Eastern Mediterranean route that year (IOM, 2018).
48. The 2016 EU-Turkey Agreement has caused the surge in sea crossings along the Eastern
Mediterranean route to ebb as abruptly as it had started. According to the Agreement, Turkey would
stem the flow of migrants embarking towards Greek islands, while the EU would accelerate the visa
liberalization process for Turkish citizens and mobilize funding to support Turkey’s hosting of about
3 million Syrian refugees. Moreover, the Agreement allows for all undocumented migrants arriving
in Greece to be deported back to Turkey. For each Syrian being returned to Turkey, another Syrian
would be resettled from Turkey to the EU. In the two years since the Agreement became operational,
irregular migration via the Eastern Mediterranean has dropped by 97%. In 2017, Greek authorities
registered 42,319 undocumented sea arrivals and 62 deaths at sea. However, there has been an
increase of sea arrivals from Turkey to Greece since the beginning of 2018.
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49. Turkey has shown great generosity in hosting more than three million refugees from Syria and
elsewhere. However, while the Agreement has been praised for reducing both irregular migration
and the number of deaths in the Eastern Mediterranean, it has also engendered criticism, largely for
potentially infringing on human rights and refugee law. In most cases, undocumented migrants have
successfully appealed the decision to be returned to Turkey by arguing that Turkey is not a safe
country. As of 12 March 2018, a total of 12,489 refugees registered in Turkey were resettled in the
EU, but only 2,264 migrants were returned to Turkey.
50. With the enactment of the EU-Turkey Agreement, the Central Mediterranean has become the
main entry point for undocumented migrants arriving in Europe by sea. Stemming irregular migration
from Libya has always been challenging. While Morocco, Tunisia and Algeria adopted legislation
criminalizing the exit of undocumented migrants or the facilitation thereof, Libya did not follow suit
(Fargues, 2017). With the collapse of the regime in 2011, Libya became a major transit hub for
cross-Mediterranean migration. Libyans as well as migrants from across North Africa, the Sahel and
sub-Saharan Africa continue to embark on perilous sea journeys to Europe, taking advantage of the
porous borders and the weak points in state authority.
51. The Central Mediterranean route is also the most dangerous as the distance from North Africa
to Italy is significantly longer than that of the Eastern Mediterranean route. In 2016, the number of
sea arrivals in Italy peaked at 181,436, while 4,578 migrants lost their lives on this route. Despite a
significant reduction of departures from Libya over the past year, the figures for 2017 remained high
with 119,369 arrivals in Italy and 2,873 deaths at sea. On 29 June 2018, at least 100 people died
after a boat carrying roughly 123 refugees and migrants sank off the coast of Libya.
52. Some observers argue the EU-Turkey Agreement caused a migratory shift from the Eastern
Mediterranean to a longer and more perilous route. While departures from Libya indeed increased
in spring 2016, the composition of nationalities shows that the migrants arriving in Europe via the
Central Mediterranean route are not those who are stopped in Turkey (Fargues, 2017). Even after
the route from Turkey to Greece was barred, the vast majority of sea arrivals in Italy still came from
sub-Saharan Africa (UNHCR, 2017).
53. Regarding the Western Mediterranean, traversing the Strait of Gibraltar is the shortest
possible way to cross the sea. However, cooperation between Morocco and Spain has kept the
number of arrivals relatively low. Migratory flows temporarily shifted to the Atlantic, where migrants
embarked on long and extremely dangerous sea journeys from Mauritania or Senegal to the Canary
Islands. Recently, irregular migration along the Western and Atlantic routes substantially rose again:
sea arrivals in Spain more than doubled compared to 2016, with 28,349 arrivals by sea (European
Commission, 2018). The similar composition of nationalities among arrivals in Italy and Spain
suggests that efforts to stem irregular migration in the Central Mediterranean shifted migratory flows
to the West.
B. SAR CAPABILITIES IN THE MEDITERRANEAN
54. Until recently, SAR operations in the Mediterranean were conducted on an ad hoc basis,
mainly by merchant vessels and coast guards of the Mediterranean littoral states. However, the
alarming increase in fatal sea crossings in recent years spurred the gradual formation of a proactive
emergency response system in the region, particularly along the dangerous Central Mediterranean
route. Today, various actors are involved in the region, including the EU, NATO, NGOs, individual
states and merchant vessels, but often with very different approaches and geographical areas of
operation. As international law obliges all shipmasters to render assistance to any person in distress
at sea, all these actors engage in rescue operations to some extent, even though they might not
operate under a primarily humanitarian mandate that focuses on SAR.
55. The wreckage of a migrant boat off the coast of Lampedusa on 3 October 2013, which left
366 people dead or missing, prompted a fundamental change in the region’s emergency response
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system. Within two weeks of the incident, the Italian government launched Mare Nostrum, a major
rescue and border control operation under the authority of the Italian Navy. With a considerable
budget of USD 12 million a month, Mare Nostrum saw the deployment of both sea and air assets
along the Sicily Channel between Italy and Libya. Before the operation was discontinued a year later,
it saved the lives of about 150,000 people in over 400 SAR operations. High operational costs and
dwindling public support, however, led to its end on 31 October 2014.
56. To replace Mare Nostrum, the EU’s Border and Coast Guard Agency (Frontex) launched
Operation Triton in November 2014, thereby answering calls from Italy to share the burden.
Operation Triton ran in parallel to Operation Poseidon, a similar Frontex-led operation in the Aegean
Sea that started to operate in 2011. Responding to the surge of irregular migration via the
Mediterranean and several large-scale accidents, the EU tripled the resources and assets for
Poseidon and Triton in 2015. At the same time, Triton also expanded its operational area from 30 to
138 nautical miles south of Sicily. Although the mandates of both operations were focused on border
control and surveillance, the participating vessels took part in numerous SAR operations that
assisted migrants in distress.
57. On 1 February 2018, Frontex replaced Operation Triton with Operation Themis, again
responding to Italian demands for fairer burden sharing. While Triton required those rescued to be
taken to Italy, Themis leaves this decision to the country coordinating the rescue. However, as Italy’s
Maritime Rescue Coordination Center in Rome continues to coordinate the overwhelming majority
of SAR operations in the Central Mediterranean, the changes under Themis serve primarily as a
political message from Italy to its Mediterranean neighbors that the country is assuming a more
assertive stance on addressing irregular migration (Deutsche Welle, 2018).
58. When addressing the NATO PA Committee on the Civil Dimension of Security at the Spring
session in Warsaw in May 2018, Fabrice Leggeri, Executive Director of Frontex, noted that the
agency is primarily a law enforcement body, but that it also has other responsibilities, such as risk
analysis, capacity-building assistance and SAR. He said that Frontex had assisted with the rescue
of more than 34,000 people in 2017 alone and helped save more than 280,000 lives in total since
2015. He noted that the agency has access to satellite images from the European Satellite Centre
(SatCen) and regularly exchanges information with other multinational bodies, including Europol and
NATO’s Allied Maritime Command (MARCOM). He further noted that Frontex has developed a rapid
reaction mechanism: if a member state requests support in a crisis situation, Frontex can deploy a
rapid reaction force within five days – a capability each member state must contribute to by law.
Mr Leggeri also informed the Committee that Frontex is in the process of developing autonomous
aerial capabilities, which will allow the agency to engage in SAR without deploying vessels.
59. Further incidents prompted the EU to launch the EUNAVFOR MED, also known as Operation
Sophia, in 2015. While the operation’s initial mandate was limited to identifying, capturing and
disposing of vessels and enabling assets used for migrant smuggling and trafficking, it has
significantly evolved since then. Legal as well as political obstacles prevented the full implementation
of the planned mandate, which provided for the eventual expansion of anti-smuggling operations to
Libyan territorial waters. However, neither of the groups claiming to be Libya’s government granted
the EU permission to enter Libyan waters, nor did the UN Security Council (Tardy, 2017). A
2016 amendment to the operation’s mandate added capacity building and training of the Libyan Navy
and Coast Guard to its tasks. The mandate was amended again in 2017 to include surveillance
activities on illegal trafficking, with the information gathered in this context to be released to
competent Libyan authorities. Meanwhile, confined to international waters, Operation Sophia’s sea
and air assets participate in SAR missions when needed. To date, they have been involved in the
rescue of more than 40,000 people.
60. EU member states are working bilaterally and multilaterally to stem human smuggling and
trafficking in source and transit countries, including Libya, despite the difficulties of operating in such
a volatile environment. As part of Operation Sophia, the EU trained and monitored about 200 Libyan
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Navy and Coast Guard personnel in 2017, and it is planning to train an additional 90 in 2018. With
the overall objective of increasing security in Libya’s territorial waters, these programs aim to
enhance the capacity to conduct SAR activities as well as to disrupt smuggling and trafficking from
and to the Libyan shores. Supported with EU funding, Italy is also planning to set up a maritime
rescue center in Tripoli in 2018 (Tardy, 2017). While certain aspects of EU and Italian cooperation
with Libya remain a concern from the perspective of human rights NGOs, a reduction in the levels of
migrant smuggling has been achieved. According to the International Organization for Migration,
the Libyan Coast Guard rescued over 20,300 migrants in 2017. Further efforts to disrupt smuggling
networks and trafficking should center on providing support and protection to migrants, refugees,
and internally displaced persons in Libya.
61. NATO’s Operation Sea Guardian actively supports the EU’s efforts to enhance maritime
security in the Mediterranean by providing Operation Sophia with information and logistics support.
Launched in October 2016, Sea Guardian operates under NATO’s MARCOM and covers a wide
array of duties, with maritime situational awareness, counterterrorism and regional capacity building
at its core. Since February 2016, NATO ships and aircraft have also assisted EU authorities in
stemming illegal trafficking and migration in the Aegean Sea by conducting reconnaissance,
monitoring and surveillance activities and sharing any relevant information gathered in this context
with Frontex and the Greek and Turkish Coast Guards. Although NATO’s operations and assistance
missions in the Mediterranean generally do not focus on SAR, like all ships, they have the duty to
help when made aware of people needing rescue nearby.
62. Since 2014, a growing number of NGOs conducting SAR operations in the Central
Mediterranean have worked to develop a proactive emergency response system. The first NGO to
actively pursue rescue operations was the Malta-based Migrant Offshore Aid Station (MOAS). It was
later joined by other organizations from across Europe, most notably Médecins Sans Frontières
(MSF), Sea-Watch, SOS Mediterranée, Proactiva, Sea-Eye, Jugend Rettet, and Save the Children.
Some of these NGOs have large surface vessels, allowing them to carry out entire SAR operations –
from picking up people in distress to disembarking them at a safe port. Organizations with smaller
capabilities focus on providing emergency medical care, life jackets and water while waiting for larger
vessels to arrive.
63. These NGO SAR activities in the Central Mediterranean have spurred tension among the
different actors involved. Italian authorities have accused NGOs of colluding with smuggling and
trafficking networks. In July 2017, the Italian Ministry of Interior, in consultation with the
EU Commission, drafted a “Code of Conduct for NGOs Undertaking Activities in Migrants’ Rescue
Operations at Sea”. Among other things, the code clearly prohibits NGOs from entering Libyan
waters or transferring those rescued to other vessels, and it obliges NGOs to allow Italian law
enforcement personnel on board their vessels. Some NGOs initially refused to sign the code, arguing
it violates international maritime law and reduces rescue capacity. However, Italian authorities made
clear that any failure to subscribe to the code would come at a high cost. The NGOs Jugend Rettet
and Proactiva, for instance, had their vessels confiscated by Italian authorities and are now under
investigation for abetting irregular immigration. Except for MSF, all major NGOs involved in SAR in
the Mediterranean eventually agreed to sign the code after negotiations with and concessions from
the Italian Ministry of Interior.
64. Libyan authorities have also accused some NGOs of operating too close to the Libyan coast,
thereby violating the country’s sovereignty. In August 2017, the Libyan Navy and Coast Guard
started to reassert their authority over the country’s SAR zone, restricting the access of NGO vessels
to Libyan territorial waters as well as international waters off the Libyan coast. Confronted with a
simultaneous clampdown by the Italian and Libyan authorities, most NGOs have suspended their
rescue operations.
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65. Merchant ships have also been involved in SAR operations on an ad hoc basis. At the height
of the migrant and refugee crisis, merchant shipping was at the forefront of mitigating the loss of life
in the Mediterranean. In 2015, the International Chamber of Shipping (ICS) called on EU member
states to launch a proper SAR mission to ease the strain on commercial ship operators. The
development of the proactive SAR system outlined above resulted in a significant decline in rescues
by merchant vessels. However, commercial ships continue to regularly assist SAR operations when
called upon by a Rescue Coordination Center. The ICS has expressed concern that many of the
seafarers involved are not trained to conduct large-scale rescue operations and sometimes suffer
psychological harm from these experiences.
66. The growing number and complexity of actors involved in managing migratory flows in the
Mediterranean have prompted the EU to establish certain coordination mechanisms. Under the
auspices of Operation Sophia, SHADE MED (Shared Awareness and De-confliction in the
Mediterranean) has been established as a forum aimed at fostering dialog and easing tensions
between different actors involved in maritime security operations in the Mediterranean. SHADE MED
was held for the fifth time in November 2017, attracting 156 participants from 94 organizations,
including NATO as well as relevant NGOs.
67. Under mounting pressure from the Italian government to take “concrete steps” towards better
burden sharing, EU leaders agreed – during the last European Council in June 2018 – on a new
migration deal. They agreed to adopt a "comprehensive approach to migration that combines more
effective control of the EU's external borders, increased external action and the internal aspects, in
line with our principles and values". EU leaders decided to create “controlled centers” – i.e. secured
refugee camps funded and managed by the EU on EU territory. These centers will aim to provide
“rapid and secure processing allowing to distinguish between irregular migrants, who will be
returned, and those in need of international protection, for whom the principle of solidarity would
apply”. However, member states are free to choose if they want such centers to be set up on their
territory. In addition, member states agreed to strengthen EU external border controls by allocating
more funds for Frontex and some Mediterranean countries. In line with this, they agreed to launch
the next tranche of the Facility for Refugees in Turkey and to allocate an additional EUR 500 million
for Africa.
68. The Council also announced plans to establish “regional disembarkation platforms” in
third-party countries, most likely in North African countries, to process the asylum applications of
people rescued at sea outside the EU. The idea is to separate economic migrants and refugees
before they embark on a journey to Europe in order to reduce the number of people trying to reach
the EU. The agreement provides for a collaboration with the IOM and the UNHCR on this question,
but without further details. The deal also plans to boost EU support for the Libyan Coast Guard.
69. Member state leaders appeared mainly satisfied with this migration deal. “Italy is not alone
anymore”, claimed Prime Minister Giuseppe Conte. The agreement was also praised by British,
German and French leaders as a "European solution" to what is currently, according to
Chancellor Merkel, “perhaps the most challenging topic for the European Union”. In contrast, some
leaders, such as Austrian Prime Minister Sebastian Kurz, adopted a more cautious posture, while
the prime ministers of the Czech Republic and Slovakia criticized the decision to strengthen Frontex
rather than providing more support for member states’ border guards. The agreement has also been
criticized for its vagueness in terms of its actual implementation.
70. The migration deal has also been criticized by some human rights NGOs, such as Human
Rights Watch, who claim that the reinforcement of border controls will only encourage smuggling
while pushing people fleeing violence and determined to reach Europe to take more perilous routes.
They also claim that the creation of “controlled centers” contravenes Europe's founding principle of
solidarity and its duty to observe human rights, especially in regard to migrants’ and refugees’ rights
to liberty. Furthermore, the externalization of the asylum policy appears as a way to push this
responsibility onto other actors, outside Europe. The problem is that these actors often fall short of
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meeting international human rights standards in many ways. The Rapporteur is convinced that, while
implementing the deal, the EU must insist on a radical improvement of conditions and the protection
of human rights in existing facilities on the other side of the Mediterranean.
C. AUGMENTED SAR CAPABILITIES – LIFESAVING OR COUNTERPRODUCTIVE?
71. To a much greater degree than in the Arctic, SAR in the Mediterranean is heavily politicized
due to its linkage with the refugee and migration crisis. There is a debate on whether SAR operations
encourage more and riskier sea crossings. Some stakeholders, including some EU authorities, argue
that augmented SAR capabilities only create the impression of a safer route and help smuggling
networks and traffickers achieve their aims at lower costs. These arguments have had tangible
effects, causing some member states to withdraw from missions that involve SAR activities. The
United Kingdom, for example, had initially refused to participate in Frontex-led operations in the
Mediterranean, arguing “they create an unintended 'pull factor', encouraging more migrants to
attempt the dangerous sea crossing and thereby leading to more tragic and unnecessary deaths”
(Benton, 2014). Currently, however, two British Border Force cutters are deployed in support of
Frontex operations Themis and Poseidon. Other actors, including NGOs, argue that migratory
drivers are more complex and advocate for a humanitarian approach that focuses on saving the lives
of those in immediate distress regardless of the consequences (see e.g. MSF, 2017). During his
presentation to the CDS, Mr Leggeri, director of Frontex, stressed that while the agency has a duty
to rescue anyone in distress at sea, one must not encourage criminal networks seeking to exploit
SAR capabilities.
72. Several studies have examined the relationship between attempted sea crossings and rescue
activities along the most frequented Central Mediterranean route (e.g. Heller & Pezzani, 2017;
Steinhilper & Gruijters, 2017). In general, comparative analyses of trends in sea crossings during
periods with low and high numbers of proactive SAR activities do not support the claim that rescue
activities encourage more sea crossings. For instance, Italian authorities reported slightly less sea
arrivals from November 2015 to May 2016, when a significant number of state and non-state actors
actively pursued rescue operations along the Central Mediterranean route, compared to the same
period the year before, when Frontex’s Operation Triton was the only proactive SAR mission and
had not even been expanded yet (Steinhilper & Gruijters, 2017). In other words, a similar number of
people attempted to cross the Central Mediterranean irrespective of the extent of SAR capabilities
along the route. While these analyses only demonstrate statistical correlations (or better, the lack
thereof), they strongly suggest that augmented SAR capabilities have little effect on the number of
attempted sea crossings.
73. Smugglers’ tactics and operations locations have shifted in recent years, leading to riskier
crossings in the Central Mediterranean. Namely, since late 2015, smugglers have tended to stay
within Libyan waters, using fishing boats or rubber dinghies rather than sailing vessels (which were
the preferred means of transportation prior to 2015), with less fuel, water and food on board
(European Commission, 2017; MSF, 2017). There are two potential explanations for these changes.
Riskier smuggling practices may reflect the expectation that migrants, once they are on the high sea,
will be picked up and transported to Europe as part of rescue operations. It is also possible that
smugglers prefer to stay in Libyan waters in reaction to the deployment of EU Operation Sophia and
Frontex forces, whose presence means smugglers can no longer navigate with impunity in
international waters (Heller & Pezzani, 2017).
D. POST-RESCUE CONDITIONS
74. Migrant flows have put strain on refugee camps in Greece and Italy as well as on detention
centers in Libya. The EU has instituted several “hotspots” in Greece and Italy to speed up the
registering, identifying, and debriefing of asylum seekers. However, each hotspot currently exceeds
its capacity by at least 2,000 people and camp infrastructure is under strain as a direct consequence
of this overpopulation. Poor conditions – such as lack of sanitation, the spread of disease, and lack
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of safety for children and women – have been noted by several international organizations working
within the camps (UNHCR, 2018).
75. In addition, migrants frequently feel unable to navigate an asylum system that is still slow and
overloaded by too many applicants. The ambitious EU plan to relocate refugees and asylum seekers
from Italian and Greek camps to other EU countries – should the applicants meet certain conditions –
has only relocated around 33,000 people instead of the 100,000 originally planned. Germany took a
third of those migrants. However, even Germany’s program recently ended, leaving thousands of
migrants stranded in camps with deteriorating conditions.
76. The situation is dire in Libya, where regulations for camps or the detention of undocumented
migrants are far weaker than EU regulations. Serious human rights violations in migrant camps and
detention centers have been reported by international NGOs. For example, there have been reports
that detention center guards have sold people into slavery (BBC News, 2018). The Office of the UN
High Commissioner for Human Rights (OHCHR) expressed dismay at the EU’s decision to assist
the Libyan Coast Guard in catching undocumented migrants as Libya has proven incapable of
guaranteeing humane conditions for these migrants. The EU has stated that, while it is working with
the Libyan government to intercept boats and put in place search and rescue operations, it does so
with the understanding that centers in Libya comply with international humanitarian standards.
77. While conditions in camps or detention centers are challenging for all migrants, observers
consider women and children to be the most vulnerable. Children, in particular those travelling
unaccompanied, require more assistance from host countries, as they are at increased risk of assault
or abuse. Similarly, women and girl refugees and migrants experience various forms of
gender-based violence. For example, they are vulnerable to abuse – sometimes from coast guard
personnel, host country authorities or men in their camps – as well as trafficking and sexual
exploitation (Fry, 2016; Shreeves, 2016).
78. The refugee and migration crisis shows that the Dublin Regulation, which determines which
EU member state should be responsible for examining an application for asylum, requires a serious
overhaul. The regulation’s provision that asylum applications be processed by the country that first
allowed entry has placed a substantial burden on Europe’s southern nations. Italy and Greece
especially have struggled to provide for their asylum seekers. This situation has led some member
states to suspend the enforcement of the Dublin Regulation. For instance, the German government
has periodically refrained from sending asylum seekers back to Greece and Hungary and has
de facto suspended the regulation for Syrian applicants.
79. The European Commission has proposed amendments that the European Parliament has
approved, along with some amendments of its own. Key reforms include a shared responsibility of
all EU countries towards asylum seekers, so that if a country’s capacity to accommodate
asylum seekers is significantly overwhelmed, applications to that country will be re-directed to other
member states. The reform proposal has been criticized – albeit for different reasons – by several
EU states, including Germany, the Czech Republic and Hungary. Without the member states’
agreement, it will be difficult for the European Parliament to push forward the proposed amendments.
IV. CONCLUSIONS
80. In the current strategic environment, characterized by blurring lines between war and peace,
cooperation is needed between the military, civilian and non-governmental sectors to protect
populations from old and new threats. While NATO has provided civil protection for over 60 years,
this role is becoming increasingly important for the Alliance as it embraces a more comprehensive
approach to security. NATO has developed several niche areas of expertise – including border
security, surveillance, early warning, disaster relief and submarine SAR – that could significantly
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contribute to the global response to humanitarian crises. NATO’s contribution in this area does not
only help save lives, it also enhances the Alliance’s global standing and bolsters its raison d'être.
81. NATO and its members should provide an adequate response to new challenges to civilians
which are arising on the Alliance’s southern and northern borders. Given that NATO’s core mandate
is collective defense and that its capabilities are limited, NATO’s non-military involvement in the High
North and the Mediterranean will remain complementary to the efforts of other actors. However,
there are certain areas where the contribution of NATO and its members could be enhanced and
expanded.
82. Namely, when it comes to the High North, the Rapporteur would suggest:
• Ensuring that the Alliance’s reformed command structure has the capacity to monitor
and assess naval activities and contribute to improving situational awareness in the
Arctic;
• Contributing to the interoperability of SAR units in the region by holding exercises such
as Dynamic Mercy in Arctic conditions;
• Offering support to the Arctic Allies in developing adequate SAR assets, including
satellite coverage and communications technologies, as well as surveillance and delivery
drones in remote Arctic regions;
• Welcoming initiatives to establish jointly-owned bi- or multi-national SAR bases in remote
areas, where participating nations would provide SAR capabilities on a rotational basis;
• Encouraging dialogue among all High North nations to clarify the role of militaries in
providing disaster relief and SAR, particularly in multilateral operations;
• Urging all Allies to ensure the full and rigorous implementation of the Polar Code and
requesting the development of even higher international safety and environmental
standards; and
• Promoting best practices, including the requirement for ships to travel in pairs when
traversing remote areas.
In addition, the Euro-Atlantic community should continue to lead global efforts to reduce greenhouse
emissions. The implementation of the Paris Agreement is paramount in order to stabilize the impacts
of climate change on the Arctic.
83. Regarding the Mediterranean, the Rapporteur emphasizes:
• NATO should continue providing logistical and information support to the EU, Frontex
and national coast guards through its operations in the Aegean Sea and through
Operation Sea Guardian, potentially expanding the coverage of NATO assets to the
Western Mediterranean and employing new NATO capabilities such as the Sicily-based
Global Hawk remotely-piloted aircraft (RPA) as part of the Alliance Ground Surveillance
(AGS) initiative;
• The Allies should strongly consider holding Dynamic Mercy-type exercises in the
Mediterranean;
• The coordination of various actors and operations in the region should be further
enhanced through SHADE MED;
• NATO should do more to assist North African states, and particularly Libya, in training
and otherwise assisting their coast guard, while demanding that the recipients of this
assistance comply with international standards for the treatment of refugees and
migrants and provide improved conditions to ensure their protection and well-being;
• The new European Border and Coast Guard Agency should receive sufficient funding,
as well as human and material resources, including surveillance drones; and
• The Allies should reform the Dublin Regulation to ensure fairer burden sharing and a
collective, rather than strictly national, approach to problems linked with migrant and
refugee surges.
165 CDSDG 18 E rev. 1 fin
18
BIBLIOGRAPHY
(For further information on sources, please contact the Committee Director)
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http://www.bbc.com/news/world-africa-42492687
Benton, Jon, “Parliament round-up: UK withdrawal from EU Mediterranean rescue operation”, 5
November 2014, https://www.theparliamentmagazine.eu/articles/special-report/parliament-
round-uk-withdrawal-eu-mediterranean-rescue-operation
Bouffard, T., Managing the Barents Sea: Comparing Norwegian & Russian Offshore Oil-Spill
Prevention Policies. Arctic Yearbook, 2017,
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Charron, A., Canada, the US, Russia and the Arctic – A Pragmatic look. Centre for Security,
Intelligence and Defence Studies, 24 March 2017, https://carleton.ca/csids/2017/canada-the-
us-russia-and-the-arctic-a-pragmatic-look/
CRS, “Changes in the Arctic: Background and Issues for Congress”, Congressional Research
Service, 4 January 2018, https://fas.org/sgp/crs/misc/R41153.pdf
Deutsche Welle, “Frontex launches new EU border control mission Operation Themis”,
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operation-themis/a-42417610
Dushkova, D., Krasovskaya, T., & Evseev, A., Environmental & Human Impact of the Northern Sea
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Yearbook, https://www.arcticyearbook.com/images/Articles_2017/scholarly-
articles/15_Environmental_&_Human_Impact.pdf
European Commission, “Irregular Migration via the Central Mediterranean. From Emergency
Responses to Systemic Solutions”, EPSC Strategic Notes, Issue 22, 2 February 2017,
https://ec.europa.eu/epsc/sites/epsc/files/strategic_note_issue_22_0.pdf
European Commission, “Progress report on the Implementation of the European Agenda on
Migration”, Communication from the Commission to the European Parliament, the European
Council and the Council, 14 March 2018, https://ec.europa.eu/neighbourhood-
enlargement/sites/near/files/com_2018_250_f1_communication_from_commission_to_inst_
en_v10_p1_969116.pdf
Fargues, Philippe, “Four Decades of Cross-Mediterranean Undocumented Migration to Europe.
A Review of the Evidence”, International Organization for Migration, 2017,
https://publications.iom.int/system/files/pdf/four_decades_of_cross_mediterranean.pdf
Fountain, Henry, “With More Ships in the Arctic, Fears of Disaster Rise”, The New York Times,
23 July 2017.
Fry, H., A Gender Sensitive Response to the Migrant and Refugee Influx in Europe is Needed, OSCE
PA, June 2016, https://www.oscepa.org/documents/all-documents/special-
representatives/gender-issues/report-17/3382-2016-annual-session-report-by-the-special-
representative-on-gender-issues/file
Geiselhart, Michel T., “The Course Forward for Arctic Governance”, Washington University Global
Studies Law Review, vol. 13, no. 1, 2014.
Headland, Robert K., “Transits of the Northwest Passage to End of the 2017 Navigation Season”,
Scott Polar Research Institute, University of Cambridge, 14 December 2017,
https://www.spri.cam.ac.uk/resources/infosheets/northwestpassage.pdf
Heller, Charles; Pezzani, Lorenzo, “Blaming the Rescuers”, Forensic Architecture agency,
Goldsmiths University of London, 2017, https://blamingtherescuers.org
House of Lords, Responding to a changing Arctic. Select Committee on the Arctic, 27 February 2015,
https://publications.parliament.uk/pa/ld201415/ldselect/ldarctic/118/118.pdf
Ikonen, Emmi, “Arctic Search and Rescue Capabilities Survey”, Finish Border Guard/Ministry of
Foreign Affairs of Finland, 2017,
https://www.raja.fi/download/73962_Arctic_Search_and_Rescue_Capabilities_Survey.pdf?8
61827138740d588
165 CDSDG 18 E rev. 1 fin
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IOM (International Organization for Migration), “Missing Migrants – Tracking Deaths Along Migratory
Routes: Mediterranean”, 2018, http://missingmigrants.iom.int/region/mediterranean
LeBlanc – Senate of Canada, Testimony of Pierre LeBlanc, President, Arctic Security Consultants.
Evidence to the Standing Senate Committee on Fisheries and Oceans. The Standing Senate
Committee on Fisheries and Oceans, 15 February 2018,
https://sencanada.ca/en/Content/SEN/Committee/421/pofo/53827-e
Melia, N., Haines, K., & Hawkins, E. (2017, July). Future of the Sea: Implications from Opening Arctic
Sea Routes. UK Government Office for Science:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/634437/Futur
e_of_the_sea_-_implications_from_opening_arctic_sea_routes_final.pdf
MSF (Médecins Sans Frontières), “Humanitarian NGOs conducting Search and Rescue Operations
at Sea: ‘A pull factor’?”, Issue Brief, August 2017,
http://searchandrescue.msf.org/assets/uploads/files/170831_Analysis_SAR_Issue_Brief_Fin
al.pdf
Smith, T., Search and Rescue in the Arctic: Is the U.S. Prepared?, 2017, Retrieved from RAND:
https://www.rand.org/pubs/rgs_dissertations/RGSD382.html
Shreeves, R., Gender aspects of migration and asylum in the EU: An overview. European
Parliament, 4 March 2016,
http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2016)579
072
Steinhilper, Elias; Gruijters, Rob, “Border Deaths in the Mediterranean: What We Can Learn from
the Latest Data”, Border Criminologies, 8 March 2017, https://www.law.ox.ac.uk/research-
subject-groups/centre-criminology/centreborder-criminologies/blog/2017/03/border-deaths
Steinicke, S., & Albrecht, S., Search and Rescue in the Arctic. SWP, December 2012,
https://www.swpberlin.org/fileadmin/contents/products/arbeitspapiere/WP_FG2_2012_Steini
cke_Albrecht.pdf
Sydnes, Are Kristoffer; Sydnes, Maria; Antonsen, Yngve, “International Cooperation on Search and
Rescue in the Arctic”, Arctic Review on Law and Politics, vol. 8, 2017.
Tardy, Thierry, “Operation Sophia’s world. Changes and Challenges”, EUISS Brief, November 2017,
https://www.iss.europa.eu/sites/default/files/EUISSFiles/Brief%2032%20Operation%20Sophi
a_0.pdf
The Economist, The Arctic as it is known today is almost certainly gone, The Economist, 29 April
2017, https://www.economist.com/news/leaders/21721379-current-trends-arctic-will-be-ice-
free-summer-2040-arctic-it-known-today
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Mediterranean and Western Balkans routes”, February 2017,
http://www.unhcr.org/58b449f54.pdf
UNHCR, “Refugee women and children face heightened risk of sexual violence amid tensions and
overcrowding at reception facilities on Greek islands”, 9 February 2018,
https://data2.unhcr.org/en/news/20607
Wezeman, S., Military capabilities in the Arctic: a new Cold War in the High North? SIPRI, October
2016, https://www.sipri.org/sites/default/files/Military-capabilities-in-the-Arctic.pdf
Zysk, Katarzyna; Titley, David, “Signals, Noise, and Swans in Today’s Arctic”, SAIS Review, vol. 35,
no. 1, 2015.
______________________
COMMITTEE
ON THE CIVIL DIMENSION OF
SECURITY (CDS)
COUNTERING RUSSIA’S
HYBRID THREATS:
AN UPDATE
Special Report
by Lord JOPLING (United Kingdom)
Special Rapporteur
166 CDS 18 E fin | Original: English | 1st October 2018
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................................................1
II. HYBRID TECHNIQUES IN THE KREMLIN’S PLAYBOOK ....................................................2
A. THE ORIGINS AND THE FRAMEWORK......................................................................2
B. POLITICAL INTERFERENCE.......................................................................................3
C. KINETIC OPERATIONS ...............................................................................................5
D. DISINFORMATION AND PROPAGANDA ....................................................................7
E. CYBER AND ELECTRONIC WARFARE ......................................................................8
F. OTHER TYPES OF HYBRID THREATS.......................................................................9
III. RESPONDING TO HYBRID THREATS............................................................................... 10
A. NATO ......................................................................................................................... 10
B. EUROPEAN UNION ................................................................................................... 12
C. NATIONAL LEVEL...................................................................................................... 12
D. MEDIA AND CIVIL SOCIETY ..................................................................................... 14
IV. CONCLUSIONS AND RECOMMENDATIONS .................................................................... 14
BIBLIOGRAPHY.................................................................................................................. 17
166 CDS 18 E fin
1
I. INTRODUCTION
1. Although it is not a new term, “hybrid warfare”1
became a buzzword in the international political
discourse following Russia’s invasion in Ukraine and its illegal annexation of Crimea in 2014. Hybrid
warfare can be defined as “the use of asymmetrical tactics to probe for and exploit weaknesses via
non-military means (such as political, informational, and economic intimidation and manipulation)
[that] are backed by the threat of conventional and unconventional military means”2
. In NATO’s
context, “hybrid warfare” entails a campaign against an Ally or the Alliance by means that are not
expected to trigger Article 5 of the Washington Treaty, which enshrines the principle of collective
defence.
2. The current security environment in Europe and North America is filled with hybrid activity. This
special report will focus specifically on the Kremlin’s use of hybrid tactics because Moscow’s hybrid
toolbox is arguably the most sophisticated, resourceful, comprehensive and concerted. It also
focuses on Russia because Russia’s 2014 military doctrine clearly identifies NATO as its primary
threat. Russia’s hybrid warfare primarily targets the Euro-Atlantic community and the countries in the
“grey zone” between NATO/EU and Russia.
3. Western experts agree that, while Russia is a declining power and greater challenges are likely
looming over the horizon, in the short-term, Russia poses the most serious threat to the international
order. In fact, Russia’s decline might be an incentive for the Russian president, Vladimir Putin, to
use available means to revise the post-Cold War settlement sooner rather than later (Foreign Affairs,
2017). Hybrid methods can give significant advantages to the “weaker side” (Saarelainen, 2017).
For example, they exploit the problem of attribution, wherein attacks can be difficult to trace back to
the government of a specific country. These tactics are also aided by globalisation. Power dynamics
are no longer based on just material means and increasingly focus on the ability to influence others’
beliefs, attitudes and expectations – an ability that has been boosted enormously by new technology
and the interconnectedness of the Information Age (Smith, 2017).
4. Moscow’s use of hybrid techniques is neither random nor spontaneous. It is a manifestation of
a well-thought out, well-funded and coordinated strategy. Recent findings of the US intelligence
agencies, which link two very different types of hybrid methods – interference in the US elections
and the use of Russian mercenaries in Syria – to the same pro-Kremlin oligarch,
Mr Yevgeny Prigozhin3
, are a case in point.
5. The awareness of Russia’s disruptive activities in the West has grown considerably since the
invasion in Georgia in 2008, and even more so since the illegal occupation and annexation of Crimea
in 2014. In her speech in November 2017, the British Prime Minister, Theresa May, directly accused
the Kremlin of trying to "undermine free societies" and "sow discord in the West" by mounting a
sustained campaign of cyber espionage and disruption on governments and Parliaments across
Europe. In a rare joint statement issued on 15 March 2018, leaders of the United Kingdom, France,
Germany and the United States condemned the Salisbury chemical weapon attack as an assault on
British sovereignty, “highly likely” committed by Russia. In August 2018, the United States introduced
new sanctions on Russia over the Salisbury attack that would prevent Russia from obtaining
sensitive electronic components and other dual-use technologies from the United States.
Twenty-eight NATO Allies and partners expelled over 150 Russian officials from their territories, in
1 The term “hybrid warfare” has been in use since at least 2005. It was subsequently used in reference to
the strategy used by the Hezbollah in the 2006 Lebanon War.
2 As defined in the 2015 NATO PA Defence and Security Committee General Report Hybrid Warfare:
NATO’s New Strategic Challenge? [166 DSC 15 E bis].
3 Mr Prigozhin, known as “Putin’s cook”, built his restaurant and catering empire largely owing to state
contracts and his proximity to President Putin. The New York Times writes that – according to
Mr Prigozhin’s critics, including opposition politicians, journalists and activists, as well as the United
States Treasury and the special counsel to the US Department of Justice, Robert S. Mueller III – Mr
Prigozhin is the Kremlin’s go-to oligarch for various covert missions.
166 CDS 18 E fin
2
a show of solidarity with the United Kingdom. NATO condemned the first use of a nerve agent on
NATO territory, and reduced the maximum size of the Russian Mission to NATO by a third, thus
sending a clear message to Russia that there are consequences for its unacceptable and dangerous
pattern of behaviour.
6. This report aims at further improving awareness of Russia’s hybrid activities, including political
interference, low-level use of force, espionage, crime and corruption, disinformation and
propaganda, cyberattacks, economic pressure and sanctions-busting, as well as showing how
several techniques reinforce and complement each other. The report will examine the
counter-measures adopted by the Euro-Atlantic community and offer thoughts on additional means
of response to enhance resilience and defend our populations against these complex threats.
II. HYBRID TECHNIQUES IN THE KREMLIN’S PLAYBOOK
A. THE ORIGINS AND THE FRAMEWORK
7. Moscow’s use of hybrid warfare dates back to the Soviet era when the concepts of “active
measures”4
, “maskirovka”5
and “reflexive control”6
were developed. Hybrid methods were revived in
Russia in the 2000s due to the renewed identification of the West as its strategic adversary,
exemplified by Mr Putin’s speech at the 2007 Munich Security Conference. Hybrid warfare was also
adopted in response to the stark disparity between Russian and Western conventional military and
technological capabilities and “soft power”, and as a response to advances in information and
communications technology, which have allowed for the emergence of new avenues for targeting
the societies and political systems of potential adversaries.
8. Moscow’s intention to use hybrid methods is articulated in several documents, the most recent
being the 2014 Military Doctrine, the 2015 National Security Strategy and the 2015 Information
Security Doctrine. These documents advocate the development of an effective means to influence
public opinion abroad and, where necessary, a Russian resort to “non-traditional” methods. In his
oft-cited article outlining the principles of hybrid warfare, Russia’s chief of general staff,
Valery Gerasimov, pointed out, inter alia, that "[t]he information space opens wide asymmetrical
possibilities for reducing the fighting potential of the enemy" (NATO StratCom, 2015). In February
2017, the Russian defence minister, Sergei Shoigu, publicly announced the creation of information
operations forces “for counter-propaganda purposes.” Russia also streamlined the decision-making
process in hybrid warfare by setting up the National Defence Management Centre (NTsUO) in 2014.
This body coordinates the activities of military structures, but also of security and civilian agencies
such as the Federal Security Service (FSB), the Federal Protective Service (FSO), the Foreign
Intelligence Service (SVR), the Ministry of Interior and the State Atomic Energy Corporation,
Rosatom. The NTsUO is seen to have “an incredibly expansive list of oversight, monitoring, and
decision-making functions for state defence.” According to Russia expert Roger McDermott, the
NTsUO represents a step “toward conducting more integrated security operations in the future.” The
body is designed to give Russia the edge over NATO in taking decisions in a shorter time-frame. At
the same time, other hybrid techniques in Russia’s arsenal are intended to sow discord among and
within NATO Allies in order to slow down NATO decision-making (Thornton, 2016).
4 Subversive political influence operations, ranging from media manipulation to targeting political
opponents.
5 Camouflaging military activities for the purpose of denial and deception. An example is the concealment
of offensive weapons transported to Cuba prior to the 1962 Cuban Crisis.
6 Feeding an opponent selected information to prompt him to make knee-jerk decisions that are
favourable to the Kremlin. Timothy L. Thomas, a prominent expert on Soviet “reflexive control”, provided
an example of how Soviet leaders paraded fake missiles and planted fake documents for Western
intelligence to conclude that Soviet nuclear power was more formidable than it actually was.
166 CDS 18 E fin
3
9. Moscow justifies its use of hybrid methods by portraying itself as a victim of the West’s
"information aggression." Sergei Naryshkin, Russia’s foreign intelligence service chief, accused the
United States and its allies, particularly the United Kingdom, Poland, the Baltic States and Sweden,
of waging a covert hybrid war against countries in the Commonwealth of Independent States (CIS).
Mr Naryshkin further accused the West of trying to drive a wedge between CIS countries and of
obstructing Eurasian integration. Mr Naryshkin also accused the West of interfering in the
“democratic processes” of sovereign members of the CIS (Belsat, 2017).
10. As prominent Russia expert Mark Galeotti puts it, the Kremlin’s focus on hybrid techniques
“reflects the parsimonious opportunism of a weak but ruthless Russia trying to play a great power
game without a great power’s resources” (Calabresi, 2017). In the following chapters, this report will
provide a brief overview of Russia’s hybrid techniques.
B. POLITICAL INTERFERENCE
11. While Moscow has long been suspected of interfering in the politics of its so-called “near
abroad”, there is mounting evidence of its efforts to influence political developments in established
Western democracies though a combination of cyberattacks, leaks of stolen data, the use of internet
bots7
and trolls8
, disinformation and support for fringe political parties9
. According to Estonia’s
Foreign Intelligence Service, Russia is cultivating a network of “influence agents” – politicians,
journalists, diplomats or business people who are pushing Russia’s agenda in Western Europe. The
Special Rapporteur wishes to list some of the facts and statements that, taken in their entirety,
suggest a deliberate policy by Moscow to meddle in recent elections and referenda in the West.
These interventions tend to back political parties, candidates or referendum proposals that oppose
the established system (Galeotti, 2017). The Rapporteur wishes to stress that Russian meddling in
no way implies that Moscow’s interference was the decisive factor in the outcome of the concerned
elections and referenda.
12. The most salient example of the Kremlin’s interference was its attempt to influence the
presidential election in the United States in 2016. In January 2017, the US intelligence community
published a report stating that: “[Mr] Putin and the Russian Government aspired to help
President-elect Trump’s election chances when possible by discrediting Secretary Clinton.” The
report also assessed “with high confidence that Russian military intelligence [released] US victim
data obtained in cyber operations publicly and in exclusive to media outlets and relayed material to
WikiLeaks.” The report also notes that “these activities demonstrated a significant escalation in the
directness, level of activity, and scope of effort compared to previous operations.” Department of
Homeland Security (DHS) officials admitted that the Russians targeted the voter registration rolls of
21 US states, managing to penetrate “an exceptionally small number of them.” The DHS was able
to determine that “the scanning and probing of voter registration databases was coming from the
Russian government’’ (McFadden, Arkin & Monahan, 2018).
13. Individuals associated with the Russian government stole and published thousands of emails
of US politicians and bought Facebook ads, while Russia-backed bots and trolls posted false stories
on social media and in the comments section of articles. During the presidential election, the
Russians ran over 3,000 adverts on Facebook and Instagram to promote 120 Facebook pages in a
campaign that reached 126 million US citizens (House of Commons, July 2018).
14. Senior Trump Administration officials, including the then-secretary of state, Rex Tillerson, and
the US ambassador to the UN, Nikki Haley, branded Russia's alleged meddling in the presidential
7 Software applications designed to generate messages (e.g. tweets) automatically.
8 People who post controversial, provocative, inflammatory or off-topic messages online.
9 The techniques used by the Kremlin to target Western electoral processes are explored in detail by the
NATO PA Science and Technology Committee’s 2018 report Russian Meddling in Elections and
Referenda in the Alliance [181 STC 18 E fin].
166 CDS 18 E fin
4
election an act of "hybrid warfare" and accused Russia of trying to “sow chaos” in elections across
the world.
15. The UK Parliament is investigating Russian interference in the Brexit vote. Damian Collins,
chair of the parliamentary Digital, Culture, Media, and Sport Committee, noted that the first batch of
data received from social media companies show that pro-Kremlin accounts were trying to “influence
political debate in the UK and also to incite hatred and turn communities against each other”, while
admitting that the evidence collected “could just be the tip of the iceberg” (Burgess, 2017). A report
by British company 89up.org found that the Kremlin state media, RT and Sputnik pumped out at
least 261 articles with a clear anti-EU bias, while pro-Kremlin trolls and bots ensured the broad
dissemination of these articles in social media (Euronews, 2018). Another study by British experts
found that more than 156,000 Russia-based Twitter accounts mentioned #Brexit in original posts or
retweets – predominantly supporting “Leave” – in the days surrounding the vote. These posts were
seen hundreds of millions of times (BBC, November 2017).
16. Similar incidents took place in the French presidential election, most notably with the
eight-gigabyte leak of thousands of Macron campaign documents – several reported to be falsified
or fabricated – shortly before the poll. While the French chief of cybersecurity states there is
insufficient information to establish this attack came from Russia, the cybersecurity company
Trend Micro stated the attack had patterns that were very similar to suspected Russian meddling in
the United States (Willsher & Henley, 2017). The director of the US National Security Agency (NSA),
Michael Rogers, similarly stated that his agency pinned at least some electoral interference in the
French election on Moscow. The NSA warned French cybersecurity officials ahead of the
presidential runoff that Russian hackers may have compromised certain elements of the election
(Greenberg, 2017). A Russian bank has helped finance the campaign of far-right leader
Marine Le Pen, though the party denies allegations of impropriety (Shekhovtsov, 2015).
17. Allegations of possible Russian interference have also reached Spain whose latest National
Security Strategy includes the threat of misinformation campaigns. While Russia is not specifically
mentioned in the document, Spanish officials have been open about Moscow’s interference in the
Catalan independence referendum. The Spanish defence and foreign ministers stated that many of
the profiles that spread fake news came from Russian territory. Reportedly, pro-Kremlin Twitter
accounts, including bots, and Russian state media, such as Channel One, Vesti, and Izvestia,
circulated fake or inflammatory anti-Spanish content. Notably, however, RT (formerly Russia Today)
seems to have provided a more balanced coverage of the Catalan referendum, possibly because
some in the Russian leadership might have thought that going too aggressively against Madrid could
be counter-productive (Rettman, 2017).
18. The General Intelligence and Security Service (AIVD) of the Netherlands, also reported that,
in the context of the Dutch parliamentary elections, “Russia [was] not afraid of using Cold War
methods to obtain political influence.” In an annual report, the AIVD claimed that Russia tried to
influence the election by spreading fake news, but that it failed in “substantially influencing” the
election process.
19. Russia continues to nurture links with anti-establishment political parties in the West,
particularly among far-right parties. Alternative for Germany (AfD), which came third in the 2017
German parliamentary elections with 12.6% of the vote, is remarkably popular among the country’s
Russian-speaking population. According to the AfD’s own estimates, Russian speakers make up as
much as a third of its voters. AfD leaders have travelled to Russia and met with officials from
Mr Putin’s United Russia party and other representatives of the Kremlin. AfD’s electoral success is
partly explained by rising anti-immigrant sentiments in German society. Pro-Kremlin trolls and bots
are known to have bolstered these sentiments. In one notable case, Russian outlets disseminated
the fake story of a Russian-German girl, Lisa, who was allegedly raped by migrants (Shuster, 2017).
166 CDS 18 E fin
5
20. Greece also accuses Moscow of bribery and meddling in its internal affairs. In July 2018,
four Russian diplomats were banned from Greece after evidence revealed Moscow was trying to
sabotage the naming deal between Athens and Skopje, which would pave the way towards an
eventual NATO membership for the former Yugoslav Republic of Macedonia10
. Reports have
revealed that Russian agents – citizens and officials – have attempted to bribe senior Greek
intelligence and military officers as well as to fund far-right groups. This situation mirrors Russia’s
apparent willingness to influence politics in the Western Balkans and to undermine EU and NATO
aspirations in the region. Experts warn that the year 2018 marks the “launch of a renewed Russian
campaign in the Balkans” (Galeotti, 2018).
21. One of the key findings of the Lithuanian state security department’s 2018 annual report was
that Russian intelligence and security services were particularly interested in the upcoming
Lithuanian presidential elections in 2019.
22. Russia has a dedicated policy to reach out to and support Russian-speaking communities
abroad, particularly in the countries of the former Soviet Union. Moscow estimates some 17 million
such “compatriots” live in its neighbourhood. The three major instruments that support compatriots
are the government agency Rossotrudnichestvo, which receives USD 95.5 million in funding from
the state budget; the Russkiy Mir Foundation, which receives USD 15 million; and the Gorcharkov
Foundation for Public Diplomacy, which receives USD 2 million (Kuhrt & Feklyunina, 2017). While
the official goals of these organisations appear to be legitimate (e.g. promoting Russia's culture,
language and worldview), the activities of these groups can have political consequences, by using
Russian-speaking minorities to pressure their governments to abandon sanctions against Russia,
for example.
23. Political interference and its actual impact are difficult to measure and prove. Whether it is
funding from a Russian bank or cyberattacks by groups traced to Russian territory, it is often difficult
to establish a clear and direct link between these actions and the Russian state.
24. In most cases, the Kremlin’s interference does not create new societal cleavages or negative
trends, it merely tries to reinforce them. The rise of anti-establishment political forces is an old trend.
However, the pro-Russian attitudes of the Western far-right – examples of which are mentioned in
paragraphs 16 and 19 of this report – are a recent phenomenon, which coincides with Moscow
noticing these parties and providing support to them (Polyakova, 2016). Exaggerating the impact of
Russian meddling could, in fact, be counterproductive as it could make the Kremlin more important
than it really is. However, it should not be downplayed either and further steps to protect political
systems in the free world are urgently needed.
C. KINETIC OPERATIONS
25. The term “hybrid warfare” does not refer solely to non-kinetic operations. Experts note that, as
part of its hybrid tactics, Russia has employed “a full spectrum of activities, ranging from incitement
of violence, kidnapping, and attempted assassination to infiltration and covert action combined with
military efforts” (Kramer & Speranza, 2017). The most obvious example of a kinetic operation is the
use of professional soldiers without military insignia, likely Russian Special Forces, in the occupation
of Crimea and Donbas. These soldiers have since been referred to as “polite men” or “little green
men.” While the origin of these troops has never been doubted, the absence of insignia allowed
President Putin, at least formally and temporarily, to distance the Russian state from these forces
and mitigate international reaction. Evidence of Russian military presence in Donbas is abundant,
but, due to the lack of formal attribution of these forces, Russia continues to present itself as a third
party in the conflict.
10 Turkey recognises the Republic of Macedonia with its constitutional name.
166 CDS 18 E fin
6
26. The degree of plausible deniability varies by context. While the occupation of Crimea was a
poorly disguised Russian Special Forces operation, local ownership of the “rebellion” in Donbas was
more significant, allowing Mr Putin to downplay the involvement of the Russian state to a mere
participation of Russian “volunteers” who took a “leave of absence” from serving in the Russian
military. In Syria, Russia’s continuing military involvement after the formal withdrawal of Russian
forces is even more shadowy. It has relied on a private paramilitary company, the Wagner Group,
which was also active in Ukraine in early 2014 and is, according to media and US intelligence reports,
associated with a Russian oligarch, Yevgeny Prigozhin. Since September 2015, the Wagner Group
has played a major role in the Syrian government’s reconquest of its territory, operating as an
undeclared branch of the Russian military alongside official Russian forces (Hauer, 2018). The clash
between these trained Russian mercenaries and US forces in Syria resulted in the deaths of about
100 Russian mercenaries. Such a direct clash between Russian and US soldiers is unprecedented
in recent history and could have resulted in a dangerous escalation. However, Mr Putin was able to
deny any links between the Russian state and these mercenaries.
27. The presence of private Russian military contractors has also been reported in some African
and Arab countries, including the Central African Republic (CAR)11
, Sudan or Libya. Companies like
the Wagner Group allow Moscow “to enter a foreign (…) environment with minimal risk, and to exploit
both political and economic opportunities there” while offering the Kremlin plausible deniability on its
involvement (Hauer, 2018).
28. A particularly alarming development is Moscow’s apparent readiness to target its perceived
enemies on foreign soil, including with weapons of mass destruction. The collateral damage of the
chemical attack on Mr Skripal and his daughter in March 2018 in Salisbury caused the death of a
civilian British woman and sent her husband to the hospital. The UK investigation identified two
Russian citizens – who travelled to the United Kingdom under the names of Alexander Petrov and
Ruslan Boshirov – as primary suspects and linked them to the Russian foreign military intelligence
agency (GRU). Independent investigations, including by the prominent independent research
organisation Bellingcat, have supported this conclusion. The Russians have claimed that these two
individuals travelled to London from Moscow for a two- or three-day visit in order to see Salisbury
cathedral. They conveniently neglected to refer to the identification of traces of the Novichok nerve
agent in their London hotel bedroom. More recent investigations have identified one of the two
suspects as a much-decorated GRU colonel, Anatoly Chepiga.
29. Other low-level uses of force by Russia include repeated incursions into NATO airspace12
,
alleged involvement in the anti-NATO coup attempt in Montenegro in October 2016 and targeted
actions such as the kidnapping of an Estonian officer in September 2014.
30. Russia also engages in regular large-scale exercises, such as Zapad and Kavkaz, designed
to demonstrate Russia’s offensive abilities in eastern Europe for intimidation purposes and – in the
cases of Georgia in 2008 and Ukraine in 2014 – to mask invasion. When conducting these exercises,
Russia regularly evades its commitments under the Vienna Document to exchange information about
its exercises and notify other member states. The scope of these exercises is usually substantially
larger than officially declared by Moscow. Zapad 2017, for instance, reportedly involved 60,000 to
70,000 troops instead of the officially announced 12,700.
11 Three independent Russian journalists were killed in the CAR while investigating the Wagner Group’s
activities there.
12 One of the most recent incursions occurred on 12 March 2018 over the Estonian island of Vaindloo.
According to NATO’s military command, the behaviour of Russian aircraft during such incursions is
unprofessional rather than hostile. However, this behaviour could lead to serious incidents, such as the
shooting down of a Russian fighter jet over Turkish territory in 2017. The European Leadership
Network’s study of 39 encounters between Russian and NATO air and naval forces concluded that these
"highly disturbing" violations of national airspace had caused several incidents where an open conflict
or the loss of life was narrowly avoided.
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D. DISINFORMATION AND PROPAGANDA
31. This Committee’s 2015 report The Battle for the Hearts and Minds [164 CDSDG 15 E bis] and
2017 report The Social Media Revolution [158 CDSDG 17 E bis] explored Russia’s disinformation
and propaganda machine in detail. These reports show that Russian mainstream media are not
merely biased but have been “weaponised” and turned into the Kremlin’s foreign policy tool.
Margarita Simonyan – the chief editor of RT, which, along with Sputnik, is Moscow’s flagship foreign
language channel to influence international public opinion – claims RT is needed “for about the same
reason as why the country needs a Defense Ministry” and that RT is capable of “conducting
information war against the whole Western world,” using “the information weapon” (EUvsDisinfo,
January 2018).
32. Russian state-controlled media fail to meet minimal journalistic requirements: they are not
independent and receive weekly instructions from the Kremlin (EUvsDisinfo, September 2017). More
importantly, they lack scruples and ethical boundaries, blatantly falsifying evidence and reporting
outright lies. Examples of this unethical “reporting” are extensively presented in the abovementioned
NATO PA reports. The French president, Emmanuel Macron, has banished Russia’s RT and Sputnik
representatives from his media pool, arguing that they are not journalists but agents of influence.
33. In 2017, Russia’s full-scale disinformation campaign continued. EU counter-propaganda
experts, in their annual overview, mentioned examples of spectacular claims from pro-Kremlin
mouthpieces, such as the imminent threat of civil war in Sweden, a US plane dropping a nuclear
bomb over Lithuania, or a report that rape cases in Sweden had risen by a thousand percent (in fact
a rise of 1,4% since 2015). Ukraine has remained a target of many of these stories, with Ukrainians
often described as fascists and oppressors and Ukraine portrayed as an artificial country and a failed
state (EUvsDisinfo, December 2017).
34. While exploiting the diverse and free Western media landscape, Russian state media promote
a unified message and narrative. Unlike in Soviet times, this narrative has a less solid ideological
base and appeals to a wide range of people with anti-Western, anti-liberal and anti-globalist views.
Anti-Americanism is a key element of the narrative, designed to drive a wedge between the
United States and Europe. This narrative embraces virtually all fringe ideas that contradict the
mainstream Western worldview. An example of an initiative in this area is the new media venture
“USA Really. Wake Up Americans” that was launched by the “Internet Research Agency”, a Russian
troll factory that was indicted for meddling in the 2016 US elections and, according to numerous
media investigations, is linked to Yevgeny Prigozhin (EUvsDisinfo, April 2018). This venture, created
to combat the “growing political censorship imposed by the United States”, mainly targets
anti-establishment audiences. Active on social media, it mostly spreads anti-US views and focuses
on socially and politically divisive issues.
35. As noted, new breakthroughs in information and communications technology, including the
growth of social media, has allowed Moscow to propel its disinformation and propaganda to a new
level. Multiple reports show how pro-Russian trolls and bots spread fake news and socially divisive
contents in Western societies. NATO’s Strategic Communications Centre of Excellence reports that
two-thirds of Twitter users who write in Russian about NATO presence in eastern Europe are bot
accounts. Online channels are used in other ways, such as creating the illusion of a chemical leak
through mass tweeting to generate panic in the US state of Louisiana or having the employees of
Russian “troll factories” create false websites (Chen, 2015). Russia also imitates the official websites
of Western institutions, for example replicating the website of the European Centre of Excellence for
Countering Hybrid Threats, adding a pro-Russian twist. The Centre’s website address, which is
https://www.hybridcoe.fi/, has been imitated with the web address http://hybridcoe.ru/, giving it a
professional and legitimate look, while adding anti-NATO and anti-EU content.
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36. It must be noted that the Kremlin’s disinformation machine could acquire even more efficient
tools in the future. The development of artificial intelligence algorithms called Generative Adversarial
Networks (GANs) offers the possibility of easily doctoring sound and video and thus create visual
contents that could, for instance, convincingly depict a Western leader making a pro-Russian
statement or a statement intended to prompt panic and confusion among Western audiences (The
Economist, 2017).
E. CYBER AND ELECTRONIC WARFARE
37. Russia uses cyber weapons to carry out hybrid operations such as election meddling,
espionage and disinformation campaigns. However, a cyberattack could also be a category of hybrid
warfare in its own right. In 2017, multiple large-scale cyberattacks targeting critical infrastructure had
serious real-world consequences. The WannaCry ransomware attack13
, attributed to North Korea,
crippled health services in the United Kingdom and other Allied countries. The NotPetya ransomware
attack, attributed to Russian hackers by the United Kingdom and other Allies, targeted the Ukrainian
tax system but spread to businesses across the country and beyond. Corporate losses from this
attack are estimated to be in the hundreds of millions of US dollars. In November 2017, the head of
the British National Cyber Security Centre (NCSC), Ciaran Martin, warned that Russian hackers had
targeted the British energy, telecommunications and media sectors. Russia is also accused of
attacks on the German Parliament in 2015 and the German Foreign Ministry in 2017, as well as the
crippling of a French TV broadcasting network (TV5Monde) in 2016. Earlier this year, the BSI –
Germany’s Federal Office for Information Security – accused the Russian government of carrying
out a large-scale cyberattack on German energy providers. Ahead of the US midterm elections,
Microsoft declared it had seized fake websites created by hackers linked to Russian military
intelligence. These websites were replicating the websites of the Hudson Institute and the
International Republican Institute but were in fact redirecting users to web pages created to steal
passwords and other credentials (Sanger & Frenkel, 2018).
38. An interesting case demonstrating the link between Russian hackers, Russian “soft power”
agents and the Russian state concerns the dispute around the potential separation of the Ukrainian
Orthodox Church from the Moscow Patriarchate. Religious and state officials in Russia have been
working hand in hand to prevent the split, as it would certainly diminish Russia’s influence in Ukraine.
As the split has been tentatively approved by the Ecumenical Patriarch Bartholomew I of
Constantinople14
, it was revealed that Russian hackers had targeted senior Orthodox Christian
figures including top aides to Patriarch Bartholomew I. Reportedly, the same Russian hacker group,
Fancy Bear, was associated with the US Democratic National Committee email hacks in 2016
(Satter, 2018).
39. Russia is also suspected of carrying out electronic warfare (EW) attacks. The former
commander of United States Army Europe, Lieutenant General Ben Hodges, notes that Russia has
developed “a significant electronic warfare capability” over the past three years. On the eve of the
Zapad 2017 exercise, the mobile communications network in western Latvia was jammed,
apparently by a Kaliningrad-based communications jammer aimed towards Sweden. A NATO official
claimed the incident demonstrates Russia’s ability to intercept or jam civilian networks “within a
significant radius and with relative ease” (Gelzis & Emmott, 2017). Norway’s public broadcaster
announced that, during Zapad 2017, civilian aircraft operating in East Finnmark, Norway, reported a
loss of their GPS signal. Measurements showed the disturbance came from the east. A report by the
International Centre for Defence and Security found that further EW capability development by
Russia would pose a serious challenge to NATO’s eastern flank. Russia uses advanced surveillance
techniques, such as drones and covert antennas, to pull data from smartphones used by NATO
troops in the Baltic States and Poland (Grove, Barnes & Hinshaw, 2017).
13 Ransomware attacks lock victims’ computers and/or threaten to release captured data, demanding
payment.
14 Considered “first among equals” in the Orthodox Christian Church.
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40. While the problem of attribution in cyberspace is acute, most cyberattacks of this scale have
been traced to Russia—often to groups of hackers called Cosy Bear, also known as APT29, and
Fancy Bear, also known as APT2815
. The NCSC has accused Russia of using cyberattacks "to
undermine the international system." According to a 2017 British House of Commons Intelligence
and Security Committee report, the escalation of Russian cyber activities shows Russia is no longer
concerned about remaining covert and is adopting a more brazen approach.
F. OTHER TYPES OF HYBRID THREATS
41. While most countries engage in some form of espionage and intelligence gathering, the
activities of Russian spies seem disproportionate compared to the country’s global weight.
US intelligence experts warn that the conflict between the US intelligence community and Russian
special services is intensifying in ways that could destabilise the bilateral relationship and the broader
world order (Beebe, 2017). The US government claims that the number of Russian spies in the
United States has considerably increased in the past 15 years (Schmidle, 2017). The United States
also suspects that the Moscow-based Kaspersky Lab has used its popular antivirus software to spy
on the United States and blunt US intelligence activities. Another example of Russian espionage in
the United States is the case of Maria Butina, a Russian woman charged with “working to infiltrate
the National Rifle Association (NRA) and influence US politics” (Swaine, 2018). The investigation
has revealed her ties to Kremlin-backed banks and Russian oligarchs under US sanctions.
42. Meanwhile, the British secret intelligence service (MI6) has reclassified Russia as a "tier one"
threat alongside Islamist terrorism. For comparison, Russia was not even mentioned in the British
National Security Council's annual strategic defence and security review in 2010. British experts
further assess that Russia employs between 705,000 and 940,000 people across its security
agencies. In comparison, the British security agencies put together employ about 16,500 people.
Officials also assess that Russian security and intelligence budgets have grown annually by 15-20%,
with spending mainly going to operations (Edwards, 2017). Non-NATO neighbours like Sweden have
also reported that espionage has increased since Russia’s annexation of Crimea (Ringstrom, 2015).
43. Russia experts such as Mark Galeotti, who addressed this Committee at the 2017 NATO PA
annual session in Bucharest, detect links between the Kremlin and Russian-origin criminal groups
operating in Europe. They claim to have evidence that the Kremlin uses these groups as sources of
“black cash”, cyber attackers, traffickers of people and goods and even targeted assassinations by
offering access to the networks of Russian intelligence. Local criminal groups have reportedly
assisted Russia’s invasion of Crimea and Donbas (Galeotti, 2017). In May 2018, a report by the
British Parliament’s foreign affairs Committee entitled "Moscow's Gold: Russian Corruption in the
U.K." said that London is being used as a "base for the corrupt assets" of individuals linked to the
Kremlin. The authors of the report asserted that these financial activities are “clearly linked to a wider
Russian strategy” and are a threat to UK national security. The report called for a "coherent and
pro-active strategy on Russia, (…) that clearly links together the diplomatic, military and financial
tools that the U.K. can use to counter Russian state aggression." The proposed concrete measures
include establishing a register of ownership for foreign companies that wish to own property in the
United Kingdom, thereby exposing those who “purchase UK property through offshore shell
companies, disguising their identities and the potentially corrupt sources of their funding” (House of
Commons, 2018a).
44. Russia has a long history of using its energy resources as a foreign policy tool16
. It is important
to stress that Europe’s energy vulnerability has diminished considerably. This is due to the following
factors: 1) diversification of supply through additional infrastructure, such as new Liquefied Natural
Gas (LNG) terminals in Poland and Lithuania; 2) the development of shale oil and gas reserves in
the United States; 3) the EU’s steps towards an integrated energy market through the Third Energy
15 The cybersecurity firm CrowdStrike associated Cosy Bear with the FSB and Fancy Bear with the GRU.
16 This issue is discussed in detail by the Assembly’s Economics and Security Committee’s 2018 report
The Energy Security Challenge in Central and Eastern Europe [070 ESC 18 E].
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Package, which forces Gazprom to sell its stakes in European transmission networks; and 4) the
“green revolution” in energy, especially the advances in renewable energy and energy efficiency
(Russia’s 2017 Economic Security Strategy identified the development of green technology as a
threat to its economic security).
45. Nevertheless, Russia retains significant leverage over Europe’s energy market. Russia’s gas
supplies to Europe are growing and almost 40% of Europe’s gas imports come from Russia. The EU
is currently discussing the controversial Nord Stream 2 project, a new pipeline connecting Germany
and Russia while bypassing countries like Ukraine and Poland. Opponents of the pipeline argue that
the project undermines the energy solidarity envisioned by the European Energy Union initiative.
The Baltic States have taken important steps to reduce energy dependence on Russia, but their
electricity markets remain synchronised with the Moscow-controlled electricity network BRELL. The
Baltic states are concerned that Moscow will try to sabotage their desynchronisation plans. Lithuania
is also highly concerned by the Russian company Rosatom’s non-transparent construction of a
nuclear power plant in Belarus, 50 kilometres from the Lithuanian capital, Vilnius. Europe’s energy
sector, as a whole, needs to improve its cybersecurity resilience from hostile foreign actors (Grigas,
2017).
46. A recent report by the Asan Institute for Policy Studies provides information indicating that
Russia has been engaging in sanctions-busting as a foreign policy tool. More specifically,
circumventing the UN sanctions on North Korea, Russia is believed to have supplied 622,878 tons
of undeclared refined oil to this country between 2015 and 2017, which represents around one third
of North Korea’s total refined oil imports during the same period (Asan, 2018).
47. Some experts, including British Chief of the Defence Staff Air Chief Marshal Sir Stuart Peach,
British MP Rishi Sunak and former NATO Supreme Allied Commander Admiral James Stavridis,
warn that the Russian navy could potentially pose a threat to the undersea cables that carry
97% of global communications and USD 10 trillion of financial transfers every day. There are no
alternatives to these cables. Modern economies and societies depend crucially on this undersea
infrastructure, which lacks basic defences (Murphy, Hoffman & Schaub, 2016). Russian submarine
activity in the northern Atlantic has increased significantly in recent years, and these submarines
have been “aggressively operating” near undersea cables. Russia is significantly expanding its naval
capacity, including Yantar class intelligence ships and auxiliary submarines, both of which are
specifically able to disrupt undersea cable infrastructure. Sir Stuart Peach claims the United Kingdom
and its NATO Allies are ill-prepared to deal with the prospect of such an attack (BBC,
December 2017). In June 2018, the United States imposed sanctions on the Russian government’s
underwater capabilities, which reportedly helped the Kremlin tap undersea communications cables
used by Western countries.
48. Generally speaking, Russia’s hybrid activities pose a threat to the maritime environment. Ports
and commercial and military vessels are easy targets for sabotage, navigational spoofing and
cyberattacks (Kremidas-Courtney, 2018). Considering the vessels’ high reliance on cyber-enabling
capabilities, cyberattacks can cause important damage.
III. RESPONDING TO HYBRID THREATS
A. NATO
49. As noted, hybrid attacks present a challenge to the Alliance as they are generally not expected
to trigger Article 5 of the Washington Treaty. In the hybrid era, the emphasis falls on Articles 3, which
outlines collaboration and mutual assistance short of collective defence, and 4, which obligates
consultations when the security of an Ally is threatened. At its summit in Warsaw in 2016, NATO
adopted a strategy on the Alliance’s role in countering hybrid warfare. It was reaffirmed that the
primary responsibility to respond to hybrid threats rests with the targeted nation. NATO, however, is
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prepared to assist an Ally at any stage of a hybrid campaign. The Allied leaders also announced that
Allies would be prepared to counter hybrid warfare as part of collective defence and that the
North Atlantic Council could decide17
to invoke Article 5 of the Washington Treaty. Collective action
depends on a unified assessment of the threat, a determination that Russia’s hybrid tactics aim to
prevent.
50. In the wake of Russia’s aggression in Ukraine, NATO drafted a Readiness Action Plan (RAP)
that tripled the size of the NATO Response Force (NRF) and introduced a Very High Readiness Joint
Task Force (VJTF) capable of being deployed within days as a deterrent force. To ensure the
efficiency of the VJTF, NATO set up the NATO Force Integration Units (NFIU) in eastern and central
Europe. One notable step by NATO was the deployment of four battalions in the Baltic states and
Poland, which considerably escalated the cost of potential aggression against these Allies18
.
51. To be fully effective, these military responses must be complemented by efforts to achieve
national resilience in areas such as continuity of government, critical government services and cyber
networks, energy, food and water supplies and the ability to deal effectively with uncontrolled
movement of people. In 2017, NATO produced an Alliance-wide assessment of national resilience
which generated an overview of the state of civil preparedness. This identified areas where further
efforts are required to enhance resilience.
52. NATO has also improved intelligence cooperation among Allies by establishing a new Joint
Intelligence and Security Division (JISD). To reflect the growing need to take a holistic approach, a
new branch for hybrid analysis was created within the JISD with a mandate to analyse the full
spectrum of hybrid actions by drawing from military and civilian, classified and open sources. Many
aspects of hybrid warfare – such as countering disinformation, cyber threats and energy security –
are also covered by NATO’s Public Diplomacy Division and Emerging Security Challenges Division.
NATO has also launched a platform of cooperation with Ukraine specifically dedicated to bringing
together experts on hybrid threats.
53. Several NATO-certified or NATO-supported centres of excellence – including the Strategic
Communications Centre in Riga, the Cyber Defence Centre in Tallinn, the Energy Security Centre
in Vilnius and the European Centre of Excellence for Countering Hybrid Threats (Hybrid CoE)19
–
provide the threat analysis and draft policy recommendations.
54. Since the massive 2007 cyberattack against Estonia by Russian hackers, NATO has made
great strides in developing its cyber defence capabilities. The 2016 Warsaw Summit identified
cyberspace as the fifth “domain of operations in which NATO must defend itself.” In February 2017,
NATO Allies endorsed an action plan that put cyber defence at the core of NATO’s collective defence
and promoted NATO’s cooperation with the industry. Every year for 10 years, NATO has organised
a cyber exercise week that involves NATO member states and allies reacting to simulations of
cyberattacks that mirror real threats. Through the Cyber Defence Pledge, NATO members have
committed to prioritising enhancements to the defences of their national networks – which is of critical
importance, given the fact that the Alliance’s cyber security is inhibited by the capabilities of its
weakest member. NATO has shored up the defence of its own networks20
.
17 All NATO decisions are made by consensus, after discussion and consultation among member
countries.
18 For more details on NATO’s Enhanced Forward Presence (EFP), see this year’s general report of the
NATO PA Defence and Security Committee entitled Reinforcing NATO’s Deterrence in the East
[168 DSC 18 E].
19 Hybrid CoE is a joint project of NATO, the EU and several NATO/EU member states, inaugurated in
October 2017.
20 In 2016, NATO had to ward off about 500 cyberattacks each month.
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55. NATO is also increasingly cooperating with the EU on cyber defence: the two organisations
have increased information exchange and participated in joint exercises. They have also agreed to
cooperate in incident response and crisis management.
B. EUROPEAN UNION
56. With its considerable resources and soft power, the EU is a key player in building Europe’s
resilience to hybrid threats, particularly disinformation and cyberattacks. The 2016 EU-NATO Joint
Declaration lists more than 40 specific areas of cooperation and as many as ten of those relate to
strengthening cooperation on hybrid threats. However, EU-NATO cooperation is limited to the
international staff of the two organisations and does not involve member states.
57. In April 2016, the European Commission and the High Representative of the EU for Foreign
Affairs and Security Policy adopted a Joint Communication on countering hybrid threats. The
framework defines the EU’s assistance to member states in building their resilience against hybrid
threats while recognising that the primary responsibility for countering these threats lies with member
states. To improve situational awareness through sharing of intelligence analysis, the EU has
established the Hybrid Fusion Cell.
58. As a response to Russia’s disinformation campaigns, the EU created the East StratCom Task
Force, also referred to as EU "myth-busters". The team of a dozen nationally-seconded diplomats
exposes Russia’s online disinformation daily. After repeated calls from the European Parliament, the
taskforce has finally been granted a separate budget of just over 1 million euros a year. The
Rapporteur is convinced that the amount remains inadequate, given the scope of the challenge and
the EU’s vast financial capabilities.
59. While the EU’s recently established Permanent Structured Cooperation on Defence (PESCO)
focuses mainly on hard security investments, one of the 17 collaborative defence projects—led by
Lithuania and involving nine EU members – led to the establishment of rotational EU Cyber Rapid
Response Teams. In December 2017, the EU established a permanent Computer Emergency
Response Team (CERT-EU) covering all EU institutions, bodies and agencies. The EU allocated
EUR 50 million to develop a cybersecurity competence network connecting private and public entities
– including research centres, university programmes, and industry partners – to best tackle the EU’s
cybersecurity challenges and strengthen individual member state capacities.
C. NATIONAL LEVEL
60. Many NATO and EU member states and aspirant countries have revisited their national
security policies in response to Russia’s hybrid activities. While it is impossible to provide a
comprehensive overview of these efforts within the limits of this report, the Rapporteur would like to
highlight several important national initiatives.
61. Regarding political interference, the United States launched an investigation into Moscow’s
interference in its 2016 presidential election, led by US Special Counsel and former FBI Director
Robert Mueller. The investigation has indicted 32 people and three Russian entities. The
US Department of Justice has also indicted 12 Russian GRU intelligence officers for hacking
Democratic Party representatives using spear phishing emails and malicious software. The 12
officers are also charged with releasing sensitive documents and stealing the data of half a million
voters. This is the first US official indictment charging the Russian government with intending to
influence the outcome of the 2016 election. Moscow denies any involvement and denounces a
“conspiracy”.
62. Considering mounting evidence of Russia’s ongoing efforts to interfere in the upcoming 2018
US midterm elections – including attempts to hack US senators and the creation of fake official
websites – a bipartisan group of senators introduced a bill to impose new sanctions on Russia for
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meddling in US elections. These sanctions would mostly target the Russian sovereign debt, its
energy projects and corrupted oligarchs.
63. Forewarned by events in the United States and informed by US intelligence services, French
political forces managed to prepare for impending interference in their presidential election
campaign. Then-candidate Emmanuel Macron’s team hired cyber experts who suggested setting up
decoy email accounts and prepared a communication strategy to deal with potential leakages.
64. German security services successfully minimised foreign interference in the 2017 elections by
looking for vulnerabilities in networks. Unusually, the head of Germany’s domestic intelligence
agency went public to warn citizens about disinformation campaigns and cyberattacks from Russia
(EUvsDisinfo, 2016). The British government helped protect its political system by tracking the major
perpetrators of these attacks, providing politicians with professional expertise on communications
security and working with media and think tanks to promote open discourse that counteracted
propaganda. In the run-up to the Swedish elections in September 2018, authorities trained local
election workers to spot and resist foreign influence, while Swedish political parties enhanced their
email security systems. The Swedish Prime Minister announced the creation of a new agency
responsible for bolstering the "psychological defence" of the Swedish public by "identifying,
analysing, and responding" to "external influence" campaigns (Rettman, 2018).
65. As previously discussed, NATO’s frontline states are concerned about kinetic threats, such
as armed groups without military insignia. In addition to relying on NATO’s support, these countries
have an all-society approach to defence. Lithuania, for instance, reintroduced conscription and
published a 75-page manual, entitled “Guide to Active Resistance”, for distribution in schools and
libraries. It includes tips on civil disobedience in case of foreign invasion. Similarly, the US Army has
drafted a new strategy for 2025 to 2040. It focuses on enemies that have not declared themselves
as combatants in a context where the lines between war and peace are blurred. To meet these foes,
the US Army is expected to move toward smaller, “semi-independent” and much more versatile
formations able to fight in every domain of warfare simultaneously (Tucker, 2017).
66. Regarding disinformation, Germany has taken strict measures to limit hate speech and fake
news on social media, imposing heavy fines (up to EUR 50 million) for companies – from Facebook
to Google – that do not remove posts that incite hate or violence. In France, legislation has been
proposed that would allow the Superior Council of the Audiovisual (CSA), a media watchdog, to take
down contents, close user accounts and block websites in order to protect French democracy from
fake news during elections. The proposed law would also establish responsibilities for the media to
cooperate with the state and be transparent about their sponsored content.
67. NATO Allies in central and eastern Europe have taken aggressive steps to counter Russia’s
disinformation. Estonia recently increased the budget of its strategic communications department –
responsible for countering propaganda – more than 13-fold. The Czech Republic has set up a Centre
against Terrorism and Hybrid Threats in its Ministry of Interior to combat propaganda. The Centre
uses a Twitter feed to debunk false stories. Lithuania hosts the US-funded Radio Liberty, which
broadcasts to Russian and Belarusian audiences in their native languages.
68. In terms of cyber, a notable development has been the announcement by the United Kingdom
of the creation of a new offensive cyber force of up to 2,000 personnel, which represents a near
four-fold increase in manpower focused on offensive cyber operations (Haynes, 2018).
69. Sweden and Finland, non-NATO partners, are increasingly targeted by Russian hybrid
activities. Both nations emphasise an educational approach to misinformation instead of restricting
access to it. Both countries launched programmes to teach children to differentiate between real and
fake sources as early as primary school. These tips are presented in entertaining formats, including
in one of Sweden's most famous cartoon strips. Finnish Foreign Ministry officials claim that media
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literacy education has helped Finns turn away from fake news and propaganda sites and led to the
closure of the Finnish-language bureau of Sputnik due to low readership (Standish, 2017).
D. MEDIA AND CIVIL SOCIETY
70. Efforts to tackle hybrid threats are not confined to the government, but have proliferated among
civil, academic and media organisations. The most prominent civic and academic initiatives to
expose pro-Kremlin falsehoods include StopFake.org (an initiative by Ukrainian journalists and
students), the Digital Forensic Research Lab (an effort by the US-based Atlantic Council think tank)
and the Baltic “elves” (volunteer internet users in the Baltic states taking on pro-Kremlin trolls).
71. Traditional media have set up numerous fact-checking mechanisms, including the BBC’s
Reality Check and Le Monde’s ‘Les Décodeurs’. Leading German and Swedish newspapers teamed
up to prevent foreign information meddling during the election period. Recently, all major Lithuanian
news outlets, the Baltic “elves” and Lithuania's Military Strategic Communications unit launched a
joint initiative called Demaskuok.lt (“Debunk.lt”) aimed at monitoring and debunking disinformation
before it spreads in the country. The partners are using advanced algorithms and artificial intelligence
to scan thousands of news articles in Russian and Lithuanian in order to detect potential fake news
and disinformation. The initiative has generated considerable interest in NATO and EU circles.
72. Social media and technology giants, such as Facebook, Microsoft, Twitter and YouTube,
mainly focus on removing terrorist-related contents. However, Facebook has cooperated to an extent
with US authorities in the investigation of Russian meddling in US elections, and it unveiled new
transparency guidelines related to advertising. In the same vein, Twitter has launched a battle
against fake and suspicious accounts. The goal is to tackle the flow of disinformation on the platform
and “better protect users from manipulation and abuse” Del Harvey, Twitter’s vice president, said.
More than 70 million accounts were suspended in May and June and it continues. Most of these
accounts are Russian and similar to fake accounts used to interfere in the 2016 US election. The
company also announced “major changes to the algorithms it uses to police bad behaviour” (Timberg
& Dwoskin, 2018).
73. However, there is a growing pressure on social media companies to do more. In May 2017,
the Home Affairs Select Committee of the British Parliament published a report that criticised social
media firms for being “shamefully far” from tackling illegal and dangerous content. The absence of
national borders in the cyber space makes it difficult for national legislators to force meaningful
change, given that there is no commercial incentive for companies to share information with
lawmakers or allow them to scrutinise their contents.
IV. CONCLUSIONS AND RECOMMENDATIONS
74. Russia’s use of hybrid tactics poses a clear challenge to the Euro-Atlantic community. While
Russia is much weaker economically and culturally, it often seems to have the edge in hybrid warfare
because it has a unified decision-making process and a clear anti-Western agenda. The Kremlin is
also not bound by the same ethical constraints as many NATO members, as manifested, inter alia,
by the rigging of the recent Russian presidential ‘elections’ in favour of the incumbent – to the extent
of stuffing ballot boxes in front of the cameras, setting up “troll factories” and even targeting
individuals with weapons of mass destruction on foreign soil. The Kremlin exploits the open media
landscape in the free world while eradicating free speech domestically and turning its media
channels into weapons of mass deception. It sponsors extreme political movements in the West
while persecuting the opposition at home.
75. Russia’s hybrid machine is innovative and difficult to predict. In most cases, the Kremlin
exploits and aims to amplify cleavages that already exist in Western societies. Therefore, it is
imperative to focus on building the overall resilience of a society and addressing domestic
grievances, rather than on efforts to predict Russia’s next move. Examples from Sweden and Finland
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are particularly relevant in this regard. Hybrid defence efforts should primarily be oriented inwards,
rather than outwards against a specific country. The Alliance should harness the powers of
democracy, free speech, basic human rights and the rule of law in a more proactive way to counter
the vulnerabilities of a hybrid threat.
76. That said, the Rapporteur would like to offer several concrete proposals to enhance the
Euro-Atlantic community’s response to the Kremlin’s hybrid operations:
- The Allies should revise their education policies to ensure that schools promote genuine, fact-
based debate and critical thinking. New generations – who are avid social media users – ought
to be encouraged to come out of their virtual bubbles and recognise signs of trolls and bots.
Conventional armed forces play a supporting role in hybrid warfare, but the existence of an
educated, patriotic and resilient society is our first line of defence.
- An effective response to hybrid threats depends on seamless teamwork, across different
areas. There is a need for better coherence and coordination within NATO, especially by
pulling together the available civilian and military assets.
- There is a need to increase strategic awareness. Member states must be able to assess events
on the ground quickly and unanimously to respond effectively to Russia’s hybrid threats. This
effort requires greater intelligence sharing, reinforcing links between domestic agencies and a
renewed discussion of the role of Special Forces in coordinating military assistance among
NATO member states and partners. Some commentators suggest creating a designated “East
Hub” for NATO, akin to the “South Hub” in Naples, Italy. However, the Rapporteur believes
priority should be given to making full use of existing structures, such as NATO’s Joint Forces
Command located in Brunssum, the Netherlands.
- NATO members that have not yet designated specific government units charged with
countering fake news and hostile propaganda with facts round-the-clock ought to do so.
Existing NATO and EU capabilities, such as NATO’s Public Diplomacy Division and the EU’s
East Stratcom Task Force, should receive additional financial, technological and human assets
in order to better provide credible responses to hybrid warfare as often as possible.
- While focusing on domestic resilience, restrictive measures – such as the removing fake news,
imposing penalties for spreading hate speech and blacklisting and freezing the assets of the
most active Russian disinformation warriors – should continue to be applied. Members should
seriously consider targeting the Western assets of corrupt Russian elites.
- Electoral structures should be designated as strategic infrastructure. National security and
cyber institutions should offer their assistance to political parties and candidates in protecting
their data and networks.
- While cyber defence is growing in priority, more creative thinking and multilateral cooperation
across the Alliance is needed to enhance the security of our networks and systems. The Allies
should consider strengthening their retaliatory capabilities in cyberspace, allowing NATO to
call upon Allies to use, where appropriate, their offensive cyber capabilities in support of NATO
operations. The protection of undersea communication cables should be prioritised.
- While welcoming the progress made in deepening NATO-EU cooperation on countering hybrid
threats, more can be done in this area. The Rapporteur recommends the two institutions
consider establishing a joint Brussels-based platform for combating hybrid threats. The
organisations should also consider creating small NATO-EU counter-hybrid teams tasked with
information fusion and analysis to enhance situational awareness (European Parliament,
2017).
166 CDS 18 E fin
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- It is imperative to continue efforts to diversify energy imports and promote energy efficiency,
including by implementing the vision of the EU Energy Union.
- To limit the space for Russian hybrid warfare, the problem of “grey zones” in eastern Europe
must be addressed. Leaving eastern European countries in limbo is an invitation for further
Russian aggression and tensions with the West. Georgia, Ukraine and Moldova, as well as the
Western Balkan countries, should be given a clear membership perspective both in NATO and
the EU. Their accession should be based solely on their implementation of membership
criteria.
77. The Rapporteur supports the view that NATO should mainstream its role in responding to
hybrid threats in its strategic documents. For example, the former British foreign secretary,
William Hague, recently urged the Allies to consider revising the Washington Treaty and introducing
an Article 5B. The new article would make clear that hybrid attacks would trigger a collective
response from the Alliance. While changing the Treaty, which has withstood the test of time, might
not have wide support among the Allies, the Rapporteur is convinced that the Allied leaders should
initiate the drafting of the Alliance’s new Strategic Concept to reflect new global security realities,
including the rise of hybrid threats. As Mr Hague put it: “The updating of NATO […] would mean that
the Western alliance, so accustomed to the black and white choice of peace or war, would at last be
adapting to the new world so beloved of President Putin and displayed in his election victory—a
world of permanent grey.”
78. In conclusion, the Rapporteur wishes to stress that the Kremlin appears determined to disrupt
collective European decision-making and reduce the influence of the United States on the continent.
In its attempts to weaken the Euro-Atlantic security community, Moscow challenges our collective
vision of a Europe that is whole and at peace. It is a daunting challenge, but the Euro-Atlantic
community has the capacity to counter it if it acts in the spirit of solidarity. The wide international
reaction to the outrageous use of chemical warfare on UK soil demonstrates that the international
community is becoming aggressively impatient in response to Russia’s hybrid tactics. As the British
Prime Minister, Theresa May, put it in her remarks to Russian leaders: "We know what you are doing,
and you will not succeed. Because you underestimate the resilience of our democracies, the
enduring attraction of free and open societies and the commitment of Western nations to the
alliances that bind us."
166 CDS 18 E fin
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________________________
COMMITTEE ON THE
CIVIL DIMENSION OF SECURITY
215 CDS 18 E rev.1 fin
Original: English
RESOLUTION 445
on
UPDATING THE RESPONSES TO RUSSIA’S HYBRID TACTICS*
The Assembly,
1. Acknowledging that the awareness of Russia’s use of hybrid tactics against the Euro-Atlantic
community has grown considerably in recent years, but mindful that these tactics continue to pose
a serious challenge to Euro-Atlantic stability, security and unity as well as to our vision of a Europe
whole, free and at peace;
2. Alerted by the clear anti-Western agenda of the Kremlin and the complexity of its hybrid
toolbox that ranges from political interference to use of force, targeted assassinations, aggressive
espionage, exporting crime and corruption, weaponising information, conducting cyberattacks and
applying economic pressure;
3. Applauding the adoption – at the 2016 Warsaw Summit – of the NATO strategy to counter
hybrid threats and the subsequent decision of the 2018 Brussels Summit to establish Counter Hybrid
Support Teams as well as the statement that there can be no return to “business as usual” until there
is a clear change in Russia’s actions that demonstrates compliance with international law and its
international obligations;
4. Welcoming the deepening of NATO-EU cooperation in countering hybrid threats as well as
important initiatives undertaken by national governments, and traditional and social media outlets as
well as civil society actors to counter Russia’s disinformation campaigns and cyberattacks;
5. Condemning in the strongest terms the use of a nerve agent in Salisbury, United Kingdom,
and praising the unity and support demonstrated by the Allies to the British government;
6. Denouncing Russia’s meddling in recent elections and referenda in the Euro-Atlantic area,
and deeply concerned by the similar threat posed to upcoming elections as well as by the Kremlin’s
support for fringe political movements in the West;
7. Condemning the illegal construction of the Kerch bridge by Russia, combined with its policy
of selective access denial and arbitrary detaining of Ukrainian and foreign vessels in the Azov Sea,
and deeply concerned by new security, economic and ecological threats to the region;
8. Reiterating its firm support to the investigation conducted by the Dutch authorities on the
downing of flight MH17 in Ukraine, and calling on the Kremlin to comply with UN Security Council
Resolution 2166, take responsibility and fully cooperate with all efforts to establish accountability;
* Presented by the Committee on the Civil Dimension of Security and adopted by the Plenary Assembly
on Monday 19 November 2018, Halifax, Canada
215 CDS 18 E rev. 1 fin
2
9. Cognisant of Russia’s continued hybrid warfare against Georgia aimed at undermining
Georgia’s European and Euro-Atlantic aspirations and at discrediting Western values;
10. Believing strongly in the resilience of democracy and the ability of open societies to prevail
against hybrid threats;
11. URGES member governments and parliaments of the North Atlantic Alliance:
a. to reflect the new global security realities in the next NATO Strategic Concept and to take the
Russian hybrid threat into account;
b. to reiterate the position that hybrid attacks can trigger the Allies’ right to collective defence;
c. to consider discussing hybrid threats in the framework of the NATO-Russia Council;
d. to redouble efforts to build resilience among their civil society against any type of hybrid attack,
including by revising education policies in order to promote critical thinking and cyber literacy
from an early age;
e. to continue applying restrictive measures, such as applying fines in cases of hate speech, and
encouraging social media companies to increase their capabilities in removing fake news and
identifying fake or automated accounts;
f. to consider introducing targeted sanctions in solidarity with the United Kingdom, and other
members recently targeted by Russia’s hybrid attacks;
g. to enhance coherence and coordination between NATO civilian and military assets, as well
as between NATO and the EU, in responding to hybrid threats;
h. to increase strategic awareness by enhancing intelligence sharing and cooperation between
domestic agencies and strengthening further NATO’s Joint Intelligence and Security Division;
i. to continue investing in the development of well-trained local Special Forces as the first port
of call in scenarios involving the use of mercenaries and armed men without military insignia;
j. to enhance further a coordinated and comprehensive cooperation with aspirant partners in
the Western Balkans and Eastern Europe on countering Russian hybrid warfare tactics;
k. to adopt a coherent and pro-active strategy to target the Western assets of corrupt Russian
elites;
l. to design specific government units and support media and civil society initiatives in the field
of debunking fake news and identifying hostile propaganda and to provide existing EU and
NATO capabilities with additional financial, technological and human support;
m. to recognise the importance of developing cyber capabilities enabling Allies to impose costs
on those who harm them in cyberspace and allowing NATO, where appropriate, to use these
cyber capabilities to support its operations;
n. to identify electoral structures as strategic infrastructure and to offer assistance to political
parties and candidates in protecting their data and networks;
o. to continue efforts to diversify energy imports and promote energy efficiency.
_______________
COMMITTEE ON THE
CIVIL DIMENSION OF SECURITY
216 CDS 18 E rev.1 fin
Original: English
RESOLUTION 446
on
SECURITY AND COOPERATION IN THE HIGH NORTH*
The Assembly,
1. Alarmed by the speed of the climate change in the Arctic regions;
2. Mindful of the growing geostrategic importance of the Arctic as the changing climate creates
new opportunities for shipping, exploitation of mineral resources, fishing and tourism, as well as for
military activities;
3. Concerned that – while the threat of an armed conflict in the Arctic is still low – it cannot be
entirely ruled out that a possible spill-over of tension between Russia and NATO Allies, as well as
China’s increasing engagement, could lead to more strategic rivalry in the region;
4. Acknowledging the scale and scope of Russia’s military build-up in the Arctic, including the
revamping of the Northern Fleet, the establishment of military infrastructure across the region, the
development of anti-access and area denial (A2/AD) capabilities, and dramatic increases in air and
submarine activity on the Alliance’s borders;
5. Recalling that at the 2016 Warsaw Summit, the Alliance committed to strengthening its
maritime posture in the North Atlantic and to improving the Alliance’s comprehensive situational
awareness in the region to deter and defend against any potential threats, including against sea
lines of communication and maritime approaches of NATO territory;
6. Welcoming NATO’s decision to establish a new Atlantic Command in Norfolk, Virginia,
(United States);
7. Mindful of the different perspectives among the Allies on the scope of NATO’s presence in
the Arctic, yet persuaded that NATO can offer added value in the region;
8. Aware that the increasing human activity in the region raises serious concerns relating to
human security and the protection of critical economic infrastructures, particularly in the context of
harsh weather conditions and limited search and rescue (SAR) capabilities;
9. Convinced that international cooperation as well as close partnership between the military,
public and non-governmental sectors are essential in order to provide adequate civilian protection
in the High North;
* Presented by the Committee on the Civil Dimension of Security and adopted by the Plenary Assembly
on Monday 19 November 2018, Halifax, Canada
216 CDS 18 E rev.1 fin
2
10. Highlighting the role of the Arctic Council as the main vehicle for cooperation in the Arctic;
11. Emphasising that interstate relations and Arctic economic development should adhere to
international law, both customary and case law, as well as relevant international conventions and
rules, including the Polar Code;
12. URGES member governments and parliaments of the North Atlantic Alliance:
a. to steer international efforts towards promoting cooperation in the Arctic in a spirit of
responsible stewardship, and preventing tensions and competition in the region from becoming
insurmountable;
b. to adapt NATO strategic posturing in the High North to the new security realities identified in
the Assembly’s 2017 report “NATO and Security in the Arctic”, including supporting the Allied
Arctic littoral states in developing adequate defensive assets and capabilities and organising
more joint exercises such as Trident Juncture;
c. to bolster NATO’s enhanced situational awareness through greater expertise in the Arctic
region;
d. to promote and exchange best practices in terms of SAR and contribute to the interoperability
of SAR units through joint exercises both among NATO countries and with non-NATO
countries;
e. to maintain and further develop constructive cooperation with Russia in the fields of search
and rescue, fisheries and scientific research;
f. to support the work of multinational frameworks, such as the Arctic Council, and to ensure full
compliance with international law, both customary and case law, the implementation of the
Polar Code and the further development of higher international safety and environmental
standards for the High North;
g. to ensure that Indigenous peoples and communities are adequately consulted and represented
throughout decision-making processes concerning the Arctic region;
h. to strengthen efforts to minimise the impacts of climate change on the Arctic, especially by
reducing greenhouse emissions and implementing the Paris Agreement.
_______________
DEFENCE AND SECURITY
COMMITTEE (DSC)
REINFORCING NATO'S
DETERRENCE IN THE EAST
General Report
by Joseph A. DAY (Canada)
General Rapporteur
168 DSC 18 E fin | Original: English | 17 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ...............................................................................................................1
II. NATO’S NEW SECURITY CONTEXT................................................................................1
A. NATO-RUSSIA RELATIONS DRIVING EASTERN DEFENSE AND
DETERRENCE RECALIBRATION............................................................................2
B. DISRUPTIVE DOCTRINE AND MILITARY MODERNIZATION VIEWED MORE
CLOSELY.................................................................................................................2
III. CHANGES TO NATO’S DEFENSE AND DETERRENCE POSTURE – EAST...................4
IV. THE EFP AND TRIPWIRE DETERRENCE .......................................................................4
V. THE TAILORED FORWARD PRESENCE .........................................................................5
VI. BARRIERS TO ENTRY – THE CHALLENGES OF DEFENDING THE EAST....................7
A. RUSSIAN REGIONAL A2/AD CAPABILITIES ..........................................................7
B. THE ZAPAD 2017 EXERCISE..................................................................................8
C. THE VOSTOK-2018 EXERCISE...............................................................................8
VII. ADDRESSING THE PROBLEM: ADDRESSING NATO’S KEY REMAINING
HURDLES TO MILITARY MOBILITY AND DEFENSE INVESTMENTS...........................10
VIII. CONCLUSIONS ..............................................................................................................13
BIBLIOGRAPHY..............................................................................................................17
168 DSC 18 E fin
1
I. INTRODUCTION
1. NATO’s most conspicuous steps to adapt its defense and deterrence posture since 2014 are
being taken in the Alliance’s eastern European territories. Increased Allied presence in the form of
rotating forces, equipment stockpiles and exercises is changing the balance of conventional forces
to deter a resurgent, revisionist and increasingly capable Russia. This general report will review and
assess the Alliance’s ‘tripwire’ deterrence via the establishment of the Enhanced Forward Presence
(EFP) in Estonia, Latvia, Lithuania and Poland, as well as the Tailored Forward Presence (TFP) in
the Black Sea region.
2. Increased Alliance presence in both regions is meant to signal the credibility of the Alliance’s
post-2014 defense and deterrence posture – which includes the balance of conventional and nuclear
forces, as well as missile defense and arms control initiatives. Significant contributions from the
United States and Canada underscore the transatlantic security imperative of the efforts to reinforce
the Alliance’s eastern flank. According to officials at NATO HQ, the EFP and TFP are intended to
communicate Alliance cohesion and capability in the face of an evolving threat to Allied populations
and territory.
3. As this report highlights, the current configuration of conventional forces in the Alliance’s
eastern territories remains insufficient. In the instance of a contingency in any region along the
eastern flank, particularly in the Baltic States, the Alliance would be at pains to reinforce any
operation to repel an invading force and return the area to the status quo ante. This is due to
two critical remaining challenges: first, the ability to move necessary military equipment and
personnel to and across the region due to cumbersome bureaucratic and logistical hurdles; and
second, the lack of a sufficient number of European member states high-readiness rapid reaction
forces currently available for deployment in the event of a crisis.
4. Russia has neither of these problems and can bring overwhelming force and manpower to
bear upon the region quickly. Russia has the advantage of efficient internal lines of communication
and a restructured brigade-focused army, which permits rapid deployment. In addition, Russian
modernisation allows these forces near-peer capabilities in firepower and mobility, as well as air
defense systems.
5. The Alliance is taking steps to overcome these critical hurdles. In the fall of 2017, NATO HQ
announced the creation of two new commands in Norfolk, Virginia and Ulm, Germany. Both will
assist with the coordination of the movement of troops across the Atlantic and within Europe. In
addition, the United States is increasing its investment in the European Deterrence Initiative (EDI)
and Allies are increasingly investing in the personnel and equipment needed to make the current
rebalancing of conventional forces available for NATO’s defense and deterrence posture. More still
needs to be done.
6. This paper continues the Defence and Security Committee’s reporting on NATO’s evolving
post-2014 adaptation, which has followed the Alliance’s reconsiderations of the proper weight to be
given to the mix of forces comprising its deterrence and defense posture. NATO’s ability to reinforce
its conventional capabilities along the eastern flank remains a vital security concern.
II. NATO’S NEW SECURITY CONTEXT
7. As this Committee discusses frequently, the Alliance’s eastern and southern flanks are new
sources of threat, instability and potential conflict. As NATO SACEUR, General Curtis Scaparotti told
the audience at the Joint Committee Meetings in February: “We now have to manage crises,
stabilize, and defend in an environment shaped, manipulated and stressed by strategic challenges.
The two principal challenges we face are Russia and violent extremism. Both have strategic
destabilization efforts that go after the foundation of our security and target its key institutions. They
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attempt to turn the strengths of democracy into weaknesses.” The recent buzzword for this in NATO
HQ briefings is the commitment to 360-degree security in a complex and distributed environment.
A. NATO-RUSSIA RELATIONS DRIVING EASTERN DEFENSE AND DETERRENCE
RECALIBRATION
8. NATO-Russian relations are hovering close to historic lows. Russia’s annexation of Crimea
unleashed escalating tit-for-tat sanctions, dangerous rhetoric and acrimonious distrust. As a result,
brinkmanship is at its highest levels since the Cold War (Frear, Kulesa and Kearns, 2017; Boulègue,
2018).
9. The size, scope and pace of Russian military modernization, a change in military doctrine and
aggressive nuclear rhetoric and conventional military actions are critical variables driving NATO’s
defense and deterrence posture in the eastern part of the Alliance (NATO Warsaw Declaration,
2016). Russian saber-rattling via ongoing operations in Ukraine and Syria, large-scale ‘snap’ military
exercises against the "spirit of the Vienna Document" and disruptive military activities in the seas
along the Alliance’s eastern flank from the Baltic to the Black Sea are also highlighted in the official
Warsaw Summit Declaration.
10. The deployment of modern anti-access/area-denial (A2/AD) capabilities along NATO’s eastern
flank also gives Russia the potential to reduce or even block Allied freedom of movement within its
own territories and water spaces.
11. In the interim, Russia has engaged in aggressive disinformation campaigns via multiple media
outlets to sow discord and confusion across member states of the Alliance. Russian interference in
Western democratic processes via election manipulation is a particular point of contention and
division in many Allies’ domestic political discussions. Cyber interference is now one of the ways in
which Russia is continuing its long history of political interference. In addition, for years, Russia has
used its supply and control of natural resources to bully its neighbors.
12. As the past four years have demonstrated, Russia is ready to use any means available – from
hybrid tactics, to conventional operations, to nuclear menacing – to leverage its power over the
Alliance. Ultimately, its goal is to break Allied consensus and reduce Washington’s say in the future
of European security.
B. DISRUPTIVE DOCTRINE AND MILITARY MODERNIZATION VIEWED MORE
CLOSELY
13. NATO officials point to Russia’s changed military doctrine and military modernization as
particular drivers of the Alliance’s defense and deterrence posture changes in the eastern territories.
Doctrinal Shift
14. In 2014, a few months after the intervention in Ukraine, Russia published its new military
doctrine. The document marks a fundamental change of direction in Russian foreign policy. While
Russia’s 2010 military doctrine openly contemplated cooperation with NATO, four years later, the
updated doctrine considers the Alliance as a de facto competitor.
15. The 2014 military doctrine repeats much of the language of its 2010 predecessor, but the
tone is strikingly more hostile toward NATO. While both doctrines list NATO under the category of
“main external military dangers”, the 2014 publication characterizes the Alliance as acting against
Russia rather than simply having the desire to do so. In particular, the 2014 doctrine highlights
NATO’s activities in central and eastern Europe as a threat to Russian national interests (Sinovets
and Renz, 2015). It notes the intention to increase Russian efforts to protect Russian interests in its
immediate neighborhood, moving from the Arctic down through eastern Europe to the Black,
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Mediterranean and Caspian Seas. NATO’s deployment of missile defense systems and the
implementation of “global strike” are designated as major military dangers for Russia. Additionally,
the doctrine views the use of information and communication technology for political-military
purposes as another major threat to the Russian Federation and its allies (Russian Embassy to the
UK, 2015). As such, the Russian government interprets the Maidan and other “Color” Revolutions
as attempted or successful external interference to drive regime change by the West, which merits
reciprocal response, possibly in the form of election meddling in the West.
16. Russian military modernization, exercises and rhetoric in recent years confirms this shift in
strategy.
Russia’s Increasingly Modernized, High-Readiness, Deployable Forces
17. As previously reported in this Committee, Russia continues its now decade-long concerted
effort to build a modern, professional and high-readiness suite of armed forces. Increased investment
is impacting the quality of the forces dramatically.
18. The Russian army of 2018 is a far cry from that of 2008. After relatively hobbled performances
in the Caucasus during the first two decades after the demise of the Soviet Union, particularly during
the Georgian War of 2008, Russia instituted a massive military reform project, termed the “New
Look.” In addition to structural reforms, a massive arms procurement policy, the State Armaments
Programme (SAP), has reversed decades of decline and significantly improved the Russian military’s
ability to sustain firepower and maneuver over time and distance (Giles and Monaghan, 2014; IISS,
2018). Russian defense spending increased 16-fold in nominal terms from 2000-2015 (IISS, 2015).
In recent years, Russia has consistently dedicated 3-4% of its GDP toward force modernization
(IISS, 2018).
19. Though military spending was somewhat slowed in recent years due to the sanctions-stressed
Russian economy and depressed global oil and gas prices1
, Russia now fields very capable land,
air and sea forces. New Russian equipment has increased the ability for precision strikes at distance,
state-of-the-art air defense systems and highly-mobile and powerful equipment, for example the
SU-57 5th
generation stealth fighter, the T-14 Armata tank and the dual-use Iskander tactical ballistic
missile systems, among others (IISS, 2018; RAND, 2018).
20. Restructuring is making the Russian army more brigade-focused, which allows for quicker
mobility. In addition, the number of volunteer (or contract) soldiers has increased dramatically – up
to approximately 360,000 out of a total of about 900,000 personnel in the armed services (IISS,
2018; Golts, 2017). The professionalization of the army allows for a larger number of units to be
ready for short-notice deployment. Russia has also reinforced its Western Military District, sending
units from its inner regions and activating new armored, infantry, artillery and air defense formations
– the Western District now bases up to 400,000 forces, approximately 80,000 of which are within
close proximity to the Baltic States (RAND, 2018; IISS, 2015).
21. Finally, the Russian military has been training its forces via large-scale ‘snap’ exercises, which
emphasize sustaining combined-force operational scenarios over time and distance. These
exercises have been augmented by the real battlefield experiences of combined-arms operations in
both Ukraine and Syria, where Russia is not only testing troop readiness, but also the efficacy of its
new, modern weapons systems.
1 Oil and gas revenues surpass 35% of Russia’s annual budget, up from only 9% in 2000. See, US Energy
Information Administration, Russia: International Energy Analysis and Data, October 31, 2017.
www.eia.gov/beta/international/analysis.cfm?iso=RUS
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III. CHANGES TO NATO’S DEFENSE AND DETERRENCE POSTURE – EAST
22. NATO responded to Russia’s 2014 annexation of Crimea by revamping the NATO Response
Force (NRF) via the Readiness Action Plan (RAP), which sought to scale the number of forces
capable of responding to a contingency to 40,000 and to make them more flexible and adaptable,
with the objective of guaranteeing rapid reinforcement and mobility. After its reform, the NRF
contains air, land, maritime and Special Operations Forces (SOF) components.
23. The RAP also established the Very High Readiness Joint Task Force (VJTF) as the spearhead
of the NRF, capable of deploying 5,000 brigade-level troops within two to seven days’ notice to the
periphery of the Alliance. At the same time, NATO Allies held land, sea and air military exercises,
from the Baltics to the Black Sea region and established new air and maritime policing missions2
.
24. By 2016, Allies recognized the necessity of larger-scale adaptation across the Alliance to
create a more modern mobile and dynamic deterrence posture to face the realities of a far more
complex security environment.
25. In light of continued deterioration in NATO-Russia relations, NATO Allies decided at the
July 2016 Warsaw Summit to further strengthen the Alliance’s posture in order to deter potential
adversaries from using force against NATO member countries: the Enhanced Forward Presence in
Poland and the Baltic States and the Tailored Forward Presence in the Black Sea region are the key
resulting initiatives in NATO’s eastern territories. During the Warsaw Summit,
then-US President Barack Obama committed to using US defense funds in reassurance and support
of the European Allies’ defense efforts, referred to as the European Reassurance Initiative (ERI).
These initiatives were reaffirmed at the most recent NATO Summit in Brussels in July 2018.
IV. THE EFP AND TRIPWIRE DETERRENCE
26. NATO’s EFP consists of the deployment of four rotating multinational battlegroups, stationed
in Estonia, Latvia, Lithuania and Poland. These forces are over 4,500 strong and are drawn from
17 different NATO member states under the lead of four framework nations: Canada in Latvia,
Germany in Lithuania, the United Kingdom in Estonia, and the United States in Poland. The four
battlegroups are under NATO command as they report to a new multinational division headquarters
based in the Polish 16th
Mechanized Division in Elblag, which will in turn answer to the Multinational
Division Northeast (MND-NE) Headquarters in Szczecin in Poland. The four battlegroups became
fully operational on 28 August 2017 after the completion of all certification exercises (CERTEX). The
MND-NE will reach full capability by December 2018.
27. From a conventional power perspective, the deployed battalions are clearly insufficient to
defend against a large-scale, conventional Russian offensive, a point driven home to the Defence
and Security Committee during its table exercise with members of the RAND Corporation research
staff during its January 2017 visit to Washington.
28. The table exercise summarized the findings of the RAND Corporation’s study on NATO’s ability
to repel a concerted attack on the Baltic States. According to the study, the longest it would take
Russian forces to reach either Tallinn or Riga would be 60 hours. As RAND Corporation researchers
told Defence and Security Committee members, despite efforts to bolster the Alliance’s deterrence
posture in the region in terms of forces and equipment, NATO would in fact need about
35,000 soldiers already on the ground and with much better equipment, such as air defense systems
and heavy armour, to thwart a serious Russian invasion.
2 This Committee addressed in greater detail the impact of the decision in a previous report, NATO’s
Readiness Action Plan: Assurance and Deterrence For The Post-2014 Security Environment, by Xavier
Pintat, [167 DSCFC 15 E bis].
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29. As of February 2018, EFP rotating battalions only interpose 4,692 troops, and they are
distributed across a wide geographic area: in Tapa, Estonia a battlegroup led by the United Kingdom,
operating with Estonian forces and supported by Denmark and Iceland has 1,001 NATO troops; the
forces based in Adazi, Latvia number around 1,170 and are led by Canada and supported by Albania,
Italy, Poland, Slovakia, Slovenia and Spain; German forces lead a battlegroup of 1,404 troops in
Rukla, Lithuania, supported by Croatian, French, Dutch and Norwegian forces; and, finally, a US-led
battlegroup with 1,117 troops from Croatia, Romania and the United Kingdom is based in Orzysz,
Poland. (See Appendix)
30. While perhaps insufficient as standalone forces in the instance of a full-scale attack by Russia
in the region, the EFP serves as a tripwire for a whole-of-alliance Article 5 response in the instance
of an aggressor’s potential action against any Allied territory and/or populations. Ultimately, the EFP
seeks to bolster the credibility of the Alliance’s deterrence posture in what had been perceived as a
strategically vulnerable part of the Alliance.
V. THE TAILORED FORWARD PRESENCE
31. At the Warsaw Summit, NATO also established the Tailored Forward Presence in the
Black Sea region. Based on a proposal by Romania, the TFP bolsters NATO’s presence in the land,
air and maritime domains (Romania’s Permanent Delegation to NATO, 2017).
32. The NATO PA was reminded of the geostrategic importance of the Black Sea during the
2017 Annual Session in Bucharest, where the NATO Secretary General, Jens Stoltenberg, noted
the Alliance’s desire to increase its efforts to project stability across the region in response to
Russia’s illegal activities in Ukraine.
33. The land component of the TFP includes a multinational brigade in Craiova and a Combined
Joint Enhanced Training Initiative (CJET). The Multinational NATO South-East Brigade reached
Initial Operational Capability in April 2017 and was officially inaugurated on 9 October 2017. The
core of this multinational formation is the Romanian 2nd
"Rovine" Infantry Brigade, a brigade of up to
4,000 soldiers3
, which is complemented by a separate deployment of 900 US troops already in place
(Emmott, 2017). The CJET is a regional platform for cooperation, aimed at ensuring a continuous
Allied presence in the region, through participation in exercises and training activities.
34. The TFP’s maritime component involves integrated training and more exercises with the
participation of the NATO Standing Naval Forces. An example of the TFP’s recent Black Sea
maritime efforts is the July 2017 multinational maritime exercise Sea Breeze, which included assets
from the Standing NATO Maritime Group Two Task Unit Two (SNMG2 TU.02)4
and other maritime
assets from both Allied and partner states. The exercise played out both in the Black Sea and on
Ukrainian territory with the participation of Belgium, Bulgaria, Canada, France, Georgia, Greece,
Italy, Lithuania, Norway, Poland, Romania, Sweden, Turkey, Ukraine, the United Kingdom and the
United States.
35. The TFP’s air component, NATO’s enhanced Air Policing (eAP), is manned by rotating Allied
forces patrolling the Romanian and Bulgarian airspace. On 31 December 2017, Canada concluded
its four-month contribution to the eAP, after having deployed approximately 135 Canadian Armed
Forces personnel and four CF-188 Hornets at the Mihail Kogalniceanu Air Base in Romania. During
the mission, ATF-Romania, Canadian Air Forces also participated in joint training exercises with their
3 Also known as Scorpions Brigade, it was previously deployed in Afghanistan and in Iraq.
4 SNMG2 is one of NATO’s four Standing NATO Maritime Groups (SNMGs). The SNMGs are a
multinational, integrated maritime force made up of vessels from various Allied countries. These vessels
(including their helicopters) are permanently available to NATO to perform different tasks ranging from
participating in exercises to actually intervening in operational missions. http://www.mc.nato.int/media-
centre/news/2016/nato-and-partner-country-forces-participate-in-exercise-sea-breeze.aspx
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Romanian counterparts, demonstrating their readiness in terms of medical support, flight safety,
aircraft maintenance, command and control, and policing (Strong, 2018).
36. At the NATO defense ministerial meeting held in Brussels on 8-9 November 2017, the
United Kingdom announced its decision to redeploy four RAF Typhoons to work with Romania to
police the Black Sea skies on a permanent basis (Wills, 2017). The decision came right after two
Typhoon jets were scrambled in September to monitor Russian planes heading towards British
airspace; a similar incident occurred in January 2018 (Hartley-Parkinson, 2018). In July 2017, RAF
Typhoons scrambled in response to Russian Air Force Tu-22 Backfire strategic bombers heading
south near NATO air space over the Black Sea.
US European deterrence initiative
37. The Trump Administration’s December 2017 National Security Strategy (NSS) defines the
current international security environment as one of global competition at all levels. In the document,
Russia is identified as seeking peer-rival status vis-à-vis the United States. The document
underscores that an important line of effort to counter this is to build stronger alliances. The NSS
emphasizes Washington’s desire to remain active in Europe: “A strong and free Europe is of vital
importance to the United States” (NSS, 2017).
38. US policymakers also worked to dispel any lingering doubts in delegation members’ minds
about the United States’ Article 5 commitment during the Defence and Security Committee’s most
recent visit. As Thomas Goffus, Deputy Assistant Secretary of Defense (DASD) for European and
NATO policy, noted: “The United States’ Article 5 guarantee is iron-clad.” Mr Goffus continued by
stating that the United States would focus on the European Deterrence Initiative (EDI) during the
upcoming summit in Brussels: “Deterrence is what we do together, rather than the US-focused
European Reassurance Initiative, as the EDI was previously known.”
39. The EDI includes plans for additional forces, prepositioned brigade sets and other support
assets in Europe, with the increased number of forces coming from the combination of additional
forces and the deferral of previously planned force reductions. It also provides support for an
additional armored brigade combat team (ABCT). The EDI, therefore, funds the maintenance of two
ABCTs, two Fires Brigades and air defense, engineer, movement control, sustainment and medical
units in the region, which would be sufficient to sustain a division (US DOD, 2018).
40. The ERI/EDI has funded a significant increase in US presence in eastern Europe, which
supports more exercises, infrastructure, equipment prepositioning, and partner capacity
development efforts. In many ways, the proof of US commitment is in the USD 10+ billion already
spent or planned to reinforce Allied defense and deterrence in Europe.
41. The United States recently announced a planned allocation of USD 6.5 billion to the EDI in
2019, a USD 1.7 billion increase from last year and USD 3.1 billion more than was allocated in 2017.
42. During the February 2018 NATO PA Joint Committee meetings held in Brussels, briefers
reiterated the United States’ commitment to Europe is strong and a paralleled surge in defense
investment is now expected from the United States’ European Allies.
Exercise Trident Juncture 2018
43. Trident Juncture 2018 [TRJE18] is scheduled to take place in Norway in October and
November and will include 40,000 personnel, 130 aircraft and 70 vessels from the 29 NATO
members, Sweden and Finland. The exercise is comprised of three main phases: deployment and
redeployment, a live field exercise and a command post exercise. Within the live field component,
training will be divided between land, air and sea and will take place across Norway and the North
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and Baltic Seas. The exercise is a major test for the Very High Readiness Joint Task Force (VJTF),
which will be certified at the end of TRJE18 (See Appendix I for Map).
44. Beyond logistical and climatic concerns, organizers also point to Russia as a potential
challenge. The exercises proximity to Russia and the inclusion of non-NATO members–Sweden and
Finland–is sure to heighten Moscow’s interest. Norwegian Defense Minister Frank Bakke-Jensen
stated': “There will be an opportunity for Russia to practice different methods of influence. So, we
must be prepared to be exposed to false news and influence, both in advance, during the exercise,
and afterwards” (Taylor, 2018). The Committee will remain focused on the progress and success of
Trident Juncture 2018.
VI. BARRIERS TO ENTRY – THE CHALLENGES OF DEFENDING THE EAST
A. RUSSIAN REGIONAL A2/AD CAPABILITIES
45. From a conventional tactical point of view, NATO’s tripwire deterrence relies heavily on
reinforcements being deployed from the center to the periphery of the Alliance on short notice. Even
if the decision to deploy the NRF and its VJTF is taken in due time, Russia could easily outmatch
NATO’s forces by simply denying them freedom of movement to and inside the targeted area through
the effective use of its A2/AD capabilities (Baroudos, 2016).
46. Russia is in the process of fielding an impressive variety of A2/AD systems in and around the
Baltic Sea region, the Black Sea, the Eastern Mediterranean and the Barents Sea. When fully
operational, these systems will substantially limit NATO’s ability to reinforce Allies by land, air and
sea (NATO STO, 2017). By mid-2016, the Russian Federation had already introduced air defense,
coastal defense and electronic warfare capabilities as well as ballistic missiles in Kaliningrad, in
Syria, and later in Crimea (IISS, 2017). Russia’s A2/AD exclusion areas were extended with the
deployment of the S-400 air defense system to Syria in November 2015 and to Crimea in
August 2016; each has a range of up to 250 miles. Advanced Russian air defense is also operated
in cooperation with Belarus and Armenia through the Joint Air Defense System (Weinberger, 2016).
According to the Lithuanian Minister of Defense Raimundas Karoblis, Russia has also permanently
deployed Iskander missiles in Kaliningrad (AFP, 2018).
47. The TFP serves as a means of monitoring the evolution of Russia’s A2/AD capabilities in and
around the region. This is especially true considering that Romania is home to the Aegis Ashore
Ballistic Missile Defense site. The NATO Science and Technology Organization (NATO STO) is
currently conducting an analysis on Russian A2/AD capabilities in order to address existing
vulnerabilities (NATO STO, 2017).
48. In particular, given their geographical location, the three battlegroups deployed in the Baltic
States could be trapped behind the Russian A2/AD wall. As noted by the Defence and Security
Committee, the only weakness in the Russian A2/AD bubble in the Baltic Sea is the Swedish island
of Gotland.
49. In September 2017, Sweden held its biggest military exercise since the early 1990s. Aurora-17
involved 19,000 Swedish soldiers and a foreign contingent of seven NATO countries (the United
States, Denmark, Estonia, France, Latvia, Lithuania and Norway), plus Finland. The objective of the
exercise was the defense of the Swedish island of Gotland from an attack coming from territories
roughly corresponding to Kaliningrad and Belarus (Winnerstig, 2017). After the exercise, following
decades of absence, Sweden decided to reinstate a permanent military presence on the island.
Commenting on this decision, former US Army Europe Commander General Ben Hodges reaffirmed
Sweden’s and Gotland’s importance for NATO: “You have a strategically very important task here. I
do not think there is any island anywhere that is more important” (The Local, 2017).
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B. THE ZAPAD 2017 EXERCISE
50. Aurora-17 was held a few days before the start of Russia’s large-scale military exercise
Zapad 2017. While Russia holds yearly large-scale exercises5
, there are several factors which make
Zapad 17 worthy of further consideration. The exercise was the first exercise held in the west6
–
specifically in Belarus and in Russia’s Kaliningrad oblast – since 2013 and therefore since Russia’s
intervention in Ukraine and the deteriorated relations with NATO (IISS, 2018).
51. Russia was deliberately vague about the number of troops and equipment deployed for the
exercise. Official statements stated 12,700 personnel participated, just short of the 13,000 threshold
which would require the presence of international observers under the 2011 Vienna Document. While
Belarus had indeed invited a small number of observers, Russia was vague about the number of
personnel deployed to Kaliningrad for the exercise. Estimates for the total number of personnel
deployed in both Belarusian and Russian territory range between 50,000-60,000 (IISS, 2018).
52. Russian Defense Minister Sergei Shoigu described the exercise as a counterinsurgency
operation against extremist groups benefitting from external support. Russia tested, inter alia, its air
and missile defense systems, which were successful as air and land reinforcements to the
hypothetical armed groups operating in the exercise. In addition to conventional components, Russia
also added asymmetric components to the exercise, testing its ability to repel
diversionary-reconnaissance groups and counter-electronic warfare. The exercise’s
counterinsurgency components transitioned to conventional warfare (IISS, 2018; Boulègue, 2017).
Some analysts have underscored the significance of this, as Russia tends to rehearse tactics it plans
to deploy later in a real scenario–a striking example being Russia’s use of its Spetsnaz (Special
Forces) during the 2013 exercise, which were subsequently an essential element to the annexation
of Crimea (Mizokami, 2017).
53. The main takeaways from Zapad 2017 are twofold. First, despite NATO’s post-2016
reassurance efforts, Russia's ambiguity about the size and scope of the exercise was successful in
rattling many Allied and partner governments, particularly in NATO’s eastern territories. Second,
Russia showed its capacity to conduct a range of operational theatre tactics, from heavy
combined-arms to asymmetrical.
C. THE VOSTOK 2018 EXERCISE
54. From 11 to 17 September 2018, Russia held its largest military exercise since the
Soviet Union’s Zapad 81. Minister of Defense and General of the Army Sergei Shoigu claimed
Vostok 2018 involved approximately “300,000 troops; more than 1000 planes, helicopters, and
drones; up to 80 combat and logistic naval vessels; and up to 36,000 tanks, armoured-personnel
carriers, and other vehicles” (Synovitz, 2018). The main exercise centered on Tsugol training facility
in Zabaykalsky krai, but activities reached across eastern Siberia. General of the Army Valery
Gerasimov highlighted multiple new technologies and armaments being tested, among them
upgraded T-80 and new T-90 tanks, the new SU-34 and SU-35 airplanes, Mi-28 and Mi-35 attack
helicopters, as well as Iskander missile systems (TASS, 2018). The size and scope of the operations
is a clear demonstration of force by the Kremlin, which hopes to project military capabilities
comparable to the Soviet Union.
55. In addition to Russian forces, both Chinese and Mongolian forces participated as well, with the
People’s Liberation Army sending 3200 troops and 900 pieces of weaponry (Higgins, 2018). China’s
presence at Vostok 2018 underscores a growing strategic partnership between Moscow and Beijing.
This could signal a response to the US National Security Strategy, which stated both nations
5 Russia’s policy is to rotate the regional focus of its exercises yearly; other than Zapad, which literally
translates as West, there are also Kavkaz (Caucasus), Tsentr (Center) and Vostok (East).
6 Zapad means west in Russian. Russian exercises rotate annually along cardinal points – as noted
below, Vostok, or east, is taking place in the fall of 2018.
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“challenge American power, influence, and interests, attempting to erode American security and
prosperity;” with both Moscow and Beijing signaling to Washington their desire for closer
cooperation, particularly at the security level (NSS, 2017). Furthermore, through Vostok 2018 Russia
and China can mirror NATO’s Trident Juncture exercise and develop the image of their strategic
partnership as a peer competitor to the West.
56. Concurrent with Vostok 2018, the Russian Navy reinforced its contingent of warships in the
eastern Mediterranean. On 1 September 2018, 26 Russian warships and support vessels along with
36 planes took part in a naval exercise off the coast of Syria (Coker, Saad and Gall, 2018). As
Russian forces engage in naval training in the eastern Mediterranean, only a few hundred miles
away, Russian-backed Syrian forces prepare to oust the last vestiges of the opposition forces in Idlib
province. These military maneuvers near Syria are another way Russia is seeking to project its
renewed global reach and ambitions.
57. Despite stalled NATO-Russia cooperation attempts, communication channels remain open
between the two. To prevent unintended conflict and ease tension, the NATO-Russia Council met in
May 2018 to discuss Vostok 2018 and Exercise Trident Juncture 18 (RFE/RL, 2018). Additionally,
military-to-military lines of communication are used to provide transparency in military activities.
NATO’s Northeastern Flank – A Weakness Exposed
58. As noted above, in January 2017, RAND Corporation political scientists told the Defence and
Security Committee that NATO’s capabilities, posture and capacity to defeat a Russian attack on the
Baltic States with its conventional land and air forces were too weak to return the region to the status
quo ante without serious conflict escalation. While the EFP, VJTF and US EDI have certainly
changed the balance of forces calculations, these remain insufficient when considering Russia’s
advantages that persist, particularly in the Baltic area.
Russian Local Advantages Remain Significant
59. NATO’s focus on out-of-area stability operations after the Cold War, particularly after the
9/11 terrorist attacks, diverted attention from heavy combined-arms capabilities, artillery and missile
defense (RAND, 2018). This trend, coupled with the cuts to defense spending and investment, has
hollowed out the conventional capabilities of most European forces, which compromises the ability
to reinforce or sustain deployed forces7
. A recent study of the abilities of the British, French and
German armies to generate and sustain armored brigades in the Baltics found that each would likely
be able to deploy and sustain a heavy brigade, though at different rates and at great sacrifice
(Shurkin, 2017). The study found that, of Europe’s three largest armies, only France could deploy
one battalion within a week and a brigade within a month. Recent reporting on the operability of
many major German military systems reveals Germany’s contributions are even less likely (Buck,
2018).
60. By contrast, Russia has spent the last decade honing the specific capabilities NATO’s
European and Canadian forces are now lacking. Russia has strengthened and improved its
combined-armed forces, making them more mobile and lethal. In addition, Russia is exercising these
capabilities at an accelerated rate and is even testing them in real combat operations in Ukraine and
Syria. All of these improvements have indeed made Russia a near-peer competitor, as outlined in
the recent US NSS.
61. In the Baltic region, Russia maintains a significant advantage in integrated air and missile
defenses, long-range artillery and heavy armor (IISS, 2015; RAND, 2018). Finally, Russia’s internal
lines of communication, both road and rail, would allow Moscow to launch and sustain operations in
the region rapidly.
7 This topic is examined in detail in the DSCTC report Burden Sharing: New Commitments in a New Era
[170 DSCTC 18 E rev.1 fin].
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62. As such, despite recent efforts to change the balance of conventional forces in the Baltics in
the Allies’ favor, Russia would still dominate any conflict in the short- to medium-term until the
Alliance would be able to bring, likely across the Atlantic, overwhelming resources to bear upon the
conflict.
VII. ADDRESSING NATO’S KEY REMAINING HURDLES TO MILITARY MOBILITY AND
DEFENSE INVESTMENTS
63. A robust and effective defense of all of NATO’s territories and populations is essential. To get
there an effective deterrence posture must be in place to dissuade any potential adversary from even
considering an attack anywhere within the Alliance at any given moment. To overcome the
challenges to an effective defense and deterrence policy for NATO’s eastern territories, national
Parliaments need to find the ways and means to address the following challenges.
Military Mobility and Bureaucratic Delays
64. During the Cold War, ensuring the mobility of troops and equipment was a priority and was
reviewed during frequent exercises. Cold War infrastructure included readiness for support,
command and control, as well as for destruction, denial and diversion. It also incorporated
multi-layered communication lines, hardened storage for ammunition and fuel and a central and
northern European pipeline to bring fuel to forward operating bases. While some of this infrastructure
still exists today, it only reaches the frontier of NATO’s Cold War borders (Jacobson, 2018). As NATO
moved its borders further east, attention to infrastructure and connectivity with the new members did
not follow (Novaky, 2017). Today, NATO faces two main military mobility problems; the first concerns
infrastructure itself, the other legal regulations.
65. Today, the Alliance has significant infrastructural deficiencies. First, it lacks the necessary
infrastructure to transport modern military equipment at speed over long distances due to critical
shortages in rolling stock to load and unload along the rail lines of communication. In addition, there
is insufficient material for military bridging. Infrastructure in certain states is not physically capable of
sustaining the weight of state-of-the-art military vehicles and is in urgent need of modernization. In
the Baltics, for example, the rail gauge narrows at the Polish border (Jacobson, 2018).
66. The Alliance also faces significant bureaucratic delays at member state borders when clearing
the transfer of equipment and forces. US General Ben Hodges (Ret.) was particularly outspoken
about his unhappiness with the current bureaucratic ordeal concerning the movement of troops at
border crossings. He noted the irony of having very high readiness forces and then not being able
to move them fast enough because of bureaucracy (Schultz, 2017). During the NATO PA February
Joint Committee Meetings, members learned cumbersome bureaucratic regulations cause
unnecessary delays, even in key areas of vulnerability. It was estimated that, even working 24 hours
a day and not taking unforeseen problems into account, it could take weeks to move a considerable
number of vehicles across some borders in Europe (Schultz, 2017).
67. Establishing a more coherent and straightforward legal framework within the Alliance – often
informally referred to as a “Military Schengen Zone” – should go hand in hand with infrastructure
modernization. At this point in time, the above-mentioned troop and equipment border transfer
requests can even be unexpectedly denied (EEAS, November 2017). While the issue has been badly
neglected, there are consistent joint efforts that should be able to deliver significant results in a
relatively short period of time.
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The Example of the Suwalki Corridor
68. The thin strip of land connecting Poland and Lithuania is increasingly referred to as the Suwalki
corridor. Its location between the Russian enclave of Kaliningrad and Belarus makes it a potential
choke point between the Baltic States and the rest of the Alliance’s eastern territories. The Suwalki
corridor bundles the key challenges to building and maintaining an effective deterrence in NATO’s
eastern territories: infrastructural deficiencies, red tape and a critical imbalance of forces and
equipment, as well as insufficient storage facilities to handle any potential surge in Allied military
activities in the region.
69. In the event of a contingency in the Baltic region, the Suwalki corridor would become a lifeline
between the Baltic States and Poland. As such, the Alliance must have in place an effective early
warning system to detect a possible incursion, developed infrastructure for the quick deployment of
troops, and the necessary manpower ready to defend the territory. As noted in this report, it currently
does not.
Initial Steps Taken: Adapting NATO’s Structure
70. In July 2018, NATO Secretary General Jens Stoltenberg confirmed the addition of two new
commands to update the Alliance's force structure. First, the NATO Joint Force Command for the
Atlantic will be stationed in Norfolk, Virginia to assist not only with increasing security in the Atlantic,
but also to coordinate the transfer of reinforcements across the Atlantic in the event of a contingency
in Europe. Another new command to assist with the logistical and bureaucratic hurdles associated
with moving troops and supplies across Europe will be built in Ulm, Germany. Further, a new Cyber
Operations Centre will also be established at the Supreme Headquarters Allied Powers Europe
(SHAPE) in Mons, Belgium.
71. Allied efforts in the North Atlantic are also increasing to reflect the rapidly evolving security
environment in the region and the need for increased presence to protect vital assets and key
transatlantic sea lanes. In August 2018 the US Navy reactivated the Second Fleet, which will serve
as a deterrent to increased Russian activity along the United States’ eastern coast and across the
North Atlantic. The UK Navy similarly announced an increased presence in the North Atlantic with
the stated objective of protecting transatlantic submarine communication cables.
72. Further, to address the challenges of reinforcement, the Alliance announced a new initiative at
the July Summit in Brussels – the NATO Readiness Initiative, often referred to as the "30-30-30-30
plan". The new initiative requires NATO to have available, from a common pool of forces, “an
additional 30 major naval combatants, 30 heavy or medium maneuver battalions, and 30 kinetic air
squadrons, with enabling forces” ready to deploy within 30 days or less of being put on alert. The
implementation of the plan can be understood as a challenge to all NATO members to meet the
demands of the Alliance’s new defense and deterrence posture.
73. In addition, at the Brussels Summit, Allies also endorsed the Enablement Plan for SACEUR’s
Area of Responsibility. While short on details of how it will be implemented at the national level, the
plan commits nations to work assiduously to “improve the necessary legislation and procedures,
enhance command and control, and increase transport capabilities” (NATO Brussels Declarations,
2018). As such, the Summit declarations note the need to address the abovementioned key
challenges currently impeding the efficient transfer of equipment and personnel across the Alliance.
The remaining question is the degree to which each nation, particularly those in the eastern
territories, will take up the challenge of implementing the Enablement Plan.
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Increased NATO-EU Cooperation Needed To Help Solve The Problem
74. In December 2017, addressing existing barriers to military mobility at the legal and
infrastructural levels was identified as an area of cooperation between the EU and NATO (Council
of the EU, 2017). Within the EU, military mobility is likely to become the first flagship initiative of the
EU-led Permanent Structured Cooperation (PESCO), as EU High Representative for Foreign Affairs
and Security Policy Federica Mogherini vows to have an action plan for military mobility ready by
March 2018 (European Council, 2017; EU Commission, November 2017).
75. The European Union identified improving the resilience of transport infrastructure as a key
element in countering hybrid threats; as such, it is a fundamental part of the EU-NATO cooperation
framework (EU Commission, July 2017). Cooperation with the EU is necessary in order to map out
existing legislation concerning the movement of troops. Indeed, military equipment is currently
excluded by the customs union; as such, military mobility is still regulated by a complex mix of NATO,
EU and national regulations, which leads to uncertainties and significant delays (Fiott, 2017).
76. In March 2018, the European Commission published an Action Plan on Military Mobility to
address regulatory hurdles and infrastructure deficiencies delaying military mobility across the
European Union (European Commission, 2018). Most of the deadlines for key EU projects are set
for the end of 2018 and 2019. An important first step set for the end of 2018 is the streamlining of
custom formalities for military operations. Additionally, through the European Reassurance Initiative,
the United States has invested in specific logistical improvement, such as the modernization of
railheads to decrease unloading times for tanks in eastern Europe (Peel and Acton, 2018). In fact,
infrastructure modernization to improve military readiness is identified as a key objective of the EDI,
which dedicates USD 337.8 million of its 2018 budget to it and over USD 800 million in 2019.
77. Although infrastructure improvements are a major issue across the Alliance, there have been
some positive developments in eastern Europe. For example, renovations continue along European
Route E67, which runs from Prague to Helsinki by way of Poland, Lithuania and Estonia. Still,
progress has been rather piecemeal; despite some localized advancements on the Via Baltica
expressway, the project is years away from completion. Bottlenecks in the Suwalki corridor in both
roads and rail leave the whole corridor strategically vulnerable (Hodges, Bugajski and Doran, 2018).
78. Other infrastructure projects undertaken in the Baltic region include expanding the Polish port
of Gdansk. The EU Transportation Coordinating Committee recently approved EUR 1.9 billion for
the modernization of facilities, the dredging of the port and improved road and rail connections
(Maritime Journal, 2016). This will make the port more accessible to larger vessels and improve the
transit of personnel and military supplies. In light of Russia’s use of natural gas as a political tool in
eastern Europe, important steps forward for regional energy security are being taken. Polish and
Lithuanian gas transmission operators have approved a grid connection agreement this year, which,
when completed in 2022, will provide a strategic energy link between Poland and the Baltic States
(Ministry of Energy of the Republic of Lithuania, 2018).
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VIII. CONCLUSIONS
79. Certainly, conventional forces are only a part of NATO’s defense and deterrence posture.
NATO’s nuclear forces are also a core component of the Alliance’s overall capabilities. The purpose
of any deterrence posture, however, is to convince an opponent that any potential benefit to be
gained from a military action would be wiped out by the overwhelming costs of such an action –
thereby making the action unthinkable.
80. The conventional imbalance in NATO’s eastern territories provides an unnecessary
hypothetical temptation. If Russia were to test Alliance resolve, quick escalation would be disastrous.
81. Much can and should be done to bolster the balance of conventional forces in the region to
erase any such temptation, no matter how slight or improbable it may be.
82. NATO’s Enhanced Forward Presence and Tailored Forward Presence revolve around three
central messages. The first is signaling Alliance solidarity in the face of Russian regional aggression
and threats. The transatlantic security imperative of the new defense and deterrence efforts in the
region is underscored by Canada and the United States leading the multinational battlegroups in
Latvia and Poland. The second is the resolve to deter further aggression by demonstrating more
robust capabilities in the region. The third is NATO’s resolve to counter a limited incursion in the
area.
83. These messages can be strengthened in the following ways; Considerations for NATO
Parliamentarians:
84. First, the deployment of additional ground forces and equipment to the east remains an
imperative. By doing so, the mobilization dilemma identified above would be mitigated: the increased
numbers of troops and weapons stocks would greatly reduce deployment times.
85. Second, all Allies can support the NATO-EU initiatives to strengthen infrastructure and reduce
legal and bureaucratic hurdles to military equipment and personnel transfers to the east. NATO
parliamentarians can act domestically in their own Parliaments to move such legislation and funding
initiatives forward. Such investments would clearly have an impact ranging far wider than just the
transfer of military materiel – better roads, bridges, communication infrastructure, ports and airports,
etc. can all have far-ranging economic impacts and demonstrate the political will to share Allied
burdens.
86. The burden-sharing debate often overlooks the positive security and defense impacts such
investments can have, not to mention the political will to demonstrate unity of purpose by regional
Allies to "do their part". As Lieutenant General Carsten Jacobson told the delegation at the February
2018 Joint Committee Meetings: “When vital equipment cannot cross borders without intense
bureaucracy and lengthy procedures – and we have seen delays not just for days, but for weeks in
recent exercises – we simply cannot show Alliance capabilities across Alliance territory. This subject
needs to be addressed urgently; it is a political task.”
87. Third, European Allies should have faster deployment times than those outlined above. They
should also have the resources necessary to sustain these deployments. All Allies should be able to
contribute in a substantive way. Targeted investments to address force deficiencies are an
imperative.
88. Regional Allies also need to invest in modern low-tier air defense systems, capable
intelligence, surveillance and reconnaissance (ISR) systems, sensors and radars to give Allies a
more complete air picture, as well as in defense capabilities that are more difficult to track, such as
man-portable air-defense systems (MANPADS). In the absence of larger air defense systems,
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investing in capabilities like Stinger missiles would be a clear means to change Russian calculations
about their ability to dominate the air and ground if there is a contingency, even in the short-term.
89. Fourth, Allies must invest in the means to overwhelm and degrade Russia’s A2/AD systems.
This means investing in 5th
generation fighters like the F-35, jamming systems, as well as
longer-range precision missile systems to target and destroy any Russian attempts to degrade the
Allies’ ability to operate inside Allied territory.
90. Finally, as mentioned in the 2017 Sub-Committee on Transatlantic Defence and Security
Cooperation (DSCTC) report on burden sharing, the North Atlantic Council determined that the
Alliance requires a new, modern, dynamic and mobile deterrence posture. The necessary means to
implement this new posture must follow. This translates to increased Allied defense spending in the
right kind of equipment and force structure to ensure NATO can respond to today’s evolving security
challenges and threats to international stability. Ultimately, however, NATO’s ability to do so will be
addressed only when the political will is present for a whole-of-Alliance solution to deliver the
necessary capabilities in terms of personnel and resources.
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APPENDICES
NATO Enhanced Forward Presence
Map of Exercise Trident Juncture 18
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16
The Suwalki Corridor
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hodges-europe-nato-russia-sweden
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9 October 2017, www.balkaninsight.com/en/article/nato-inaugurates-black-sea-force-to-deter-
russia-10-09-2017
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military-drills-president.html
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Budget Fiscal Year 2019”, Office of the Undersecretary of Defense (Comptroller),
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of War, 29 August 2016, www.understandingwar.org/backgrounder/russian-anti-access-and-
area-denial-a2ad-range
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exercise-in-sweden-1/ ________________
DEFENCE AND SECURITY
COMMITTEE (DSC)
Sub-Committee on Future Security
and Defence Capabilities (DSCFC)
NATO SPECIAL
OPERATIONS FORCES IN
THE MODERN SECURITY
ENVIRONMENT
Report
by Madeleine MOON (United Kingdom)
Rapporteur
169 DSCFC 18 E rev.1 fin | Original: English |18 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ..............................................................................................................1
II. TODAY’S SECURITY ENVIRONMENT – OPPORTUNITIES AND CHALLENGES
FOR SOF..........................................................................................................................4
III. SOF IN THE MODERN INTERNATIONAL SECURITY ENVIRONMENT..........................5
ALLIED SOF AND COUNTERTERRORISM.....................................................................5
IV. SOF AND PARLIAMENTARY OVERSIGHT .....................................................................9
SELECTED OVERVIEW OF ALLIED PARLIAMENTARY SOF OVERSIGHT.................10
V. CONCLUSIONS: WAYS FORWARD FOR NATO PARLIAMENTARIAN
CONSIDERATION..........................................................................................................12
BIBLIOGRAPHY.............................................................................................................14
169 DSCFC 18 E rev. 1 fin
1
I. INTRODUCTION
1. NATO Special Operations Forces (SOF) are executing a range of critical missions in today’s
complex international security environment. For example, a coalition of international Special Forces
is supporting local forces in the fight against Daesh, and other Special Operations task groups
(SOTGs) are embedded across the Middle East and Africa and work to help forces focus on small
unit tactics, techniques, and procedures as well as military operations. Beyond the struggle to
counter violent extremism, NATO SOF are also working to help Allies maintain an edge over rising
near-peer threats.
2. Small in footprint and highly specialised, Special Forces can be seen as a precision instrument
at the disposal of nation states seeking to perform a range of difficult tasks in an increasingly
challenging operational environment and beyond. Further, as this report will document, Special
Forces also provide plenty of other benefits to achieve policy goals at a fraction of the cost with a
relatively high rate of success.
3. A key part of today and tomorrow’s international security environment is playing itself out in a
grey zone of competition between NATO and its principal foes. This murky terrain below the
threshold of war is one not particularly suited to NATO’s strengths. Robust, capable, and
interoperable Alliance Special Forces will be an essential element to a whole-of-Alliance strategy to
overcome the challenge.
4. NATO Special Operations Headquarters (NSHQ) is working to train, advise, and assist NATO
Allies and partners to achieve this, but much more can be done at the Alliance and national levels to
increase resilience and heighten situational awareness. NSHQ is still short of the resources
necessary to accomplish the increasing number of tasks it is being assigned. More broadly, Allies
across the board are seeking to develop increasingly capable and effective Special Operations
Forces to hone their situational awareness and response capabilities. Despite their efforts, however,
research indicates that most Allied SOF are neither large enough nor sufficiently resourced to
accomplish the accelerating pace of tasks assigned to them, particularly those requiring effective
strategic reach outside of Europe. Parliamentary attention to the allocation of adequate funding to
make national Special Forces fit for purpose in today’s security environment is essential if we are to
remedy this problem.
5. This report examines the new, dynamic role Special Forces play in today’s operations, training,
and planning. Ultimately, the report will seek to broaden the NATO member states’ legislators’
understanding of the costs and benefits of increased use of SOF in a challenging security
environment. As is clear from this report, parliamentarians need to think seriously about the role and
use of SOF, as well as understand the hurdles to the appropriate interagency cooperation necessary
to address critical issues such as resourcing and operational oversight.
DEFINING SOF: WHAT DO SOF ACTUALLY DO?
6. Special Forces are by nature designed to respond to complex and dynamic security missions.
They are expected to innovate quickly enough to stay ahead of the most difficult security challenges
facing any state. Today, they are a vital element of most Allies’ armed forces, yet their duties and
tasks are often poorly understood. NATO Allied Joint Doctrine for Special Operations defines SOF
as engaged in “military activities conducted by specially designated, organised, selected, trained,
and equipped forces using unconventional techniques and modes of employment". The definition
goes on to specify: "These activities may be conducted across the full range of military operations,
to help achieve the desired end-state. Politico-military considerations may require clandestine or
covert techniques and the acceptance of a degree of political or military risk not associated with
operations by conventional forces. Special Operations deliver strategic or operational-level results
or are executed where significant political risk exists."
169 DSCFC 18 E rev. 1 fin
2
7. Three broad categories can encapsulate Special Forces’ principal tasks: Military Assistance
(MA), Special Reconnaissance (SR), and Direct Action (DA) – these mission sets are common to all
NATO member state SOF.
8. Military Assistance consists of training, educating, advising, and supporting partners (most
often in the partner’s area of responsibility). Military assistance is often provided by the Allied power
until the partner is able to carry out its tasks independently. MA activities, however, can lead to cross-
pollination, as they can bring new information/insight into an area for both special reconnaissance
and direct action tasks. Special Reconnaissance tasks are essentially intelligence, surveillance and
reconnaissance (ISR) activities to inform areas or mission sets that are extremely dangerous, hostile,
or politically sensitive. Direct Action can be defined as any action taken by Allied SOF – from
precision strike operations or targeted killings to arrests of war criminals, etc. – to complete a mission.
9. In addition to the above, Special Forces often play a key role in several other types of tasks
from counterinsurgency (CI), counterterrorism (CT) or chemical, biological, radiological and nuclear
(CBRN) defence to hostage rescue/release operations.
MODERN SPECIAL OPERATIONS FORCES
10. The year 2001 marked the start of a new era for Special Forces across the Alliance. The United
States boosted SOF capabilities and used them to spearhead the Global War on Terror in the wake
of the September 11 terrorist attacks. Special Forces’ prominent role in counterterrorism operations
had two principal effects: first, US SOF’s operational successes drastically improved their reputation
and perceived usefulness; second, as a result of the successful expanded use of Special Forces,
many Allies followed suit to improve and expand their own SOF capabilities.
11. US Special Forces’ effectiveness in post-9/11 counterinsurgency and counterterrorism
operations fuelled new investment rapidly. The United States increased defence outlays to bolster
the ranks and capabilities of its Special Forces by almost five-fold from 2001 to 2016, going from
USD 2.3 billion to USD 10.4 billion (Naylor, 2016). The United States’ use of Special Forces for
missions and operations continues to grow, as global terrorism threats remain high. During the first
200 days of the Trump presidency, for example, the US Special Operations Command (USSOCOM)
carried out more than 100 operations, representing a five-fold increase over
President Barack Obama’s final 200 days (Zenko, 2017).
12. In parallel to the United States, many European countries also have well-trained, effective and
dynamic modern Special Operations Forces – and attention to these forces is only growing. Among
the larger European militaries, it should come as no surprise that both the United Kingdom and
France have a long tradition of developing and deploying Special Operations Forces for a range of
tasks from direct action and special reconnaissance to military assistance. Since 2001, both nations
have been vital partners to US global counterterrorism efforts, and both nations have taken leading
roles in areas such as Libya, Iraq, Syria, Mali, and beyond. At home and abroad, both France and
the United Kingdom have proven to be not only key SOF innovators, but also essential contributors
to Allied operations and training missions.
13. Beyond the larger NATO militaries, increased attention to SOF is also changing the force
structures and contributions of many other medium and smaller Allies to NATO missions and tasks
– Spain, Norway and Lithuania are excellent examples of this trend. Their varying size, geography,
and threat perspectives demonstrate the growing trend across the Alliance to invest in dynamic and
innovative modern SOF.
14. As a delegation from the NATO PA Sub-Committee on Future Security and Defence
Capabilities (DSCFC) learned on a recent visit to Spain, the Spanish Special Forces are evolving
quickly. Spain has recently begun raising its defence expenditures and a 2016 review of its force
structure resulted in the reorganisation of its army brigades for increased deployability via more
169 DSCFC 18 E rev. 1 fin
3
efficient mechanised formations and Special Operations Forces (Mix, 2018). The greater emphasis
on SOF follows the 2014 creation of the Joint Special Operations Command, which sought to
organise Special Operations Forces across all branches of the Spanish military (Villarejo, 2016). In
addition, Spain has created a fourth Special Operations Force, the Grupo de Operaciones
Especiales (GOE), which increases its ability to deploy its SOF abroad. The Spanish Special
Operations Command (SOCOM) is also currently leading the Special Operations element of the
2018 NATO Response Force (NRF).
15. The Norwegian Special Operations Command (NORSOCOM), established in 2014, combined
the two Norwegian SOF units under one new autonomous command, allowing the Norwegian SOF
(NORSOF) a more comprehensive approach to tackling complex challenges such as hybrid warfare
tactics or violent extremism. Now an independent military branch, NORSOF is equivalent to the
Norwegian Army and Navy (Deblanc-Knowles, 2015). NORSOCOM indicated in 2016 its intention
to establish a Special Operations Air Component (SOAC). Norway is also investing in greater C4ISR1
technology for its Special Forces in its announced procurement for 2017-2025 (Norway MOD, 2017).
Norway is currently hosting NATO’s Trident Juncture 2018 exercise, which is serving as a major test
for the Very High Readiness Joint Task Force (VJTF), in which Allied Special Forces play a key role.
16. Understanding the limitations of its conventional forces, Lithuania has placed stronger
emphasis on its Special Operations Forces’ tactical units to create a more versatile and flexible
military response capability (Andriskevicius, 2014). In 2014, Lithuania assigned 2,500 troops to a
rapid reaction component of the Lithuanian Armed Forces (LAF). This rapid reaction SOF component
is a means of providing a swift response in the event of a hybrid contingency, to which conventional
forces would likely be too slow to respond. Lithuania also hosts the annual Flaming Sword exercise,
which brings together NATO member states’ and partner nations’ SOF. The exercise’s value is in its
focus on strengthening Allied SOF interoperability when responding to a localised hybrid incident,
which then scales quickly to broader conventional conflict.
17. As is clear from the examples of Spain, Norway, and Lithuania, the post-2014 international
security environment is driving an Alliance-wide renewed focus on the development of modern SOF.
Some Allies are also expanding the role of women among their ranks.
THE GROWING ROLE OF WOMEN IN SOF
18. While still a controversial subject, the integration of women into SOF has demonstrated clear
benefits to the handful of nations that have begun doing so. With an ever-increasing reliance on
SOF units across a broad range of missions, the integration of women into SOF units is providing
NATO member states with new, valuable in-theatre operational capabilities. For example, in 2014
the Norwegian Special Forces created the Jegertroppen, an all-female Special Forces training
programme, focusing on surveillance and reconnaissance. Norwegian officials note that in
Afghanistan, intelligence gathering and relationship building, two crucial aspects of counterterrorism
operations, were being hampered because the all-male SOF units were unable to interact with
women in the conservative local population. Outside Afghanistan, these capabilities have also
proven useful in Iraq, Syria, and off the coast of Somalia during counter-piracy missions (Korpela,
2016).
19. In 2017, however, the US Army’s 75th
Ranger Regiment had its first woman meet the standards
to join the unit after completion of Ranger Assessment and Selection Program 2. This also comes
after two women completed Army Ranger School after the United States opened all combat roles to
women (Tzemach Lemmon, 2017). When it comes to Navy and the Air Force, despite women being
recruited for training, neither branch has seen a woman pass the difficult standard requirements for
admission into the forces (Swick and Moore, 2018).
1 C4ISR - Command, Control, Communications, Computer, Intelligence, Surveillance, and
Reconnaissance
169 DSCFC 18 E rev. 1 fin
4
20. While Canada has some women SOF personnel, it is currently working to broaden the
operational capabilities women can provide to Canadian Special Forces. Canadian officials note that
increased participation from women SOF will allow for greater flexibility when carrying out operations,
particularly highlighting the fact that mixed-gender teams would likely be less conspicuous in
operations than an all-male team (Brewster, 2018).
II. TODAY’S SECURITY ENVIRONMENT – OPPORTUNITIES AND CHALLENGES FOR SOF
21. NATO’s scramble to adapt post-2014 can be lumped into two broad challenges: Russia and
jihadi-inspired violent extremism. Thinking of these as distinct poles seeking to undermine the peace
and security of Allied populations and territory, however, masks the complexity of the threats they
pose. In the longer term, NATO will need to find the means to adapt its force structure and policies
to defend Allied populations and territories from both near-peer competitors, such as Russia and
China, and powerful non-state actors probing to find exploitable weaknesses in Allied consensus
and commitment.
22. Russia is a revisionist state opposed to the political, economic, and security arrangements
dictated by the Euro-Atlantic community in Europe. Emboldened by recent advances in its
conventional military capabilities, Russia is increasingly aggressive in its political, economic, and
security brinkmanship with the West. Russia is far from a strictly conventional threat, however, which
requires only the calculation of the right balance of conventional, nuclear, and air and missile defence
systems to counter it. In reality, Russia also poses a suite of asymmetrical challenges, some of which
are more often associated with non-state armed groups and criminal networks than with modern
nation states.
23. Terrorist organisations exploiting religious motives are a major security challenge for all Allied
states today. The number of European and North American citizens committing violent acts in the
name of extremist ideologies is growing, and it is testing the limits of national police forces and
causing deep civil society turmoil (Vidino et al., 2017). Intelligence estimates put the number of
Europeans rushing to join Daesh after its rapid rise in 2014 at 5,000; about 1,500 of these are
expected to try to return home (Renard and Coolsaet, 2018).
24. Pressured by active military campaigns against them in Syria, Iraq, Libya, and Afghanistan,
Daesh leaders are encouraging people to act with any means available wherever they can. As a
result, random stabbings and vehicle slaughter have accounted for the highest number of successful
attacks in recent years – one study identified 51 such lone wolf attacks in the three years from
June 2014 to June 2017 (Vidino et al., 2017).
25. In numerous conflicts around the world, from Afghanistan to the Middle East to West Africa,
armed groups are wreaking havoc on weak states and causing the displacement of large numbers
of local populations, many of whom are swelling the ranks of refugee and migrant flows into Turkey,
Europe and, across the Atlantic, into Canada and the United States. Today’s international terrorist
groups, such as Daesh, are also using methods and tactics more associated with state actors –
holding territory, taxing civilians, building more structured conventional-style fighting forces, etc. As
such, these groups are having an even more profound impact on the ground, in war-torn societies
seeking to find a means of political and social reconciliation. Transnational groups, local non-state
armed groups, and “lone wolf” individuals all employ terrorism tactics from a position of relative
weakness to disrupt and sow fear and doubt about the current political order’s ability to maintain
peace and security.
26. This complex spectrum of threats is forcing political leaders and policy advisors to expand their
understanding of security in new ways as they seek to find the appropriate instruments of national
power – diplomatic, informational, military, economic, financial, intelligence, and law enforcement
169 DSCFC 18 E rev. 1 fin
5
(DIME-FIL) – to match the near and longer-term goals to maintain the peace and security of the
populations for which they are ultimately responsible.
DISRUPTIVE TACTICS SHORT OF WAR: THE GREY ZONE AND NEAR-PEER
COMPETITION
27. Expanding our understanding of security is made more difficult by the fact that many threats
to NATO today operate in what many academics and, increasingly, policymakers, call the grey zone.
Between war and peace, grey zone competition exists below Article 5. The term encapsulates the
myriad disruptive tactics that can be used to gain advantage over an adversary short of provoking a
conventional conflict. In the grey zone, state and non-state actors “employ threats, coercion,
co-option, espionage, sabotage, political and economic pressure, propaganda, cyber tools,
clandestine techniques, deniability, the threat of the use of force, and the use of force to advance
their political and military agenda” (Roberts, 2016).
28. States, or any other actor trying to challenge a state, have two basic strategic choices when it
comes to designing defensive frameworks – matching (as the United States and the USSR did in
the Cold War) or offsetting, which means investing in and exploiting the capabilities necessary to
undermine their competitor’s advantage (Goldman, 2011).
29. Given the conventional and (still) technological superiority of NATO member states, particularly
the United States, NATO Allies’ adversaries are investing in and honing their grey zone capabilities.
By doing so, NATO’s adversaries are seeking the means, short of war, to disrupt at the political,
social, economic and security levels. As a result, concern about a wide range of potential disruptors,
from terrorist attacks to election meddling to disinformation campaigns, is shifting the understanding
of defence and deterrence today for all NATO members.
30. Given their training, education, and operational dynamism across a range of tasks, there is an
increasing tendency to see Special Forces as a key element of the defence, deterrence, and
situational awareness needed by Allies facing threats emanating across the increasingly broad
spectrum of security challenges facing NATO today.
III. SOF IN THE MODERN INTERNATIONAL SECURITY ENVIRONMENT
ALLIED SOF AND COUNTERTERRORISM
31. As noted above, SOF have become the de facto military instrument of choice for the broader
global counterterrorism campaign begun in the aftermath of the 9/11 attacks. There are two main
kinds of SOF deployment: direct missions to find, track, obtain evidence on, arrest, neutralise or
destroy key terrorist capabilities; or, indirect methods, which often involve SOF train, advise, and
assist missions of partner forces (both state and non-state). Both direct and indirect missions in the
era of the global war on terror have been extremely successful. Examples of both abound; in the
case of Iraq, coalition forces’ efforts in pursuit of al-Qaeda from 2005 to 2011 decimated their
capability, avoided a sectarian war, and thereby saved countless Iraqi civilian lives. Further, it can
be argued the training, advice and assistance provided to the Iraqi Special Forces over the same
period proved to be the lynchpin that saved Baghdad from falling during the darkest hours of the
2014 Daesh onslaught upon the country. The US operation to track and eliminate Osama bin Laden
was able to add a degree of closure to the trauma of the 9/11 attacks.
32. SOF prevail in today’s counterterrorism policy environment for a simple reason – their
effectiveness at achieving operational objectives with the most appropriate means for mission
requirements. Policymakers, however, should be wary of the overuse and longer-term
policy-strategy mismatch that result from an overreliance on SOF.
169 DSCFC 18 E rev. 1 fin
6
POTENTIAL PROBLEMS OF LONG-TERM CT STRATEGY AND RELIANCE ON SOF –
THE EXAMPLE OF DAESH AND THE TALIBAN
33. Many Allied nation’s most recent SOF-heavy operations should underscore a key attribute
about the use of SOF: Special Operations are almost always part of a larger strategic goal, which
requires support not only from other military instruments of power, but from national ones as well,
such as economic and political. While SOF can help achieve tactical success, broader strategic goals
necessitate an investment of more sustained effort and political will. At times, however, some nations
deploy SOF to capture or eliminate “high-value” targets within a specific terrorist organisation, with
the objective of precipitating the organisations’ collapse or obsolescence.
34. As studies have shown, high-value targeting strategies have not been as effective as hoped
(Long, 2016). Despite efforts to decapitate and erode certain groups’ leaders and effective
middlemen, the strategy is largely ineffective due to these groups’ organisational strategy –
highly-institutionalised groups such as the Taliban have proven to be able to absorb shocks to their
leadership structure quickly.
35. Further, those groups that have been beaten down through the attrition of a high-value capture
and kill strategy, such as Daesh, have found ways to regroup, resource, and re-emerge. As the state
part of the Islamic state of Iraq and the Levant (ISIS) fails, the group will retreat to what all armed
terrorist groups seem to do today – plan to regroup by using a mix of international and regional
terrorism and local insurgency to keep their cause alive, maintain relevance and then resurge.
Unfortunately, the conditions on the ground in Iraq and Syria today likely still offer ripe spaces for
the group to resurge.
36. In addition, it should be noted there are clear legal and human rights issues regarding targeted
killing outside of the legally prescribed battlefield. This issue is at the centre of the current debate in
the United States about the need for a new authorisation for the use of military force. Further, the
divergent perspectives on the question of what are and what are not extrajudicial killings fuel social
media speculation and distrust, not to mention the propaganda of the very terrorist organisations our
nations’ forces are fighting.
A. RUSSIAN USE OF SOF
37. Russia is using SOF to disrupt and destabilise its near abroad in an effort to maintain influence
and control over political developments in those regions. The most recent example is the annexation
of Crimea.
Russia’s Annexation of Crimea and Continued Interference in Ukraine
38. As this Committee debated in its 2015 report on Hybrid Warfare [166 DSC 15 E bis], Russia’s
interference in and subsequent annexation of Crimea were an example of all elements of Russian
state power combined to achieve a short-term strategic outcome. Russian Special Forces played a
key role in Moscow’s ability to deceive, disrupt, and then seize territory in Ukraine.
39. In the early months of 2014, Ukrainian civil society was in a very public struggle for its future,
its options being either to remain in the Russian sphere of influence or to move further toward the
Euro-Atlantic community via closer association with the European Union and NATO. By the end of
February, Russia had initiated a large-scale snap exercise of up to 150,000 personnel, which was
able to divert attention from Russian actions in Crimea. Quickly, a large-scale cyberattack was
launched against Ukrainian public and private institutions, which was followed by the classic
electronic warfare tactic of jamming communication systems on Crimean institutions. The electronic
warfare attack was able to isolate the peninsula from Kyiv so it would not be able to muster a
coordinated response. Soon, unidentified Russian Special Forces infiltrated and seized key military
and government locations across the peninsula. Russia also used a disinformation campaign and
169 DSCFC 18 E rev. 1 fin
7
diplomatic efforts to push through a trumped-up referendum on independence. All the tactics used
managed to stay short of war while still achieving the desired political outcome.
40. Russia continues to interfere in Ukraine. The sustainment and training of insurgent forces in
eastern Ukraine is an excellent example of a Russian military assistance mission. Moscow’s support
of proxy forces blocks Kyiv’s ability to control all Ukrainian territory and thereby distracts it from its
efforts to further its Euro-Atlantic integration projects. Non-military means to destabilise Kyiv include:
the use of control of natural resources to exert economic and political pressure, cyberattacks, the
use of criminal networks, etc. All of this is happening under an incessant barrage of propaganda and
dezinformatzia or fake news to unanchor people’s perceptions of truth by keeping various narratives
of any particular news event alive, to even the reinterpretation of recent and long historical past.
41. It is clear from the above that Russia conceives of its military forces, including its SOF, as
assets to be used in support of all elements of its national power, which it uses towards its grand
strategic goals. This differs significantly from the Alliance. NATO Allies seem to conceive of their
forces as assets to be deployed in defence of their national instruments of power. This will lead to a
perpetual strategic imbalance and weakness when faced with Russia. As a result, NATO continues
to respond to Russia, rather than anticipate its actions.
NATO’S RESPONSES TO THE EVOLVING SECURITY ENVIRONMENT – WHAT ROLE
FOR A COORDINATED SOF EFFORT?
42. NATO is responding to the Russian challenge via a range of initiatives to update its defence
and deterrence posture post-2014. These include NATO’s increased presence in its eastern
territories via the Enhanced Forward Presence and the Tailored Forward Presence. The Alliance is
also working to coordinate its deterrence along the southern flank via initiatives such as the Hub for
the South in Naples. The ability to respond and to reinforce Allied forces in the event of a contingency
is also reflected in a revised NATO Response Force, an expanded command structure, the
Readiness Initiative, and the Enablement Plan for SACEUR’s area of responsibility.
43. More broadly, however, the institution of new missions and operations, as well as centres of
excellence, and the expansion of the Alliance’s structure are part and parcel of the push for all Allies
to engage with what is being called 360-degree security. It is essentially a call on Allies to be resilient
in all domains (including cyber), to be aware of and have the ability to respond to rapidly evolving
security situations around them, and, ultimately, to work with partners to project stability abroad.
44. A key question, therefore, is how NATO is working to coordinate the training and
interoperability of Allies’ SOF to meet the diverse range of tasks they are increasingly being asked
to face as the Alliance develops its new defence and deterrence posture.
B. EVOLUTION OF THE ROLE OF SOF IN NATO2
45. In 2010 Allies established the NATO Special Operations Headquarters (NSHQ), which was
designed to be a standing headquarters with a coordinating function, rather than a NATO Special
Operations Command. NSHQ’s core function is the coordination of the development of SOF
capability and interoperability for Allies and Partners 3
. A key element of NSHQ’s efforts is
encapsulated in the NATO SOF School, which provides training and education “to build Alliance and
Partner Nation SOF capability, capacity, and interoperability”. Currently, the school offers 27 different
2 The information provided below extends from a number of interviews and briefings the author and
NATO PA Defence and Security Committee staff had with NATO SOF Commanders at NSHQ and the
NSHQ Commanders Conference, and with staff at the Global SOF Foundation (GSF). Any fault of
misinterpretation is our own.
3 A task greatly assisted by NATO’s Battlefield Information Collection and Exploitation Systems (BICES).
Currently, all NATO and approved SOF partners are able to share, access, and collaborate on all
releasable information on BICES.
169 DSCFC 18 E rev. 1 fin
8
resident courses focusing on professional development, operational studies, intelligence and
technical exploitation operations, SOF air development, and SOF medical training and education.
46. Beyond NATO Allies, current NSHQ development with partners is focused on heavily
resourced programmes in Ukraine, Georgia, and Tunisia. While NSHQ sees a benefit in expanding
its partner development programmes, this is still not a political priority at NATO.
C. NATO SOF AND POST-2014 ADAPTATION
47. As noted above, a key element of NATO’s response to Russia’s 2014 annexation of Crimea
was the revamping the NATO Response Force (NRF) via the Readiness Action Plan (RAP), which
sought to scale the number of forces capable of responding to a contingency to 40,000 and make
them more flexible and adaptable, with the objective of guaranteeing rapid reinforcement and
mobility. The RAP also established the Very High Readiness Joint Task Force as the spearhead of
the NRF, capable of deploying 5,000 brigade-level troops within two to seven days’ notice to the
periphery of the Alliance4
. Following its reform, the NRF contains air, land, maritime and SOF
components.
48. NSHQ’s principal role in the NRF is to coordinate Allied SOF capability development in order
for nations to complete the Long-Term Rotation Plan for the NRF, including establishing the NRF
Special Operations Component Commands (SOCC) and the Task Groups (and Units) beneath them.
As building the SOCC is the most challenging role for Allied nations to fill, NSHQ has a dedicated
Zero to NRF SOCC programme, which provides a five-year structured approach to developing a
nation’s ability to provide a SOCC. The programme includes education, training, exercises, and
evaluation. Depending on the need, the programme can also include NATO assistance in the
provision of Communication Information Systems (CIS) and other enabling capabilities the nation
may not be able to resource independently.
49. As NATO continues to adapt its defence and deterrence posture, Allied SOF have a key role
to play. NHSQ is seeking to transition from the above-mentioned operational command and control
capability to providing a strategic theatre Special Forces capability to the Alliance. As a theatre SOF
component, NSHQ will be linked more closely to the Director of Special Operations Office at SHAPE
to provide strategic advice and synchronise the Special Forces domain across the entire theatre at
a level above the Operational Joint Force Commands.
D. NATO SOF REGIONALISATION?
50. There is a desire today to push SOF command, control, and planning to the regional level via
an expanded network of SOCCs. Regional SOCCs could be configured by linguistic commonality,
geography, historical linkages, or capability. This would translate into a coordination of the member
state SOF capabilities in any one region in order to tap into joint tasking, which would then create a
clearer regional picture – combined regional SOCCs would then be pulled together to form a more
complete intelligence understanding of any form of hybrid developments across Alliance territory, to
be compiled into a coordinated picture in Brussels. The ability to have increased assets available
and operating at the regional level is an essential element in increasing situational awareness and
the capacity for the Alliance to identify and react to hybrid scenarios – in some ways, clearing up
some confusion that can reign in the grey zone.
51. Another principal driver behind NATO SOF regionalisation is that NATO SOF are having a
hard time filling the required number of SOCCs according to their ambition levels. As many nations
are still short on resources and capability, the creation of composite SOCCs with discrete roles for
each nation, allowing for a stronger, more resilient network, is still lacking. Some nations are already
4 This Committee addressed in greater detail the impact of the decision in the 2015 report NATO’s
Readiness Action Plan: Assurance and Deterrence for the Post-2014 Security Environment
[167 DSCFC 15 E bis] by Xavier Pintat (France).
169 DSCFC 18 E rev. 1 fin
9
responding and acting accordingly. For example, Belgium, Denmark, and the Netherlands recently
signed a Memorandum of Understanding on the creation of a Composite Special Operations
Component Command (C-SOCC) in June 2018. The C-SOCC is expected to have initial operational
capability by 2019 and full operational capability by 2021 (NATO, 2018).
RECENT ALLIED SOF EXERCISING
52. There is also momentum to increasingly coordinate Allied SOF exercising and training. For
example, in 2016 NATO SOF units trained together during the exercise Cold Response. Recognising
the Arctic as a new potential arena for strategic competition, 14 Member States and partner nations
carried out exercises in Norway aimed at enhancing the capabilities of NATO SOF teams during cold
weather operations.
53. In June 2018, the USSOCOM Europe-led exercise Trojan Footprint 18 took place, which
brought together Special Operations Forces from 13 NATO Member States and partner nations. The
Trojan Footprint exercise takes place every two years. The focus of Trojan Footprint 18 was the
“rapid deployment of SOF into a crisis, the establishment of multinational mission command
structures, and the integration of SOF and conventional forces.” Trojan Footprint 18 took place in
Estonia, Latvia, Lithuania, and Poland, incorporating both air and sea assets (Weisman, 2018). As
noted above, Trident Juncture 2018 is taking place across Norway, with additional elements taking
place in Sweden, Finland, Iceland, the North Sea, and the Baltic Sea. The exercise incorporates
significant Special Forces elements and serves as a test of the VJTF’s certification in the revised
NRF.
IV. SOF AND PARLIAMENTARY OVERSIGHT
54. As previously discussed, SOF can play an important role in the grey area between war and
peace. However, as this grey area is inherently vague and used to justify a wide array of activities,
there are growing concerns about accountability.
55. These accountability concerns manifest in two ways. First, Special Forces traditionally do not
require parliamentary approval for specific deployments. Second, governments usually report
successful operations, but often keep silent over botched operations. Consequently, the public
perceives SOF operations to be more reliable than they might be in reality because of selective use
of data.
56. For many valid reasons, secrecy is still a predominant feature of SOF operations. Still, while
SOF units are, in principle, under the same military justice system as regular troops, the secrecy of
their operations means that courts are often unable to access full files, including the identity of the
personnel. As such, the lack of information surrounding operations makes personnel hard to
prosecute for serious mistakes and negligence - if not worse. It is also difficult for parliamentarians
to ensure SOF personnel have the appropriate training, equipment, and leadership in place to deal
with the consequences of mistakes, which is essential to refining best practices.
57. A quick overview of the role several member states’ parliaments play in overseeing their
Special Forces in their national security policy highlights a range of approaches taken to institute
democratic control over Special Forces across the Alliance.
169 DSCFC 18 E rev. 1 fin
10
SELECTED OVERVIEW OF ALLIED PARLIAMENTARY SOF OVERSIGHT
The United Kingdom
58. In 2015, this Rapporteur made an enquiry in the House of Commons after the Prime Minister’s
cabinet vowed to increase the SOF budget by GBP 2 billion. The cabinet failed to explain why such
an increase was needed. This Rapporteur also oversaw a parliamentary inquiry that debated
whether the Ministry of Defence should lose its immunity from prosecution— over incidents during
exercises after the incidental deaths of three Special Air Service (SAS) candidates during a selection
event (Moon, 2015; Townsend, 2016). Crown immunity makes it virtually impossible to prosecute
the Ministry of Defence for failures of duty of care towards personnel.
59. In the United Kingdom, any information concerning Special Operations activities is highly
classified. UK parliamentarians have discussed the release of information concerning these
operations on multiple occasions, most notably as a means of requesting further details over the
British Special Air Service’s involvement in the global war on terrorism.
60. Details over operations are excluded from UK Freedom of Information Act and from its
30-year rule on the public disclosure of government documents. Former British Defence Secretary
Philip Hammond was quite outspoken over the government’s policy: “We never comment on the
disposition of our special forces anywhere in the world and that will remain our policy” (Moran,
2016a). Indeed, on its public website, the British Ministry of Defence does not acknowledge SOF as
deployed troops (The British Army, 2018). Available data has either been approved by the Ministry
of Defence or leaked. The United Kindgom’s SOF involvement in Libya was revealed incidentally by
King Abdullah II of Jordan during a briefing with the US Congress (Ramesh, 2016).
The United States
61. Since 2001, the United States Congress has authorised the president to use the means
necessary, including the armed forces, to prosecute what has become known as the Global War on
Terrorism. The first Authorization to Use Military Force (AUMF) allowed the president to “use all
necessary and appropriate force” against any actor or organisation that aided or abetted the 9/11
terrorist attacks. The second AUMF, passed on 11 October 2002, gave the president the authority
to “use the Armed Forces of the United States as he determines to be necessary and appropriate”
to defend the nation against continuing the threat posed by Iraq. The US Congress has not passed
an additional AUMF since, and the Obama and Trump administrations have continued to argue these
two AUMFs are sufficient to engage in military activities related to the war on terrorism outside of
Afghanistan and Iraq, which often involve SOF military assistance or direct action.
62. There has been considerable debate about the need for a new AUMF in the United States in
recent years. In many respects, this is a debate about how much authority to use military force should
be in the hands of the US executive branch, given that the US Constitution actually allocates a fair
amount of control in this respect to the US Congress – practice over the years, however, has
significantly reduced this role. In the wake of the October 2017 killings of three US soldiers in Niger,
debate has increased.
63. Despite this, the House and Senate Armed Services Committees are regularly briefed, both
orally and in writing, about US military programmes and the authorisations under which they are
operating. Still, there is clear concern growing in the legislative branch about the extent to which US
Special Forces are being used. In November 2017, for example, congressional representatives from
both the House and Senate Armed Services Committees voiced their concerns over the increasing
use of SOF at a policy forum organised by the Global SOF Foundation, where they argued US SOF
units are fatigued by repeated and uninterrupted deployments (Brimelow, 2017).
169 DSCFC 18 E rev. 1 fin
11
France
64. In France, the Commandement des Opérations Spéciales (Special Operations Command,
COS) was established in 1992 following the blueprint of USSOCOM. As of 2017, the Ministry of
Defence had recognised 25 operations conducted by French Special Forces since the COS’
inception, but it is likely many more were conducted in secret (Schumacher, 2017). The COS
established a prominent role for itself in the French defence strategy, as it managed to secure a
considerable budget to invest in new technological capabilities (Guibert, 2018). On the other hand,
its missions are characterised by the same lack of information found in the United States and in the
United Kingdom.
65. In recent years, French military involvement in Libya was made public only through a
journalistic investigation by Le Monde. As a consequence, then-Minister of Defence
Jean-Yves Le Drian launched a criminal investigation into this violation of national defence secrecy
(Guibert, 2016). In 2017, the government announced the death of a French soldier in Iraq, without
revealing either his identity or the exact place of his death, to preserve the larger objectives of the
mission; France had never recognised an official deployment of troops in the area (Kujawski, 2017).
From a legal perspective, the secret deployment of Special Forces could be considered a violation
of the French Constitution: in principle, the French Constitution says the French president should
always give notice to the Parliament within three days of a military operation, while a deployment of
more than four months would require parliamentary approval (Thomas, 2015). In order to shed light
over the COS’ activities, its Commander, General Grégoire de Saint-Quentin, had a Committee
hearing in June 2016. At the hearing, General de Saint-Quentin argued discretion to be an intrinsic
characteristic of COS missions, in order to maintain a strategic advantage in the theatre of operations
(Assemblée Nationale, 2016).
Challenges of Parliamentary Oversight of SOF in Other Member States
66. Problems concerning lack of parliamentary oversight are also present in other NATO countries.
In 2016, Italy reorganised its Special Operations’ command structure, allocating authority over
Special Forces missions to the secret services. As such, the Italian government acquired full control
over their deployment, effectively removing any parliamentary oversight role. The reform coincided
with reports that Italian forces have been operating in Libya: most likely, the government wanted to
avoid a parliamentary debate over such a divisive issue (Kington, 2016). In Canada, Special Forces
share a similar fate to their US counterparts: their use has grown significantly in recent years for
counterterrorism operations, but it seems to have done so away from public knowledge or oversight
by parliamentarians (National Post, 2015).
67. As noted above, secrecy is a crucial part of success for operations conducted by Special
Forces. However, this should not come at the cost of at least some form of democratic control of the
use of these armed forces. While recognising the strategic importance of SOF, parliamentarians
should still be able to exercise some form of real control over their activities. Aside from conducting
parliamentary hearings, parliamentarians usually have voting powers over defence budgets, and
therefore also over SOF funding. Parliamentarian information requests about exactly what their
nation’s SOF forces are requesting funding for in their budgets may shed more light on the types of
activities they will be executing. Funding spent on new equipment and technologies for effective
intelligence, surveillance, and reconnaissance operations is money well spent; non-traceable
funding, however, will raise more than a few eyebrows about the ways in which any nation’s Special
Forces are directing national resources.
169 DSCFC 18 E rev. 1 fin
12
V. CONCLUSIONS: WAYS FORWARD FOR NATO PARLIAMENTARIAN CONSIDERATION
68. Capable Special Operations Forces are essential to dealing with the challenges of today and
tomorrow’s international security environment. International security competitors and those elements
seeking to undermine the Alliance will increasingly attempt to do so via grey zone tactics – coercion,
co-option, espionage, sabotage, political and economic pressure, propaganda, cyber tools,
clandestine techniques, etc. These instruments allow competitors to attempt to remain below the
threshold of Article 5, which would bring to bear the overwhelming power of the Alliance into a conflict
– which, at present, any opponent would lose. To parry competitors' grey zone tactics, Allied Special
Forces can provide essential special reconnaissance, intelligence, and precision operations.
69. The increased demand for Special Forces’ services, however, is straining the ability for Allied
nations to fill their ranks with soldiers capable of performing the demanding missions asked of them.
Further, many Allies’ SOF are currently lacking the necessary strategic reach to accomplish their
tasks outside of continental Europe. Special Forces need the strategic reach capabilities to execute
their missions – this means, for example, investing in capabilities like the C-17 or the A-400 and the
necessary accompanying tanker support.
70. The Alliance has the means to provide uniform, capable, and interoperable SOF across all
member states. The key channel through which this happens is the NATO Special Operations
Headquarters. As the Alliance is adapting, so is NSHQ.
71. Member state parliamentarians should know, however, that NSHQ is faced with the dilemma
many institutions and services face in today’s security environment: limited resources being
stretched over too much demand. For example:
- NATO’s demands with regards to fielding special operation commands will soon need to
scale to include another level of battalion-level HQs.
- The Alliance’s increased demand for policy planning from NSHQ, which at current levels
is diverting precious resources away from other institutional core tasks.
- NSHQ is perennially understaffed. It is currently running at only 70%. Member state
parliamentarians should inform themselves about what their nation is doing to support this
critical institution to Allied-wide capable SOF development.
72. The drive for an increasingly regionalised Alliance SOF presence still lacks the necessary
political will. Regionalisation would provide clear benefits: regional NATO SOF component
commands would allow for an expanded situational awareness capacity and a clear edge in terms
of speed and accuracy. The Alliance desperately needs this in the face of hybrid tactics, which
attempt to sow chaos, confusion, or discord about the reality on the ground. We must recognise that
security competition between NATO and its competitors is increasingly played out in the grey zone,
and that a more efficient SOF structure would increase the clarity of the security picture facing the
Alliance.
73. A more efficient regionalised SOF presence would bring significant resilience and strength to
the Alliance’s new defence and deterrence posture. Coordinated regional SOF would assist greatly
with Brussels’s oft-repeated desire to have a 360-degree security posture backed by a dynamic and
mobile deterrent – which a cadre of elite, highly educated, trained, and rapidly deployable SOF
across the Alliance’s disparate regions would strengthen greatly. A regional NATO SOF architecture
would increase Alliance understanding of the new, more nuanced and complex, challenges to its
security.
169 DSCFC 18 E rev. 1 fin
13
74. We must ask ourselves several basic questions:
- Do we have an understanding beyond the balance of forces assessment used when
examining Allied conventional defence posture?
- Do we have capable, able, adaptable and structured forces available, on a regular basis,
to deal with a Ukraine-like attack on our countries?
- Can we afford to delay putting the regional structures in places to provide the responses
we require?
75. Ultimately, Special Operations Forces should be thought of as a complement to a broader
whole-of-government approach to security, rather than as a panacea to complex issues.
Parliamentarians need to think seriously about these issues and work to attain the right kind of
interagency cooperation to address these growing and complex challenges.
169 DSCFC 18 E rev. 1 fin
14
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__________________
DEFENCE AND SECURITY
COMMITTEE (DSC)
Sub-Committee on Transatlantic Defence
and Security Cooperation (DSCTC)
BURDEN SHARING:
NEW COMMITMENTS IN A
NEW ERA
Report
by Attila MESTERHAZY (Hungary)
Rapporteur
170 DSCTC 18 E rev 1 fin| Original: English | 17 November 2018
TABLE OF CONTENTS
I. INTRODUCTION 1
II. BURDEN SHARING DEFINED AND IN CONTEXT ...............................................................1
III. BURDEN SHARING AS A PERENNIAL CHALLENGE IN NATO...........................................2
A. WHY THEN THE 2% GUIDELINE? ..............................................................................2
B. TOWARD THE WALES 2014 JOINT 2% COMMITMENT.............................................3
IV. THE 2% DEBATE: LIMITATIONS AND BENEFITS ...............................................................4
A. DEFENCE SPENDING DEFINED AND CRITICISED ...................................................4
B. IS 2% VALID FOR ALL?...............................................................................................4
C. WHAT ABOUT RISK?...................................................................................................4
D. INPUTS, OUTPUTS OR BOTH? ..................................................................................5
V. WARSAW DOUBLES DOWN ON ADAPTATION INCREASING PRESSURE ON THE 2%...5
A. RECENT US VIEWS ON BURDEN SHARING .............................................................6
B. RHETORIC VERSUS REALITY – THE RENEWED US COMMITMENT TO EUROPEAN
SECURITY ...................................................................................................................6
VI. TRENDS IN DEFENCE SPENDING ......................................................................................7
A. NORTH AMERICA........................................................................................................8
1. United states.................................................................................................................8
2. Canada.........................................................................................................................8
B. EUROPE ......................................................................................................................8
1. Eastern Europe.............................................................................................................9
a. Poland ....................................................................................................................9
b. Romania .................................................................................................................9
c. The Baltics..............................................................................................................9
2. Southern Europe......................................................................................................... 10
a. Italy....................................................................................................................... 10
b. Greece.................................................................................................................. 10
3. Western Europe.......................................................................................................... 11
a. France .................................................................................................................. 11
b. The United Kingdom ............................................................................................. 11
c. Germany............................................................................................................... 11
VII. INTRA-EUROPEAN GAP .................................................................................................... 12
VIII. CONCLUSIONS .................................................................................................................. 13
IX. STEPS FORWARD FOR NATO PARLIAMENTARIANS...................................................... 14
X. EXPANDING THE DEBATE TO STRENGTHEN ALLIED SECURITY ................................. 14
BIBLIOGRAPHY.................................................................................................................. 15
170 DSCTC 18 E rev 1 fin
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I. INTRODUCTION
1. NATO is implementing ambitious new initiatives to adapt its defence and deterrence posture
in response to a rapidly evolving complex international security environment. In parallel there is a
rising expectation all NATO Allies must do more to invest in the success of these initiatives. The
most vocal proponent of increased spending is coming from the US executive.
2. The United States’ expectations of its Allies to do more is increasing the pressure on the
already substantive shift in the burden sharing debate made at the 2014 Wales Summit, when Allies
committed to moving toward dedicating 2% of their GDP toward defence spending by 2024 –
20% of this increased spending, it was also stipulated, should be dedicated to purchasing new
equipment and research and development (R&D).
3. Among Allies, the burden sharing debate intensified due to the persistent fall off of
NATO Europe and Canada’s defence spending in the wake of the Cold War, even while the
United States took the opposite course after the 9/11 attacks. Increased pressures on the United
States globally and the perception of some Allies’ decisions to opt out of NATO operations or tasks
in recent years have only increased the temperature of the debate surrounding Allied contributions.
4. Despite criticism of the 2% guideline due to its definitional and conceptual shortcomings, the
Wales defence spending commitment has anchored the Alliance to the benchmark.
5. This report will briefly highlight the history of the burden sharing debate in the Alliance and the
main criticisms of the 2% guideline. It will then highlight the levels of new defence investments across
the Alliance by region. It will conclude with an attempt to underscore the value in focusing on effective
new defence investments by all Allies, as well as suggest several steps forward NATO
parliamentarians can take to increase their inputs as the burden sharing discussion continues to
gather political importance over the coming years.
II. BURDEN SHARING DEFINED AND IN CONTEXT
6. For the purposes of this report, burden sharing is defined as the relative weight of the
distribution of costs and risks across Allies in pursuit of common goals.
7. Burden sharing in NATO is subject to the political-military nature of the Organisation – the
Alliance’s core identity is defined by efforts to guarantee the safety and security of Allied populations
and territories. Ultimately NATO is a consensus-based organisation which implies that any operation,
adaptation or other kind of collective action is de facto a common political goal to which Allied
resources must be committed.
8. Allied peace and security is the central goal of the Alliance. Throughout NATO’s history, the
pursuit of this goal has inevitably produced a debate about the necessary means to achieve it and
the ways in which these means will be employed.
9. In the case of NATO, the burden sharing argument has perennially revolved around just how
much of any appropriate military asset each Ally is able to deliver to accomplish any task. When
taken together, these tasks ultimately seek to maintain peace and security within the Alliance and
even to project stability abroad. To achieve this broad-based goal, NATO defines three core tasks:
collective defence, crisis management and cooperative security.
170 DSCTC 18 E rev 1 fin
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Burden Sharing as defined by NATO
10. NATO defence planners utilise metrics measuring financial input and military output as well as
percentages of deployable armed forces, airframes and vessels, staff positions in NATO’s Command
and Force Structures, as well as the requirements of the Response Force to have a clear assessment
of contributions by each individual member state across the Alliance (Mattelaer, 2016).
11. NATO uses seven metrics for assessing individual countries’ defence contributions, including
the 2% of GDP formula, the 20% target of national defence budgets dedicated to equipment
purchases and R&D, the percentage of deployable armed forces and the actual contributions
deployed to NATO in terms of land forces, aircraft, ships and personnel dedicated to the NATO
Command Structure (NATO, 2017a).
III. BURDEN SHARING AS A PERENNIAL CHALLENGE IN NATO
12. The burden sharing question has been central to Allied political leaders’ discussions since
NATO’s founding in 1949. At the time, the relative power balance between post-war Europe and the
United States clearly indicated the latter would play the dominant role in shaping the Alliance.
US political leaders did, however, anticipate their agreement to any form of treaty-bound collective
security alliance with their post-WWII allies would lead to a burden sharing dilemma. As Secretary
of State Dean Acheson told the US Congress during the NATO ratification hearings in 1949, the
newly forming Alliance must guarantee “nobody is getting a meal ticket from anybody else so far as
their capacity to resist is concerned” (Czulda and Madej, 2015).
13. To pre-empt the burden sharing problem, Article 3 was inserted in the Washington Treaty,
which underscored the Allies’ obligations to invest in their own forces to make the whole of the
Alliance stronger as well as to bolster each nation’s capacity for self-help.
14. In drafting the Washington Treaty, the Alliance’s founding fathers knew all too well the
credibility of collective defence ultimately depends on the political will of all NATO Allies to sustain
it. As such, expectations of Allied defence spending proportionate to the necessity of maintaining
capable forces were understood to be a fair price for every Ally to pay for the increased security
guaranteed by NATO membership. The principle of self-help attempted to ensure no Ally would
become a weak link in Allied efforts to defend their populations and territory.
15. Despite various forms of political pressure on Allies to increase their defence spending by the
United States, defence investment clearly remains a national prerogative. Throughout the history of
the Alliance, a tacit understanding always existed acknowledging each Ally would inevitably have
ebbs and flows in their domestic political and economic circumstances, which may preclude a steady
or even increased defence investment at any given time. The essential, therefore, was to encourage
a steady increase over time and to not call out individual members for ‘failing’ to live up to these
expectations at any given time. The reason for this was clear – the maintenance of Allied solidarity
always overrode any momentary shortcoming (Lunn and Williams, 2017).
A. WHY THEN THE 2% GUIDELINE?
16. Prior to its initial endorsement at a 2006 NATO Defence Ministerial, a benchmark of 2% GDP
defence spending for aspirants emerged as a logical and feasible goal for incoming member states
who at the time were spending approximately 1.7% GDP on defence (Lunn and Williams, 2017). In
parallel, as Allies were taking the lead in Afghanistan in 2003, median defence spending among
European NATO Allies and Canada had fallen to 1.7% GDP. Therefore, 2% became a guideline for
aspirational Allied defence investments as a means of backstopping continued “peace dividend”
defence spending cuts and as a goalpost for incoming members.
170 DSCTC 18 E rev 1 fin
3
17. Unfortunately, the 2% defence spending guideline for Allies surfaced just before the
2008 financial crisis, during which defence budgets became prime targets for cash-strapped
governments across the Alliance. To make matters worse, a growing divergence in transatlantic
defence spending was well underway in parallel.
18. After the 2001 terrorist attacks, defence spending by the United States increased dramatically.
The United States assumed a global war footing as it sought to defend and deter against terrorism
– the most obvious and burdensome were its commitments in both Afghanistan and Iraq. NATO
member states invoked Article 5 for the first time in the history of the Alliance in defence of the
United States and soon took the lead in Afghanistan. As the Alliance’s expeditionary operations and
missions continued, however, a growing number of Allies began to reduce their commitment or even
to reject partnering in Washington’s conception of broader Atlantic security – the starkest example
being NATO’s Libya operation, which functioned more as a coalition of the willing than a
whole-of-alliance effort.
19. In parallel, instead of an increase in the defence expenditures necessary to continue assisting
in Atlantic security tasks, declines in NATO Europe and Canada continued. By 2011, median NATO
European and Canadian spending had declined to 1.52% GDP. The transatlantic gap in defence
investments had grown to approximately 70%, as the United States now accounted for
USD 712 billion of the USD 1.012 trillion total Allied defence spending. In light of the ever-widening
transatlantic defence spending gap and the waning political will to commit to US-defined Atlantic
security interests, what had previously been confined to grumblings in Washington grew to sharp
public rebukes and chastisements by 2011. Robert Gates, then US Secretary of Defense, openly
questioned the future of the Alliance in the absence of stronger political will and renewed defence
investments from European Allies to participate in NATO missions and operations more capably
(Shanker, 2011).
20. Secretary Gates’ remarks reflected the strain the United States was facing at the time, as it
was bogged down in “forever” wars in the broader Middle East and beyond. Still, the comments
reflected the dire reality – the transatlantic gap had become a chasm, and, as Mr Gates bluntly
stated: “[…] there will be dwindling appetite and patience in the US Congress – and in the American
body politic writ large – to expend increasingly precious funds on behalf of nations that are apparently
unwilling to devote the necessary resources […] to be serious and capable partners in their own
defense” (Shanker, 2011).
21. Mr Gates continued with a stark depiction of the strain the burden sharing dilemma had
wrought upon the Alliance as he lamented the growing divide “between those willing and able to pay
the price and bear the burden of commitments, and those who enjoy the benefits of NATO
membership but don’t want to share the risks and costs” (Shanker, 2011).
B. TOWARD THE WALES 2014 JOINT 2% COMMITMENT
22. The rapidly deteriorating security environment of 2014 brought the burden sharing debate front
and centre as a swift set of political decisions by the North Atlantic Council (NAC) sought to bring
about the most significant adaptation of Alliance posture and structure since the end of the Cold War.
As NATO looked to make its deterrent posture more mobile and dynamic to face a range of
conventional and non-conventional threats from the east and the south, attention necessarily
returned to ensuring member states were investing in the required means to achieve this new
deterrence posture and subsequent force readiness.
23. As the Defence and Security Committee’s (DSC) general report [168 DSC 18 E fin] on NATO
deterrence demonstrates in greater detail, the new forces and structures needed to support the
Readiness Action Plan (RAP) and the Very High Readiness Joint Task Force (VJTF) required
significant quality defence outputs from all Allies. Given the perceived range of threats from the
conventional to the asymmetrical, an emphasis on increased spending as well as a focus on new
170 DSCTC 18 E rev 1 fin
4
equipment acquisition and research and development made their way into the defence investment
commitment at the Wales Summit by September 2014. NATO Heads of State and Government for
the first time made a public statement confirming their intentions to increase their defence spending
toward 2% GDP, at least 20% of which would be focused on equipment purchases and R&D1
. Such
a joint commitment was a radical departure from previous efforts to address burden sharing
concerns.
IV. THE 2% DEBATE: LIMITATIONS AND BENEFITS
24. This Assembly discusses and debates the question of burden sharing in NATO with regular
frequency. The question of the necessity of allocating 2% GDP to defence spending is always a
central part of the discussion. According to both NATO PA Defence Committee discussions and the
broader policy world, there are four principal points of debate: 1) The lack of consensus about the
definition of defence spending; 2) The appropriateness of a blanket 2% expectation for all Allies;
3) The question of broadening defence investment expectations to incorporate risk; and, perhaps
most relevantly, 4) The concern the 2% benchmark is too focused on inputs rather than outputs.
A. DEFENCE SPENDING DEFINED AND CRITICISED
25. NATO defines defence expenditures as including defence ministry budgets, pensions,
peacekeeping or humanitarian operations, research and development costs2
, financial assistance
by one Ally to another, and expenditure on NATO infrastructure. Benefits to veterans or war damage
repairs, as well as civil defence expenditures are excluded (NATO, 2017b).
26. The argument put forward in Assembly debates and in academic writings about the lack of
clear definition of defence spending rests on the notion that reported figures from individual members
across a range of organisations vary too much to make a clear assessment of who is spending what
and how. For example, reports of national defence spending by NATO and the UN on the same
member state can vary significantly – in 2013 the United Kingdom reported USD 62.3 billion to NATO
and USD 57.7 billion to the UN (IISS, 2017). (The United States currently allocates approximately
USD 60 billion additional funds to the Overseas Contingency Operations budget; European
Deterrence Initiative (EDI) funding is drawn from this sum. This finding is not found in US declared
defence spending when calculating along the above parameters.
27. Further complicating the issue is the fact there is no consistent measure of GDP either – from
the IMF to the World Bank to varying national measures, all broad-based GDP calculations differ
from one another slightly.
B. IS 2% VALID FOR ALL?
28. The crux of the criticism surrounding the blanket application of a 2% benchmark is
straightforward. Some Allies have global security interests extending beyond NATO Euro-Atlantic
security responsibilities. The United States and, to some extent, France and the United Kingdom
dedicate a portion of their defence spending to goals extending beyond the remit of NATO’s
Euro-Atlantic responsibilities. For example, the United States allocates approximately 3.6% GDP to
defence spending, but how much of this is purposed exclusively to its Pacific interests? By contrast,
it can be argued all of Estonia’s 2.14% benefits NATO-related security interests (Dobbs, 2017).
C. WHAT ABOUT RISK?
1 It should be noted, however, that Germany and Canada joined forces during the Wales Summit to ensure
the 2% guideline was not going to become a legal commitment, but rather a non-binding benchmark
(Driver, 2016).
2 “Including those for projects that do not successfully lead to production of equipment.”
170 DSCTC 18 E rev 1 fin
5
29. Including a measure of risk in Allied activities is also a valid criticism. While two Allies may
deploy forces to any particular operation, one may not allow for their forces to be in the line of fire
while the other does. Good examples of Allies consistently willing to assume greater operational
risks are Denmark and Norway – from counter-ISIS training and precision-strike missions to active
combat roles in Afghanistan. Still, while both nations have increased their investments from 1.17%
to 1.21% GDP and from 1.5% to 1.61% GDP respectively over the past four years, they fall relatively
far below the 2% benchmark (NATO, 2018).
30. Should the weight of such contributions be greater given the value of their outputs? This
argument leads directly into the most often cited criticism of the 2% benchmark – too much emphasis
on inputs, rather than on the quality of outputs.
D. INPUTS, OUTPUTS OR BOTH?
31. Many critics contend that simply measuring inputs neglects the core issue at hand in this era
of adaptation. The real focus should be on those capabilities and contributions that most effectively
reinforce NATO’s deterrence and collective defence. What good, for example, is 2% if over 70% of
that sum is dedicated to personnel costs? Further, if new equipment purchases focus
disproportionately on items such as tanks, how fit for purpose would such acquisitions be for the
Alliance (Braw, 2017)?
32. The input versus output argument is clearly the most valid criticism of the 2% benchmark. It
has spurred on the current persistent buzz rhetoric from NATO HQ seeking to get Allies to focus on
cash, commitments, and capabilities. The alliteration is a means of driving home three key ideas:
1) inputs are a de facto necessity to have outputs; 2) political commitment is necessary to make
increased defence funding available, and 3) the combination of the two should be focused on the
acquisition of the capabilities necessary to address security challenges to the Alliance.
33. Critics of the 2% benchmark also note the NATO definition of defence expenditures (as
outlined above) does not address some of the broader, and ultimately more nuanced and difficult to
calculate, challenges to security today. This extends from the range of political, economic, and social
disruptions caused by hybrid tactics to dealing with the root causes of terrorism and climate change
through such channels as development assistance and new regulations. Actions to bolster
whole-of-government resilience in the face of potential non-conventional hybrid tactics do not figure
in the above-mentioned criteria for Allied defence spending reporting.
34. The most often cited example of an alternative approach is the 3% proposal made by
Wolfgang Ischinger at the February 2017 Munich Security Conference. Ischinger’s proposal would
include 3% to deal with “crisis prevention, development assistance, and defence”. The 2% defence
spending metric would be coupled with the UN goal of nations dedicating of .7% GDP to development
aid, etc.
V. WARSAW DOUBLES DOWN ON ADAPTATION INCREASING PRESSURE ON THE 2%
35. In the wake of the Wales commitment, decisions to expand the breadth and depth of NATO
adaptation at the 2016 Warsaw Summit only further reinforced the sentiment Allies needed to
accelerate defence investments to meet the “2&20 pledge” and, for those member states not already
meeting the standard, a credible plan to achieve the benchmark by 2024 was expected.
36. A key milestone achieved at the Warsaw Summit is the Joint Declaration formalising NATO-EU
cooperation. The statement identifies seven concrete areas of cooperation, namely hybrid threats,
maritime security, cyber security, defence capabilities, defence industry and research, joint exercises
and building resilience in Europe’s East and South. The current security environment likely grants
the statement more weight than it would in a different geopolitical context. The declaration offers the
170 DSCTC 18 E rev 1 fin
6
22 members NATO shares with the EU unprecedented opportunities for increased cooperation, joint
capability development, cost-effective platforms for enhanced complementarity and duplication
elimination.
37. The remaining post-Warsaw challenges relate to the Alliance’s ability to show continued
solidarity and credibility in the face of unpredictable security challenges – such as Russia’s reactions
to NATO’s new posture – and the ability to maintain unity in circumstances of continued refugee and
migrant flows and conflict in regions along NATO’s Southern and Eastern flanks.
38. Although the Alliance is witnessing an overall convergence of threat perception in terms of a
NATO-wide agreement on the severity of the various geographical and resilience challenges,
geography still dictates the security perceptions of all member states. For example,
Southern European NATO states perceive the challenges in the Middle East and North Africa
(MENA) region to be of more immediate concern than the Central-Eastern European and Baltic
states. Such a divergence of perspective still challenges the Alliance’s ability for collective action.
39. There is an imperative today for all Allies to understand the dichotomy between Eastern and
Southern flank challenges is false; threats to any Ally’s security will inherently affect the entire
Alliance.
A. RECENT US VIEWS ON BURDEN SHARING
40. President Donald Trump is dramatically accelerating the burden sharing debate. During his
campaign, candidate Trump called NATO “obsolete”, claimed European countries “owe massive
amounts of money” to NATO and pointed out the unfairness of “free-riding” towards US taxpayers
(Rohac, 2017). President Trump’s statements only served to sharpen previous US leaders’ criticism
of the burden-sharing dilemma in the Alliance. US Secretary of Defence James Mattis has also
warned the United States might “moderate its commitment” if Allies do not shoulder more of the
burden (MacAskill, 2018).
41. During the 2018 annual NATO PA Defence Committee visit to Washington, US policymakers
also delivered a loud and clear message: The United States is increasing its commitment to NATO,
and it expects increased investments in parallel from its Allies. Officials told the delegation the Trump
Administration would make burden sharing among Allies one of its principal goals at the July 2018
NATO summit in Brussels. The other main priorities, deterrence and defence as well as
counterterrorism, officials stressed, go hand in hand with Allies’ responsibility to meet their defence
spending commitments. The Director of the Office of European Security and Political-Military Affairs
at the Bureau of European and Eurasian Affairs, Michael Murphy, told the delegation: “The Wales
Pledge is at the forefront of US officials’ minds in the run-up to Brussels.” Mr Murphy insisted all
Allies must be able to present credible plans to get there, to which he added only approximately 13
were currently on track to do so. “If these numbers are still present at the summit, this will be
problematic – please carry this message back to your governments and constituencies,” he warned.
42. Burden sharing was indeed a key element of the NATO Brussels summit. The myriad variables
driving increased investment in domestic defence programmes and Allied tasks have had a clear
impact across the Alliance. In Brussels, Allies again pledged their commitment to the 2014 Wales
Defence Investment Pledge, with promises “to submit credible national plans on its implementation,
including the spending guidelines for 2024, planned capabilities, and contributions” (Brussels
Summit Declaration, 2018).
B. RHETORIC VERSUS REALITY – THE RENEWED US COMMITMENT TO
EUROPEAN SECURITY
43. The Trump Administration’s December 2017 National Security Strategy (NSS) defines the
current international security environment as one of global competition at all levels, as the
170 DSCTC 18 E rev 1 fin
7
administration views both China and Russia as seeking peer rival status vis-à-vis the United States.
An important line of effort to counter this, the document contends, is to build stronger alliances. The
NSS underscores Washington’s desire to remain active in Europe: “A strong and free Europe is of
vital importance to the United States” (NSS, 2017). The NSS also says the United States “expects”
Allies to fulfil their defence spending commitments but stops short of making US support conditional
(Brattberg, 2018).
44. US policymakers also attempted to lay to rest any lingering doubts in delegation members’
minds about the United States’ Article 5 commitment during the Defence and Security Committee’s
most recent visit. As Thomas Goffus, Deputy Assistant Secretary of Defense (DASD) for European
and NATO Policy, confirmed: “The United States’ Article 5 guarantee is iron clad.” Mr Goffus also
stated the United States would continue to focus on the European Deterrence Initiative (EDI):
“Deterrence is what we do together, rather than the US-focused European Reassurance Initiative
(ERI), as the EDI was previously known.”
45. The United States recently announced a planned allocation of USD 6.5 billion to the EDI in
2019, a USD 1.7 billion increase from last year and USD 3.1 billion more than allocated in 2017. As
the DSC’s general report highlights more thoroughly, the ERI/EDI has funded a significant increase
in US presence in Eastern Europe, which supports more exercising, infrastructure, equipment
prepositioning, and partner capacity-development efforts. In many ways, the proof of
US commitment is in the USD 10+ billion already spent or planned to reinforce Allied defence and
deterrence in Europe.
46. The United States’ recent increased investments come on top of an already substantial existing
commitment by Washington to guarantee the security of all Allies, particularly those in Europe. For
example, the United States maintains about 68,000 active military personnel and an additional
16,000 Department of Defense civilian personnel in its own as well as shared facilities across
Europe. The 2018 US defence budget allocates USD 24.4 billion to cover the expenses of US military
assets in Europe. Further, as noted in the Committee’s [161 DSC 17 E] report on NATO’s ballistic
missile defence initiative, the backbone of NATO’s current ballistic missile defence system is funded
directly by the US Missile Defence Agency’s budget. The United States also funds approximately
22% of NATO common funding to support and maintain facilities, common procurement of new
equipment, as well as an increasing pace of training, exercises, and operations. The United States
also maintains a relatively small amount of direct bilateral military assistance to individual Allies and
partners in Europe.
VI. TRENDS IN DEFENCE SPENDING
47. Relatively stable economies and the steady growth of European member states make it no
longer possible to hide behind the pretext of lingering effects of the financial crisis. The EU bloc is
the globe’s second largest economy when measured as a collective GDP. According to Eurostat,
the EU’s statistical office, Eurozone GDP is growing 2.5% on a yearly basis and 2017 represented
the fifth consecutive year of growth.
48. It is clear Europe is investing in defence again. This represents a sharp contrast with the
pre-2014 period, when the Euro-Atlantic region was the sole region exempted from global defence
expenditure growth (IISS, 2015). Additionally, the most recent report from NATO shows that defence
spending by European countries and Canada has risen from USD 256 billion in 2016 to a projected
USD 312 billion in 2018 (NATO, 2018). As the NATO Secretary General, Jens Stoltenberg, said
quite succinctly about the changing dynamics in NATO Allied defence spending this past June: “We
now have four consecutive years of real increases in defence spending. All Allies have stopped the
cuts. All Allies are increasing defence spending. More Allies are spending 2% of GDP on defence
and the majority of Allies now have plans to do so by 2024. Across European Allies and Canada, we
expect a real increase this year of 3.8%. This means that, since 2014, European Allies and Canada
170 DSCTC 18 E rev 1 fin
8
will have spent an additional USD 87 billion on defence. When it comes to capabilities Allies have
committed to investing 20% on their defence spending on major equipment. This year, 15 Allies are
expected to meet the guideline, and I count on more to do so in the coming years” (NATO, 2018).
49. Defence spending is driven by both increased threat perception and regional economic growth,
but total spending continues to decline when compared to most countries’ GDP growth rates (Jane’s
Defence Weekly, 2018a).
A. NORTH AMERICA
1. United States
50. The United States is putting considerable emphasis on increased defence spending. The 2019
National Defense Authorization Act, passed by Congress and signed by President Trump in
August 2018, allocates USD 716 billion to defence spending and investment – an increase from
President Trump’s earlier request of USD 686 billion (US DoD, 2018). If all of the authorised spending
allocations are funded, this will represent an approximately USD 76 billion increase in defence
spending by the United States since 2015. As noted above, this figure does not include the billions
being spent, for example, on the European Deterrence Initiative, which falls in the Overseas
Contingency Operations budget. Defence spending in the United States is witnessing its fastest
increase rate in a decade (Jane’s Defence Weekly, 2018a).
51. The Third Offset Strategy has also played a role in budget allocations in terms of raising
awareness of the United States’ eroding technological edge and the imperative of sustaining
US advantage through innovation in equipment and military doctrine.
2. Canada
52. The Canadian Prime Minister, Justin Trudeau, has expressed a commitment to reverse the
decline in Canada’s defence spending and enhance its role in NATO. Indeed, Canada’s recent
defence policy review, “Strong, Secure, Engaged” (SSE), includes a renewed emphasis on hard
power and the will to decrease reliance on the United States on defence matters through substantial
investments (IISS, 2018). The Government of Canada released figures in May 2018 showing that
capital spending fell short in the SSE’s first year by USD 2.3 billion. Figures predict further shortfalls,
with the SSE promising USD 24.3 billion in spending for the 2020-2021 fiscal year while the
Department of National Defence’s 2018-2019 Departmental plan is forecasting total spending at
USD 20.1 billion for the same period, a USD 4.2 billion shortfall (CGAI, January 2018; Canadian
Department of National Defence, 2018).
53. Defence spending only rose by USD 1.1 billion over three years from 2014 to 2017, however,
leading some to question how Canada will fulfil its above-stated ambitions. The Canadian Global
Affairs Institute has attributed the underspending to “a dysfunctional defence procurement system at
Canada’s Department of National Defence” (CGAI, May 2018).
B. EUROPE
54. Defence spending continued to increase on aggregate across European NATO member states
in 2016, from USD 255.7 billion to USD 256.5 billion from 2015 to 2016 and showing a 0.3% increase
(Béraud-Sudreau and Giegerich, 2017). In terms of defence expenditure as share of GDP in
European NATO Allies, a steady decrease can be seen from 2009 when the spending was 1.69%
on average, reaching 1.45% in 2013 and going as low as 1.40% in 2015, only to rebound slightly in
the past three years to 1.5% in 2018.
55. Overall, in real terms, NATO Europe has steadily increased total defence spending by about
USD 40.5 billion since 2015 (NATO, 2018).
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1. EASTERN EUROPE
56. Defence spending in Eastern European states has witnessed a 24% increase in real terms
between 2014 and 2017, clearly motivated by Russia’s illegal annexation of Crimea, ongoing conflict
in eastern Ukraine, and Russia’s large-scale “snap” military exercises in the region. Budgetary
projections indicate Eastern Europe will deliver the fastest growth in defence spending, which rose
to an average of 1.6% GDP in 2017 from 1.3% in 2013 and is predicted to reach 1.8% by 2020
(Jane’s Defence Weekly, 2018a).
a. Poland
57. As the largest frontline state in Europe’s Eastern Flank, Poland’s key strategic position makes
it particularly vulnerable to Russian interference and potential aggression. With regards to burden
sharing, Poland surged over the 2% threshold in 2015, only to waver and decline from 2016 to 2017.
According to the most recent reporting by NATO, Poland’s budget is to grow to USD 12.08 billion in
2018 to bring total defence spending to 1.98% GDP (NATO, 2018). Poland is poised to complete
construction for the land-based Aegis Ashore ballistic missile defence system this year and plans to
acquire new F-35 Lightning II jets and used F-16 fighter jets from the United States and the 3D mobile
surveillance radar NUR-15M (Adamowski, 2017a).
58. The Polish government says it is committed to reattain a defence investment level equalling
2% in the near future and even intends to increase it to 2.5% by 2030 (IISS, 2018).
b. Romania
59. Romania has increased its defence budget from USD 2.6 billion to USD 3.6 billion from 2014
to 2017 (NATO, 2018). Romanian defence spending is estimated to reach 1.93% GDP in 2018. The
government’s plan is to reach USD 5 billion by 2020, which would push it above the 2% benchmark.
60. An active NATO member, host of the Aegis Ashore missile defence system and of several
multinational NATO forces, Romania is only 200 miles away from Crimea. After the inauguration of
the Aegis Ashore in 2016, President Vladimir Putin warned Romania and Poland they are in
Moscow’s “crosshairs” (Hope, 2017). In response, Romania set out plans to purchase the US-made
Patriot missile and air defence system.
61. Furthermore, Romania is also an enthusiastic participant in the EU’s Permanent Structured
Cooperation (PESCO) and related defence integration initiatives. As the EU’s fastest growing
economy, Romania’s procurement list includes fast corvettes, armoured troop carriers,
multiple-launch rocket systems and Intelligence, Surveillance and Reconnaissance (ISR) systems
(McLeary, 2017).
c. The Baltics
62. Directly bordered by Russia, including its Kaliningrad exclave, Lithuania, Latvia, and Estonia
see NATO membership as vital to their security strategies. Due to their perceived vulnerability, the
three states make up a key strategic area to NATO’s Enhanced Forward Presence battalion
deployments. In parallel, all three states have dramatically increased their defence spending.
63. Overall military spending in the Baltic is poised to double in real terms compared to 2014
(Jane’s Defence Weekly, 2018a). Estonia’s defence budget has been steadily growing from
USD 480 million in 2013 to USD 637 million in 2018. Latvia’s defence budget more than doubled
from 2013 to 2018, going from USD 281 million to USD 701 million. Lithuania followed suit by
increasing spending from USD 355 million to USD 1.06 billion over the same period (NATO, 2018).
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64. All three states have ambitious procurement goals both independently and jointly, including a
plan for an air defence covering all three territories. Estonia’s procurement plans include
11,000 automatic firearms during 2018-2021, infantry fighting vehicles, K9 howitzers,
communications systems, Unmanned Aerial Vehicles (UAVs) and long-range anti-tank missile
systems. The Latvian government also plans purchases of combat vehicles and M109 self-propelled
howitzers (Adamowski, 2017b).
65. With a vast spurge in defence spending, Lithuania plans to acquire PzH 2000 self-propelled
howitzers, the Norwegian Advanced Surface-to-Air Missile System (NASAMS), as well as transport
and combat helicopters. Additionally, Riga’s and Vilnius’ defence procurements are to be
synchronised for both armed forces following a recent agreement (Adamowski, 2017b).
66. In tandem with Eastern Europe becoming the fastest growing defence spender, these states
are all forecast to meet the 2% of GDP target, together with the United States, the United Kingdom,
Turkey and Greece.
2. SOUTHERN EUROPE
a. Italy
67. Although Italy recognises the threat posed by Russian aggression, Rome’s principal defence
concerns focus across the Mediterranean. Italy’s defence spending trends are slightly volatile, but
still in decline, moving from USD 26.6 billion in 2013 to USD 25.78 billion in 2018 (NATO, 2018). The
Eurozone crisis has exposed significant structural economic weaknesses in the country, which have
contributed to the decline in spending.
68. A defence white paper and a parallel defence plan were released by the Italian government in
2017 outlining goals to increase personnel, expand joint exercising, and upgrade equipment. Despite
sector volatility, Italy retains a strong defence industry and remains an active member in NATO
exercises, air-policing missions and operations while also leading the EU’s Operation Sophia in the
Mediterranean (IISS, 2018). As such, Italy is expected to maintain a line of continuity in defence as
it is deepening involvement in key European defence projects and military operations (Marrone,
2018).
b. Greece
69. Before the Eurozone crisis and economic difficulties, Greek armed forces have traditionally
been well-funded. Although in recent years major procurement has been halted and military
exercises reduced, Greece is now strengthening maritime-patrol and anti-submarine-warfare
capabilities, bolstering surveillance in the Mediterranean, enhancing rotary-wing transport capability
and upgrading its F-16 fleet (IISS, 2018).
70. In 2013, Greece spent USD 5.31 billion on defence. It declined steadily in ensuing years,
though 2017 did witness a small growth from USD 4.64 billion to USD 4.75 billion when compared
to 2016. Greece is estimated to spend USD 5 billion in 2018. In 2013 Greece allocated 3.08% of its
GDP to defence, in 2017 it had fallen to 2.38% (NATO, 2017b). While Greece still technically makes
the 2% GDP commitment, this has only been possible due to the severe contraction of the Greek
economy in recent years.
71. Greece is often an example highlighted by critics of the 2% guideline, as over 70% of the
country’s total defence spending goes to personnel costs, including pensions, rather than concrete
investments in armed forces and readiness (NATO, 2018). In 2018, however, Greece is expected to
spend 12.4% on equipment and another 24% on functional expenditures.
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3. WESTERN EUROPE
72. Western Europe averaged only a 2% increase in 2017 (Jane’s Defence Weekly, 2018a). While
Eastern Europe is prioritising military modernisation and procurement, the larger Western European
powers such as France and the United Kingdom struggle to sustain and develop capabilities
proportional with the size and scale of their global ambitions.
a. France
73. The French President, Emmanuel Macron, has announced simultaneous cuts and increases:
almost USD 1 billion in cuts to the 2017 defence budget to limit public deficit coupled with an increase
of USD 2 billion to the 2018 budget. The French defence budget declined from USD 52.3 billion to
USD 46.1 billion from 2013 to 2017 (IISS, 2015, 2018). The 2018 defence budget, however,
increased to bring French defence spending as a percentage of GDP up to 1.82 from 1.77 in 2017,
equalling a total of USD 52 billion. The 2018 budget also confirmed the will of the French government
to reach the 2% GDP spending objective by 2025. On July 13 2018, the military programming law
for 2019-2025 – passed by both chambers of the representative government – noted the intention to
invest EUR 295 billion in defence from 2019 to 2025 (Ministère des Armées, 2018). France has
made it clear it seeks to maintain full spectrum capabilities to meet global security challenges to
French and Allied interests. The increased investments outlined in the new military programming law
will be crucial for it to be able to do so.
b. The United Kingdom
74. As Europe’s largest defence spender, the United Kingdom’s defence budget decreased to
USD 50.7 billion in 2017 from USD 52.6 billion in 2016, far below the 2014 USD 65.6 billion figures
(IISS, 2018; NATO, 2017b). In 2018, however, it is expected to increase to USD 61.5 billion. In
January, the British government disclosed the initiation of its third defence review which will assess
the UK’s security posture and set spending priorities. After the Brexit referendum, the government
launched the National Security Capability Review to ensure that British capabilities are able to meet
its foreign policy targets (Jane’s Defence Weekly, 2018b).
75. Britain’s defence review is said to formulate an industrial strategy, to adapt procurement to
current requirements, and to aim to integrate cyber and electronic warfare as well as artificial
intelligence considerations when enhancing defence capabilities. Brexit is likely to increase the
British commitments to NATO, as the terms of third country participation in the EU’s new defence
pact, PESCO and the European Defence Fund (EDF) scheme have yet to be determined.
c. Germany
76. Defence has traditionally been a politically sensitive issue in Germany for clear historical
reasons. Recently, however, the motor of Franco-German cooperation on defence has been driving
the European Union’s unprecedented cooperation on security matters. As a staunch promoter of
European integration, Germany’s hopes are that instruments such as PESCO, the EDF and
Coordinated Annual Review on Defence (CARD) will not only boost European capabilities and
strengthen the EU pillar in NATO, but also deepen European integration. The development of the
EU’s Common Security and Defence Policy (CSDP) has been a key focus of German foreign policy.
77. After a sharp decline in 2014-15 from USD 46.1 to 39.8 billion, Germany’s defence investments
have been steadily increasing, reaching USD 44.6 billion in 2017 (IISS, 2015, 2018). Defence is high
on the current German government’s agenda, with Minister Ursula von der Leyen announcing an
intention to increase the defence budget by USD 4-5 billion annually until 2030 (Moelling, 2016).
Consequently, Germany is expected to spend USD 51 billion in 2018 (NATO, 2018).
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78. Germany’s contribution to NATO burden sharing by meeting the 2% target has been widely
present in the debate, as Minister von der Leyen reaffirmed this goal – though it is highly unlikely,
given the pledged increases come nowhere near the approximately USD 70 billion additional funding
needed to reach this goal.
79. A slate of recent reports about the lamentable state of the land, air, and sea forces show the
energy to renew defence investments is sorely needed in Germany. At present, reports indicate not
a single one of Germany’s 212A-type submarines is able to leave port. This is part of a broader trend
wherein entire German weapons systems are unusable due to lack of funding for spare parts and
proper maintenance (Buck, 2018).
Trends in European Equipment and R&D Investments
80. European defence spending on major equipment and research and development for future
weapons systems is increasing across the board but focuses on priorities defined by differing threat
perspectives. Total defence investments reached USD 58.7 billion in 2017, with northern and central
European states outpacing their southern and western neighbours in terms of rate of increased
investment. Broadly speaking, the kinds of investments can be divided into two principal categories:
defence acquisition for power projection or for territorial defence – with the geographic divide
between the two again falling around divergent poles of threat perception. Accordingly, Western and
Southern European Allies are acquiring more ISR systems and naval and air assets, while central
and northern European Allies are acquiring more combined heavy arms systems such as armoured
vehicles, artillery systems, and air defences (Béraud-Sudreau and Giegerich, 2018).
VII. INTRA-EUROPEAN GAP
81. European military spending has sustained four consecutive years of real growth. NATO’s
European member states on aggregate have sustained between 3-5% defence budget increases
over the past three years. In 2017 the largest increases in real-term defence spending growth were
in the Baltic States, Germany, and Romania (NATO, 2018). Yet, there is some variation across
regions, as spending in northern and central Europe grew by 5.5%, while southern and western
Europe only saw an increase of about 2.5% (Béraud-Sudreau and Giegerich, 2018).
82. A closer look upon member’s defence spending reveals underlying problems preventing a
clear-cut assessment of proportional inputs and outputs. While a full harmonisation of defence
planning among nations is far-fetched, solutions for greater congruity are needed in order to identify
metrics for ensuring defence spending is converted into concrete outputs beneficial for the Alliance’s
post-2014 adaptation.
83. Lack of defence cooperation between European countries is estimated to cost anywhere from
EUR 25 to EUR 100 billion every year in needless duplications of effort or extra subsidisation needed
to make up for the lack of economies of scale. As such, the current state of the European defence
market is characterised by protectionism, duplication, and fragmentation. Recent approximations
place 80% of procurement and over 90% of research and technology projects in the hands of national
authorities (European Commission, 2017a, b). The EU’s landmark defence projects such as PESCO
and its financial stimulus for joint capability development and research, the European Defence Fund,
aim to remedy the current fragmentation.
84. To assess progress across the Alliance, NATO Allies agreed to submit defence spending plans
by the end of 2017 which should outline means of achieving the 2% target by 2024. The exercise
proved less useful than intended: several countries submitted three-year plans while others planned
beyond 2024, and many failed outright to plan to reach the 2% target. Currently, 15 out of
29 countries have announced clear plans of reaching the target.
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VIII. CONCLUSIONS
85. Aware most NATO member states are now increasing their defence spending, the Alliance is
seeking to find the means to maintain momentum towards the spending pledge goal. As a result, an
effort is being made to paint a clearer picture of what increased defence spending efforts by Allies
are producing. As of March 2017, Allies are expected to publish annual defence spending plans
detailing three key elements – cash, capabilities, and commitments: a) how much they are spending
and how they intend to reach the defence spending pledge goal if they have not already; b) how they
are investing in NATO-required capabilities; and, c) what contributions are made to and planned for
NATO’s current operations and missions.
86. The results have been mixed, as some plans do not go far enough while others surpass the
2024 goal set out in the Defence Spending commitment of 2014. Some Allies have yet to submit
them. Clearly the ability to produce feasible and acceptable plans will continue to be an Alliance
priority.
87. Still, as this draft report highlights, the Alliance’s relatively radical shift on the burden sharing
debate at the 2014 Wales Summit imposes upon Allies a criterion to which they have now all
committed. Much of the debate surrounding burden sharing today centres on the shortcomings of
the 2% guideline: it lacks clear definition; US defence funding serves global interests, while most
Allies’ serves Euro-Atlantic security interests; it does not calculate risk; it fails to emphasise the
quality and effectiveness of outputs, etc.
88. Despite the rhetoric and challenges laid down by both Candidate and President Trump,
however, the United States has in fact doubled-down on its commitment to European security – the
EDI is funding a significant increase in US presence in Eastern Europe, supporting more exercising,
infrastructure, equipment prepositioning, and partner capacity development efforts. In many ways,
the proof of US commitment is in the USD 10+ billion already spent or planned to reinforce its already
significant commitment to Allied defence and deterrence in Europe.
89. Another clear message coming from Washington is the bipartisan Congressional support for a
strong Alliance. As the US delegation to the NATO PA has noted on several occasions, the increased
efforts by the United States to bolster European security is strongly supported by the United States
Congress – in both houses, by both parties. The political will to sustain and reinforce the transatlantic
link is evidenced by the high levels of support for European security in the 2019 National Defence
Authorization Act (NDAA), reported by the House Armed Services Committee this past May. The
2019 NDAA passed the US House of Representatives in a 359-54 vote in July, while it passed the
US Senate 87-10 in early August. Further, the United States Senate has recently expanded the
breadth and depth of its support for NATO via the re-establishment of the Senate NATO Observer
Group this past July. The strong role the US Congress plays in shaping US foreign and security
policy should not be overlooked, and the signals are clear – the United States is doing its part to
meet the challenges facing the transatlantic security environment and it expects its Allies to step up
and do the same in the interest of transatlantic collective security.
90. As is made clear by the recent publications of the US National Security Strategy and the
National Defense Strategy, the United States feels the pressure of a changing international security
environment. To stave off the challenges of potential near peer competitors, it will not only boost its
domestic defence investment efforts, it also views strong alliances as key to taking on the challenge.
In fact, the NSS even underscores the vital nature of European security to the United States – a key
reminder of the importance of the transatlantic link.
91. NATO Europe and Canada clearly now feel the pressure of the changing security environment
both in the Euro-Atlantic area and globally. This is driving new investments in defence – particularly
in Eastern Europe. Still, many Allies remain far from achieving the expectations of the “2&20 pledge”
on defence investments. And, while arguments against the limitations of the 2% guideline are
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certainly valid, inputs are certainly needed for quality outputs, which all Allies now realise are vital to
build and sustain the mobile and dynamic defence and deterrence posture outlined at the last two
summits.
IX. STEPS FORWARD FOR NATO PARLIAMENTARIANS
92. NATO has a relatively well-established means for identifying Allied defence sector
shortcomings – the NATO Defence Planning Process (NDPP). The NDPP runs on a four-year cycle
to align NATO military staff needs to fulfil their missions with what Allies are actually bringing to the
table. Member state parliamentarians can familiarise themselves with the NDPP and their country’s
level of coordination and synchronisation in their defence planning and procurement processes to
meet the needs set forth by Alliance military leaders.
93. NATO parliamentarians can also solicit information from their respective defence
establishments about how their nations are not only responding to NATO requirements, but also
working to streamline spending to make their current contributions more effective. In addition, as all
Allies are likely to seek to channel new spending into their defence sectors, it is imperative such
spending is well allocated – more focus on new effective equipment, research and development or
exercising over top-heavy personnel costs should be a priority.
94. NATO parliamentarians can and should also familiarise themselves with the breadth and depth
of NATO adaptation decisions made at Wales, Warsaw, and Brussels. This will bring a greater
understanding to the need for increased defence spending that will contribute effectively to the
Alliance today.
X. EXPANDING THE DEBATE TO STRENGTHEN ALLIED SECURITY
95. It is clear from recent ministerial meetings and briefings the United States expects NATO
European Allies to do more in the fight against terrorism. The United States will likely continue to
take the lead in the denial of safe operating space for terrorist groups across the globe – but it will
certainly look to its Allies for assistance when addressing the more long-term challenges of investing
in the broader security measures needed to address the root causes of violent extremism.
96. Perhaps European Allies can thereby broaden the burden sharing debate accordingly and
demonstrate their willingness to step up in this arena by expanding their commitment to development
aid and democratic assistance programmes throughout the MENA region and beyond. Such a
measure would expand the 2% debate on defence spending and make it more similar to the
3% criterion put forward at the last Munich Security Conference that is more focused on the broader
issues of the complex causes of security challenges today.
97. The insistence on the new alliteration – cash, commitment, and capabilities – highlights the
way to think about the needs for a unified Allied commitment to fulfilling the political goals they have
set for themselves to tackle the new security environment and thereby continue to guarantee the
peace and security of NATO populations and territory.
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170 DSCTC 18 E rev 1 fin
17
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______________________
www.nato-pa.int
DEFENCE AND SECURITY
COMMITTEE (DSC)
AFGHANISTAN: THE NEXUS
OF LOCAL AND REGIONAL
SECURITY
Special Report
by Wolfgang HELLMICH (Germany)
Special Rapporteur
171 DSC 18 E fin | Original: English | 17 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................................................1
II. TRUMP ADMINISTRATION / US POLICY.............................................................................1
III. RSM UPDATE .......................................................................................................................2
IV. THE ANDSF AND THE INSURGENCY .................................................................................3
A. THE ANDSF .................................................................................................................3
B. THE TALIBAN ..............................................................................................................5
C. DAESH IN AFGHANISTAN – ISIL-K.............................................................................6
D. OTHER INSURGENT GROUPS...................................................................................7
V. STATUS OF THE CIVILIAN SECURITY ENVIRONMENT .....................................................7
VI. GOVERNANCE .....................................................................................................................8
A. ELECTIONS AND ELECTORAL REFORM...................................................................8
B. EFFORTS TO STEM CORRUPTION ...........................................................................9
VII. INCREASING FOCUS ON THE REGIONAL DIMENSION................................................... 11
A. PAKISTAN.................................................................................................................. 11
B. INDIA.......................................................................................................................... 14
C. CHINA ........................................................................................................................ 15
D. IRAN........................................................................................................................... 16
VIII. INTERIM CONCLUSIONS FOR NATO MEMBER STATE PARLIAMENTARIANS .............. 17
ANNEX : GLOBAL HEROIN TRAFFICKING FLOWS 2012-2016......................................... 18
BIBLIOGRAPHY.................................................................................................................. 19
171 DSC 18 E fin
1
INTRODUCTION
1. Increased violence in Afghanistan, driven by a resurgent Taliban and other insurgent forces,
is forcing international attention back to the country. Tactical and strategic gains by the Taliban
coupled with persistent institutional corruption continue to drive the attrition of the Afghan National
Defense and Security Forces (ANDSF) and have altered the balance of forces on the ground. In the
face of this worsening situation for the Afghan government and its forces, NATO Allies and their
international partners are stepping up their efforts.
2. Allies agreed at the Brussels meeting of NATO Heads of State and Government on
25 May 2017 not only to continue NATO’s Resolute Support Mission (RSM) in Afghanistan, but to
increase financial and personnel contributions as well. Allied efforts in Afghanistan over the next few
years will be critical to turning around the increasingly tenuous security situation on the ground.
3. In August 2017, the Trump administration announced the United States would let ‘conditions
on the ground’ guide its efforts to assist the ANDSF as well as the United States’ parallel
counterterrorism mission in the country. To help achieve its goals, the United States is effecting a
mini-surge of its forces and resources dedicated to Afghanistan. The Trump administration has made
it clear participation in Afghanistan is a part of its interpretation of burden sharing in the Alliance – it
expects its Allies to contribute more to NATO efforts to achieve the broader mission in Afghanistan;
a stable country that will never again become a wellspring for international terrorism.
4. New rules of engagement are allowing international forces to work more closely with the
ANDSF to help build a more effective fighting force in operations. In addition, international pressures
seem to be bringing a much-needed government focus on rooting out corruption in the nation’s
security institutions. Further, the Trump administration has eased restrictions on war fighters in the
battlefield and, as a result, US-led airstrikes doubled in 2017.
5. The United States is also increasing pressure on regional states to play a key role in future
peace and security in Afghanistan. Attention is being paid to Pakistan’s insufficient efforts to deny
the Afghan Taliban and other designated international terrorist groups the freedom to operate in
regions bordering Afghanistan.
6. This special report will provide a thorough overview of the evolution of the security situation in
Afghanistan, from the state of the insurgency to the status of the ANDSF. A focus of this report,
however, will be the complex regional variables at play in the fight for the future of Afghanistan. It
will conclude with steps forward for the consideration of NATO member state parliamentarians.
TRUMP ADMINISTRATION / US POLICY
7. After months of consultations, US President Donald Trump announced a new ‘Afghanistan and
South Asia policy’ in a speech to troops at Fort Myer in Arlington, Virginia on 21 August 2017.
Departing from his predecessor’s policy, which included a gradual military drawback from
Afghanistan, Mr Trump reaffirmed a continued US commitment to the NATO-led Train, Advise and
Assist (TAA) and US counterterrorism missions. Among other things, the new US strategy provides
for the deployment of several thousand additional troops, relaxed rules of engagement for US forces
and increased pressure on neighbouring states to contribute to the stabilisation of Afghanistan.
Moreover, discarding the Obama administration’s calendar-driven withdrawal or sunset clause, it
specifies any future military withdrawal will be conditions-based (The White House, 2017). Beyond
these broad strategic revisions, the president’s speech outlined few details. For instance, the metrics
to assess the conditions mentioned in the revised sunset clause remained undefined.
8. While the new strategy downgrades the importance of political engagement with Afghan
governance issues, it clearly strengthens the US commitment to military efforts in Afghanistan. More
171 DSC 18 E fin
2
specifically, it proceeds on the assumption the Taliban can be forced into negotiating a political
settlement by subduing them on the battlefield (IISS, 2017). To achieve this goal, President Trump
asked NATO Allies and partner countries involved in Afghanistan to follow the United States’ lead in
increasing troops and funding, thereby also linking the mission in Afghanistan to the burden sharing
debate1
.
9. The Trump administration’s broader regional policy is changing quite significantly as well. The
administration is now putting significant pressure on regional actors critical to the broader security
outcomes in the region as well as the specific battlefield conditions inside of Afghanistan. This
broader regional approach is a key element to what will ultimately determine the contours of the
Trump administration’s approach to Afghanistan; the challenges of regional variables in Afghanistan
are highlighted in detail later in this report.
RSM UPDATE
10. At the 2016 Warsaw Summit, NATO Allies and partners agreed to extend the Resolute Support
Mission beyond 2016, continue funding for the ANDSF until the end of 2020 and strengthen political
and practical support for Afghan government institutions. These commitments were formally
announced in the Warsaw Summit Declaration on Afghanistan and reaffirmed at the May 2017
meeting of NATO leaders in Brussels.
11. RSM’s objectives have remained the same: to prevent Afghanistan’s retreat into a sanctuary
for terrorist forces capable of exporting violence and instability, as well as to provide the conditions
and support for Afghanistan to sustain its own security, governance and development.
12. To achieve these goals, RSM will continue to train, advise and assist the ANDSF, the Ministry
of Defence (MoD) and the Ministry of Interior (MoI) with a new focus on more tactical-level TAA.
Operating through regional and functional commands in Kabul, Mazar-i-Sharif, Herat, Kandahar and
Laghman, NATO and partner forces work closely with a range of different ANDSF elements,
including the police, air force, special operations and conventional ground forces (Resolute Support,
2018a). In an effort to replicate the success of US Special Forces' training for the Afghan Special
Security Forces, the new US Afghanistan and South Asia policy provides for more US and Allied
advisors to spread down to the battalion and brigade levels of Afghan conventional forces.
Previously, save a few exceptions, conventional forces were only advised at the corps level
(US Lead IG, 2017).
13. Moreover, RSM forces continue to make use of some combat enablers to address the
ANDSF’s capability shortcomings. These include intelligence, surveillance and reconnaissance
(ISR) assets, artillery systems, aerial fires and logistical support such as medical evacuation
(US DoD, 2017). Importantly, the modification of the US forces’ rules of engagement under the new
Afghanistan and South Asia policy removed some caveats limiting US fires and air support in close
proximity with hostile fighters (Wasserbly, 2017). As a result, US Forces operating in Operation
Freedom’s Sentinel (OFS) and the Resolute Support Mission increased their air operations
significantly. In 2017, for example, they conducted 1,248 sorties with at least one weapon released
– compared to 615 in 2016.
14. The Trump administration’s revised Afghanistan and South Asia policy has translated into a
significant increase of RSM force levels. Since the announcement of the new strategy last August,
the United States has deployed 3,000 additional troops to Afghanistan, of which 2,400 are assigned
to NATO’s RSM (SIGAR, July 2018). Another 1,000 members of the newly created US Security
Force Assistance Brigades (SFAB) are planned to be deployed starting from February 2018.
1 This year’s DSCTC report [170 DSCTC 18 E rev. 1 fin] investigates the burden sharing debate in the
Alliance today as its central theme.
171 DSC 18 E fin
3
Specifically trained for combat advising, the SFAB will train, advise and assist the conventional
ANDSF at the battalion level (SIGAR, January 2018; Wellman, 2018).
15. President Trump’s call on NATO Allies and partners to follow suit has had its effect as well.
Following the most recent meeting of NATO Defence Ministers in November 2017, NATO
Secretary General Jens Stoltenberg announced the size of NATO’s mission in Afghanistan would
increase from about 13,000 to approximately 16,000 personnel. Apart from the United States,
another 27 RSM-troop-contributing nations also pledged to raise troop numbers (NATO, 2017). The
German Defence Minister, for example, announced plans to increase the size of the German forces
in Afghanistan from 980 to 1,300 personnel (Sprenger, 2018). NATO’s newest member,
Montenegro, has also pledged to increase troops by about 50% (Tomovic, 2018). To date, all
contributing nations have pledged to increase either materiel and/or personnel support efforts to
RSM.
16. Taking the already deployed reinforcements into account, RSM currently consists of
16,229 troops from 39 contributing nations (26 NATO Allies and 13 operation partners). With 8,475
troops the United States remains by far the largest force contributor. In addition to the NATO-led
RSM, US troops are conducting counterterrorism and air operations as part of USFOR-A’s Operation
Freedom’s Sentinel, amounting to a current total of approximately 14,000 US military personnel in
Afghanistan (US DoD, 2017). Despite welcoming the recent troop reinforcements, US and NATO
officials stated they continue to fall below international commitments and warned contingent
shortcomings might endanger both the successful completion of the mission and effective force
protection2
.
THE ANDSF AND THE INSURGENCY
A. THE ANDSF
17. With the start of NATO’s RSM in 2015, the Afghan security forces have taken sole
responsibility for security throughout Afghanistan. As the ANDSF are now about to enter their
fourth fighting season since they took the lead against the Taliban-led insurgency, NATO officials
are optimistic about their development. In November 2017, RSM Commander
General John W. Nicholson stated the momentum has shifted in the ANSDF’s favour – a clear
difference the “stalemate” between government and insurgent forces he spoke of just seven months
before (Nicholson, 2017a, 2017b). Supreme Allied Commander Europe General Curtis Scaparrotti
echoed General Nicholson’s perception during a more recent visit to Kabul in February 2018 and
said he is certain “the Taliban cannot win on the battlefield” (Resolute Support, 2018b).
18. In early 2017, Afghan President Ashraf Ghani began implementing his four-year strategy to
reform the ANDSF, now commonly referred to as the ‘ANDSF Road Map’. The plan aims to:
1) strengthen fighting capabilities, particularly in the special operations and air forces; 2) improve
leadership capacity; 3) increase the unity of effort and command between MoD and MoI; and
4) reduce corruption across all Afghan security forces. The goal of these efforts is to bring 80% of the
population under government control, forcing the Taliban into peace talks by 2020. The following
assesses progress on President Ghani’s ANDSF Road Map.
2 It should be noted, however, that with the completion of the SFAB’s deployment, the size of US forces
is expected to surpass 15,000 this year.
171 DSC 18 E fin
4
ANDSF Road Map Progress
19. Implementation of President Ghani’s ANDSF Road Map has been slower than some
expectations, but it has been producing concrete results since 2017. Following the abovementioned
scheme outlined by the government in Kabul, the following significant steps have been taken. First,
to increase the size and capabilities of the Afghan special operations and air forces: the Afghan
National Army Special Operations Command (ANASOC) expanded its training facilities, graduating
four instead of two Afghan Special Security Forces (ASSF) companies each year; while the Afghan
Air Force (AAF) received the first eight of 159 UH-60 Black Hawk helicopters, thus beginning the
overhaul of the AAF’s current fleet of 47 ageing Mi-17s (Hecker, 2018). Second, regarding leadership
development, the MoI replaced 13 of its senior leaders, including even the Minister. In the MoD, five
of the six Afghan National Army (ANA) corps commanders were removed and replaced with younger
commanders, three of whom have special operations training and experience. Moreover, a
standardised and comprehensive evaluation process has been imposed on all ANA commanders.
Third, the Afghan Border Police (ABP) was renamed the Afghan Border Force (ABF) and transferred
from the MoI to the MoD. The Afghan National Civil Order Police (ANCOP) is due to follow suit later
in 2018, bringing all offensive security forces under MoD control (US DoD, 2017). The transfer of
ABP and ANCOP to MoD’s administration is expected to further support the MoI's efforts to engender
efficient law enforcement and root out corruption (US DoD, 2018).
20. President Ghani’s Road Map also outlines a plan to shift the Afghan National Police’s (ANP)
focus from counterinsurgency operations to traditional community policing. The Afghan National
Police consists of four main branches and three sub branches and is under the authority of the
Interior Ministry3
. Among the main branches, the Afghan Uniform Police (AUP) constitutes the largest
policing force with 99,068 authorised personnel and has a diverse range of tasks from traffic policing,
to fire fighting and intelligence gathering, which make it the backbone of the ANP. The ANP’s efforts
to become an effective civilian-policing force, however, are hamstrung by its active participation in
counterinsurgency (COIN) operations alongside the ANA. Because ANP forces are not “sufficiently
trained or equipped” for COIN operations, “the near-constant prospect of combating” insurgent forces
fuels the high-levels of attrition in the ranks of its personnel (US DoD, 2018). Thus, although it is too
early to measure its effectiveness, President Ghani’s goal of redefining the ANP’s role and
responsibilities to transform it into a skilled and capable police force remains vital.
21. Corruption, specifically public extortion, is also cited as another source of inefficacy greatly
undermining ANP operations. Unjustified fines and taxes imposed upon the public, most commonly
at checkpoints, by Afghan police officers are some examples of daily extortion. More importantly,
ANP forces are also accused of accepting bribes from “criminals and insurgents in return for turning
a blind eye” to their activities (UNDP, 2007). Accordingly, widespread institutional corruption within
the ranks of the ANP hinders its forces from providing fair and sufficient crime fighting and civilian
policing. Thus, reducing corruption across all of the Afghan security forces stands as one of the
major initiatives emphasised by President Ghani’s reform plan.
22. The ANDSF continue to operate below their authorised levels of 195,000 ANA and
157,000 ANP personnel (352,000 total). Although the ANDSF’s total size has been more or less
stable over the past year, as expressed above, both the ANA and the ANP suffer from high levels of
attrition. Desertion accounts for about 70% of all personnel losses, with poor leadership being the
most cited underlying driver (US DoD, 2017). Beyond numbers, the high turnover rate of 25-30% per
year also prevents the ANDSF from developing a more experienced force. Specifically, recurrent
lengthy deployments, the expectation of participating in near constant combat operations, as well as
challenging living conditions contribute to the issues of reenlistment in the ranks of the ANP and
ANA (US DoD, 2018). Upon RSM recommendation, the ANA has established a bonus scheme for
3 The four main branches of the ANP are the Afghan Uniform Police, the Afghan Personnel and Pay
System, the Afghan Border Police and the Afghan Anti-Crime Police; the three sub branches are the
Afghan Local Police, the Afghan Public Protection Force and the Counter Narcotics Police of
Afghanistan.
171 DSC 18 E fin
5
personnel who serve the full duration of their enlistment (US Lead IG, 2017). It is, however, too early
to assess the effectiveness of these efforts. In addition to the multilaterally funded ANDSF, the
30,000-strong Afghan Local Police (ALP) is supported by the United States and overseen by the MoI
(US DoD, 2017).
23. The Afghan government and USFOR-A are currently reviewing plans to establish a new force
under the MoD, called the Afghan National Army Territorial Force (ANATF). This force, which will
consist of 7,500 ANA officers and 28,500 locally recruited personnel, is meant to prevent insurgents
from regaining ground in government-controlled areas. Pilot programmes in selected provinces are
planned to start in 2018, with a possible second round in 2019 (US DoD, 2018). If the ANATF model
proves to be successful, it will allow the ANA to free up resources for offensive operations in the
short term and to transition into a smaller and more affordable force in the long term (US DoD, 2017).
Observers have raised concerns the proposed force will merely serve to train and equip private
militias that will be most interested in advancing their own agendas. While the ANATF would bring
militia forces under MoD control, this concern is not unjustified. Previous projects involving locally
recruited forces, most notably the ALP, have had a mixed track record, providing security in some
areas and committing human rights abuses against the local population in others (US Lead IG,
2018).
24. ANDSF casualty rates remained similar to the previous reporting year with fire and improvised
explosive device (IED) attacks and, to a lesser extent, mine strikes as the main causes (US DoD,
2017). In addition, insider attacks within the ANDSF (‘green on green attacks’) and on RSM forces
(‘green on blue attacks’), though declining, continued to be a concern as they adversely affect force
morale and foster mistrust between Afghan and international forces. To address the danger of insider
attacks, the MoD adopted a new policy in September 2017, which provides for improved force
protection procedures for ANDSF and RSM personnel, such as enhanced screening mechanisms.
A similar policy is planned for the MoI. To support the MoD and MoI in this endeavour, RSM has
created an Insider Threat Advisor (ITA) position (SIGAR, January 2018).
B. THE TALIBAN
25. As the Taliban failed to achieve their operational goal of capturing a provincial capital in 2017,
they started to shift their focus to districts over the course of the past year. The group was able to
take temporary control of some district centres through infiltration techniques rather than frontal
assaults. However, the ANDSF, often with international forces’ air support, proved to be effective in
recapturing lost territory relatively quickly (IHS Jane’s, 2017; US DoD, 2017). Although the Taliban
have been pushed out of most urban centres, they were able to increase territorial control in rural
areas slightly, where the government lacks effective representation. According to the latest RSM
estimates based on data from October 2017, the Taliban hold about 14% of the country’s
407 districts, while the government is in control of approximately 56% of them (Burns and Baldor,
2018). The remaining 30% are contested. In terms of population control, RSM assessed insurgents
control about 10% and the government approximately 60% of the population, with the remainder
being contested (US DoD, 2017).
26. The failure to capture urban centres even at the district level has led the Taliban to shift to
increasingly guerrilla-style warfare against ANDSF bases, checkpoints and convoys across the
country, as well as to high-profile attacks against civilians in Kabul and other major cities. From
17-19 October 2017, for instance, the Taliban launched a series of attacks in the provinces of Paktia,
Ghazni and Kandahar, killing over 100 people, mostly police and military personnel (ICG, 2017b).
These incidents demonstrate the Taliban’s increasing focus on attacking ANDSF facilities, allowing
the group to steal military equipment and weakening morale within the Afghan forces (UN, 2017). In
January 2018, the Taliban claimed responsibility for two high-profile attacks in Kabul. On 21 January,
a raid on the Intercontinental Hotel killed 22 people, most of whom were foreigners. A week later, a
bomb hidden in an ambulance detonated in one of the capital’s most protected areas, close to
government buildings and embassies, killing over 100 people (ICG, January 2018). Most recently,
171 DSC 18 E fin
6
on 10 September, the Taliban carried out four attacks in northern Afghanistan killing at least
57 Afghan police officers (Rahim and Abed, 2018). The four attacks were the latest in a series of
targeted attacks by the Taliban against Afghan security forces.
27. The pace of violence against security officials picked up after a three-day ceasefire was
observed among the Taliban, the Afghan government, and international forces in the region during
the Eid al-Fitr (ICG, July 2018). Although the violence dropped significantly during the temporary
ceasefire, the Islamic State of Iraq and the Levant-Khorasan Province (ISIL-K) was the only
exception and carried out an attack that killed at least 26 people. However, the adherence showed
to the temporary truce by both Taliban and Afghan forces signified a “strong domestic constituency
for peace” as President Ghani offered “unconditional talks” with Taliban (ICG, July 2018). Moreover,
US officials and Taliban are reportedly preparing to hold potential peace talks, with the exchange of
prisoners being a key starting point (Ahmad, 2018). The reports of potential peace talks were
strengthened after US diplomats and Taliban representatives met in Doha in July where they laid
the groundwork for future negotiations (Popaizai and Wilkinson, 2018).
28. Integration between the Taliban and the Haqqani network has further progressed, causing
some observers to call the distinction between the two groups obsolete (US DoD, 2017). Infighting
between the Taliban’s leader, Haibatullah Akhundzada, and the head of the Haqqani network,
Sirajuddin Haqqani, has reportedly been settled with the help of Pakistani mediation. Nevertheless,
the rift allowed Haqqani to consolidate his influence within the Quetta Shura, the Taliban’s leadership
council (IHS Jane’s, 2017). Observers have noted these developments with concern, as the Haqqani
network has historically been less committed to limiting civilian casualties (US DoD, 2017).
Moreover, on 4 September 2018, the Taliban officially confirmed the death of Jalaluddin Haqqani,
the founder of the Haqqani network. Although Jalaluddin Haqqani’s death is not expected to affect
the operations of the Haqqani network, it marks a significant symbolic loss for the militant group.
C. DAESH IN AFGHANISTAN – ISIL-K
29. The territorial hold of ISIL-K continues to decline due to US counterterrorism operations,
ANDSF operations and fighting with the Taliban (US DoD, 2017). Particularly, the group’s stronghold
in the south of the Nangarhar province has suffered from an intense US airstrike campaign. By the
end of 2017, ISIL-K’s territorial control had diminished to three districts in the province – down from
nine in late 2015. Elements of the group, however, appear to have relocated to other parts of the
country, most notably to Kunar and Jowzjan provinces (US Lead IG, 2018; Nicholson, 2017b).
30. Despite territorial losses, the group proved to be resilient in its ability to conduct high-profile
attacks. In an effort to stir sectarian conflict, ISIL-K has focused on attacking Afghanistan’s Shi’a
community. On 28 December 2017, the group claimed responsibility for killing at least 41 and
wounding 84 people in a suicide attack at a Shi’a cultural centre in Kabul (SIGAR, January 2018).
ISIL-K was also partly responsible for the spike of attacks against civilian and military targets in Kabul
in January 2018. It claimed the attack on Save the Children’s Kabul office on 24 January, which killed
at least three people, as well as the raid on a military academy on 29 January, which killed 11 ANDSF
personnel (ICG, January 2018). Most recently, on 6 September 2018, ISIL-K conducted twin bomb
attacks in Kabul’s predominantly Shia Qala-e-Nazer neighbourhood, killing 20 people.
31. USFOR-A and ANDSF operations as well as attrition are taking their toll on ISIL-K’s base of
available fighters. The group is trying to compensate for its heavy personnel losses by recruiting
disaffected members from other insurgent groups in the region, most notably former Taliban and
Tehrik-i-Taliban Pakistan (TTP) members (US DoD, 2017). So far, however, increased pressure on
ISIL-affiliated fighters in Syria and Iraq has not swelled the ranks of the organisation’s Afghan branch
(Nicholson, 2017b). According to RSM statements in December 2017, the total number of ISIL-K
members throughout Afghanistan amounts to about 1,000 people (Bunch, 2017).
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32. ISIL-K continues to have difficulties gaining local support and funding. The group’s ideology
does not resonate with the larger civilian population and competition over illegal revenue sources
continues to bring the group into conflict with the Taliban and other insurgent groups
(US DoD, 2017). The competition over members and resources between the Taliban and ISIL-K is
also fuelled by recent reports of possible peace talks between the United States and the Taliban.
While ideologically the Taliban’s local agenda continues to clash with ISIL-K’s goal of establishing a
global caliphate, on the battlefield the Taliban prove to be stronger, as more than 150 ISIL-K fighters
were recently forced to surrender to Afghan security officials after being defeated by the Taliban in
Jowzjan in August 2018 (Sahak, 2018). Thus, ISIL-K finds it hard to emerge as a major force in the
face of the Taliban’s enduring regional presence.
D. OTHER INSURGENT GROUPS
33. Limiting the threat emanating from al-Qaeda remains a priority for US counterterrorism efforts
in Afghanistan. The group maintains a limited but resilient presence in eastern, north-eastern and,
to a lesser extent, southeastern Afghanistan. Moreover, its regional affiliate, al-Qaeda in the Indian
subcontinent, was able to settle in the southern and southeastern parts of the country as well as in
Pakistan. Al-Qaeda’s current focus is ensuring its survival and sponsoring local armed groups rather
than going on the offensive (Giustozzi, 2018; US DoD, 2017). Other violent extremist organisations,
most notably the Taliban, continue to provide al-Qaeda members with safe haven and support, which
USFOR-A assesses as “probably the greatest obstacle to eliminating their presence in Afghanistan”
(US Lead IG, 2018). However, there is no evidence to suggest coordination between the groups at
the strategic level (US DoD, 2017).
STATUS OF THE CIVILIAN SECURITY ENVIRONMENT
34. The general security situation for Afghan citizens remains precarious. The United Nations
Assistance Mission in Afghanistan (UNAMA) reported 10,453 conflict-related civilian casualties in
2017, which included 3,438 deaths and 7,015 injured. For the first half of 2018, UNAMA documented
1,692 deaths – the highest number of civilian casualties at mid-year for “any comparable time over
the last ten years” (UNAMA, 15 July 2018). Although the overall numbers remain high, the year-on-
year casualty count is decreasing for the first time since 2012 (UNAMA, February 2018). In addition
to the persistently high number of casualties, the conflict has also caused the displacement of over
445,000 civilians in 2017 (UNOCHA, 2018). This brings the number of internally displaced people in
Afghanistan to 2 million, with another 2.6 million refugees living outside the country (Amnesty
International, 2018).
35. According to UNAMA’s latest report, the number of casualties attributed to combined IEDs has
surpassed those caused by ground engagements in 2017. The mission voiced concern about the
surge of sectarian-motivated attacks against places of worship and religious leaders, including
ISIL-K’s growing focus on attacking the Afghan Shi’a community. In the summer of 2018 alone,
ISIL-K claimed two attacks on the Shi’a community. In June, suicide bombers targeted a gathering
of Afghan religious scholars, killing at least 12 and injuring 17 (Mashal and Sukhanyar, 2018).
Meanwhile, in August two suicide bombers attacked Shi’a worshippers in the Paktia province,
injuring 81 and killing 25 (Al Jazeera, 2018).
36. Of all conflict-related casualties in 2017, UNAMA attributed nearly two thirds to
anti-government elements and one fifth to pro-government forces, with the remainder being caused
by unattributed cross-fire during ground combat, explosive remnants of war and shelling from
Pakistan into Afghanistan.
37. There has been substantial debate on the human costs associated with growing airstrikes by
international and Afghan forces. In fact, UNAMA’s 2017 figures present the largest year-on-year
casualty count caused by aerial fire since records began in 2009. Putting these numbers into
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perspective, however, the mission states the increase in civilian deaths and injured is relatively low
compared to the significant rise of aerial operations over the course of the past year, resulting in an
overall reduced harm ratio. Commenting on the discussion, Major General James B. Hecker,
Commander of NATO’s Air Command in Afghanistan, said RSM’s training for Afghan pilots includes
developing the necessary hard skills but also “a mindset that prevents civilian casualties to the
greatest extent possible” (Hecker, 2018).
GOVERNANCE
A. ELECTIONS AND ELECTORAL REFORM
38. In addition to the challenges directly associated with security and security sector reform, the
Afghan state continues to face mounting political challenges. In this context, General Nicholson has
stressed the importance of holding credible and timely elections to increase government legitimacy
and social pressure on the Taliban (Nicholson, 2017b). The implementation of electoral reforms in
preparation for the parliamentary and district council elections scheduled for October 2018 and the
presidential elections due to take place in April 2019 is progressing relatively slowly. Both political
and technical issues, including challenges associated with voter registration, security concerns and
political disputes, have stalled progress on electoral preparations.
39. At the heart of the new electoral law passed in November 2016 is the commitment to link voters
to specific polling centres in order to reduce ballot-box stuffing, which was the most common form of
fraud during the 2014 presidential elections (SIGAR, January 2018). Ambitious plans to introduce a
biometric voter registration and verification system have been discarded, as the procurement
process for biometric machines proved unfeasible in the short term. New plans require citizens to
present their tazkera, the Afghan National Identification Card, directly at one of the polling centres to
obtain a paper-based voter registration certificate (SIGAR, January 2018; Yawar Adili, 2017b).
However, about 10 million Afghans adults do not possess identification documents, most notably
women, refugee returnees and internally displaced persons (Darnolf, 2018; NRC, 2016). Observers
have stated that the Afghan Central Civil Registration Authority (ACCRA), which is in charge of
issuing civil documentation, lacks both the institutional capacity and the appropriate funding to issue
tazkeras to all eligible voters prior to voter registration (Darnolf, 2018).
40. Along with the passing of the new electoral law, the government appointed new members to
the Independent Election Commission (IEC) and the Electoral Complaints Commission (ECC) in
November 2016. Lately, the IEC and the ECC, now the two main bodies in charge of administering
and overseeing the elections, have come under criticism by political parties and civil society
institutions. Specific allegations include the lack of progress, internal division and poor leadership
(UN, 2017). On 15 November 2017, President Ghani removed the IEC’s chairman,
Najibullah Ahmadzai, from office after five of the commission’s seven members had accused him of
incompetence. The president’s decision came after a coalition of opposition groups and protest
movements demanded the dismissal of all commissioners. With six of ten IEC Secretariat positions
unfilled and electoral preparations increasingly turning into a battlefield between different political
factions, observers have raised serious doubt about whether the IEC and the ECC have the capacity
to manage the electoral process properly (Yawar Adili, 2017a).
41. In August 2018 the ECC announced that 35 candidates, 12 of which are current members of
Parliament, will be barred from running in the 20 October 2018 elections due to their connections to
armed groups (RFE/RL, August 2018). Whilst the announcement has been praised by some foreign
diplomats who claim it will help ensure fair and legitimate elections, domestically it was met with
criticism and debates over whether the ECC is truly independent and whether the process of barring
candidates was fair and just. This has increased political tensions in Afghanistan, adding to
pre-existing security concerns as elections approach. Concerns remain that the dissatisfaction of
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those barred from elections and their supporters will spark violence, which could either further delay
the elections or at least disrupt them.
42. Ensuring voter security remains a challenge as well. In 2017-2018, the IEC reviewed the
location of polling centres throughout the country to assess voter accessibility for the first time (UN,
2017). Out of the approximately 7,300 polling centres, the IEC assessed 1,707 centres across
32 districts as being subject to high security threats (Shaheed, 2018a). In support of safe and fair
elections in Afghanistan, in July 2018 UNAMA decided to allocate an additional USD 57 million to
the elections budget (UNAMA, 25 July 2018). The US Department of Defense (DoD) stated the
United States and NATO Allies are not planning to support election security with significant force
levels (US DoD, 2017). However, Secretary General Jens Stoltenberg has offered (limited) NATO
assistance for the parliamentary elections in October 2018 amid fears of security issues hampering
the election process (RFE/RL, April 2018).
43. The slow pace of electoral preparations – parliamentary elections were initially scheduled for
2015 – puts the legitimacy of Afghanistan’s legislative bodies at risk and causes internal turmoil;
particularly because successful local and parliamentary elections are a pre-requisite for long-awaited
constitutional amendments. For example, the implementation of the 2014 executive power sharing
agreement between the president and the chief executive officer of the national unity government
(NUG) will require constitutional amendment; only a loya jirga4
, however, can enact constitutional
amendments, and they in turn depend on successful district council elections for their constituency.
At the time of writing, the challenge of maintaining local elections coupled with the ongoing power
struggle between the president, the legislature, and critics of the national unity government like
Mr Karzai have led to political paralysis.
B. EFFORTS TO STEM CORRUPTION
44. Among Afghanistan’s greatest challenges is deeply entrenched public-sector corruption, which
threatens to undermine the efficiency and legitimacy of the Afghan government and its security
institutions. Although the NUG made combatting corruption a priority when its members took office
in 2014, there has been little progress since then. Afghanistan continues to rank near the bottom, as
177th
out of 180 countries, in Transparency International’s Corruption Perception Index
(Transparency International, 2018). Moreover, 83.7% of all respondents in the Asia Foundation’s
latest survey of the Afghan people said corruption is a major problem in Afghanistan as a whole (The
Asia Foundation, 2017). Putting these rankings into perspective, Integrity Watch Afghanistan’s (IWA)
2016 National Corruption Survey states that USD 3 billion (almost a sixth of Afghanistan’s GDP that
year) was paid in bribes in 2015, an almost 50% increase from 2014 (Integrity Watch Afghanistan,
2016).
45. At the 2016 Brussels Conference on Afghanistan, the NUG committed to draft a
comprehensive anticorruption strategy encompassing all government branches. About a year later,
on 28 September 2017, the ‘National Strategy for Combatting Corruption’ was officially approved by
the High Council on Rule of Law and Anti-Corruption. The National Strategy, however, puts
anticorruption activities under the authority of the Attorney General’s Office, while the previous draft
anticorruption law provided for the establishment of an independent commission (SIGAR, January
2018). In the absence of an agreement on oversight, progress on the anticorruption law has been
stalled. Further, the National Strategy has also been criticised as falling short of international
standards and best practices, missing aligned goals and benchmarks as well as not calling for the
establishment of a permanent and fully independent anticorruption organisation (SIGAR, January
2018).
46. RSM is specifically involved in efforts to stem corruption in Afghanistan’s security sector. It
has, for instance, established a Counter-Corruption Advisor Group (CCAG) to support the MoI and
4 A Loya Jirga is a traditional grand tribal assembly of elders to which district councils send delegates,
and which has a legislative function in the country.
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MoD in identifying and targeting corruption networks within their own ranks and to coordinate
anti-corruption efforts among Afghan security institutions, RSM and international partners (US DoD,
2017). Moreover, the Combined Security Transition Command-Afghanistan (CSTC-A) and the
Afghan Ministry of Finance signed a Memorandum of Understanding in August 2017, allowing the
CSTC-A to audit the execution of the United States’ on-budget assistance to Afghan security forces
and institutions. The CSTC-A has also supported the Ministry of Finance in developing the new
‘Afghan Personnel and Pay System’. Currently under implementation, the new system registers
every ANDSF member biometrically, thereby reducing the risk of paying unaccounted for (or ‘ghost’)
soldiers (Nicholson, 2017b; SIGAR, January 2018). CSTC-A advisors also work with the
Anti-Corruption Justice Center (ACJC) and its principal investigative arm, the Major Crimes Task
Force (MCTF). Established by President Ghani in 2016, the ACJC brings together investigators,
prosecutors and judges to cover high-level corruption cases, meaning those involving losses of more
than AFN 5 million or allegations against senior public officials (Resolute Support, 2017;
SIGAR, January 2018). However, while the ACJC represents some progress in the Afghan
anticorruption efforts, there are worries that it “lack[s] the capacity, resources, or security [it] need[s]
to perform [its] function” (SIGAR, July 2018).
The Opium-Corruption Nexus
47. One of the key feeders into Afghanistan’s corruption issues, opium trade, provides equally
complex challenges to local and regional security. More than 75 per cent of the world’s opium comes
from Afghanistan (see Annex A) and the value of the opium trade has been estimated to over half
(53 per cent) of the nation’s licit GDP (UNODC, 2018a). During the course of the war in Afghanistan,
the 21st
century has seen opium cultivation and trade spike to unprecedented levels. Even during
President Ghani’s rule – praised for being harsher on warlords than his predecessor Hamid Karzai’s
administration – cultivation and production have increased. From 2016 to 2017 opium production
increased by 87 per cent to reach 9,000 tons (UNODC, 2018a).
48. The increase in opium production has both global and local implications: fuelling regional
instability and insurgency sustaining terrorist groups through illicit funds, but also making
communities dependent on the income from opium poppy cultivation. The result is rampant
corruption at all levels. The large volume of poppy cultivation makes Afghanistan the key provider of
opium to not only its immediate neighbours in South Asia but also Europe, via Central Asian and
Middle Eastern routes, most of Africa and even the United States (Meyer, 2018). The Taliban’s links
to narcotics go back to the 1990s, and more concretely following the wake of the 2001 US invasion
when, having moved to Pakistan, the Taliban solidified its links to the Quetta alliance, a loose
confederation of three tribal clans in control of most of the regional narcotics trade. Displaying their
cross-organisational co-operation capabilities, the insurgent Taliban and the drug kingpins agreed
to exchange funding provided by illicit trade for security provided by the Taliban and their affiliates.
As a result, the Taliban has had between USD 100 and USD 350 million available as funding for its
insurgency each year (Meyer, 2018).
49. With the support of the international community, predominantly the United States, the Afghan
government has taken various measures to combat the narcotics trade in Afghanistan. However,
these have yielded limited results – despite significant opium production in Afghanistan, most drug
seizures happen outside the country (notably in the Middle East and Eastern Europe). The Afghan
Ministry of Counter Narcotics (MCN), established in 2005 and tasked with the "coordination,
evaluation and implementation of the Counter Narcotics law and the National Drugs Control Strategy
(NDCS)”, has received USD 27.7 million from the US Bureau of International Narcotics and Law
Enforcement Affairs (INL) for capacity building purposes since 2008.
50. A key role the Ministry has recently played is implementing the new penal law on counter
narcotics, in effect since February 2018. Stricter than the previous law, the new penal law favours
prison terms over fines and has criminalised public officials’ behaviour that may jeopardise official
investigations. While the United States continues to train Afghan authorities on implementing of the
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law, results are encouraging as over five hundred cases were adjudicated using the new law
between 1 April and 7 June 2018 (SIGAR, July 2018). Meanwhile, within the ANDSF, the Counter
Narcotics Police of Afghanistan (CNPA) and specialised units within it – especially the Sensitive
Investigation (SIU) and National Interdiction Units (NIU) – conduct key counter narcotics operations.
As of July 2018, the CNPA has 2,596 authorised personnel located in all 34 provinces. As of 2016,
NATO has played a role in training counter narcotics officers via its Partnership for Counter Narcotics
Training with the UNODC to tackle drug trafficking in South and Central Asia.
51. Complementing these operations is the INL’s Counter-Narcotics Community Engagement
(CNCE) programme established in 2013. Targeting local communities and farmers, the programme
funds initiatives “aimed at discouraging poppy cultivation, preventing drug use, and encouraging licit
crops” (SIGAR, July 2018). Similarly, the Boost Alternative Development Intervention through Licit
Livelihoods (BADILL) programme, implemented by the UNODC, endeavours to diversify licit
livelihoods for small-scale local farmers and remove incentives for illicit poppy cultivation. Observers
note, however, this initiative has had very limited long-term results in dissuading farmers from opium
production (SIGAR, July 2018). As political tensions, the ongoing insurgency, rampant corruption,
and illicit trade continue to reinforce one another in Afghanistan, the key in resolving these issues
will lie in the cohesion of the national unity government and the success of its negotiations with the
Taliban. The more tolerant stance of President Ghani towards the Taliban and his increasingly
pro-peace settlement rhetoric spell out a commitment to political stabilisation that is a positive signal
for creating the conditions for a lasting peace (Ghani, 2018).
INCREASING FOCUS ON THE REGIONAL DIMENSION
52. It is clear achieving peace and stability requires a political settlement between the national
unity government and the Taliban. Less straightforward and thus often neglected when discussing
Afghanistan’s prospect for peace is the regional dimension of this endeavour. The announcement of
the gradual withdrawal of NATO troops in 2011, however, has caused Afghanistan’s neighbours to
move from the margins to the centre of attention again.
A. PAKISTAN
53. The most crucial neighbour for achieving peace and stability in Afghanistan is Pakistan.
Besides Saudi Arabia and the United Arab Emirates, Pakistan is one of only three countries that
formally recognised the Taliban regime as Afghanistan’s legitimate government between 1996 and
2001. Although then Pakistani President Pervez Musharraf officially cut ties with the Taliban within
days of the 9/11 attacks, less conspicuous support channels remain. To date, the Afghan Taliban
and the affiliated Haqqani network continue to enjoy safe haven on the Pakistani side of the Durand
Line, allowing these groups critical sanctuary to avoid ANDSF and coalition-supported military
operations and giving them the space necessary to plan, resource and launch attacks
(US DoD, 2017).
54. There is considerable evidence Pakistan’s military and especially its Inter-Service Intelligence
Directorate (ISI), actively support Taliban activities in Pakistan and Afghanistan. The targeting and
subsequent assassination of Osama bin Laden in 2011 drew global attention to the Pakistani
military’s complicity with various armed groups and the freedom of action these groups’ leaderships
enjoy in the Pakistani area of operation. More recently, Ahktar Muhammad Mansour, then leader of
the Taliban, was killed in a US drone strike in Pakistan in 2016. He was found without any weapons
or guards (Gall, 2017). For such a high-profile terrorist group leader to operate so freely in the region
suggests at the very least tacit, if not overt, support from the government in Pakistan. In addition, the
track record of arrests or disappearances of Afghan Taliban leaders based in Pakistan who make
overtures to the government in Kabul or their international partners without the direct consent of the
Pakistani government only further highlights the degree to which political and military leaders in
Islamabad maintain key influence over terrorist groups (ICG, 2017a).
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55. Pakistan’s willingness to cooperate and crackdown on Taliban sanctuaries is balanced with a
parallel desire by both political and military leaders to maintain armed group proxies active in the
region in order to curb India’s potential influence in Afghanistan.
56. Since British India was divided into what is now known as the Islamic Republic of Pakistan and
the Republic of India in 1947, the two countries have fought each other in four full-scale wars and
43 smaller conflicts (Mitton, 2014). Central to the ongoing dispute is the Kashmir region, which both
states claim belongs to their respective territory. Marked by this history of bitter rivalry, the Pakistani
military sees Afghanistan as providing critical strategic depth vis-à-vis India. In the minds of Pakistani
leaders, sustaining strong political influence in Afghanistan can prevent potential encirclement by
their long-term rival and, in the instance another war breaks out, provide the government in
Islamabad with a reliable ally on its rear flank (Dalrymple, 2013).
57. The 2001 US-led invasion of Afghanistan sought to remove the Taliban from power due to their
support and harbouring of al-Qaeda. The US intervention was a critical juncture for Pakistan’s role
in the region – not only did it lose its agent in Kabul, it also started to decline in importance in relation
to the international community’s efforts to bring peace and stability to the region. This was due to its
lack of initiative in denying safe haven to the remnants of the defeated Afghan Taliban as they fled
across the border from US forces. The issue of Taliban and other armed groups asylum in Pakistan’s
Federally Administered Tribal Areas soon became a key dividing point for international forces on the
ground, as well as for the political effort to foster a stable government in Kabul in order to develop a
new Afghan state. US-NATO combined efforts knocked the Pashtun out of key positions in Kabul,
ushering in a new era where the Tajik-influenced government led by Hamid Karzai5
had close ties to
India (Mitton, 2014). Hence, in Pakistan’s view, backing insurgents was its only realistic instrument
to maintain influence in the region.
58. When Ashraf Ghani took office as president of the NUG in 2014, he initially made considerable
efforts to improve relations and security cooperation with Pakistan. There were several reciprocal
visits to Kabul and Islamabad in late 2014 and early 2015, during which Afghan and Pakistani officials
tried to find ways to bring the Taliban to the negotiation table. Initially, officials on both sides
expressed beliefs that formal talks were near (Yusuf and Smith, 2015). President Ghani even agreed
to send a small number of Afghan troops to be trained at the Military Academy in Abbottabad in early
2015, after former President Karzai had repeatedly rebuffed Pakistani offers to assist in the training
of the ANDSF. Shortly afterwards, in April of the same year, the Inter-Services Intelligence (ISI) and
its Afghan counterpart, the National Directorate of Security (NDS), signed a Memorandum of
Understanding aiming to enhance intelligence cooperation (Katzman and Thomas, 2017).
59. Meaningful action against Taliban sanctuaries in Pakistan, however, failed to materialise and
recent high-profile attacks jarred rapprochement efforts, eventually causing Afghan-Pakistani
relations to deteriorate again. In the past two years, President Ghani has repeatedly called on
Islamabad to take decisive action against Afghan extremists launching attacks from Pakistan. At the
first meeting of the "Kabul Process" in June 2017, for example, Mr Ghani even accused the Pakistani
government of waging “an undeclared war of aggression” against Afghanistan (Dawn, 2017).
Pakistan denies supporting the Taliban and other extremist groups, arguing it is being made the
scapegoat for other countries’ failings in the protracted and gridlocked conflict. Privately, however,
civilian government officials say it is the military and particularly the ISI that are standing in the way
of concrete measures aiming to clamp down on insurgent groups (Abi-Habib, 2018).
60. These more recent events unfold against the background of a long-standing border dispute
between the two countries. Afghanistan refuses to recognise the Durand Line as its international
border with Pakistan, arguing it divides Pashtun territory. The border was drawn under British
colonial rule in 1893 and has regained attention in 1947, when Pakistan declared its independence
and refused Afghanistan’s demands to grant Pashtun tribes living on the Pakistani side of the border
5 Hamid Karzai served as interim leader of Afghanistan from 2001-2004 and officially as President from
2004-2014.
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the right to self-determination (Katzman and Thomas, 2017; Rahi, 2014). Recently, Pakistan has
started to build a fence along the Durand Line, with plans to cover 2,400 km by the end of 2018
(SIGAR, January 2018). While Islamabad argues the fence is necessary to regulate cross-border
movements and prevent militant incursions, Kabul has voiced strong opposition to the unilateral
undertaking and insists on renegotiating the border (Dilawar and Haider, 2017). Despite heightened
tensions in the bilateral relationship, military-to-military border cooperation at the tactical level
remains largely intact (US DoD, 2017).
61. Many observers were apprehensive about the election of Imran Khan as Pakistan’s new
Prime Minister in July 2018 due to worries about his policy on Afghanistan. Mr Khan had previously
stated the Taliban insurgency is “justified” (Boone, 2012), which raised concerns about Pakistan
being a spoiler in the Afghan peace talks (Schmitt, 2018). Prime Minister Khan, however, has thus
far been supportive of peace negotiations with the Taliban, having said: “[i]f there is peace in
Afghanistan, there will be peace in Pakistan” (Coll, 2018). Given his Pashtun background, Mr Khan
could in fact increase ties between Pakistan and Afghanistan should this become a foreign policy
priority for his government (McKirdy, 2018).
The Trump Administration Changes the Course of US-Pakistan Policy
62. While US Presidents George W. Bush and Barack Obama prioritised ensuring Pakistan’s
overall stability to keep the country’s numerous militant groups in check and its fast-growing stockpile
of nuclear weapons out of the wrong hands, the Trump administration has decided to take a hard
line with Pakistan. While presenting the new US South Asia strategy in August 2017,
President Donald Trump stated his administration could no longer ignore the sanctuary provided to
the Afghan Taliban in Pakistan. As a result, in January 2018, the US government decided to suspend
all Coalition Support Fund and Military Financing aid for Pakistan – security assistance worth
approximately USD 2 billion – until the Pakistani leadership substantiates its commitment to
crackdown on Taliban sanctuaries (Bokhari et al., 2018; Nawaz, 2018). Ahead of his visit to
Islamabad in September 2018, US Secretary of State Mike Pompeo announced the United States
would cancel USD 300 million of aid to Pakistan “due to a lack of decisive actions in support of the
South Asia strategy” (Barker, 2018).
63. Moreover, the Trump administration successfully lobbied the member states of the Financial
Action Task Force (FATF) into putting Pakistan back on the ‘grey list’ of countries not doing enough
to combat money laundering and terrorist financing. This grey listing is likely to discourage banks
and other financial institutions from engaging with the Pakistani government, complicating the
country’s efforts to meet its growing financial needs (Abi-Habib, 2018; Masood, 2018).
64. The changing course of US-Pakistan policy under President Trump has sparked substantial
debate in the US foreign policy community. Some security experts argue a hardline approach gives
the United States increased leverage by limiting Pakistan’s capabilities. For example, the reduction
in aid stalls military modernisation efforts and could be a long-term setback if no other country can
fill the substantial gap left by the loss of US aid (BBC News, 2018).
65. At the same time, however, some observers question whether the strategy of increasing
pressure on Pakistan will achieve the desired results, arguing it might actually prove to be
counterproductive. Pakistan was on the FATF’s grey list from 2012 to 2015 and US military aid to
the country was already cut by about 60% from 2010 to 2017 – neither of these measures had any
apparent impact on Pakistan’s behaviour (Felbab-Brown, 2018; Masood, 2018). While there have
been few signs of such measures impacting Pakistan’s behaviour toward terrorist groups, the
United States has benefited from its ability to use Pakistani roads and airspace to deliver supplies
into Afghanistan and Pakistani military bases to launch drone strikes (Aleem, 2018). Some experts,
including a former US ambassador to Pakistan, fear these benefits could end if aid is cut off in a
highly public manner. Pakistan could obstruct or complicate US operations, as it did in 2011 when it
shut down NATO supply routes into Afghanistan after the United States attacked a Pakistani guard
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post, or it could pursue closer ties with rivals such as China and Russia (BBC News, 2011; Olson,
2018). Increasing pressure on Pakistan also risks reinforcing the military’s perception that it needs
Afghan insurgents to compensate for insecurities vis-à-vis India, particularly because the
Trump administration’s South Asia policy also calls for a growing Indian role in Afghanistan (Felbab-
Brown, 2018).
B. INDIA
66. Much like its principal rival, India’s involvement in Afghanistan is informed by concerns over
violent extremism and the potential influence of Pakistan. India strongly opposed the Taliban
government, as it viewed Kabul’s harbouring of al-Qaeda as a major threat to its security. From
New Delhi’s perspective, links between al-Qaeda and violent separatist groups in Pakistan directly
connected extremism in Afghanistan to instability in the disputed Kashmir region and south east Asia
more generally (Katzman and Thomas, 2017). Even after the Taliban’s ouster, some of these groups
have continued to prove their potency with major terrorist attacks in India and against Indian targets
in Afghanistan. Most notable in this regard are the 2008 and 2011 Mumbai attacks, but also the 2008
and 2009 attacks against the Indian embassy and the 2010 attack against an Indian guesthouse in
Kabul (Dalrymple, 2013). Eager to prevent any violent extremist groups from regaining power in
Kabul, New Delhi supported the Northern Alliance against the Taliban in 2001 with both military
advisors and equipment, and it has made considerable efforts to re-establish and solidify bilateral
relations since then.
67. India has become one of Afghanistan’s largest and most reliable regional partners in terms of
trade and development assistance (US DoD, 2017). Since the Taliban’s ouster in 2001, New Delhi
has funded major civil development and infrastructure projects such as the new parliament building
in Kabul and the Afghanistan-India Friendship Dam in Herat Province, completed in December 2015
and June 2016 respectively. India’s development assistance to Afghanistan amounts to projects
worth USD 2 billion in total and Indian Prime Minister Narendra Modi pledged an additional
USD 1 billion for Afghanistan’s development in 2016 (Katzman and Thomas, 2017). Meanwhile, the
overall volume of trade in goods amounted to USD 383 million in 2016 (SIGAR, January 2018). While
India is becoming increasingly involved in Afghanistan’s reconstruction and economic development,
the Indian government has been careful to stress the civilian character of these investments.
68. Most recently, India has committed to invest USD 85 million in the development of the
Chabahar seaport in south eastern Iran (Dawn, 2018). As Pakistan continues to block the land transit
of goods from Afghanistan to India and vice versa, the project aims to facilitate trade between India,
Iran and Afghanistan while bypassing Pakistan. Launched with a series of trilateral transit
agreements in May 2016, the project has progressed relatively slowly as the first consignment of
wheat was shipped from India to Afghanistan through Chabahar only in October 2017 (Panda, 2017).
On 17 February 2018, Prime Minister Modi and Iranian President Hassan Rouhani finalised
agreements on the management of Chabahar, giving operational control of the port to the Indian
government for the following 18 months (Dawn, 2018). In addition to sea access, Afghanistan and
India have also established a direct airfreight corridor, which was inaugurated with the first cargo
flights between New Delhi and Kabul in June 2017 (MEA India, 2017a).
India as Security Partner to Afghanistan
69. The nature of Indian-Afghan relations changed and intensified again in 2011, when the
two countries signed a “Strategic Partnership” giving India a formal role in Afghan security for the
first time. Importantly, the partnership agreement provided for India to train and equip ANDSF
personnel (MFA Afghanistan, 2011). Since then, about 130 members of the Afghan security forces
have attended officer-training programmes at Indian military institutions every year (US DoD, 2017).
Furthermore, India has begun to supply the ANDSF with combat equipment, thus departing from its
previous policy of providing Afghanistan with support equipment only. Most notably, India has
donated four Mil Mi-25 attack helicopters to the Afghan Air Force (AAF) to replace their grounded
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Mi-35s. As the donated helicopters have also experienced serviceability issues, however, the Indian
government announced in 2018 that it would purchase four refurbished Mi-24 helicopters from
Belarus for Afghanistan (Gady, 2018).
70. Recent developments suggest India’s involvement in Afghan security is likely to increase even
further. As a way of coordinating and reviewing the implementation of the strategic partnership at
the ministerial level, the agreement established a “Partnership Council” with regular meetings
headed by the Foreign Ministers of both countries. The council met for the second time in
September 2017, where both sides agreed to strengthen security cooperation and extend India’s
assistance to the ANDSF. Notably, the council also explicitly called for the end of state-sponsored
sanctuaries for terrorist groups attacking Afghanistan (MEA India, 2017b).
71. This does not mean, however, there are no limits to the role India is willing to play in
Afghanistan. As part of the new US South Asia policy, President Trump called on New Delhi to
contribute more to international efforts aiming to foster peace and stability in Afghanistan. In
September 2017, a month after President Trump’s address, Indian Defence Minister
Nirmala Sitharam met with her US counterpart James Mattis in New Delhi. During the meeting, Mrs
Sitharam made it clear India is not going to send troops to Afghanistan but is prepared to increase
development assistance and training for ANDSF personnel (Deutsche Welle, 2017). India’s restraint
in this regard is likely to be first and foremost informed by New Delhi’s fears of potential retaliation
attacks by Pakistan-backed insurgent groups in India or against Indian targets in Afghanistan.
C. CHINA
72. Beijing’s expanding regional investment projects, coupled with concerns that instability and
violent extremism in Afghanistan might threaten China’s domestic security, drive the country’s
involvement in Afghanistan. First, despite a relatively small, shared border (92 km), Afghanistan’s
mountainous and sparsely populated Wakhan corridor connects to China’s Muslim-majority Xinjiang
province, where Uygur separatist groups seek to establish an independent East Turkestan. China is
concerned about the surge of violence in recent years and suspects some of these groups take
advantage of instability in parts of Afghanistan and Pakistan to train and plan terrorist attacks in
Xinjiang and other parts of China (Huasheng, 2016; Umarov, 2017).
73. Second, Afghanistan’s wealth in minerals such as copper, iron and gold, estimated to be worth
USD 1 trillion, has attracted major Chinese investments (Barnes, 2017). In 2008, for instance, the
state-owned China Metallurgical Group signed contracts to develop Afghanistan’s Mes Aynak field,
the country’s largest copper deposit. Like many other Chinese projects in Afghanistan, however,
security-related incidents such as attacks at the site and kidnappings of Chinese specialists have
stalled the field’s full development (Umarov, 2017).
74. Third, and most importantly, Afghanistan’s geographic location in the heart of Central and
South Asia means peace and stability in Afghanistan are crucial for the viability and effectiveness of
China’s massive “One Belt, One Road” (OBOR) initiative. Launched in 2013, OBOR is the
centrepiece of Beijing’s current foreign policy. It aims to connect China to Central and
Southeast Asia, Europe and Africa through a network of railways and highways (the land-based “Silk
Road Economic Belt”) as well as maritime routes (the sea-based “Maritime Silk Road”). The increase
in Chinese investment and engagement in Central Asia through OBOR suggests China could play a
significant role in increasing the regional links between Afghanistan and their Central Asian
neighbours.
75. In 2016, Afghan Foreign Minister Salahuddin Rabbani and his Chinese counterpart Wang Yi
signed a Memorandum of Understanding on enhancing cooperation within the OBOR framework,
giving Afghanistan a formal place in China’s ambitious infrastructure project (Kumar, 2017). Since
then, a new rail route was opened, linking China to Afghanistan through Kazakhstan and Uzbekistan
(Wu, 2016). Beijing has also signalled Afghanistan could become part of the China-Pakistan
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Economic Corridor (CPEC), a series of infrastructure projects currently under construction which
aims to connect China to the Indian Ocean via Pakistan (SIGAR, January 2018).
76. These economic and strategic interests as well as the significant cutback of international forces
and partners in Afghanistan after the departure of ISAF have driven Beijing from its traditional place
at the sidelines of the Afghan war towards greater involvement in Afghan security issues. The 2012
“Joint Declaration between the People’s Republic of China and the Islamic State of Afghanistan on
Establishing Strategic and Cooperative Partnership” marked the beginning of strengthened security
cooperation between the two countries. Two years later, as a way of accelerating the implementation
of the agreement, Beijing appointed the first Chinese Special Envoy for Afghan Affairs. Moreover,
since the NUG took office in 2014, Kabul and Beijing have signed four Memoranda of Understanding
on defence and security cooperation and hosted an unprecedented number of reciprocal visits by
high-level diplomatic, security and military officials (Umarov, 2017). In 2016, Afghan security forces
received their first batch of Chinese military aid, reportedly containing military vehicles, logistical
equipment, ammunition and weapons (Dominguez, 2016). Most recently, there have been reports of
joint counterterrorism patrols made up of Afghan and Chinese troops operating in the Wakhan
corridor along the countries’ shared border (Katzman and Thomas, 2017). While Chinese military
assistance and Sino-Afghan security cooperation are still marginal compared to other international
actors, they have certainly increased in recent years. In August 2018, reports emerged indicating
the Chinese government is planning to open a military base in Afghanistan to host troops undertaking
counterterrorism training in neighbouring Xinjiang (Farmer, 2018). However, these claims have thus
far been denied (Reuters, August 2018).
77. In addition to growing bilateral efforts, China has launched or participated in a number of
regional initiatives aiming to promote the Afghan peace process. Most notably, China is part of the
Quadrilateral Coordination Group, the Shanghai Cooperation Organization-Afghanistan Contact
Group and the Heart of Asia-Istanbul Process. While all of these regional forums convene regularly,
no significant progress towards a peace settlement has been achieved since negotiations with the
Taliban broke down in 2015 (UN, 2017). China is nevertheless considered to be in a relatively good
position to foster cooperation and mediate between Afghanistan and Pakistan, as it has friendly
relations with both governments. With close ties to the Pakistani military and at least some informal
links to the Quetta Shura, the Taliban’s leadership council, Kabul hopes Beijing will use its relations
to bring the Taliban back to the negotiation table (Huasheng, 2016; Jackson and Abbas, 2018).
D. IRAN
78. Iran’s involvement in Afghanistan is mainly driven by its desire to contain US and ISIL-K
influence in Afghanistan. Iran’s foremost concern is the increase in ISIL-K attacks against the Afghan
Shi’a community. Second, Tehran seeks to limit US military presence in the close vicinity of its
border, which the United States may be able to use as a staging ground to pressure or attack Iran
(Katzman, 2018).
79. These concerns have led the Shiite-ruled Tehran to expand its ties with the hard-line Sunni
Taliban and to support their fighters with money, training and equipment. Thus, the very group Iran
vehemently opposed in the 1990s and nearly went to war with in 1998 has now become a useful
proxy force to advance Iranian interests in the region (Gall, 2017).
80. Yet, Iranian-Afghan relations are more complex, as both sides recognise – at a meeting in
Kabul with Iranian Deputy Foreign Minister Seyyed Abbas Arghchi, Afghan Chief Executive Abdullah
Abdullah said "joint cooperation between the two countries of Iran and Afghanistan on fighting
terrorism is necessary and the rise of shared threats makes these kinds of cooperation more
necessary” (ICG, 27 September 2018). Iran is Afghanistan’s second largest trading partner after
Pakistan as well as the most significant exporter of goods to Afghanistan – the total trade between
the two coming to USD 1.46 billion in 2016 (UN, 2016). Iran’s commitment to economic cooperation
is most evident in the Chabahar Port project with India, under which Iran is due to hand over control
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of the port to India in exchange for trade routes from landlocked Afghanistan to be able to bypass
Pakistan. Meanwhile, Afghanistan’s commitment to cooperation with Iran is evident in its request for
exemption from Iran-related sanctions.
81. Moreover, there is also evidence Iran’s Revolutionary Guards Corps (IRGC) has been
recruiting Afghan refugees to join pro-government militias in Syria since at least 2013. According to
Human Rights Watch, potential recruits do not always join voluntarily but are often detained and
given the choice between deportation to Afghanistan and fighting in Syria (HRW, 2016, 2017). While
they do not pose an immediate risk to Afghan security, their eventual return from Syria might swell
the ranks of Afghan insurgent groups with battle-hardened and trained fighters. During a visit to
Tehran UN High Commissioner for Refugees Filippo Grandi recently stated Iran is in grave need of
further support in order to be able to house, support and educate the large Afghan refugee population
(of almost a million civilians) it is currently host to (Lomax, 2018).
CONCLUSIONS FOR NATO MEMBER STATE PARLIAMENTARIANS
82. It is clear NATO Allies view sustaining their mission in Afghanistan as being of vital importance.
NATO Allies and their international partners have a clear goal with their mission in Afghanistan – to
ensure Afghanistan will never again become an ungoverned space from which terrorist groups can
operate and launch attacks. Achieving this goal has involved almost 17 years of significant
investment in personnel and resources – some people have paid the ultimate price to help
Afghanistan achieve the peace and stability that have eluded it for the last four decades at least.
83. Military assistance to the ANDSF and financial and diplomatic assistance to the government
in Kabul have changed the situation on the ground in Afghanistan in significant ways: the ANDSF
are leading the fight against the insurgent forces seeking to undermine the government; access to
health care, education and other economic opportunities has expanded greatly since the end of
Taliban rule in 2001; a parliamentary democracy, though advancing slowly, is taking hold and
working to guarantee rights for all Afghan citizens. Advances in rights for women and girls in the
country have perhaps come the farthest of all.
84. While none of these achievements should be discounted, much work remains to be done. This
report underscores many areas where sustained attention, resources and political will need to be
focused to effect the change necessary: from continued security sector reform investment to
increased attention to anticorruption measures. The parliamentary elections scheduled for the fall of
2018 will be a key focus for the government, its international backers and the insurgent fighters
seeking to block the installation of a legitimate democracy in the country.
85. This report gives extra attention to the regional dimension of the security challenges in
Afghanistan due to its importance for achieving lasting peace. Pakistan’s ability to deny the use of
its territory as safe haven by the myriad groups fighting in Afghanistan will be crucial. Clearly,
international pressure is increasing on Pakistan to take new steps to rectify what all military and
policy experts believe to be a key problem for the future of the war in Afghanistan. The complexity
of the Pakistan-India dynamic should not be overlooked, however, when examining policies and
actions to deal with the Afghanistan-Pakistan border dilemma.
86. As the Trump administration stated correctly in its iteration of its new policy toward Afghanistan
– the solution to Afghanistan will require investment from all the elements of US power, not just the
military. An obvious conclusion from such a statement is that, ultimately, lasting peace in Afghanistan
will be the result of an Afghan-owned and implemented political solution. While the continued
strengthening of the ANDSF and the correction of key security sectors may continue apace and
change the balance of forces on the battlefield, it is clear a political compromise with the Taliban
must be achieved.
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ANNEX: GLOBAL HEROIN TRAFFICKING FLOWS 2012-2016
Source: United Nations Office on Drugs and Crime (UNODC), 2018.
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171 DSC 18 E fin
23
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_______________________
DEFENCE AND SECURITY COMMITTEE
217 DSC 18 E rev. 1 fin
Original: English
RESOLUTION 447
on
BURDEN SHARING: NEW COMMITMENTS IN A NEW ERA*
The Assembly,
1. Concerned by threats to NATO’s territories and populations which could undermine peace
and security;
2. Recognising this security challenge demands a determined, unified, and capable Allied
response;
3. Recalling the new adaptation measures decided upon at the 2014 and 2016 Summits in Wales
and Warsaw to address these threats;
4. Welcoming the readiness and reinforcement initiatives announced at the 2018 Brussels
Summit to ensure more rapid and effective Allied responses to any possible contingency in NATO
territory;
5. Aware a dynamic and mobile Allied deterrence posture requires significantly larger
investments;
6. Encouraged by continued US investment in European security via such initiatives as the
European Deterrence Initiative (EDI);
7. Understanding deterrence is a whole-of-Alliance undertaking, requiring investment and
sacrifice from all Allies so that NATO is positioned to achieve collective defence, crisis management,
and cooperative security in the face of any challenge;
8. Recalling that Article 3 of the Washington Treaty commits all Allies to do their part to carry the
burden of Alliance initiatives, operations, and tasks;
9. Remembering the Defence Investment Pledge undertaken at the 2014 Wales Summit which,
inter alia, commits Allies to aim to move towards the guideline of spending 2% of their Gross
Domestic Product (GDP) on defence by 2024 and investing 20% or more of their defence budgets
on major equipment, including related research and development, with a view to meeting their NATO
capability targets and filling NATO’s capability shortfalls, and noting that the Defence Investment
Pledge (DIP) is not only Cash, but also Capabilities and Commitments, as the so-called three “Cs”
accurately reflect the Allies’ level of solidarity, which indeed represents the basic pillar of the
Alliance’s credibility;
* Presented by the Defence and Security Committee and adopted by the Plenary Assembly on
Monday 19 November 2018, in Halifax, Canada
217 DSC 18 E rev. 1 fin
2
10. Encouraged by the economic recovery across the Alliance, which has helped underwrite over
USD87 billion in new defence spending by NATO European Members and Canada since 2014;
11. Noting that since 2014, the NATO PA has conducted a consequential and positive dialogue
on burden sharing that has helped build a political consensus supporting the notion that more must
be done to ensure a strong and capable NATO for the future;
12. Applauding the fact that five Allies are now spending over 2% of GDP on total defence
spending, while 15 Allies have achieved or surpassed the 20% threshold for new investments;
13. Welcoming both the 2016 NATO-EU Joint Declaration, which has fostered closer NATO-EU
cooperation, and reenergised collective defence efforts in Europe, including rising contributions to
the European Defence Fund (EDF) and to the Permanent Structured Cooperation (PESCO) which
are helping to deepen defence cooperation among EU member states;
14. Aware that the majority of Allies have not yet reached the Defence Investment Pledge
guideline, and that Allies have agreed to regularly submit credible national plans for its
implementation;
15. URGES the member governments and parliaments of the North Atlantic Alliance:
a. to recognise the challenging and rapidly evolving security environment facing the Alliance,
while redoubling national efforts to move towards the 2% guideline for defence spending by
2024 as all Allies agreed at the 2014 Wales Summit;
b. to aim to increase their annual investments into new equipment and related research and
development to 20% of total defence expenditures focused on obtaining a force structure best
suited for not only national defence requirements, but also the most effective contribution to
broader Alliance security needs according to the NATO Defence Planning Process (NDPP);
c. to submit credible national plans outlining the steps their nations will take to achieve the type
and amount of investment in defence necessary to engage a whole-of-Alliance effort to meet
the security challenges facing NATO today and in the future.
16. ASKS its own Members:
a. to familiarise themselves with the NDPP as a means of better understanding both the positive
impact of their countries’ contributions and the strategic and fiscal benefits of deeper
coordination and synchronisation in defence planning and procurement;
b. to solicit information from their respective defence establishments about how their nations are
responding to NATO requirements and streamlining spending to make their current
contributions as effective as possible;
c. to help lead the debate about defence spending and their nation’s contributions to the Alliance.
_______________
DEFENCE AND SECURITY COMMITTEE
218 DSC 18 E rev. 2 fin
Original: English
RESOLUTION
on
REINFORCING NATO’S DETERRENCE IN THE EAST *
The Assembly,
1. Acknowledging that NATO’s territories and populations face significant conventional
and hybrid threats, particularly in the East;
2. Aware that NATO-Russia relations are at the lowest point since the end of the Cold War,
cognizant of Russia’s large-scale military aggression against Georgia in 2008, continuous illegal
occupation and steps towards factual annexation of the Georgian regions of Abkhazia and
Tskhinvali/South Ossetia, and mindful that Russia’s illegal annexation of Crimea prompted quid pro
quo sanctions, rancorous rhetoric, and high levels of mistrust;
3. Alarmed by Russia’s increasingly escalatory and reckless pattern of behaviour in the form
of cyber attacks, the use of force against its neighbours, the illegal use of chemical nerve agents for
attempted murder on Allied territory, as well as its insidious undermining of democratic institutions
and principles through its use of election interference and disinformation campaigns;
4. Cognizant that Russia’s doctrinal shift from 2010 to 2014 has reaffirmed NATO as its de
facto competitor and that it views NATO activities in Central and Eastern Europe as direct threats to
Russian national interests;
5. Concerned by Russia’s deployment of modern anti-access/area denial (A2/AD) systems
along NATO’s eastern flank, which could impede the Alliance’s freedom of movement;
6. Stressing the importance of the Enhanced Forward Presence in Poland and the Baltic States
and the Tailored Forward Presence in the Black Sea Region as key defence and deterrence
measures to secure NATO’s eastern flank;
7. Welcoming Georgia’s engagement in strategic discussion and mutual awareness on Black
Sea security and Georgia’s contribution to NATO’s efforts to enhance Black Sea security;
8. Recognising that NATO’s eastward enlargement has resulted in the need for strategic
enhancements, specifically concerning outdated infrastructure and bureaucratic regulations, which
could delay the quick movement of troops and supplies;
9. Noting that many of the significant concerns in NATO about infrastructure and regulations
impeding military mobility can be found in Suwalki Corridor, the location of which between
* Presented by the Defence and Committee and adopted by the Plenary Assembly on
Monday 19 November 2018, Halifax, Canada
218 DSC 18 E rev. 2 fin
2
Kaliningrad and Belarus makes it a potential choke point between the Baltic States and the rest of
the Alliance’s eastern members;
10. Applauding the EU Transportation Coordinating Committee’s EUR 1.9 billion investment in
strategic infrastructure in Eastern Europe and other major improvements in necessary infrastructure
developments in NATO’s eastern flank, and recognising that the impetus must now be on NATO
and the EU working together to deliver the shared goal of being able to move NATO forces (both
EU- and non-EU Member States) across Europe as quickly as possible;
11. Recognising the Trident Juncture 2018 exercise in Norway offered a crucial opportunity to
test the Very High Readiness Joint Task Force (VJTF);
12. Commending the installation of the new NATO Joint Force Command for the Atlantic in
Norfolk, Virginia, and the US Navy’s reactivation of the Second Fleet as necessary for the protection
of the North Atlantic;
13. Supporting the NATO Readiness Initiative (30-30-30-30 Plan) as essential to meeting the
demands of NATO’s new defence and deterrence posture;
14. Praising the Enablement Plan for SACEUR’s Area of Responsibility as a means of improving
NATO forces’ response time in a potential crisis;
15. Upholding NATO’s dual track approach towards Russia, based on a combination of
deterrence, defence and dialogue;
16. URGES member governments and parliaments of the North Atlantic Alliance:
a. to continue to ensure the sustainability and readiness of NATO’s Enhanced Forward Presence
in the Baltic States and Poland, and the Black Sea region, VJTF, and enhanced NATO
Response Force;
b. to address existing barriers to military mobility at the legal and infrastructure levels in Europe
through enhanced NATO-EU cooperation;
c. to invest in the improvement of strategic infrastructure as a necessary element of countering
hybrid warfare, such as improved roads, bridges, communication infrastructure, ports and
airports and to reinforce the security of energy projects;
d. to develop an early warning system to detect a possible incursion into the strategically vital
Suwalki Corridor, develop infrastructure for quick deployment and sustainment of troops and
the necessary manpower to defend the essential territorial link with the Baltic States;
e. to deepen dialogue and engage Georgia in the framework of NATO’s Tailored Forward
Presence (tFP);
f. to further the implementation of NATO’s Readiness Initiative which is essential to meeting the
demands of NATO’s new defence and deterrence posture and its reinforcement;
g. to demonstrate continued commitment to the Enablement Plan for SACEUR’s Area of
Responsibility, which is dedicated to improving legislation and procedures, enhancing
command and control, and increasing transport capacity;
h. to address force deficiencies, develop faster deployment times, and make available the
resources necessary to sustain deployed forces;
218 DSC 18 E rev. 2 fin
3
i. to ensure the Alliance has the necessary means to reinforce Allies in an A2/AD environment,
potentially through the acquisition of advanced fighter jets, jamming systems, and longer-range
precision missile systems;
j. to commit to resourcing Alliance contingency plans, including force allocation needs of
Graduated Response Plans that address Eastern threats.
_______________
ECONOMIC AND SECURITY
COMMITTEE (ESC)
THE FUTURE OF THE
SPACE INDUSTRY
General Report
by Jean-Marie BOCKEL (France)
General Rapporteur
173 ESC 18 E fin | Original: French | 17 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................................................1
II. CHANGING DYNAMICS OF THE SPACE INDUSTRY..........................................................2
III. STATE OF THE CURRENT COMMERCIAL SPACE MARKET .............................................5
A. SATELLITES ................................................................................................................5
B. LAUNCH SERVICES....................................................................................................6
C. GROUND EQUIPMENT................................................................................................7
D. POTENTIAL FUTURE MARKETS ................................................................................8
IV. NATO AND THE COMMERCIAL SPACE INDUSTRY ...........................................................8
V. OPPORTUNITIES ............................................................................................................... 10
A. ECONOMIC BENEFITS.............................................................................................. 10
B. INTERSTATE COOPERATION .................................................................................. 10
VI. CHALLENGES FOR THE FUTURE..................................................................................... 11
A. CYBER THREATS...................................................................................................... 11
B. DEBRIS ...................................................................................................................... 12
C. TREATY AND REGULATORY ENVIRONMENT......................................................... 13
D. INTERSTATE COMPETITION AND THE MILITARISATION OF SPACE.................... 14
BIBLIOGRAPHY.................................................................................................................. 16
173 ESC 18 E fin
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I. INTRODUCTION
1. Sixty years ago, the Soviet Union successfully launched the first artificial satellite; Sputnik I.
This event inaugurated what came to be known as the Space Race, a period of intense direct
competition for supremacy in space mainly between the United States and the Soviet Union. It was
hardly surprising that other actors were initially excluded from this competition given the scale and
costs of the effort the two superpowers were willing to undertake. The US National Aeronautics and
Space Administration’s (NASA) Apollo programme, for example, employed more than 400,000
people and cost USD 110 billion when adjusted for inflation (Baiocchi and Wel, 2015). Additionally,
early space programmes posed inordinate risks and led to various training and spaceflight-related
deaths and injuries. These costs far exceeded what most countries were willing to bear, and no
individual or private company would ever even have considered embarking upon such an
undertaking without state support.
2. Despite these costs, space programs accorded significant strategic and economic benefits.
While there is no definitive study on the full technological impact of space programmes, commercial
spin-offs from national space programmes have clearly had a major impact on the economy of the
United States and is inextricably linked to the digital revolution. The US space programme helped
nurture a network of firms capable of commercially exploiting emerging technologies. Thus, the need
for advanced computing and smaller electronics for space flight contributed to significant advances
in a range of fields from computers to advanced materials. Satellites, which were essentially built by
governments for military surveillance and reconnaissance, ultimately enabled global
telecommunications and GPS technologies. One study on the macroeconomic effects of the US
space programme suggests that each dollar spent on research and development yielded an average
of slightly over seven dollars in commercial returns over an 18-year period (Schnee, 2000).
3. The close links between space projects and commercial endeavours are once again a headline
generating phenomenon. All the leading space powers are advancing important exploration
programmes: China’s Moon programme and various Mars programmes (driven by private players
such as SpaceX NASA and the European Space Agency (ESA). Space remains a critical frontier
for strategic and economic competition among states, and this effort continues to produce significant
technological advances. Moreover, the list of states with national space programs has increased
markedly. Europe has pooled its efforts through the European Space Agency, and, since the Lisbon
Treaty, it has collectively derived a benefit of scale through EU programmes such as Galileo and
Copernicus. China, India and Japan are now prominent players, and a number of other countries
have also entered the field. International cooperative programs have resulted in new links being
created, often in the form of common projects.
4. Space-related technologies have helped drive this growth and played an essential role in
knitting together an interconnected USD 78 trillion global economy (NATO PA, 2017). At the same
time, they have enabled nuclear deterrent systems, facilitated ground, air and sea-based military
operations, and triggered major advances in meteorology, Earth observation, mapping, the internet
and communications. Although the original paradigm for space exploration was one of a Cold War
race for predominance, space has also become an arena of significant international cooperation.
The International Space Station (ISS) is a perfect expression of interstate collaboration in space,
and there are myriad examples of shared missions, international procurement and joint scientific
projects.
5. At the same time, space remains an important arena for interstate competition, perhaps best
encapsulated in the proliferation of intercontinental ballistic missiles but evident also in areas such
as missile defence, military communications, command and control, surveillance and intelligence
gathering. The United States government still spends over USD 40 billion annually on space, with
the funding largely split between the Pentagon and NASA. European Space Agency member-states
spend over USD 6 billion each year while Russia spends an estimated USD 1.6 billion on its space
endeavours (European Space Agency, 2016). Precise figures for China remain elusive.
173 ESC 18 E fin
2
6. A revolution in space funding, exploration and commercialisation is also underway. Spurred
by major technological advances and the promise of triggering technological and commercial
breakthroughs, new actors, including developing countries, private firms and even individuals are
now playing in an arena once dominated almost exclusively by powerful countries. These actors are
altering the dynamics of the space industry and raising important commercial and strategic questions
for policymakers in all NATO member states. This general report will explore the paradigmatic shift
that is now broadly labelled “new space” and identify the key opportunities and challenges that NATO
member states confront as this critical dimension of human activity undergoes a revolution in
technology, opportunity, expectations and leadership.
II. CHANGING DYNAMICS OF THE SPACE INDUSTRY
7. One of the features of new space is that private firms are no longer simply operating as
contractors to nation states but are themselves becoming key protagonists in space. To take one
notable example, in 2018, SpaceX launched 15 rockets, which among other things sent a
Luxembourg-made satellite to be used by NATO into orbit. It also sent a Tesla automobile into space
as a marketing stunt and a way to announce that the company was prepared to reinvent the way
companies conceive of space (SpaceX, 2018). In in 2017 that company launched 18 rockets and
recovered 14 reusable boosters (The Economist, 2018). Blue Origin plans to launch the first tourists
into space by April 2019 (Wattles, 2017). Commercial actors are also roiling European markets and
compelling traditional actors to up their game. Europe itself has become an ever more important
protagonist in space and European firms now rival their American competitors across an array of
technologies and are thus helping to advance European ambitions. At the same time, developing
countries are making significant advances in their own their space programmes. China may now be
spending more on space than the Russian Federation (Clark, 2016). Indeed, more than 60 states
currently own and operate satellites, and the space market is growing ever more globalised and
diverse (OECD, 2016).
8. Traditionally, investors have considered the commercial opportunities of space to be “high risk,
high cost, and [characterised by] long payment periods” (Wakimoto, 2018). In 2011, NASA estimated
that the average cost of a manned space shuttle mission was USD 450 million, with unmanned
rockets costing roughly USD 420 million each (Bray, 2017). Insurance costs, meanwhile, can amount
to USD 800 million (Basak, 2016). This figure is nonetheless a high estimate of the annual insurance
market, with insurance representing on average about 10% of the cost of a launch. Even discounting
the potentially catastrophic financial and reputational cost of a launch failure, opportunities for
significant profit in the industry have long seemed limited. Until 1982, the US government was
responsible for launching all civil and commercial payloads within its borders. Launch vehicles
themselves were only produced under contract with the US government, and the bidding process for
these contracts tended to be non-competitive due to the government’s reliance on a limited number
of aerospace giants and its need for supply security over cost competitiveness (Berger, 2017).
9. Several important changes, however, have dramatically reduced barriers to entry and
increased private interest in space. First, gradual improvements in managerial practices and the
falling cost and size of technology are slashing launch and payload costs. SpaceX has expressly
designed its Falcon rockets, for example, to maximise standardisation, which, in turn, has reduced
the number of processes and the tooling required prior to any given launch while diminishing unit
costs of critical parts. Advances in rocket engine design, meanwhile, have lowered combustion
instability and driven down the material costs (Chaikin, 2012). The digital revolution and
minutarisation have increased the power of critical satellite technology while reducing its size and
weight—key drivers of launch costs.
10. Driven by these changes, the space sector has begun to have a more profound impact on the
broader economy. Ever-smaller telecommunications satellites are now playing a pivotal role in
corporate strategy by offering space-based solutions to inherently Earth-bound problems (OECD,
173 ESC 18 E fin
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2016). As savings from these advances mount, companies are encouraged to build upon existing
space-based systems and to develop new capabilities serving an ever expanding array of
commercial markets.
11. Reusable rockets are among the most promising of these advances provided the restoration
costs, which are currently very high, are under control. This technology substantially reduces costs
by allowing officials to launch the same rocket multiple times. In 2010, SpaceX launched a payload
into orbit with the rockets returning to Earth for eventual reuse. This made it the first non-government
entity ever to achieve this feat. In 2015, it recovered the first stage of one of its rockets (Kluger,
2018). In 2017, it launched one of the most powerful rockets in human history and successfully
landed its two outer stages, which can now be redeployed in future missions (Hern, 2018). In 2015,
another private company, Blue Origin, designed and launched a reusable suborbital rocket, which
will help that company substantially reduce its production costs (Kim and Orwig, 2017).
12. Traditionally government support has been a critical driver of technological change linked to
the space industry. Private corporations in the United States, for example, were long granted access
to their country’s space agency’s technical archive. They also benefited from the secondment of
NASA experts. These favourable conditions helped these firms to make technological leaps that took
decades to refine and billions in public funds to finance (Chaikin, 2012). Cooperation between
government scientists and private industry triggered compelling advances in an array of critical
components, such as heat shield materials, that ultimately also had important commercial
applications (Werner, 2015). Governments have also played a compelling financial role and
sustaining the space sector through a system of research grants, contracts, and other agreements
with the private sector. Even after a technology’s usefulness is demonstrated, it can still require
significant direct or indirect public support before it becomes a marketable component or platform.
Investment costs can be daunting, and the risks often remain too high for companies alone to
shoulder (OECD, 2016). The United Launch Alliance, a joint programme between Boeing and
Lockheed Martin, for example, receives roughly USD 800 million a year from the US military through
a launch capability contract (Gruss, 2016).
13. In the United States, however, there is a strong risk-taking ethos linked to its entrepreneurial
culture, and other financial options have emerged. The role of so called “angel-financiers” played a
critical role in the rise of the digital economy. These risk-taking investment companies poured billions
of dollars into start-ups with good ideas and talented engineers but little capital to help them bring
these ideas to fruition. The success of this model is well documented and some of it has spilled over
into the space market. That should hardly be surprising, particularly as the digital revolution itself is
a central feature of the new space paradigm. In any case, those pushing the technological and
commercial frontiers of space in the United States have financial options that are less available in
Europe and Japan, for example. It is accordingly correct to speak of different national models at play
in this rapidly changing sector.
14. Managerial revolutions are another element of the story. Driven by competition, leading
companies have reduced production costs and sped up production lines by tightening up supply
chains, tapping into robotics and digital printing technologies, and even producing key components
in-house. The ArianeGroup in Europe, for example, is using digital printers to manufacture its own
critical titanium components and has made enormous savings doing so (NATO PA Visit to Paris and
Toulouse, October 2018). SpaceX manufactures and assembles more than 70% of its launch
vehicles to reduce its dependence on any single supplier (SpaceX, 2013). Off-the-shelf components
can play a critical role in driving down costs. SpaceX claims to save between USD 45,000 and
USD 95,000 for a single radio compared to the price of radios aerospace companies typically
purchase (Koebler, 2015). Blue Origin recently unveiled its own rocket factory that will be responsible
for designing and rebuilding reusable rockets (Kim and Orwig, 2015). Virgin Galactic has assembled
a vertically-integrated team capable of producing and testing many rocket components in-house
(Foust, 2015). For new entrants to the market, expertise is increasingly consolidated within single
firms instead of across a multiplicity of vendors and contractors. The process of designing, testing,
173 ESC 18 E fin
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and improving products in all of these companies has been streamlined in new and innovative ways.
Creative management and new design approaches have thus been central to slashing costs in this
burgeoning industry.
15. Increased competition has made such cost-cutting essential. For a long time, government
largesse helped insulate the commercial space industry from traditional market pressures. Reflecting
its space programme’s national security and prestige-based origins, the US government passed laws
that imposed restrictions on the ability of foreign companies to work within its borders. This
undermined the kind of dynamism that trade competition generally encourages and some of these
practices, many of which are rooted in security concerns, persist (Zelnio, 2006). The International
Traffic in Arms Regulation (ITAR), for example, sets restrictive rules on the trade of US technologies,
and this actually helped galvanise European manufacturers to develop their own technologies
outside of US export controls (Hauser and Walter-Range, 2008). ITAR’s broad mandate,
extraterritorial reach, and slow and unpredictable process, almost paradoxically fed the proliferation
of non-US space firms developing their own technologies and pushing the frontiers of space in new
directions.
16. In the United States, major companies like Lockheed Martin and Boeing overcame these
barriers thanks to exclusive contracts with the US government. But this left smaller competitors
effectively barred from the market. The government had few options but to sign exclusive
agreements with large space companies. In effect, government policy helped create monopolies or
at least oligopolies and this failed to provide sufficient incentives to innovate or drive down costs.
17. In 2014, however, the US Department of State reclassified most commercial, civil and scientific
satellites and accompanying equipment under the Department of Commerce’s “Commerce Control
List” (CCL) making it significantly easier for private companies in the US space industry to sell in the
international market. Whilst ITAR still restricts many aspects of the US space industry, this revision
constituted an important step towards loosening restrictions that were impeding the market.
18. Lawsuits, policy changes, and a growing awareness of the economic consequences of ITAR
rules sparked a degree of rethinking in the United States and elsewhere. New policies have
encouraged competition and helped open the commercial market to other actors. This competition
has, in turn, created incentives for the industry to build ever cheaper and more capable products. In
2006, NASA stopped using government-operated rockets to resupply the International Space Station
and has since relied on private industry (Grush, 2017). A subsequent analysis of this change found
that NASA spends roughly USD 89,000 per kilogram of cargo. The same service by a traditional
aerospace giant would have cost USD 135,000 per kilogram while a government-run service would
have cost USD 272,000 per kilogram. The same analysis also estimated the cost of a start-up firm
running a crew rotation for the International Space Station as compared to a similar operation
conducted by an aerospace giant. The former would cost USD 405 million while the latter would be
priced USD 654 million (Zapata, 2017). According to analysts, SpaceX charges USD 4,653 per
kilogram to launch a telecommunications satellite into orbit while traditional aerospace companies
charge between USD 14,000 and 39,000 per kilogram (Routh, 2017). This represents a profoundly
disruptive change to the industry with long-term commercial, scientific and even military-security
implications. The price fall is a function of regulatory change, managerial innovation, competition and
critical technical innovation.
19. These advances have also sparked intense interest among well-financed space enthusiasts
and entrepreneurs. Motivated by an abiding personal interest in space and driven by a belief that he
could dramatically drive down costs, Elon Musk, the US entrepreneur who earned millions after
selling his firm Paypal, founded SpaceX with a USD 100 million investment primarily composed of
his own money (Tilley, 2016). Jeff Bezos, the founder of Amazon, is selling USD 1 billion of stock a
year to finance his aerospace company, Blue Origin (St. Fleur, 2017). These entrepreneurs have a
personal interest in space and a belief that they can push out the space frontier while identifying
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projects that can generate long-term profits. Their personal wealth has afforded them the opportunity
to stretch out investment horizons in this changing but still high-cost and risky business.
III. STATE OF THE CURRENT COMMERCIAL SPACE MARKET
20. Although there has been a tendency to focus on the large players in the US space industry,
Europe has emerged as a major player in these markets. The French company Arianespace, for
example has been a key innovator in commercial launch services. European satellite manufacturers
and operators, such as Airbus DS, Thales Alenia Space, OHB, Eutelsat and SES, rank among the
world leaders. The US government, however, spends significantly more on space-related activities
than any other country. In 2014, the institutional space budgets of the United States exceeded USD
4 billion, significantly more than any other countries (OECD, 2014). Its commercial space sector has
been bolstered by innovation, risk taking and a financial structure that encourages risk taking and
seeks to reap large rewards as pay off.
21. The commercial space industry, however, is growing increasingly globalised, and there are
challenges to traditional US dominance. European companies, for example, now control about 40%
of the world market for satellite manufacturing, launching, and operations (European Commission,
2009). Although its position has recently declined due to launch failures and the rise of less
expensive alternatives, the Russian Roscosmos provided NASA with rocket components as recently
as 2014 (Wright, 2014). Virgin Galactic, a company founded by a British investor, Richard Branson,
has invested substantial resources into commercial spacecraft and suborbital spaceflights.
22. Though rapidly evolving, the current space industry can be divided into three core sectors:
Satellites; Launch Services; and Ground Equipment. The following section explores the current
environment shaping these sectors and points to the direction in which they are now moving.
A. SATELLITES
23. Satellites make up the most developed sector of the space industry due to their place in the
architecture of the global economy. From 2012 to 2017, the number of satellites in space increased
from 994 to 1,459. This number is expected to rise to 7,000 within several years (NATO PA visit to
Paris and Toulouse, October 2018. Meanwhile, revenue across the sector increased from USD
113.5 billion to 127.7 billion (Bryce Space and Technology, 2017). Though satellites serve myriad
functions, the sector itself can be divided into two parts: manufacturing and services. Designing,
deploying and maintaining these systems is a highly complex and expensive undertaking, but it can
generate enormous paybacks. The generated know-how involved spillovers into other commercial
sectors beyond those directly involved with satellite production. The city of Toulouse, France,
provides a case in point. Its booming economy is driven not only by its large satellite industry, but
also by the spin-offs this sector generates, which have helped launched an array of other industries
in everything from digital services to material engineering.
24. While governments and companies across the globe increasingly rely on satellites, the
manufacture of these systems remains relatively centralised in a handful of companies that possess
the skilled workforce, the scale, engineering capacity, and financial resources needed to produce
reliable complex systems. These organisations include the European Thales Alenia Space, Airbus
DS and OHB as well as various US companies, such as Maxar Technology (formerly SSL), Boeing,
Lockheed Martin, and Orbital ATK. As the above list suggests, the United States is the largest
manufacturer of these spacecraft, with Europe and Russia rounding out the list (Canis, 2016). In
2016, government agencies purchased 382 satellites, almost three quarters of all devices launched.
Satellite manufacturing has thus been largely driven by government demand. But this demand can
fluctuate significantly over time. In 2016, for example, yearly commercial revenue shrank 13.1%
partly because the government and private-sector customers had reached the end of their satellite
replacement cycles, the period in which an active satellite must be replaced (Bryce Space and
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Technology, 2017). Some analysts suggest that the market suffers from significant overcapacity and
has been hindered by delayed investment decisions in the conventional geostationary transfer orbit
(GTO) satellite market. The expectation is that commercial demand will help reduce reliance on state
customers and help fill orders.
25. Satellites are very expensive, but costs are declining with the advent of small satellites, also
known as “minisats”, which weigh less than 500 kilograms and “nanosats,” that can weigh as little
as 3.5 kilograms. These small satellites are able to carry out certain tasks that were once only
conducted by far larger vessels. Rapid advances in consumer electronics have transformed satellite
technology and driven down costs and size. As price decreases and performance increases, the
cost of manufacturing complex satellites accordingly falls. One small satellite producer, the
US-based Orbital Sciences, claimed several years ago that its production and launch costs had fallen
to between USD 150,000 and 1 million compared to the typical cost of USD 200 million to
USD 1 billion for larger alternatives with similar functionality (The Economist, 2014). British
manufacturer SSTL, the world leader in small satellites, offers entry-level solutions for less than
USD 1 million. Larger satellites feature functionalities superior to those of small satellites. The
Airbus-OneWeb satellite programme aims to launch 900 microsatellites - that weigh between 10 and
20 kilograms - that will collectively provide affordable internet access to the entire world. The first of
these micro satellites are being deployed in 2018. This is a highly ambitious trans-Atlantic project
that has also demanded very rapid satellite production lines relying on robotics. The project has
produced innovation on that front as well. SpaceX also plans to launch thousands of small satellites
to enable global internet (Wattles, 2018). These kinds of innovations are believed to have generated
an 11% increase in revenue for the Earth imagery industry in 2016 (Klotz, 2017). Payloads averaging
13.1 kilograms are thought to have made up a quarter of all launches in 2016.
26. According to the OECD, the top 25 actors in fixed satellite services, the architecture of which
relies on ground terminals, generated USD 12 billion in revenue in 2013. Though the top five players
in this particular market represented 70% of that revenue, this share has dropped due to increasing
competition from emerging players (OECD, 2014). Satellite broadcasting, meanwhile, is estimated
to have a market of USD 92 billion. As of 2017, satellite television made up almost a third of space-
related commercial activity (Canis, 2016).
27. Satellite services extend well beyond telecommunications. Earth observation start-ups raised
USD 96 billion in 2017. The industry is moving rapidly from the business of collecting imagery from
all over the globe to transforming data into actionable intelligence. Data analytics is expected to
generate significant earnings for this sector over the coming years (Komissarov, 2018). This
information is used to track trends in agriculture, disaster mitigation, mass migration, shipping, as
well as to track piracy and other criminal activities including environmental crime. Atmospheric
monitoring-satellites track weather patterns and help provide daily weather forecasts as well as
predict droughts and floods. Transportation-related satellites provide geolocation services to
consumers, delivery trucks, such as FedEx, and ride-sharing services, such as Uber (Canis, 2016).
These same kinds of services obviously have important military applications and national security
forces and intelligence agencies will remain important clients for the business. It is worth noting that
originally, the GPS constellation was a military system and the Galileo programme will have a
classified military dimension for EU members only.
B. LAUNCH SERVICES
28. The launch sector is perhaps less a driver of the space industry than it is an enabler for other
activities. As much as the industry demands sophisticated electronics and well-engineered devices,
it also needs to get this equipment into orbit. This poses a range of financial and technological
challenges. In 2017, the United States, China, Russia, the European Union, India, Japan, Israel,
Brazil and North Korea conducted 90 launches. Of these, 64 were commercially procured, 13 were
not commercially procured, and 13 involved space vehicles (Bryce Space and Technology, 2018).
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Between 2004 and 2014, private companies sent an estimated 817 satellites into orbit, with 41% of
these relating to telecommunications and 21% relating to Earth observation (Euroconsult, 2015).
29. The commercial launch sector is estimated to be worth USD 5.4 billion and, in 2015, clients
booked USD 2.6 billion in launch services (Canis, 2016). While the number of launches ebbs and
flows over time, most experts expect an upward trend in the sector’s activities and profitability.
Declining barriers to entry will likely spur additional growth and there seems to be an ever-larger
space for commercial as opposed to government programs. In 2015, US companies conducted
eight commercial launches (Dillingham, 2016). Between 2013 and 2018, SpaceX’s share of the
global commercial market grew from 5% to over 60%, while Roscosmos, Russia’s state-run
company, saw its share sharply decline from almost 50% to 5% (Hughes, 2017). Government-
controlled facilities, such as the Kennedy Space Center in the United States and the Guiana Space
Centre (CSG) in Kourou, have traditionally served as launch sites for commercial entities under very
different economic conditions. SpaceX uses NASA’s facilities almost for free, which is not the case
for Ariane at the CSG, which charges EUR 20 million per launch. In the United States alone, there
are 19 active and licensed launch sites, ten of which are operated by US states in partnership with
private industry. There are an additional three non-licensed sites, which can exist because
companies own and operate them and exclusively use their own vehicles (Federal Aviation
Administration, 2017).
30. As discussed above, new market entrants and improved rocket technology drive many of these
transformations. Reusable rockets, a recent innovation successfully tested by SpaceX in 2018,
represent an especially promising advance that will further reduce costs and launch turnaround time.
Nevertheless, this production choice which reduces the number of rockets produced, entails an
increase in unit price. How quickly this technology will be integrated into the sector’s regular services
is not yet apparent.
31. One possible limiting factor on the launch industry is the extent to which the sector is “captured”
by established companies. As the US Federal Aviation Administration noted in its 2018 assessment
of the sector, most satellite operators have exclusive agreements with launch providers and are
prohibited from “shopping their services around” (Federal Aviation Administration, 2018). Such
exclusivity could limit potential savings insofar as it restricts competition, which invariably leads to
higher than necessary prices.
C. GROUND EQUIPMENT
32. The final notable component of the space industry is ground equipment, which refers to the
Earth-based infrastructure that directs the information transmitted from satellites to appropriate
transmitters and receivers. This infrastructure includes antennas that allow for transmission and
reception of different communications signals, such as satellite radio and television. It also includes
user terminals, such as rooftop dishes for satellite televisions, large corporate dish antennae, and
data accounting and distribution systems, which identify and respond to errors in transmission. Such
systems tend to be highly automated and are only occasionally monitored by individuals (Canis,
2016).
33. With revenue amounting to USD 119.8 billion, of the total USD 248 billion revenue of the
industry, ground services constitute a significant 34% of the space industry. Its largest segment,
consumer equipment, including global navigation systems (GNSS), contributed USD 108 billion of
those USD 119.8 billion. (The Space Industry Association, 2018) GNSS systems include small
consumer products, such as standalone navigation devices and location-detecting chips in mobile
phones, as well as larger, more complicated systems, including traffic control systems, aircraft
avionics, and maritime trade networks. An additional USD 18.5 billion is spent on non-GNSS
consumer equipment, including satellite television, radio, and broadband terminals, while a final
USD 10 billion is spent on network equipment such as satellite news-gathering equipment (Bryce
Space and Technology, 2017). Growth in this sector can be attributed to the growing need for GNSS
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chips in smartphones and other consumer products. As a result, between 2012 and 2016 alone,
GNSS equipment grew from a USD 52.7 billion industry to one that generates USD 84.6 billion
(Al-Ekabi, 2017).
D. POTENTIAL FUTURE MARKETS
34. The media spends an inordinate amount of time and print exploring the ambitious plans of
emerging space companies and the entrepreneurs that lead them. Elon Musk, the CEO of SpaceX,
and Jeff Bezos the owner of Blue Origin, have attracted a great deal of attention, and they have
leveraged their personal wealth to build these ambitious firms. Because these firms are somewhat
insulated from the immediate shareholder demands, they are positioned to focus on long term project
including Moon and Mars missions, asteroid mining and space tourism as well as more immediate
activities including rocket engine and launcher production.
35. Tourism in space is not a new concept and was evoked even prior to the advent of the space
age. However, in recent years, the notion has become considerably less abstract. Since 2001, brief
orbital spaceflight has been available through expensive private ventures costing upwards of
USD 20 million (Carrington, 2013). In 2017, SpaceX announced that it had booked two private space
tourists for a trip around the moon in 2018 (SpaceX, 2017), but in February 2018, Elon Musk decided
to delay the trip until the new Big Falcon Rocket is available (Clark, 2018). Other companies such
as Blue Origin and Virgin Galactic have also devoted significant efforts to space tourism, with Jeff
Bezos’ Blue Origin planning to open the service in 2019 (Clark, February 2018). The Russian Space
agency has sent 7 paying clients into space.
36. The sustainability of these efforts, however, remains to be seen given unclear market demand,
the possibility of catastrophic failure and potential liability, and the enormous investments that civilian
space travel would require. The sector will at best remain a niche market for the extraordinarily
wealthy. Short spaceflights, epitomised by SpaceX’s effort, appear more likely and feasible than any
long-term stay in space given the lack of necessary infrastructure and the high costs of such travel.
The US Government Accountability Office does not believe any commercial company will be
accredited to fly government astronauts until 2019, suggesting that a sustainable civilian space travel
sector is not likely to emerge over the medium term (Government Accountability Office, 2017).
37. A second often discussed commercial enterprise relates to the mining and recovery of natural
resources outside of the Earth’s orbit. Throughout the universe, there are significant deposits of
natural resources that theoretically could be recovered. Asteroids, for example, can contain nickel,
platinum, iron, and cobalt. NASA estimates that the asteroid belt between Mars and Jupiter, where
over 1 million asteroids exist, has an estimated value of USD 700 quintillion (Desjardins, 2016).
Several landings on large asteroids have already been undertaken to demonstrate the technical
feasibility of beginning this industry, but the current cost structure would not seem to justify major
efforts in this arena, at least at the moment. According to the Keck Institute for Space Studies at the
California Institute of Technology, capturing a 500,000kg asteroid would cost around USD 2.6 billion
and require significant advances in propulsion systems and ground-based observation, as well as a
human presence in lunar orbit (Keck Institute for Space Studies, 2012). Given the costs, resource
recovery likely remains decades away. Any natural resource recovery would also likely require a
reworking of international treaties, such as the Outer Space Treaty, that prohibit states from claiming
celestial bodies.
IV. NATO AND THE COMMERCIAL SPACE INDUSTRY
38. As the Alliance recognised in its 2010 Strategic Concept, maintaining unimpeded access to
space is a major priority for the NATO and its members. Moreover, all members of the Alliance
depend upon the vast network of shared space assets for deterrence, strategic communications,
and navigation. As the NATO Parliamentary Assembly’s Sub-Committee on Future Security and
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Defence Capabilities emphasised in its 2017 report, The Space Domain and Allied Defence
[162 DSCFC 17 E rev.1], “NATO needs a whole-of-alliance approach to protect its interests in space
to enhance resilience and deter any threat to its space-based capabilities” (NATO PA, 2017).
39. NATO itself is not currently focused on the space domain even if it remains important to areas
like intelligence and surveillance and in missile defence. There are currently just six postings in
NATO designated as space-operations positions in six different departments. Following the
acknowledgement of the support that space assets have provided to NATO missions, especially the
12-year long NATO-led International Security Assistance Force (ISAF) mission in Afghanistan,
NATO created a Bi-Strategic Command Space Working Group in 2012. One of the more ambitious
but key recommendations for improving NATO’s space capabilities is the proposal for the creation
of a NATO Space Operations Centre of Excellence to “offer recognised expertise and experience
that is of benefit to the Alliance” (NATO, 2018). At the 2018 NATO Summit in Brussels, a decision
was made to forge a joint NATO Space Policy – however, the timeline for the project is not yet
established.
40. The emergence of new actors in space and the proliferation of national space programs are
likely to increase the importance of these capabilities. While NATO members such as the United
States, France, Germany and the United Kingdom are world leaders in the space field, and countries
like Canada and Luxembourg play important if smaller roles, an increasing number of countries that
were not traditionally players in the market are developing new capabilities. NATO thus confronts a
competitive challenge in the space domain. Six countries launched satellites into the Earth’s orbit for
the first time in 2017. China has also rapidly increased its capabilities. Although a recent rocket
failure has slowed China’s progress, it is nonetheless on track to launch the first module of its space
station by 2019 (Jones, 2018). Though its technology remains relatively unsophisticated, North
Korea has also become a player in space, largely as a result of its military ambitions. It now appears
interested in launching more satellites, and last launched an Earth observation satellite,
Kwangmyongsong-4, in February 2016 (Panda, 2018). Iran’s missile programme is also a major
concern and has been the primary reason NATO has opted to construct a limited ballistic missile
defence (BMD). As a range of countries enter this crowded market, NATO members will need to rely
on their capacity to innovate to retain a competitive edge.
41. Private actors could pose potential challenges as well as opportunities. In March 2018, a
Californian company was accused of launching satellites without government approval. Officials fear
that these satellites “pose an unacceptable collision risk for other spacecraft” (Dvorsky, 2018). After
a New Zealand company launched a large “disco ball” into space in January 2018, astronomers
complained about the bright satellite’s potential to interfere with their ability to observe and study
space (Griffin, 2018). Ever lower entry barriers could also potentially engender problems of
corporate negligence and misuse and might eventually open the space domain to malicious actors,
including hackers and terrorist organisations. Western planners are already concerned about
Chinese and Russian anti-satellite programmes and they now need to consider at least the possibility
that these challenges could multiply as new actors launch orbital space endeavours.
42. Beyond security, however, space-based systems are an increasingly important part of national
and international economic and governance systems in a variety of sectors ranging from
telecommunications to environmental monitoring. While NATO serves mainly as a political and
military organisation, its members’ economic livelihood increasingly relies on unimpeded access to
space and on its capacity to ensure the safety and survivability of space assets. The Alliance has an
interest in preserving this economic capacity while deterring any threats that might make use of the
space domain. At the technological level, military satellite designs increasingly incorporate elements
of self defence capability to cope with potential threats to their survivability.
43. NATO Joint Air Power (JAP) remains highly dependent on member states’ national
space-based capabilities as they support Air, Maritime, Land, and Cyber domains. While NATO does
not own or control space assets, JAP relies on them for “early and timely warning, space ISR, satellite
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communication, - and the provision of Position, Navigation and Timing information.” (NATO, 2018).
Space assets have supported US military operations since First Gulf War (1990-1) – nicknamed “the
first space war” and have supported critical NATO’s military operations including the intervention in
Yugoslavia in 1999, as well as, later, the wars in Iraq and Afghanistan (Tombarge, 2014).
V. OPPORTUNITIES
44. The growing capabilities of the commercial space industry offer several notable opportunities
for Allied countries. These include economic benefits linked to spin offs, the possibility for interstate
cooperation, and public-private partnerships.
A. ECONOMIC BENEFITS
45. The commercial space market is growing rapidly. Between 2001 and 2011, economic activity
in space transportation and related industries increased by 239% (Whealan-George, 2013). In 2015,
the global space market amounted to USD 323 billion, while it is projected to grow to USD 1.1 trillion
by 2040 (Hampson, 2017; Sabbagh, 2017). While much of this activity is linked to well-established
markets (e.g. satellites for the television industry — a business valued at USD 95 billion), space
enables an increasingly wide array of economic activities. It is also displacing traditional systems. In
the Flanders region of Belgium, for example, geo-fencing and satellite communication have replaced
underground sensors in the tram network (Space Foundation, 2017). In the commune of Alban (Tarn,
France), a satellite communication system is used to manage the city’s drinking water and to provide
real-time management and security of those supplies (Eurisy, 2018).
46. There are plenty of signs to suggest that the commercial space market will play an increasingly
important role in the global economy. In its 2016 report, the US Federal Aviation Administration noted
that the commercial launch industry had seen few changes in the last five years, but that the lack of
observable change “belies what is taking place behind the scenes”. The report further discusses how
“[s]everal new launch vehicles are being developed specifically to address what some believe is
latent demand among small satellite operators (Federal Aviation Administration, 2017).” The year
2016 was the most significant investment year for space-related start-ups, and investors committed
USD 2.8 billion for space ventures. Small satellites, as this report has suggested, provide further
opportunities. Various companies have announced plans to use these devices to provide worldwide,
fast access to the internet (Scoles, 2018).
47. It is not possible to predict with certainty how these efforts will develop. Taken together,
however, they point to the industry’s growing interest in space. This is reflected in long-term
investment trends. From 2012 to 2017 investment into space start-ups (USD 10,238.3 million) was
nearly three time greater than the total investment in 2000-2012 (USD 3,688.7 million) (Bryce Space
and Technology, 2018). This poses a range of regulatory and market structuring challenges that will
lead to evolving partnerships between the industry and governments in order to ensure security,
foster competition and encourage innovation.
B. INTERSTATE COOPERATION
48. An additional benefit comes in the form of potentially enhanced international connectivity. As
discussed, the space industry has become increasingly internationalised. Companies like
Thales Alenia Space, Airbus DS and OHB derive enormous benefits from workforces and supply
chains that stretch across the European Union. These companies provide a model for similar
multinational commercial ventures. They also show how commercial interests can redefine how the
notion of national interest is understood. While companies within the United States are somewhat
more restricted in their ability to cooperate with foreign firms as a result of ITAR (the US International
Traffic in Arms Regulation) and other laws, many other countries do not face such rigorous
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restrictions. That said, US firms have forged an array of important partnerships with their European
counterparts.
49. Rising commercial interest in space has also triggered a renewed focus on the treaty regimes
governing the extra-terrestrial commons. In the United States, Senator Ted Cruz has pushed for
revisions to the Outer Space Treaty, which bars states from placing weapons of mass destruction in
space and requires non-governmental entities to seek state approval prior to engaging in any
space-based activity. He argues that the treaty, designed over half a century ago, is now outdated
(Foust, 2017). There are worries that legal ambiguities are undermining the nascent commercial
space sector, and that the lack of clarification of property rights could either stifle innovation or lead
to conflicts over ownership of space rocks. In other words, the treaty is increasingly seen as outdated.
Congress has recently considered the Space Frontier Act of 2018, which would extend the operation
and utilisation of the International Space Station and streamline oversight of both launch and re-
entry activities, and non-governmental Earth observation activities. The legislation appears to have
a degree of bipartisan support in the US Senate with Senator Cruz hoping to pass it by the end of
the year (Cruz, 2018).
50. Industry leaders are widely opposed to any revisions to the Outer Space treaty and have
expressed reservations about “costly regulatory burdens” and the danger of uncertainty. This
discussion is likely to grow more intense over the coming years. When the company Moon Express
sought clearance to fly outside low Earth orbit in 2016, for example, it was unclear who within the
United States Government had the authority to authorise that operation under the Outer Space
Treaty. This issue points to the need to discuss treaty obligations and to undertake an effort to ensure
that all participants in space agree to the same principles (Foust, 2017). Although a complete rewrite
of the international treaty regime on outer space remains unlikely, there is clearly a need for an
updated general code of conduct outlining the responsibility of states in overseeing commercial
space activity planned and launched within their borders. The example of France, which amended
its space legislation in 2008, is being studied by many countries, including the United States.
VI. CHALLENGES FOR THE FUTURE
51. Amid a field of opportunity, there are also substantial risks and challenges, including the
potential cyberattacks, debris, regulatory barriers, and interstate hostility.
A. CYBER THREATS
52. Cyberattacks pose a growing threat to governments, companies, and civil society. While the
linkages between this challenge and the space domain have not been widely explored, the potential
hazard is no less significant. Attacks can come from individual hackers who want to test their skill,
criminal organisations, terrorist groups or states seeking to achieve military advantage. Hostile
operations might involve jamming and manipulating satellites to disrupt a communications network,
targeting a satellite’s control systems to shut it down or alter its orbit, or targeting ground facilities to
inhibit their ability to receive or interpret space-related data (Livingstone and Lewis, 2016) 1
. Such
attacks could have significant consequences and impact everything from telecommunications to
credit card transactions. They could have immediate military implications if they were launched
against military satellites, for example, employed for command, control and intelligence gathering
purposes.
53. There are signs that some actors are already testing these capabilities. In 2011, the
US-China Economic and Security Review Commission, a US government agency, accused China
1 A basic overview of the technical components of these attacks can be found in the NATO Parliamentary
Assembly’s Defence and Security Committee’s 2017 report, The Space Domain and Allied Defence
[162 DSCFC 17 E rev.1].
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of interfering with two US environment-monitoring satellites via a cyberattack on their ground station
in Norway (Wee, Wills and Nishikawa, 2011). In September 2014, the US National Oceanographic
and Atmospheric Administration had its weather satellite network temporarily taken offline by a
serious hacking attempt. US officials again accused China, which denied the allegations (Flaherty,
Samenow and Rein, 2014). While these incidents had few long-term national security consequences,
they revealed vulnerabilities in space-based systems. These incidents point to the need for secure
networks and control systems. In 2014, two Russian researchers identified at least
60,000 internet-connected systems that could be attacked through the internet (Pauli, 2014). In
2017, leaked documents suggested that Russian intelligence services were capable of hacking
satellite signals using relatively simple techniques (Bing, 2017). Despite the obvious strategic
benefits associated with NATO’s increasing reliance on satellite support, that reliance also increases
concerns about the vulnerabilities of those systems.
54. While military satellites are generally well-protected and designed with security in mind,
commercial satellites tend to be significantly more vulnerable due to a lack of resources devoted to
satellite security. Some commercial operations do not consider themselves vulnerable simply
because they have not faced persistent threats of attack. Such complacency is dangerous in the
current environment, and the private sector needs to dedicate more resources to defending space
systems, even those with no military functions.
B. DEBRIS
55. As detailed in previous reports, space-based systems are also increasingly threatened by
debris collisions. The number of satellites in orbit is rapidly increasing as states and commercial
actors expand their capabilities. These new satellites are, in turn, orbiting in an environment
increasingly crowded with defunct or damaged satellites. NASA and the CNES (French Centre
National d ’Etudes Spatiales) currently trackthousands of orbital debris and there are millions more,
ranging from paint flecks to shrapnel, which are far too small to track (Garcia, 2013). While these
materials might seem benign, they travel at incredible velocities and can disable or even destroy
large satellites in the event of collisions. The US Strategic Command recorded over 8,000 collision
warnings in 2014 alone, 121 of which required emergency evasive manoeuvres (Pellegrino and
Stang, 2016).
56. A significant source of concern is that space debris can create more space debris. When one
object collides with another in space, both objects can fragment, scattering material that can cause
further damage to other satellites and material. On 10 February 2009, a defunct
Soviet-era satellite collided with an active American communications satellite, scattering a cloud of
debris into higher and lower orbit (Broad, 2009). While not all collisions cause such dramatic
structural damage, chips, craters, and erosion can gradually degrade a satellite’s structural integrity.
At best, these incidents damage multi-million-dollar spacecraft and endanger astronauts on
spacewalks. At worst, a collision can lead to Kessler syndrome, a theoretical scenario wherein pieces
of debris crash into each other, leading to bigger and more frequent collisions (Szondy, 2018). This
worst-case scenario has the potential to fatally contaminate orbital ranges and render them
inaccessible for generations.
57. Debris falling onto Earth also poses concerns over liability – whilst there have been no recent
falls of debris with significant consequences, there is a concern over the fallout of such an event. For
example, after China lost control of its Space Station Tiangong-1, it re-entered the atmosphere in
April 2018, with most of it breaking apart and burning in the Earth’s atmosphere. (Kuo, 2018). Some
of the space laboratory’s pieces survived the re-entry and crashed into the ocean. Had they crashed
nearer to or on land, the issues of liability would have been much graver. The Space Liability
Convention of 1972 states that “[a] launching state shall be absolutely liable to pay compensation
for damage caused by its space object on the surface of the earth or to aircraft in flight” (UN, 1975).
However, thus far, only one claim has been filed under this Convention when in 1978 the Soviet
satellite Kosmos 954 crashed on Canadian territory.
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58. There have been attempts to reduce the amount of space debris through regulation and
sustainable practices. By establishing requirements to reduce debris, Europe has reduced the level
of space debris produced by its programs (Pellegrino and Stang, 2016). The Inter-Agency Space
Debris Coordination Committee, an international government forum for space debris activities, and
the United Nations Committee on the Peaceful Uses of Outer Space have similarly sought to
establish internationally accepted protocols and guidelines for preventing substantial releases of
space debris. Government and private actors have also explored technological solutions, such as
capturing and removing satellites. However, as stated by the European Institute for Security Studies,
these technological solutions would require “an internationally agreed legal regime […] since the
owner of the debris is the sole party responsible for it” (Pellegrino and Stang, 2016).
C. TREATY AND REGULATORY ENVIRONMENT
59. Efforts are underway to update national and international space law. Space law experts at the
International Law Association have noted that the Outer Space Treaty’s general framework still has
“gaps […] which remain open to interpretation.” These gaps include a lack of clarity regarding the
ownership of certain celestial bodies and the legal status of resources there. There also legal
challenges linked to controlling the hazards posed by space debris in the Earth’s orbit while rules
are needed to govern private sector activity in space. (Currie, 2008) While the 1979 Moon Treaty
provides some guidance, including rules on the extraction and management of celestial natural
resources, these provisions require substantial international cooperation to ensure enforcement.
This treaty obliges states to share extracted resources equitably with other states. To date no
spacefaring state has ratified it.
60. This legal void has allowed some governments to pass national laws to regulate space activity,
but these laws do not necessarily conform to international obligations and laws in other states. The
United States and Luxembourg allow their citizens and companies to possess, own, transport, use,
and sell resources extracted from a celestial body. These laws grant ownership after the resources
have been extracted to try to avoid conflict with the Outer Space Treaty’s prohibition on corporate
ownership of celestial bodies. The head of the European Space Agency’s legal services,
Marco Ferrazzani, has expressed an interest in developing new rules pertaining to space mining
(Doldirina, 2018). While space mining on any mass scale still appears to be far off, these examples
demonstrate the potential for conflict. The absence of a clear international consensus on appropriate
conduct in space may lead to contradictory regulations from different national governments. These
contradictions, in turn, could either stifle commercial activity or discourage enforcement of these
different obligations.
61. A related issue is the existence of Cold War-era national regulatory regimes that inhibit
commercial activity. The most frequently discussed example of this situation is the United States
International Traffic in Arms Regulations (ITAR), which restricts and controls defence and
military-related technologies. The goal of the law is to impede other countries from reproducing
US military capabilities, but academics and commercial space advocates have suggested that these
regulations can also have unintended consequences that inhibit legitimate commercial
developments. Many US companies working on space projects are prohibited from hiring or working
with foreign persons without an export license or from sharing minor parts and components. As a
result, commercial space companies outside the United States have simply sought to reduce their
dependency on US materials (De Selding, 2016).
62. Some organisations, such as the Space Foundation, have urged these regulations to be
revised with input from experts in the space industry. Other recommendations have focused on the
creation of defence trade treaties to enhance collaboration among companies in Allied states. In this
respect, the work of the UN Committee on the Peaceful Uses of Outer Space (COPUOS), especially
its Legal Subcommittee, set up in 1959 by the General Assembly, is crucial in directing the
development of international law on space exploration.”
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63. Most of what passes for governance takes the form of non-legally binding norms as well as
UN resolutions and government regulations and practices. Because space law is so limited, national
laws assume a degree of importance, particularly the laws of major actors in space. Interestingly
there are no binding international laws on debris and debris generation. But an ad hoc group has
been formed to draft technical regulations to limit debris. It has no legal standing as such, but many
countries have adopted these standards as well as other non-binding agreements. This kind of
practice helps impose a degree of uniformity to national rules governing activities in space. It also
points to the degree to which rule making for operations in space has become a bottom-up rather
than a top-down process. It is also worth noting that article 189 of the EU’s Lisbon treaty creates a
shared competence on some space related matters. The European Space Agency has also helped
furnish EU members with a set of shared norms even if these norms, are not elevated to the level of
law.
D. INTERSTATE COMPETITION AND THE MILITARISATION OF SPACE
64. The thrust of international laws governing space is to ensure that access to outer space and
celestial bodies remains unimpeded. The 1967 Outer Space Treaty, for example, reaffirms the
importance of peaceful and lawful exploitation of the domain (UN General Assembly, 1966). Several
international agreements reflect the international community’s resolve to create an overarching code
of conduct for those operating in space. In addition to the aforementioned 1979 Moon Agreement,
and the 1972 Space Liability Convention, the Rescue Agreement of 1968 and the Launch
Registration Convention of 1975 have sought to regulate the modalities of space exploration. More
recent discussions highlight the difficulties of reaching an international agreement on these matters.
From 1985 to 1994, an ad hoc committee on a Prevention of an Arms Race in Outer Space (PAROS)
treaty discussed and negotiated the creation of such an agreement. Whilst China and Russia did
propose a Treaty on the Prevention of the Placement of Weapons in Outer Space and of the Threat
and Use of Force Against Outer Space Objects (PPWT), the United States continues to oppose the
initiative, arguing it is “fundamentally flawed” and lacks important provisions. (Foust, 2014) The
discussion of PAROS continues in the UN Conference on Disarmament, and a number of countries
remain very focused on matters pertaining to access to space. In its 1999 National Security Strategy,
the United States declared that “unimpeded access to and use of space is a vital national interest —
essential for protecting U.S. national security” (White House, 1999). The United Kingdom’s National
Space Policy emphasises the country’s reliance on access to space services for a wide array of
essential services (Javid and Letwin, 2015).
65. Recent events suggest that space may no longer remain a peaceful common and that there is
a real possibility that access might be limited under certain conditions. Speaking before the US
House Armed Services Committee’s Subcommittee on Strategic Forces, Department of Defense
officials stated that the United States “can no longer view space as a sanctuary” because “potential
adversaries understand [US] reliance on space and want to take it away” (Marshall, 2015).
Dan Coats, the US director of National Intelligence, echoed these remarks in his May 2017 testimony
to the Senate Select Committee on Intelligence. He stated that China and Russia felt increasingly
compelled to undermine US military advantage as it related to military, civil, and commercial space
systems and that both countries “are increasingly considering attacks against satellite systems as
part of their future warfare doctrine” (Coats, 2017). In 2015, China unveiled its Strategic Support
Force to develop and coordinate its space, cyber, and electronic warfare capabilities (Office of the
Secretary of Defense, 2017).
66. The United States’ mounting concerns about space-related risks are reflected in
President Donald Trump’s recent call for the creation of a Space Force and the allocation of USD 8
billion to space security systems over the next five years. In August 2018, the US Department of
Defence outlined a plan to create such a force charged with defending US interests with aggressive
offensive capabilities (Bachman, 2018). The proposed Space Force would likely assume
173 ESC 18 E fin
15
responsibilities for the US Air Force’s role in tracking the world’s active satellites to make sure they
do not collide with one another.
67. To date, states have resisted positioning destructive weapons in space. However, various
terrestrial weapons systems do depend upon space-based infrastructure and are produced by the
private sector. Concepts for intercontinental ballistic missiles are designed and manufactured by
private companies following competitive bidding processes in the United States (Erwin, 2018). Both
the United Kingdom and France have recently made important investments in long-range missile
systems that expand the core capabilities of the Alliance (Baldwin, 2017). SpaceX, meanwhile, has
secured classified contracts with defence and security agencies (Seemangal, 2017). Russia and
China have developed increasingly sophisticated precision-guided missiles and military
communications technology. Both countries have also developed counterspace systems, sought to
modernise their military satellites, and developed anti-satellite missiles.
68. While there has not yet been an attack on a commercial spacecraft, these developments could
have a potentially chilling effect on the private sector’s willingness to invest in the domain.
Corporations do not like uncertainty and instability. They are unlikely to respond positively if they see
their multimillion-dollar spacecraft threatened as part of a space arms race. It makes eminent sense,
therefore, to continue diplomatic efforts to promote the non-weaponisation of space and to
discourage threats against spacecraft.
69. Finally, the overarching Space Policy which NATO agreed to create at the Brussels Summit
affirms the commitment of Allies to promote the non-militarisation of space (NATO, 2018). Experts
are not short of suggestions for the creation of bodies within NATO which would deal explicitly and
exclusively with space security issues. Clearly it will not be easy to strike a balance between securing
satellites as essential infrastructure for daily activities on Earth and working to avoid or even to trigger
a military space race. NATO is well prepared to share expertise and foster consensus-building on
these matters in ways that will reinforce security in the broadest sense of the term.
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ECONOMICS AND SECURITY
COMMITTEE (ESC)
Sub-Committee on Transatlantic
Economic Relations (ESCTER)
THE INTERNATIONAL
TRADING SYSTEM AT
RISK AND THE NEED TO
RETURN TO
FIRST PRINCIPLES
Report
by Faik OZTRAK (Turkey)
Rapporteur
174 ESCTER 18 E fin | Original: English | 17 November 2018
TABLE OF CONTENTS
I. INTRODUCTION.....................................................................................................1
II. COMMON MISPERCEPTIONS OF TRADE............................................................3
III. TRADE IN PUBLIC OPINION..................................................................................5
IV. PROACTIVE LONG-TERM STRATEGIES FOR COPING WITH THE GLOBAL
ECONOMY: THE EDUCATION DIMENSION .........................................................8
V. IS A WESTERN RETREAT FROM GLOBALISATION AND THE
MULTILATERAL TRADING SYSTEM POSSIBLE? ................................................9
VI. TRADE AND SECURITY.......................................................................................15
VII. RECOMMENDATIONS .........................................................................................17
BIBLIOGRAPHY....................................................................................................21
174 ESCTER 18 E fin
1
I. INTRODUCTION
1. This Sub-Committee on Transatlantic Economic Relations (ESCTER) was created soon after
the fall of the Berlin Wall to ensure that international and transatlantic trade issues would remain a
central plank of the NATO Parliamentary Assembly’s (NATO PA) agenda. The thinking then was that
the liberal trading system established after World War II had not only contributed to an
unprecedented rise of prosperity on both sides of the Atlantic, pulled millions out of poverty, and
encouraged the diffusion of technology and ideas, it had also reinforced the security order. In fact,
security, democracy and free trade proved mutually reinforcing. Indeed, an enduring Soviet threat
encouraged allied nations to contain potential trade disputes and to move steadily in the direction of
trade liberalisation. Those who built the Bretton Woods system knew full well that during the 1930s
an array of “beggar thy neighbour” protectionist measures had contributed to the Great Depression,
poisoned inter-state relations and had doubtless been a central factor in the descent into World War
II. Their instinct to reject those policies proved prescient and highly beneficial.
2. The concern after the end of the Cold War, expressed clearly by members of the US delegation
to the NATO PA, was that in the absence of an abiding Soviet threat, Allied countries might be less
focused on containing narrow trade grievances. The political will to defend a trade order that had
fostered so much prosperity would accordingly weaken. That concern, which has long animated this
Sub-Committee, seems to have been entirely justified. Today, the global economy is threatened on
many fronts. The campaign for trade liberalisation has suffered myriad setbacks, and the situation
could worsen. Job-creating trade is now seen by many voters and politicians as job-killing rather
than job-creating. No global agreement on trade liberalisation has been signed since 1995. The
United States has pulled out of the Trans-Pacific Partnership (TPP) talks it was leading, the
United Kingdom will soon leave the European Union and its future financial and trading arrangement
with that bloc is uncertain, the Transatlantic Trade and Investment Partnership (TTIP) between the
United States and the EU is in remission and the recent G7 Summit meeting ended in unprecedented
transatlantic acrimony over US tariffs on steel and aluminium and the promise of retaliation on the
part of America’s trading partners.
3. In 2016, 571 of the 771 trade interventions tracked by Global Trade Alert were characterised
as discriminatory and only 200 as liberalising. The trend continued in 2017 with an increase of 26%
in US trade actions against its G20 partners (World Economic Forum, 2018). Perhaps not
coincidentally, the World Trade Organization (WTO) forecasts that the volume of world trade will
grow by only 2.8% in 2018, the fifth consecutive year that it has increased by less than 3%. Rising
trade tensions are also undermining long-term cross-border investment by companies worldwide.
Foreign direct investment globally fell by 23% in 2017 according to the UN’s latest World Investment
Report. US-China and US-EU trade tensions appear to be driving this decline (Donnan, June 2018).
Meanwhile a 2016 YouGov/Economist poll found that less than half of US, British and French citizens
see globalisation as a “force for good” (Hu and Spence, 2017). This sentiment is also reflected in the
growing appeal of populist and ultra-nationalist movements and parties that are challenging other
fundamental liberal democratic norms.
4. Indeed, the very notion of a global economy today is under attack. Trade, immigration, and the
movement of capital across borders have all been subject to populist backlashes (Hu and Spence,
2017). Some Western governments have begun to temper their support for trade liberalisation and
seem ever more circumspect about the promise of globalisation. The Trump Administration has
openly expressed its scepticism of the benefits of free trade and the logic of multilateral trading
arrangements, and there is concern that without the leadership of the world’s strongest democracy,
the international trading system will turn to protectionism and managed trade. Most analysts believe
that for a liberal free trade order to flourish, it is essential to have a free-trading “hegemon” to lead
it. Fortunately, many in the US Congress support this perspective on US leadership.
5. It is unlikely that either Europe or China is prepared to act as the chief promoter of a global
free-trading order should the United States retreat from this historic role. China retains a strong
174 ESCTER 18 E fin
2
mercantilist impulse, although it has rhetorically pushed for the preservation of an open global
system. It fails to respect some of the key norms that would be required of a free trade hegemon
including intellectual property protection and equal treatment for foreign companies. Its financial
system remains underdeveloped and vulnerable to shock. Mounting protectionist sentiment is also
evident in some EU countries. This has been fuelled by economic stagnation in some regions,
exchange rate and fiscal adjustment inadequacies, the migrant crisis and the growing power of
nativist politics. Moreover, one of Europe’s strongest free trade advocates, the United Kingdom, is
set to leave the Union, and its traditional free trade views will no longer be part of the internal
EU discussion on trade matters.
6. The international institutions created to help govern the international economic system are also
in crisis. Organisations like the International Monetary Fund (IMF), the World Bank and the WTO
have had difficulties adjusting to the growing economic clout of developing countries. These
important institutions have become the target of political forces that find it convenient to blame them
for various economic challenges rather than empowering them to act as effective shock absorbers
and rule makers within the international economic space (Hu and Spence, 2017).
7. Of course, it would be misleading to argue that trade and globalisation have not had disruptive
effects despite their central contributions to prosperity. There is little question, for example, that trade
has been one of several factors responsible for the losses experienced by older manufacturing
sectors in developed countries, even if technological developments are a far more powerful driver of
these losses. One US study suggests that while trade may account for as much as 13% of all
manufacturing job losses in the United States, the rest is linked to productivity gains resulting from
automation (Miller, 2016). Manufacturing output has increased in many OECD countries, while the
number of factory jobs has shrunk due to technology-driven productivity increases. Technology, of
course, creates new jobs in other sectors, but older displaced workers can confront difficulties
changing careers, particularly if there are inadequate social and educational support systems to
facilitate the transition.
8. Still, this is cold comfort for the millions in the West who have lost jobs and who believe that
trade may be a factor in their declining fortunes. Between 2000 and 2016 the United States shed
close to 7 million manufacturing jobs, many operating in the tradeable goods sector. The most
dynamic job-creating sectors in that same period have been the non-tradable sectors, which
generated 25 million jobs, many in the category of lowly paid medium- and low-skilled workers.
Wages and benefits in this period stagnated, while inequality rose dramatically in some countries
and continues to do so even as the global economy recovers (Hu and Spence, 2017). Across the
OECD area, the average income for the wealthiest 10% of the population is now more than nine
times that of the poorest 10%, up from seven times 25 years ago (OECD, 2017). In some countries,
less progressive tax policies will exacerbate the equity problem induced by technology change,
although this phenomenon is often misleadingly attributed to the trading system.
9. Wealth is also concentrating geographically, with one in four OECD citizens living in regions
that are increasingly left behind in terms of productivity growth and income and where opportunities
to move into more productive sectors are very limited. Such problems can mount over time. Regions
with easy access to digital services tend to be better off economically and are better able to move
up the production ladder. Regions without that access move downward. But over the long term, the
digital economy might ultimately lead to more job losses across a wider spectrum of professions.
Not surprisingly, the global financial crisis that began in 2008 accelerated a number of these trends.
This triggered a backlash not only against trade, but also against other manifestations of
globalisation including immigration, alliances, trans-border financial flows, international economic
cooperation and the rules and institutions needed to administer the global economic order.
10. There are certainly legitimate arguments for developing countries to take a cautious approach
to trade liberalisation, although embracing it as a goal and moving in a liberalising direction invariably
benefits emerging countries. That said, trade liberalisation can produce adjustment costs for
174 ESCTER 18 E fin
3
developing countries such as the loss of reliable revenue for the state (from tariff collection), labour
shocks made worse by poor social protection for those who lose work as a result of trade, and
inadequate financing for restructuring economies suddenly exposed to international competition.
Coping with these challenges requires subtle, sequential and well-planned approaches to trade
liberalisation (Stiglitz and Charlton, 2005).
II. COMMON MISPERCEPTIONS OF TRADE
11. Public misperceptions about the international trading system allow those opposed to open
trade to blame it for a range of ills besetting national economies. Among these misunderstandings
is the notion that some countries invariably win and others lose from trade. This zero-sum game
vision of trade is inherently mistaken and runs against all evidence regarding the shared benefits of
trade. It is also often stated that trade deficits are, in themselves, a bad thing, and that they are
primarily the product of “unfair” trade policies carried out by other countries. Another often-heard
argument is that workers are better served by protectionist regimes rather than by the open liberal
trading order. Finally, there is the traditionally mercantilist national security argument that rendering
a country dependent on the international trading system somehow reduces its capacity to act
autonomously to defend its core security interests.
12. None of these charges hold up to scrutiny. David Ricardo was the first economist to
demonstrate systematically that trade in aggregate is generally a win-win proposition. His simple but
highly insightful models suggested that trade allows countries to specialise in the production of those
things that they produce the most efficiently while importing those products that they make the least
efficiently. Although trade would prove a boon to the trading countries’ most efficient trading sectors
and a bust to the less competitive sectors, each country would unambiguously be better off by
specialising in those industries to which it is best suited, importing those items which it makes least
efficiently and reallocating capital and labour accordingly. Economic modelling has since become far
more complex, but David Ricardo’s fundamental insights remain largely valid. It is hardly surprising
that trade has been such a compelling driver of economic growth in countries like India that came
around to the view that lowering tariffs could be helpful.
13. Countries that engage in the trading system are able to consume more at a lower cost than
they would if they were to operate in autarchy. Trade expands markets for domestically produced
goods, thereby increasing rewards to both the owners of those exporting firms and their workers.
But these are only the most visible impacts. There are also dynamic and often hidden impacts linked
to trade. Participating in a liberal trading order generally lowers the cost of inputs of domestically
produced goods that can then be exported. In an increasingly integrated world economy tied together
by vital global value chains, three quarters of trade today consist of firms purchasing inputs, capital
goods or services that contribute to their production. In effect, many leading export firms are also
significant importers and gain enormous competitive advantage by sourcing internationally (OECD,
2018).
14. Trade also has powerful impacts on productivity as it unleashes competition which helps to
advance organisation, information, knowledge, technology and efficiency among competing firms.
Firms operating in more autarchic settings are far less likely to be innovative simply because they
face less competition, are less exposed to the winds of change, and enjoy access to fixed, albeit
undynamic, markets. Firms seeking market expansion are inclined to see trade as potentially
beneficial. Consumers are naturally attracted to a diverse choice of high-quality low-cost goods and
should understand that the competition of imports drives down prices and raises quality. When
foreign competitors enjoy price and quality advantages, this can compel domestic firms to raise their
own level of productivity as a competitive response. This dynamic accords advantages to the firm
both in domestic and international markets, while also benefitting consumers. Enhanced productivity
will make that firm more competitive internationally and help increase sales in local and international
markets. It is not simply the importation of goods that triggers price/quality improvements. The
174 ESCTER 18 E fin
4
presence of competitively-priced foreign goods in a particular market can be a significant impetus
for local producers to become more efficient. Protectionism has just the opposite impact. It lowers
the impetus for domestic firms to raise their productivity thereby making protected companies ever
less capable of selling in global markets. Consumers are stuck with higher bills, and over time, job
losses mount.
15. Not surprisingly, therefore, open economies tend to grow more quickly than closed economies.
Salaries and working conditions are generally higher in companies that trade freely, and there are
also correlations between economic openness and productivity growth. Regions undergoing
productivity increases tend to have forged important links to the world economy. But perhaps the
simplest demonstration that trade is economically beneficial is that countries, and by extension, their
firms and consumers, willingly participate in it as they see commercial opportunities that would not
exist in strictly autarchic settings. Trade is thus the ultimate expression of commercial freedom. The
OECD recently conducted a study in which China, Europe and the United States each imposed a
hypothetical 10% tariff on all traded goods. The result was a 1.4% decline in global GDP and a 6%
fall in global trade. Importantly, the countries that imposed the trade barrier in the model suffered the
worst impacts.
16. It is also grossly misleading to suggest that trade deficits or surpluses are the product of unfair
trade practices. Trade balances are essentially determined by national savings rates. A large trade
deficit simply suggests that either public or private savings (or both) are negative. This is a hard and
fast accounting identity. Domestic savings rates correlate with current account balances which
include the trade balance. The United States, for example, has long been a low-saving (high public
deficits) high-consuming country, and this is reflected in the negative current account balances it has
run since 1981 (Irwin, 2016). It has effectively opted to consume more than it invests, and this
decision is partly reflected in low taxes relative to public spending, significant foreign borrowing to
underwrite the resulting shortfall, and large trade deficits. Reducing the trade deficit would therefore
ultimately require the United States to increase savings by consuming and borrowing less, for
example by raising taxes and lowering government spending. This might entail slashing substantial
public budget deficits, raising private and public savings, cutting the sale of Treasury Bills to foreign
Central Banks (those of China and Japan for example) and/or significantly raising interest rates.
17. According to the US Commerce Department, the US trade deficit grew 12.1% or
USD 61.2 billion in 2017, reaching USD 566 billion—a nine year high. The 2018 tax and budget bills
are likely to drive this number upward. Deficits are slated to reach USD 1 trillion by 2020, according
to the Congressional Budget Office, and US public debt will reach USD 20 trillion by 2020 (Wasson
and McGregor, 2018). The US economy has been growing at a healthy clip and this has been
expressed, in part, through significant consumer and firm demand for imports. All of these factors
will drive trade deficits upwards. Indeed, the United States is slated to enter a period of high
dissavings that will invariably be reflected in a significant influx of foreign goods and increased
foreign borrowing (Tully, 2018). Bilateral trade arrangements and new tariff regimes cannot impede
the onset of this fundamental accounting identity. Protectionist measures could actually have the
effect of worsening the trade deficit by raising domestic prices and making exporters even less
competitive or more inclined towards offshore production. In any case, significant tax cuts without
significant public spending cuts will be reflected in a rising inflow of goods and services. The trade
deficit could rise by an additional 5-6% in 2018 as a result.
18. Some might find it ironic that growth in the United States seems correlated to increases in the
trade deficit. Although the US current deficit fell from 5.8% of GDP to 2.7% in 2009, millions of jobs
were lost in that same period. In the same way, Japan has run current account surpluses for
30 years, but its economy grew very slowly over that entire period. Since 2009, the United States
has embarked on a slow but steady economic recovery and the current account deficit has remained
at a sustainable 3% of GDP in this period. Thus, the notion that the country has been flooded with
imports over the last decade does not hold up to scrutiny. The trade deficit will now increase as the
savings rate falls.
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5
19. Some developing countries undergoing rapid growth often run deficits as they need to import
substantial capital equipment in order to sustain economic take-off. This is hardly a sign of an
unhealthy trade position. A direct correlation between trade surpluses and overall economic health
is more fiction than reality. Whether or not surpluses or deficits are a good thing depends very much
on particular conditions prevailing in a given country. Perhaps the most important question is whether
a current account deficit is sustainable over the long term and whether it reflects an inherently healthy
economy that is increasingly productive or one that is suffering structural difficulties.
20. The United States derives unique benefits from the fact that the dollar remains the world’s
reserve currency of choice. This reduces the burden of internal adjustment because central banks
and other economic actors will willingly hold dollars, even though the United States runs persistent
current account deficits at levels that would be worryingly unsustainable for other countries. For a
less powerful country, running sustained current account deficits would trigger a massive flight out
of the national currency. The central place of the dollar in the international monetary order, however,
accords the United States far more leverage and flexibility than other countries running long-term
budget and trade deficits.
21. It is noteworthy that Germany, Europe’s most dynamic economy, has a significantly different
macroeconomic and trading profile than the United States. It is a high-savings economy with a very
competitive export sector. In 2017, its exports rose 6.3% to EUR 1.28 trillion while imports rose 8.3%
to EUR 1.03 trillion. This drove its trade surplus down to EUR 244.9 billion, from a record
EUR 248.9 billion surplus in 2016 (Samson, 2018). Because the euro tends to align with Germany’s
natural exchange rate, the country enjoys a certain exporting advantage over some of its EU trading
partners that no longer have devaluation in their toolbox or are less productive than Germany but
nonetheless share the same currency. This implicit exchange rate misalignment has been a factor
in the rising backlash against free trade in parts of Europe, and the Trump Administration has also
cited this in its criticism of Germany’s export position.
III. TRADE IN PUBLIC OPINION
22. A quick survey of the contemporary press would give an impression that the public harbours
deep suspicion of trade and little or no appreciation for the benefits that it confers. But public opinion
surveys belie this perception. Although US support for trade declined rather precipitously during the
2016 presidential campaign, perhaps as a result of the rhetoric employed by some candidates in
both parties, US public support for open trading relations has begun to rebound. A
Pew Research Center poll taken in April 2017 found that 52% of US citizens believe that free trade
agreements between the United States and other countries are a good thing, while 40% see them
as bad. Support for trade had troughed in October 2016, when only 45% of the public expressed a
positive view of trade. By April 2017, 44% of surveyed US citizens said that trade had definitely or
probably helped their financial situation, while 38% said that trade had definitely or probably hurt
their situation. These numbers differ only slightly from polling in 2015, and the pro-trade outlook is
substantially higher than in 2010 when, in the midst of the global recession, 26% of those polled said
that trade agreements had helped their finances, while 46% said they had had a negative impact
(Jones, 2017).
23. Perhaps more worrying is the degree to which trade has become a partisan issue in US politics.
The positions of party voters have swung wildly over the past decade. In October 2016, 29% of
Republicans and Republican-leaning independents claimed that trade was good for the
United States. A year and a half before that poll, the figure stood at 56%. By April 2017, Republican
support for trade had slightly rebounded to 36%. Democrats, by contrast, have now adopted a far
more generous view of trade and have moved away from more protectionist sentiments. In April
2017, 67% of Democrats and Democrat-leaners claimed that free trade agreements have been good
for the United States, up from 59% in October 2016. During the Bush Administration, however,
Republicans were significantly more supportive of trade than Democrats. In 2006, for example, 44%
174 ESCTER 18 E fin
6
of Republicans saw trade as beneficial to their financial situation, while only 31% of Democrats did
(Jones, 2017). All of this suggests that support for trade in the United States can be highly volatile
and that political, labour and media leadership matters a great deal on these issues.
24. Large majorities of Democrats now support the North American Free Trade Agreement
(NAFTA) while a significant majority of Republicans say that this trilateral trade agreement has been
bad for the United States. This is the sharpest area of trade discord among the US public (Kull,
2017). Indeed, 51% of US citizens polled in May 2016 saw NAFTA as favourable to US interests,
compared to 74% of Canadians and 60% of Mexicans. It is important to note here that in 2016 the
United States ran a USD 74 billion trade deficit with the other two NAFTA signatories, and this has
been a source of particular US public disquiet (Stokes, 2017). What is often not reported is the fact
that these trade flows involve US companies moving components across borders, often multiple
times, as part of the manufacturing process.
25. A University of Maryland poll released in October 2017 found that large majorities approve of
the United States reciprocally removing trade barriers with other countries and a majority of
US citizens favour allowing trade to grow and lowering trade barriers. Large majorities also support
trade adjustment assistance programmes for workers who lose their jobs as a result of trade. They
also want labour standards included in trade deals. A generational gap is apparent with 67% of
US citizens under 30 and 58% of those between 30 and 49 seeing trade as good for the country.
Only 41% of those over 50, however, hold a positive view of trade. Older people, of course, confront
more barriers to retraining and are often not well positioned to make career changes to adjust to
rapidly shifting market conditions. Education is another divider with 61% of those with a postgraduate
degree viewing trade positively, while opinion is more evenly divided among those without a
university degree. This is not surprising as less educated people have suffered more economic
setbacks in recent years.
26. European public opinion on trade matters is also complex and sometimes contradictory.
A 2015 YouGov poll revealed that, as in the United States, Europeans harboured concerns and
doubts about trade. Although the governments of both Germany and France favoured the TTIP,
43% of the German public felt that further liberalisation of trade with the United States would be bad
for their country while 26% believed it would be positive. Despite the pro-TTIP stance of the French
government, the French also opposed the idea of that agreement by 30% to 24%. By contrast, a
strong majority of US citizens (68%) had no opinion on the TTIP – and those who did were divided.
Regarding the specific benefits or downsides of free trade agreements in general, the French and
the Germans were divided in 2015, if not slightly negative. The British were more supportive of free
trade, with 50% believing that policies leading to lower tariffs and common standards at home and
abroad would help rather than hurt British businesses. Moreover, 44% of the British public were also
generally positive about the number of British jobs resulting from increased trade. Those living in
Sweden, Denmark and Finland shared this kind of optimism (YouGov, 2015).
27. The sharpest critics of trade on both sides of the Atlantic are those who have a sense that the
international trading order has not served their personal interests. Such views are particularly salient
among sectors where jobs are in sharp decline either because of technological evolution or market
changes or because of trade patterns which have made those jobs redundant. In these sectors, the
narrative that trade has led to a degradation of living standards and lower growth is most commonly
accepted and reiterated. This has created an opening for anti-trade politics. Although technological
change rather than trade is actually the leading driver of job loss, it is politically easier to blame
trading partners for domestic economic difficulties. Slowing the evolution of technology, by contrast,
is not an end with easy political fixes. Tariffs and the erection of non-tariff barriers, however, are part
of most states’ conventional policy arsenal.
28. Trade theory does provide one explanation for the dissatisfaction of certain groups with the
current trading order. In a very important paper published in 1941, Wolfgang Stolper and
Paul Samuelson noted that when a country that is relatively better-endowed with capital trades with
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7
a country that is relatively well-endowed with labour, both countries will benefit. But the owners of
capital in the country more endowed with capital will be disproportionally rewarded and the return to
labour in that country will be relatively less. In the labour-intensive country, the opposite will hold,
and labour will be disproportionately rewarded. Although the model seeks to simplify a highly
complex set of phenomena, there is some evidence that this “Stolper-Samuelson” effect has been
operational in the world economy. In labour-rich China, for example, wages have soared, particularly
in the industrialised coastal regions, as China has opened its economy to global trade. It is often said
that never before in human history have more people been raised out of poverty more quickly than
in China over the past 25 years. In the capital-intensive West, educated workers along with the
owners of capital have clearly benefitted from trade. Education is indeed a form of capital so the
rewards from trade in the West have generally also accrued to those most endowed with capital in
some form including those who are highly educated. Well-trained factory workers in advanced
technology industries as well as those with a university degree can be included in the category of
beneficiaries.
29. With this in mind, we can see how the rise of China has proven a boon to Western economies
even though the benefits have not been evenly shared. Many Western firms have benefitted from
access to vast Chinese markets. Western firms that manufacture in China have tapped into a
productive Chinese labour market and Western consumers have seen prices fall. China’s relatively
low wage structure, infrastructure endowments and organisational sophistication have helped drive
down production costs globally. This has not benefitted all Western workers, particularly those
directly competing against Chinese labour. Moreover, as many displaced Western workers are
located in regions with a heavy concentration of older industries including textiles, clothing, steel and
furniture, entire regions, like parts of the American Midwest or older industrial regions in Europe,
have suffered as a result of competition from producers in low labour-cost countries like China.
30. An oft-cited paper by David Autor of the Massachusetts Institute of Technology (MIT),
David Dorn of the University of Zurich and Gordon Hanson of the University of California, San Diego,
suggests that 44% of the decline in manufacturing in the United States between 1990 and 2007
might be attributed to competition from Chinese imports. Between 1992 and 2008, 20-40% of the
US current account deficit could be attributed to trade with China as China was not importing nearly
as much as it was exporting to the United States. That paper noted: “Adjustment in local labour
markets is remarkably slow, with wages and labour-force participation rates depressed and
unemployment rates remaining elevated for at least a full decade after the China trade shock
commences. Exposed workers experience greater job churning and reduced lifetime income. At the
national level, employment has fallen in those US industries more exposed to import competition, as
expected, but offsetting employment gains in other industries have yet to materialise” (Autor et al.,
2016). The study suggests that there is a link between job losses in some older industrial sectors
and trade with China. Employment losses resulting from trade to China largely occurred as imports
from that country to the United States soared. Interestingly, however, the market share of Chinese
goods in the US market has largely remained constant since 2010, while its rate of domestic
economic growth has slowed considerably as its own economy has matured, its wage costs risen,
and population aged. In this sense, the greatest changes in the balance of trade between the two
countries may have already occurred by now (Irwin, 2016). That China is a major purchaser of
US Treasury Bills is not at all incidental to this. Chinese lending helps finance US budget deficits,
but it also contributes to a depreciation of the renminbi relative to the dollar which, in turn, is
expressed in US current account deficits.
31. Unfortunately for less skilled Western workers, the most dynamic part of the job market has
been in positions requiring higher levels of education. The less skilled have been the most hurt by a
globalising economy. As suggested above, many job losses are also linked to technological change
and attendant job-shedding productivity gains, but it is far more difficult politically to rail against
technology than it is to complain about the unfair trade practices of foreign countries. There is thus
a tendency on both sides of the Atlantic to blame trade disproportionately for the woes that have
beset Western industrial workers over the last 20 years. Countervailing arguments regarding the
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gains from trade tend to be discounted. These include benefits to consumers who pay lower prices
for a greater variety of goods and services made available as a result of trade, dynamic gains to
productivity, falling input prices, job creation in emerging sectors, and overall competitiveness of the
export sector.
IV. PROACTIVE LONG-TERM STRATEGIES FOR COPING WITH THE GLOBAL ECONOMY:
THE EDUCATION DIMENSION
32. A number of European countries typically respond to upheavals in the job market both by
redistributing income through the fiscal system and social safety programmes and by supporting
education and job training. These policies have counteracted some of the distributional impacts
associated with maintaining an open economy by redistributing some of the gains from trade through
public budgets. It is interesting that countries that position themselves to benefit from trade while
actively generalising at least part of those gains face less resistance to free trade than those societies
where such policies are not in place. Governments can soften the harder edges of the global
economy by sharing out part of the gains to the broader society. This works best when this partial
redistribution aims above all to raise worker productivity and flexibility while improving international
competitiveness. Properly calibrated public policy can work to ensure that societies are better
positioned to cope with globalisation and the rapid technological, managerial, and educational
changes that must be undertaken if that society is to flourish while embracing inevitable change.
33. The OECD has produced an important report, Making Trade Work for All, that provides a kind
of manual of best practices for governments intent on ensuring that some of the gains from trade are
broadly shared in a way to enhance productivity. The report suggests that providing re-employment
and basic income support through unemployment insurance schemes and active labour market
programmes will not only build public support for open trade but also help countries flourish in
international markets. OECD studies suggest that generalising these policies rather than focusing
only on workers displaced by trade constitutes the most effective approach. This gets the state out
of the tricky business of determining precisely which workers have lost jobs due to trade and provides
a modicum of social protection and support to those knocked out of the job market and seeking to
re-enter it (OECD, 2017). Obviously, education is critical, and how societies structure their
educational systems over the long run conditions how well they manage their economies in an ever
more global setting. Technology, communications, migration, environmental change, trade, and
investment have all made the world smaller. Students of all ages today require the cultural
understanding, linguistic, cognitive and social skills, core knowledge, and technological prowess to
flourish in this rapidly evolving economy.
34. For many countries, this will mean updating national and local education systems so that
students as well as older “trainees” are equipped with the cognitive and critical capacities as well as
social skills and mindset that they need to help themselves and their societies flourish in an ever
more international setting (OECD, 2017). This is not, by any means, easy to achieve, for example in
isolated heartland communities far from borders. But even these communities are touched by
international market changes, and their educational systems need to prepare people from all walks
of life for these changes. Moreover, education should no longer be considered the domain of the
young. In a very fast-moving global economy, education must be a life-long endeavour. Failure on
this front threatens to exacerbate social and generational divisions and to widen the gulf between
those regions which have successfully entered the global economy and those that perceive the
global economy as a threat that is best wished away. It goes without saying that this latter “head in
the sand” approach is doomed to failure.
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V. IS A WESTERN RETREAT FROM GLOBALISATION AND THE MULTILATERAL TRADING
SYSTEM POSSIBLE?
35. There is little doubt that the international trading order was long driven by a shared transatlantic
interest in open trade, international monetary stability and agreed rules of the game.
The Bretton Woods system and the institutions needed to uphold it proved highly effective, not only
in transforming these aspirations into a reality, but also in providing a vehicle for many other countries
to participate in this system. The General Agreement on Tariffs and Trade (GATT) ultimately
transformed into the World Trade Organization, while the IMF eventually became an institution
dedicated to preserving global monetary stability after the end of the dollar-gold standard. But with
parts of the West abandoning the optimism that once infused economic policy making, the rise of
new centres of global economic power, and far more vast flows of private capital and complex value
chains determining trade flows, the old international commercial order has changed in fundamental
ways. The rise of new economic powers has also altered the strategic chessboard. Countries like
China now seem to be preparing to assume leadership roles on their own terms and premised on
their own values rather than on those of the West.
36. The withdrawal of the United States from the Trans-Pacific Partnership talks has, at least
partly, opened up a door for China to become the arbiter of the trading and monetary order in East
Asia. China remains committed to a kind of globalisation that differs in important ways from traditional
Western views of the concept. It has played a key role in pushing for the creation of the
Asian Infrastructure Investment Bank and the New Development Bank, and it is advancing its
commercial interests all the way to Europe through its Belt and Road Initiative. The problem from
the Western perspective is that China is still a developing country, and an undemocratic one at that.
Its approach to the developing world tends to be transactional and it has hardly internalised the
notion of playing the role of the benign hegemon, which sometimes requires the sacrifice of
immediate national interest for the sake of the broader system – a role that Great Britain had
assumed in the 19th
century and that the United States played to great effect in the post-war period.
China still seems to harbour a zero-sum view of trade, and its push to acquire Western developed
technologies, often in ways that violate international commercial norms, suggests that this is not a
country prepared to play a systemic leadership role. China also confronts daunting structural
difficulties as well as potential domestic political problems that will continue to distract its attention.
Its currency is not fully convertible, its capital markets are not sufficiently developed and its banking
system is vulnerable, lacks transparency and is subject to political interference. From the perspective
of many analysts, its trade policies can seem blatantly mercantilist. China is thus seen with varying
degrees of mistrust by some of its neighbours, not all of whom believe that such a thing as a “peaceful
rise” to power is possible, particularly given that this has assumed a blatantly military form in the
Pacific. Indeed, China’s rapid military build-up and its highly contested claims on the East and
South China Seas tend to reinforce those concerns.
37. While it would be difficult for China today to establish itself as a systemic leader of the
international trading order, the United States is also altering its approach. In the post-war period, the
United States advanced a multilateral vision for an international trading system that promised ever
diminishing impediments to free trade. That vision no longer holds. President Donald Trump, his
advisor Peter Navarro, Director of the White House National Trade Council, and the Commerce
Secretary, Wilbur Ross, have alluded to the possibility of replacing the multilateral trading system
with a series of bilaterally negotiated trading agreements. President Trump told Paul Gigot of the
Wall Street Journal: “We’ve also withdrawn from the Trans-Pacific Partnership, paving the way for
new one-on-one trade deals that protect and defend the American worker. And believe me, we’re
going to have a lot of trade deals. But they’ll be one-on-one. There won’t be a whole big mash pot”
(Gigot, 2017). If this is the direction in which the Trump Administration moves, and it is not at all clear
if this rhetoric will fully translate into policy, it will mark a fundamental change in the US approach to
trade policy (Gertz, 2017).
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38. This anti-trade rhetoric was transformed into policy on 8 March 2018 when the Trump
Administration, despite strong protests from Republican leaders of Congress, invoked a rarely used
national security exemption to impose new tariffs on steel and aluminium imports to the
United States, although Canada and Mexico were initially exempted pending the outcome of the
NAFTA renegotiations. The EU was also given a temporary exemption in the expectation that some
kind of deal on steel and aluminium markets could be achieved. That did not transpire and in late
May the United States slapped levies on EU, Canadian and Mexican steel and aluminium. The EU
issued a statement that expressed “its willingness to discuss current market access issues of interest
to both sides, but has also made clear that, as a longstanding partner and friend of the US, we will
not negotiate under threat.” It announced a series of retaliatory measures against US goods. By
contrast, South Korea reached a preliminary deal for a permanent exemption from the steel tariffs
because it agreed to cap its exports to the United States at 70% of the average export volume of the
previous three years (Cassella, 2018).
39. Canada, Mexico, Japan and the European Union collectively supply roughly one half of
US imported metal. In August, President Trump doubled tariffs on Turkish steel and aluminium
imports as part of a separate dispute. These decisions represent a sharp escalation of pressure on
the global trading system and have had a negative impact on broader transatlantic and hemispheric
relations. The tariffs have had an immediate impact on the global steel trade. The users of imported
steel, including the US automobile and construction sectors, are also paying a high price for the
decision.
40. The economic fallout has been ratcheted upwards due to inevitable countermeasures against
US goods. Mexico, for example, announced retaliatory tariffs on bourbon, apples, potatoes, cheese
and pork ranging from 15% to 25% (Webber et al., 2018). In anticipation of the US tariffs, the EU
had already prepared a list of US products that would be subject to elevated tariffs if the
United States went ahead with its tariffs. In June, the European Commission reported that it would
apply the tariffs to a list of US goods including whisky, motorcycles and pleasure boats. Duties on
EUR 2.8 billion worth of US goods went into force in June 2018.
41. Under the EU’s plan, which it says complies with WTO rules, virtually all of the US products on
the list face a 25% tariff. The EU estimates that US tariffs on steel and aluminium alone will cost
EUR 6 billion in lost exports. The European Commission’s Vice President overseeing trade policy
has said that Brussels sees the problem as lying with the President and not with Congress, saying:
“If you listen to congressman from both parties or American business, they are still in the same
traditional line as the United States has always been. So the problem is quite concentrated on the
Administration” (Brunsden, June 2018). Both Canada and the EU have vehemently objected to the
invocation of national security as a justification for the US tariffs, particularly given that they are close
allies of the United States. The Canadian Foreign Minister, Chrystia Freeland, described the security
argument as “frankly absurd” (Swanson, 31 May 2018). Indeed, the decision to invoke the steel tariffs
has also complicated US-Canadian relations as well as ongoing NAFTA negotiations. Canada
announced countermeasures of CAD 16.6 billion in imports of US steel, aluminium and other
products, which is the value of 2017 Canadian exports affected by the US tariffs. Both Canada and
the EU will also challenge the US action in the WTO as an illegal invocation of the National Security
Exception—Article XXI of the General Agreement on Tariffs and Trade.
42. The US Administration has also announced that it plans to undertake a “Section 232”
investigation of the trade in automobiles. The prospect of 25% import duties on cars would be far
more ruinous than steel tariffs, all the more so as these would be answered with powerful retaliation
(Brunsden and Donnan, 2018). The United States imports roughly USD 190 billion of cars annually
(Donnan, June 2018). In July, the European Commission announced that, were the Trump
Administration to follow through on its threat to impose punitive tariffs on automobile imports, it could
expect global retaliation approaching USD 300 billion of US goods across multiple sectors. This was
a day after the US President, citing European automobile tariffs, said: “The European Union is
possibly as bad as China, just smaller. It is terrible what they do to us.” The EU warned that if the
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United States were to impose automobile tariffs it would plunge the world economy into a very costly
trade war that would hit the US automobile sector which accounts for 4 million jobs. The EU’s
Ambassador to Washington testified at a public hearing on the matter that the EU believes the
“Section 232” steel and aluminium investigation lacks legitimacy and factual basis and would lead
the United States into a breach of international law.
43. Other important actors are also strongly opposed to the US Administration’s plan.
General Motors issued a warning that US automobile tariffs would raise the prices of its cars by
thousands of dollars, undermine its competitiveness and lead to substantial US job losses.
EU owned car companies account for 25% of US production, much of which is then exported from
the United States (Brunsden, June 2018). Of roughly 6 million cars exported by the EU in 2016, more
than 1 million – just over 16% of the total – were purchased in the United States. The United States
is the EU’s largest automobile export market. Of the USD 53.6 billion in US car exports in 2016,
USD 11.8 billion were generated in the EU market, which amounts to roughly 22% of total
US automobile exports (Turak, 2018).
44. President Trump has complained that the European Union discriminates against US-made
cars, arguing that US cars face tariff rates of 10% in EU markets while European made cars enter
the US market with only a 2.5% tariff rate. This particular discrepancy could be resolved through
negotiations. The EU Trade Commissioner Cecilia Malmström and Japan’s Hiroshige Seko warned
that if the administration were to move forward with this, it “could lead to the demise of the multilateral
trading system based on (WTO) rules”. There is an additional risk that other US industries could be
inspired to seek similar kinds of protection on national security grounds. This would, of course, open
the floodgates and trigger a wave of protectionist measures that would, in turn, trigger retaliation—
all at the expense of a mutually enriching liberal trading order (Lynch and Paletta, 28 May 2018).
45. Although there is a discrepancy between US and EU tariff rates on automobiles, US and EU
tariff rates are largely similar across a broad array of products. In 2017, the United States ran a trade
deficit of roughly USD 152 billion with the EU, up from USD 146 billion in 2016. Early indications are
that US deficits with the EU will be even higher in 2018, given strong US growth and tax cuts
(United States Census). The discrepancy in relative savings rates is the principal driver of this
particular deficit.
46. Trade tensions, however, have also taken on an ideological veneer. President Trump has
identified the inherently multilateral European Union itself as antithetical to his nationalist trading
vision and complained that it prevents the United States from negotiating bilaterally with individual
European countries—although blocking such divide and conquer strategies through the construction
of a common market has long been a central premise of the European project. This is also an
ambition the United States has supported, as it has maintained a broad strategic interest in a strong,
united, self-confident and open Europe.
47. In late July, President Trump and the President of the European Commission,
Jean-Claude Juncker, hammered out an agreement to halt the “tit for tat” tariff game and to begin
talks to lower tariffs and other trade barriers—a process that had already been launched in the TTIP
negotiations. Business communities on both sides of the Atlantic strongly supported those talks,
which were nevertheless suspended in 2016. The newly announced US-EU talks are slated to work
to lower tariffs and other trade barriers, including bureaucratic roadblocks to industrial goods trade
and conflicting regulations on drugs and chemicals. It is a good sign that both sides have, at least
temporarily, retreated from the abyss and put an end to further tariff imposition, and are now returning
to the negotiating table (Swanson and Ewing, 2018). The stakes are high. In 2017, US firms exported
USD 283 billion of goods to the EU, which is double what they exported to China. US consumers
purchased USD 435 billion of goods exported from the EU (Lynch and Paletta, 30 May 2018).
Investment in the United States from the EU 27 totalled USD 259.6 billion in 2017, down from USD
439.5 billion in 2015, while Canada invested USD 66.2 billion in 2017 (DW, 2017). The EU and
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Canada are thus critical investors in the US markets, so the risks of a trade war with it are a source
of deep concern on both sides of the Atlantic.
48. Trade in digital services poses a key challenge for policymakers and negotiators, particularly
as policy in this realm runs right into the matter of social and cultural preferences. The US Commerce
Secretary, Wilbur Ross, has recently argued that the EU’s General Data Protection Regulation has
protectionist implications. That law requires all companies that use consumers’ private information
to request explicit permission whenever data is collected and to accord web users the ability to
download a copy or have it deleted. Companies that fail to comply with these rules face stiff fines.
European authorities have already launched several investigations of US firms that may not be in
compliance. There is a very strong preference for privacy protection in Europe and the appeal of
such protections appears to be growing in the United States as well, particularly in light of the
revelations on how Cambridge Analytica and other companies including smartphone manufacturers
used private data gathered from millions of Facebook accounts without the users’ consent (Dance
et al., 2018). Still, there is a cultural gap on privacy, and it is noteworthy that the conflicting
preferences of voters and consumers can, in themselves, generate trade tensions. This can be tricky
for government trade negotiators charged with tackling these complex matters.
49. A third area of serious transatlantic trade tension surrounds the decision by the Trump
Administration to pull out of the Iran nuclear deal and reimpose trade sanctions on that country and
on non-US companies that continue to do business with Iran. In practical terms, this means that
those European firms that trade with Iran will be denied access to the US financial system. This has
elicited sharp European complaints of extraterritoriality and further exacerbated mounting trade
tensions within the Alliance. The European Commission, which intends to support the JCPOA as
long as Iran is complying with its terms, has announced plans to make direct payments for oil to
Iran’s central bank and to revive a “blocking statute” from the 1990s that allows companies to ignore
US sanctions with no consequences in Europe. That statute would prevent EU courts from enforcing
US sanctions judgements. It would also allow companies to recover damages arising from sanctions
from the person causing them and to offer euro credit lines to compensate for such sanctions. This,
however, will probably not be sufficient to encourage large European firms to trade with Iran as many
are active in the United States and would willingly pull out of Iran before abandoning the US market.
The French oil company, Total, for example, will withdraw from Iran’s South Pars gasfield unless the
US government grants it a waiver (Peel, 2018). By contrast, French carmaker Renault, which does
not sell cars in the US, remains in Iran despite the sanctions. European companies are concerned
that Asia is poised to seize the Iranian market if the United States successfully manages to push
European firms out (Fleming, 2018). This has now become a source of transatlantic tension.
50. Another sanctions crisis has emerged in the bilateral dispute between the United States and
Turkey over the fate of a US pastor who has been held in a Turkish jail on charges of terrorism—
charges that US officials have called groundless. In August President Trump doubled tariffs on steel
and aluminium imports from Turkey and directly linked this action to the dispute. This has only
reinforced the notion among many analysts that trade sanctions are now emerging as a “go to” tool
of foreign policy. This tendency, in turn, is feeding pessimism about the viability of the current global
trading order and its vulnerability to short-term politics (Kwong, 2018).
51. US business leaders are increasingly concerned about mounting tensions with key trade
partners and allies. Myron Brilliant, the Executive Vice President of the US Chamber of Commerce,
has warned of the risk of alienating US allies and the potential for a boomerang effect on the
US economy. US business leaders, except those in the domestic steel and aluminium industry, are
well aware that steel and aluminium tariffs have raised prices for a range of products in the
automobile, beverage, farm equipment and food packaging sectors. The US steel industry has
successfully objected to hundreds of requests for exemptions made by US companies that rely on
specialised non- US steel products (Tankersley, 2018). It is worth noting that steel tariffs imposed
by President George W. Bush in 2002 resulted in the devastating loss of 200,000 US jobs in
steel-consuming and related sectors (Time Magazine, 2018). Many US manufacturers then
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confronted difficulties in finding the high quality or specialised steel needed as input for in their
production and were compelled to shift to sourcing finished parts from overseas and/or relocating
domestic steel consuming facilities abroad (Global Steel Trade Monitor, 2017). Higher steel costs
and retaliation by America’s trading partners are factoring into decisions, like that taken by Harley
Davidson, to offshore some production. A recent report by Trade Partnerships Worldwide, an
economic consulting firm in Washington, D.C., found that President Trump's trade penalties and their
resulting retaliation by foreign markets could increase the number of jobs in the steel and aluminium
manufacturing industry by some 27,000 over the next one to three years. But these gains would be
more than offset by a reduced net employment of about 430,000 jobs throughout the rest of the
country (Kiley, 2018).
52. House Speaker Paul Ryan and a number of his colleagues on Capitol Hill on both sides of the
aisle have openly opposed the recent tariffs and warned of unintended consequences. Addressing
the decision to move ahead with tariffs on steel and aluminium imports from the European Union,
Canada and Mexico, Mr Ryan said: “I disagree with this decision. Instead of addressing the real
problems in the international trade of these products, today's action targets America's allies when
we should be working with them to address the unfair trading practices of countries like China…
There are better ways to help American workers and consumers. I intend to keep working with the
President on those better options" (Watson, 2018). Congress plays a pivotal role in making US trade
policy. Article 1, Section 8 of the United States Constitution gives Congress the power “to regulate
commerce with foreign nations”. According to this so-called Commerce Clause, the power of
Congress in these matters is exclusive. It will be interesting to see how Congress responds if the
President opts to follow a protectionist rather than a liberalising course over the coming months.
Because neither party is unified on the matter, it is not clear at this juncture if, how or when Congress
will ultimately assert its authority on these current disputes.
53. Many of these tensions were revealed at the G7 Summit in Canada in early June when trade
moved to the very top of the agenda. The summit was the most divisive in memory. Key US allies,
aggrieved that they had suddenly been targeted for tariffs under the rubric of national security, were
already in the midst of unveiling a series of retaliatory measures. A chair’s summary, released by
Canada after meetings between finance ministers and central bankers just prior to the Summit, noted
concerns that “the tariffs imposed by the United States on its friends and allies, on the grounds of
national security, undermine open trade and confidence in the global economy”. Canada’s Finance
Minister Morneau added that there had been a consensus among America’s G7 partners that
US actions had been “destructive to our ability to get things done.” US Treasury Minister
Steven Mnuchin was then asked to convey the “regret and disappointment” of the G7 partners to
President Trump (Fleming and Shubber, 2018).
54. Some have pointed to this situation as a sign that multilateral trading order is on the ropes and
will soon be replaced by bilateral arrangements. But this is highly problematic. Bilateralism in trade
lends itself to zero sum calculus when successful negotiations rely on a win-win spirit. Bilateralism
also leads to arrangements that are generally trade-diverting rather than trade-creating. Trade
diversion occurs when, because of a series of bilateral arrangements, countries lose the opportunity
to import from the most competitive suppliers and/or sell to the highest paying customers. Economies
as a whole thereby suffer so-called dead-weight losses. Many countries believe that a multilateral
setting for talks provides more room for bargaining flexibility and coalition building. Such conditions
are far more conducive to actual trade liberalisation. Bilateralism is thus not an attractive option for
many states. Trade economists generally see bilateral solutions as inferior to multilateral approaches
to trade and blame both the EU and the United States for edging away from multilateral trade
negotiations under the auspices of the WTO. A trading system premised on bilateral trade
arrangements would lead to all kinds of trade distortions. It would result in a “spaghetti bowl” of costly
rules, arbitrary definitions of product origins, and a huge array of tariffs depending on product origin
which, itself, is often difficult to determine given the international integration of production lines. Such
approaches also undermine the principle of “most favoured nation rules”, “which under the WTO
have ensured equal treatment for a broad band of countries” (Bhagwati and Panagariya, 2003).
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55. A system of bilateral trading arrangements would also require an enormous bureaucracy to
negotiate and administer. Instead of creating an easy way to navigate the international market, an
international trading order riddled with bilateral deals would impose a confusing array of rules that
would wrap exporters and importers in red tape. Such a system would set aside competition as the
driver of trade while elevating the influence of lobbyists and other rent seekers. Since presumably
these bilateral deals would not result in similar outcomes, varying tariff and quota requirements would
distort trade and lead to sub-optimal outcomes which might compel, say, car companies, to source
parts from suppliers which do not offer the best quality-price combinations. Productivity and
profitability would suffer enormously as a result.
56. Forging regional blocs has emerged as a superior alternative to bilateralism, although these
blocs can have trade-diverting impacts vis-à-vis countries outside the bloc. In November 2017, Japan
and ten other Pacific countries including Canada agreed to move forward with a vast Pacific regional
trading agreement. At Canada’s request, the new initiative is called the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the initial goal is to fully ratify
the deal by 2019. The agreement seeks to eliminate tariffs on 95% of goods traded in a bloc of
500 million consumers that account for USD 13.5 trillion in income today. The agreement has scaled
back the investor-state dispute settlement provisions that the United States had been promoting in
the TPP talks, and it will afford governments more regulatory leeway than the US had wanted.
US companies had been pushing for the right to sue governments, which many governments
opposed. The extension of copyright and intellectual property protections, something the United
States had long promoted, has also been weakened. If ratified, the CPTPP would be one of the
world’s most important and comprehensive trade agreements. It is noteworthy that the Pacific region
has opted to move ahead without the United States and without some of the principles that the US
traditionally advances. The signatories, however, have agreed to leave the door open for the United
States to join the arrangement at a later date, although President Trump has indicated that this will
not happen during his administration (Donnan, April 2018).
57. There is also uncertainty about the future of NAFTA, which has bound Canada, Mexico and
the United States in a very open trading arrangement since 1994. President Trump has stated that
the United States hopes not to have to pull out of the agreement but has been very critical of its
terms. Negotiations are underway to update NAFTA, although there has been little apparent
progress. The primary focus of talks involves rules of origin and how to measure the trade balance
among member countries, dispute settlement mechanisms and a sunset clause which would see the
agreement expire after five years unless the parties explicitly agree to extend it. The Trump
Administration supports stricter rules of origin clauses and the inclusion of a sunset clause while
opposing dispute settlement panels. Both Mexico and Canada have warned that a sunset clause
would undermine investor confidence as investors work on time horizons that significantly exceed
five years. Canada and Mexico both feel that abandoning dispute settlement panels would
undermine the enforcement of agreed trading rules. Currently, for goods to qualify for NAFTA’s duty
exemptions, roughly 60% of the product’s inputs must be from North America. The US Administration
has called for a minimal level of US content—something again that both Mexico and Canada oppose.
58. It is not clear that there is strong support for these initiatives in the United States either. The
automobile industry is particularly opposed to the proposed changes that would radically undercut
their current supply chains models, and the US Chamber of Commerce has warned against “poison
pill” proposals that might undermine the entire NAFTA agreement (Carmichael, 2017). The Trump
Administration’s imposition of steel and aluminium tariffs on Canada and Mexico has further setback
NAFTA talks and has elicited retaliatory measures from both countries. Moreover, several days after
those tariffs were announced, the Trump Administration revealed that it would henceforward seek to
deal with Canada and Mexico bilaterally rather than in tripartite talks—something again that both
Mexico and Canada vigorously oppose (Swanson and Tankersley, 2018). It is worth noting that the
Congress has not granted President Trump the Trade Promotion Authority necessary to negotiate
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bilaterally with Canada and Mexico in the context of NAFTA and that the President is therefore is not
currently authorised to conduct bilateral talks with them (Webber, 2018).
59. The US Administration has also communicated to its hemispheric partners that if it leaves
NAFTA, it will not resort to WTO trading rules and that both Mexico and Canada will therefore
confront significantly higher tariffs on goods exported to the United States. The Canadian negotiating
team refused to include a non-conforming measure that would have compelled Canada to apply the
“most favoured nation” principle to its NAFTA partners.
60. This apparent move away from structures that have so ably facilitated international trade
liberalisation has also raised questions about the future of the WTO. The US Administration has
been particularly critical of the WTO panel system that adjudicates trade disputes among WTO
members. Panel decisions are binding—something that US Trade Representative Robert Lighthizer
and the administration strongly oppose. The United States has blocked two appointments to the
appellate court, and this triggered a warning from EU Trade Commissioner, Cecilia Malmström, that
the administration policy could result in “killing the W.T.O. from the inside” (Porter, 2017). Although
the United States has won more than 90% of disputes it has had adjudicated at the WTO, it has lost
a similar percentage of cases launched against it. Robert Lighthizer has also declared that the WTO
has failed to rein in China’s mercantilist policies and its refusal to uphold patent protections (Donnan,
10 November 2017).
VI. TRADE AND SECURITY
61. Although trade is largely about economics, it also concerns state relations and security. The
conduct of trade demands a modicum of good relations among trading partners as well as a shared
agreement on the rules of the game. Mutually beneficial trade relations help bind together the state
system. As President Franklin Roosevelt’s long serving Secretary of State Cordell Hull once recalled:
“When the war came in 1914, I was very soon impressed with two points. [...] I saw that you could
not separate the idea of commerce from the idea of war and peace [...] [and] that wars were often
largely caused by economic rivalry conducted unfairly. [...] to me, unhampered trade dovetailed with
peace; high tariffs, trade barriers, and unfair economic competition, with war. Though realising that
many other factors were involved, I reasoned that, if we could get a freer flow of trade—freer in the
sense of fewer discriminations and obstructions—so that one country would not be deadly jealous
of another and the living standards of all countries might rise, thereby eliminating the economic
dissatisfaction that breeds war, we might have a reasonable chance for lasting peace” (Hurlburt,
2016)
62. Cordell Hull and the architects of the post-war international order recognised that protectionism
had been a critical factor in deteriorating diplomatic relations in the run-up to World War II. They
were determined to make free trade a central plank of the emerging global security order. The Cold
War only reaffirmed the importance of open trading relations among Allies. With strong
US leadership, tariffs and quotas were progressively reduced both in Europe and in North America.
Trade became a critical engine of extraordinarily rapid economic recovery which, in turn, made it
possible to underwrite expensive national defense programmes. The newly formed European
Communities made trade among Allies a central plank of reconciliation on the continent. As for Asia,
US leaders recognised how crucial Japanese recovery would be to Asian stability and the degree to
which open trade would be essential to this project. The GATT system ultimately helped
multilateralise these liberalising trends both by managing trade disputes and by ensuring that the
benefits of free trade could be extended across the world. The genius of US policy was that it
recognised that the prosperity created by a free trade order would both foster political stability and
lower international tension. As long as this win-win dynamic was in place, there would be a reduced
incentive to upend the international order.
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63. Unfortunately, over the last 20 years, the perception that trade constitutes a win-win proposition
and naturally bolsters domestic and international security has waned. Job losses in the
manufacturing sector in industrialised countries are increasingly blamed on trade, even when trade
is often not the determining factor. Moreover, some of the greatest beneficiaries of international trade
today are considered rivals rather than partners.
64. China, for example, has greatly benefitted from the international trading order. But trade and
prosperity have not made China democratic, even if that country is decidedly more plural than it was
during the so-called Cultural Revolution. Trade has, however, increased China’s stake in a stable
international economic order even if it remains a formidable rival to the West and one now capable
of financing its very large military complex. NATO countries are all concerned about its poor record
on intellectual property protection and its implicit state subsidies to some of its industries. But trade
tensions between the United States and its allies make it far more difficult to focus on the challenge
from China, at least in a collective fashion. China is demanding a greater say in international
economic institutions—many would argue rightfully so given its weight in the international
economy— and it will also likely become a far more powerful shaper of the East Asian economic
order after the United States pull out of the Trans-Pacific Partnership trade talks, and agreement that
also excludes China. So the Chinese example of how trade and security interact provides a mixed
message. It has both increased China’s stake in the international order while empowering it to shape
that order to better conform to its interests, for example, through the One Belt One Road Initiative or
through its cooperation with the members of the Association of Southeast Asian Nations (ASEAN)
and the Regional Comprehensive Economic Partnership (RCEP) (Hurlburt, 2016).
65. Even though the TPP and TTIP were informed by compelling strategic visions, in practical
terms they focused on reducing impediments to trade. Still, each offered new ways to manage
diplomatic relations among allies and partners. East Asia, for example, is a highly fragmented region
lacking an overarching alliance framework capable of containing rivalries and building stability. Over
decades, the United States instead erected a series of bilateral security partnerships for that
purpose. But it was long felt that a broader multilateral approach that extended into economic policy
was needed to foster a shared-stake regional security, particularly in the face of a rising China. The
TPP, which excluded China, offered a framework, at least, for regional commercial cooperation. But
the hope was that the habit of working together would spill over to the diplomatic and security realms.
The Trump Administration, however, has now adopted a bilateral approach to trade in the Pacific
(Donnan and Sevastopulo, 2018).
66. The situation for the transatlantic space is significantly different. NATO has long provided a
common security framework for the United States, Canada and much of Europe. At the same time,
multilateral trade deals have lowered barriers to trade between Europe and the United States, while
NAFTA has done the same for the United States, Canada and Mexico. In the case of the
now-suspended TTIP talks, the goal had been to reinforce the transatlantic relationship by further
deepening trade ties between the United States and the EU. Unfortunately, strong resistance on
both sides of the Atlantic emerged, in part, because these talks addressed issues that traditionally
are not considered trade matters as such, but rather concern regulatory issues which can also be
construed as non-tariff barriers. Those talks focused on three main areas: market access, specific
technical regulations and broader trading rules. The British decision to leave the EU and mounting
public opposition to TTIP led to a halt in the talks in 2016. In Europe, a coalition of populists, farm
groups, environmentalists and anti-globalisation activists drove the opposition to the talks (Barker,
2016). As suggested above, the recent meeting between President Trump and Jean-Claude Juncker
has for the moment eased mounting transatlantic trade tensions with the promise of new talks. But
the specific form these take and the outlook for progress remain to be seen. It is worth noting here
that Canada and the EU have completed a free trade agreement—the so-called EU Canada
Comprehensive Economic and Trade Agreement (CETA) —which provisionally entered into force in
September 2017.
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67. A number of strategic analysts worry that the foundations of the security-trade nexus are now
under pressure. Whereas trade and security were once generally seen as mutually reinforcing—
particularly among allies and friends—that relationship today seems less firm. Recent tensions over
steel and aluminium could mark a paradigmatic shift in how trade and security are linked in
North America and Europe. Much will depend on how the politics are handled.
VII. RECOMMENDATIONS
68. The Western commitment to open trade unambiguously diminished after the financial crisis of
2008. From a position of confidence and strength, many countries in the West appear to have
adopted more tentative and defensive postures toward international trade. Although this view belies
the preponderance of evidence, it has increasingly captured the imagination of some voters who
have suffered economically as a result of shifting economic paradigms, technological advances,
educational shortcomings and, more generally, sub-optimal public policy. The risk is that trade
protectionism, unilateralism and mercantilism could inspire wealth-destroying policies that would
shrink trade, undermine investment, raise prices, kill jobs and poison international relations.
69. Leadership truly matters. The failure of national political leaders to build and sustain a new
consensus around the virtues of trade and to construct commercial policies premised on those
virtues could have devastating economic impacts.
70. The invocation of protectionist policies invariably triggers retaliation. Trade disputes tend to
ratchet upward, particularly when the protectionist impulse is seeping into national politics.
Burgeoning trade battles would also have a devastating impact on the global economy and would
trigger new geopolitical tensions while weakening solidarity among allies. Moreover, all evidence
suggests that poorer people would suffer the most in such a scenario (Fajbelbaum and Khandelwal,
2016). An all-out effort is therefore needed now to prevent a trade war over steel, aluminium and
automobiles. Going down that path would be very harmful to the United States and its allies and it
would move the world economy in precisely the wrong direction.
71. It is high time to recall the basic principles of international trade. Firstly, a trade deficit is not in
itself a bad thing. It can simply be a manifestation of rapid economic growth or restructuring, which
requires significant importation of capital goods. Trade balances reflect broader macro-economic
phenomena related to savings and investment and are a natural consequence of dissavings and
borrowing. Trade balances can also be shaped by misaligned exchange rates by focusing policy on
trade balances, per se, one thus risks targeting the manifestation of the illness (or source of health)
rather than the cure. To assume otherwise is to dismiss overwhelming evidence that trade is a
generator of prosperity, jobs and economic dynamism. Citing trade imbalances as the source of
economic woes and calling for protectionist solutions can be politically popular even if protectionism
might best be characterised as a shortcut to economic ruin. Economists often argue that when
seeking to resolve market deficiencies, policymakers are better off focusing their efforts most directly
on the source of the problem. Restricting trade to reduce unemployment in a given sector, for
example, is the equivalent of using a sledgehammer to crack a nut. The long-term damage will far
outweigh any short-term sectoral benefits. Far more nuanced approaches are needed, such as
long-term strategies to raise productivity.
72. Indeed, “whole of government” approaches are needed. Trade policy is no longer the domain
of trade ministers alone. Redistributing some of the benefits of trade, for example, to underwrite
education and training programmes can help prepare workers for future markets rather than leaving
them untrained and vulnerable to paradigmatic changes in global markets. Ensuring the public’s
skillset is relevant to market conditions, for example, will help position societies to exploit the full
potential gains to be had from trade.
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73. Those workers who lose in trade thus need access to the tools and resources to reset their
careers. Life-long education is increasingly recognised as a vital pillar of a successful internationally
oriented economy. A working population that knows that society has its back as it participates in the
wealth-generating global economy is more likely to embrace rather than fear that economy. This is
precisely the spirit that animates the globally-oriented Nordic countries. These countries welcome
rather than fear the world economy, and they benefit enormously as a result. Their high-quality
education systems are structured to teach citizens how to flourish in this global setting. These
countries ensure that those who suffer setbacks in the dynamic and competitive global market are
both taken care of in the very short term and helped to adjust to paradigmatic economic change over
the longer term. In this way, social spending to support the safety net might be best seen as an
investment, the rewards for which are reaped in the global economy. Social anxieties are also a
primary hindrance to the societal embrace of trade. And while those anxieties are a tempting target
for political opportunists, it is actually far better to relieve them through innovative and proactive
policies rather than undercutting the trading systems which actually generate prosperity. The OECD
report, “Making Trade Work for All”, provides some very practical guidance on how states might best
structure these approaches.
74. Education and training are key to building societies that approach globalisation with
confidence. Students need to develop the analytical, linguistic, and cultural skills for the future
economy. This requires a leap of imagination on the part of educators and policymakers. In 2018,
the OECD will launch an international assessment of how school systems across member countries
and beyond are faring in developing global competencies in young people. This will provide an initial
assessment on how education systems are preparing students to function in a more integrated world.
Policymakers should pay attention to the results once the assessment is concluded. It will provide a
valuable evidence-based yardstick for governments and educators seeking to make school curricula
relevant to societies that aspire to flourish in an integrated global economic system. It will also
provide broad guidance on best practices that could be useful to school administrators, teachers and
policymakers alike.
75. It is also important to develop programmes and networks to help small and medium firms
exploit international market opportunities. These firms often lack the know-how, connections and
staffing to operate in international markets and, not surprisingly, they are underrepresented in the
global economy. Much can be done to reverse this, including reducing burdensome regulations that
effectively price these firms out of those markets. Organisational structures that help these firms pool
resources to facilitate access to international markets can be particularly fruitful. Related to this is
the need for readily accessible infrastructure that facilitates participation in global markets (OECD,
2018).
76. Trade policy is no longer simply the responsibility of trade ministers alone. They are in no
position to conduct labour, education, migration, development, tax and environmental policies on
their own. All these sectors bear directly or indirectly on how countries manage trade policy and
conduct trade negotiations. Whole of government approaches are needed to build an open global
economy. This is also in keeping with emerging approaches to growth including inclusive and
sustainable development frameworks. When the benefits of economic growth accrue to an
increasingly narrow sector of society, the risk of social and political tensions mounts, and economies
begin to underperform. Rising economic inequality places a cap on growth potential simply because
this becomes a constraint on aggregate demand. Macroeconomic, financial and trade policies can
be structured to create the conditions for more inclusive, broadly-based and sustainable growth. This
is all the more important at a moment when recent technology trends appear to be concentrating
rather than diffusing wealth. Preparing society for the nascent fourth industrial revolution may be the
most effective means to ensure that the gains from trade and economic growth are widely shared
rather than narrowly hoarded (World Economic Forum, 2018).
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19
77. Most economists would argue that moving away from a multilateral trading order towards
bilateralism would be a mistake. It would burden the global trading system with red tape, undercut
global value chains and trigger trade diversion, all of which would limit the full prosperity-generating
potential of trade. Bilateralism, moreover, will never resolve structural trade imbalances that simply
reflect savings-investment imbalances. It is thus time to revitalise multilateral trade negotiations to
give a long-term boost to global growth.
78. Multilateral trading arrangements need strong institutions to uphold the rules of the game.
Although it is not perfect, the WTO and its panel-based dispute resolution system is charged with
upholding this pillar of a rules-based global economic system. If it did not exist, it would have to be
invented. This organisation is now under attack by some who reject the very principle of
multilateralism. Those who recognise that the multilateral trading system represents a critical catalyst
for growth, innovation and peaceful win-win interaction among states need to be prepared to defend
it with great vigour and a degree of imagination. Of course, that does not rule out the desirability of
meaningful reform. The WTO needs to cope with many of the new challenges to the global trading
order including the rising importance of digital economy. A strong rules-based order will only enhance
the leverage of states and market actors who are victims of unfair trade practices. Along these lines,
North American and European concerns about property rights protection, industry subsides and
overcapacity in countries like China are legitimate and merit attention (May, 2018). The Global Forum
on Steel Excess Capacity, created by the G20, has offered a new model for how to manage such
disputes without resorting to trade wars. It has worked for the removal of subsidies and other market
distorting measures that have created a glut of steel in world markets, which has been a source of
mounting trade tension.
79. Efforts should be made to improve international trading rules in order to expand the
beneficiaries of trade, to give voice to those whose voices are often not heard in public discussions
about trade and to make the system more free, fair and open. Much of this can be achieved by better
implementing WTO rules and applying free trade principles in areas, such as agriculture, which have
long escaped the logic of liberalisation. International cooperation on matters pertaining to competition
policy could also help. Cooperation is also needed to govern the global digital economy which has
often avoided the agreed-on rules of the game. Likewise, a consolidated international effort is
needed to resolve the problem of base erosion and profit shifting (BEPS) which has allowed
multinational firms to avoid paying taxes in local markets from which they derive profits. Labour
standards and working conditions have long been excluded from trade discussions. But there is room
to do more here as well, and much can be done outside of formal trade talks. This effort is essential
to lower public anxiety about trade. Finally, there is ample room to make trade negotiations more
transparent and open. Public suspicions about trade are often fueled by secret negotiations where
many imagine their own interests are being sold out. Transparency can help alleviate those kinds of
concerns (OECD, 2017).
80. The United States and Europe have traditionally shared many fundamental assumptions about
trade and its benefits. The TTIP framework was supposed to take the trade relationship to a new
level of integration and should be revived. Allied countries should reinforce the commercial
partnership. The collective weight of a shared Euro-Atlantic vision for trade is all the more important
as the Chinese are advancing a very different view of the global trading system. There is ample room
for North America and Europe to advance a shared vision for trade well beyond the Euro-Atlantic
area.
81. In this regard, it makes sense to create an informal transnational parliamentary caucus of
democratic societies dedicated to defending and improving the liberal trading order.
Parliamentarians have a critical role to play in developing trade policy and building public consensus
to support it. Their efforts could be strengthened by reaching out to elected leaders who share those
goals.
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82. Finally trade protectionism never occurs in a vacuum. Unilaterally imposing tariffs or quotas is
a shortcut to triggering a trade war. Economic history points to the destructive nature of “beggar thy
neighbour” trade wars. No country wins and both international and domestic markets can be severely
constricted when this dynamic is unleashed. The experience of the 1930s remains instructive. A
dangerous process of deglobalisation was unleashed at a time when a financial crisis made it
impossible for the long-reigning hegemonic power, Great Britain, to reassume responsibility for the
broader trading order. The rising power, the United States, was not yet politically prepared to take
on that burden. A period of competitive devaluations and rising tariffs and quotas followed which
essentially amounted to a chain of ‘beggar thy neighbour’ policies that choked off growth in the global
economy and led to a degradation in state relations. Some analysts have discerned parallels with
the current situation and there are worries that mounting trade strife today could translate into more
serious security risks in the future (Barbieri, 2016). In short, unilaterally prioritising national economic
growth with no consideration for broader systemic obligations will poison the well for all countries
including the most powerful, and it will paradoxically undermine growth for all. At the end of the day,
it remains the essential task of leaders to mind the lessons of history.
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Watson, Kathyrn, “Paul Ryan breaks with Trump on tariffs,” CBS News, 31 May 2018,
https://www.cbsnews.com/news/paul-ryan-breaks-with-trump-on-tariffs/
Webber, Jude, et. al., “Mexico retaliates with tariffs on US imports,” Financial Times, 6 June 2018.
Wharton, University of Pennsyvania, “Bilateral or Multilateral: Which Trade Partnerships Work Best?"
Knowledge@Wharton, Apr 27, 2017 http://knowledge.wharton.upenn.edu/article/bilateral-
multilateral-trade-partnerships-work-best/
World Economic Forum, Global Risk Report 2018, https://www.weforum.org/reports/the-global-risks-
report-2018
______________________
ECONOMICS AND SECURITY
COMMITTEE (ESC)
Sub-Committee on Transition and
Development (ESCTD)
THE ENERGY SECURITY
CHALLENGE IN CENTRAL
AND EASTERN EUROPE
Report
by Ausrine ARMONAITE (Lithuania)
Rapporteur
175 ESCTD 18 E rev.1 fin | Original: English | 17 November 2018
.
TABLE OF CONTENTS
I. INTRODUCTION.........................................................................................................1
II. VULNERABILITIES.....................................................................................................3
III. NORD STREAM 2.......................................................................................................5
IV. OLD INFRASTRUCTURE IN CENTRAL AND EASTERN EUROPE ..........................8
V. ADAPTING TO THE NEW CLIMATE AGENDA........................................................10
VI. CORRUPTION, ENERGY AND THE ENERGY SECURITY CHALLENGE...............11
VII. THE UKRAINE CASE................................................................................................12
VIII. SOUTHEASTERN EUROPE.....................................................................................14
IX. CONCLUSION ..........................................................................................................16
BIBLIOGRAPHY........................................................................................................19
175 ESCTD 18 E rev.1 fin
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I. INTRODUCTION
1. Broadly defined, energy security is a condition linking the capacity of a country to sustain its
vital national interests with the availability of the energy resources needed to fulfil that fundamental
mission. In general terms, in a country enjoying a high degree of security, the flow of energy will be
uninterrupted and affordable. Increasingly, the definition includes broader considerations, such as
environmental sustainability and the capacity of the system to respond with flexibility to sudden
imbalances between energy supply and demand. It also, of course, factors in more traditional
security considerations and in this manner, it must gauge the resilience of the energy system as a
whole in the face of possible external attack from direct military operations or emerging forms of
offensive operations such as cyberattacks.
2. The global energy outlook has evolved substantially over the last decade, and the countries of
Central and Eastern Europe have been swept up in these changes. Central and Eastern Europe’s
dependence on Russian gas was a legacy of Cold War industrial and commercial structures that
survived both the fall of the Berlin Wall and the integration of some of the countries of the region into
Euro-Atlantic institutions. That infrastructure nevertheless accorded Russian companies a powerful
position in those energy markets. Consequently, a company such as Russia’s Gazprom was able to
impose long-term contracts on clients that had few other immediate energy options. Over time, the
cost of this dependence became more apparent, particularly in the wake of two Russian-Ukrainian
energy disputes in 2006 and 2009 that led to supply disruptions in several European countries.
Russia’s illegal annexation of Crimea and its aggression in Eastern Ukraine have further exposed
this set of vulnerabilities.
3. Those seminal events were a wake-up call for Europe and have helped raise awareness about
the risks of overdependence on a single energy supplier. These supply disruptions were politically
inspired. They also reflected the emergence of a more assertive Russia with a clear set of grievances
about the existing European security and political order and a willingness to act to upend that order.
Russia’s energy endowments provided it with a powerful lever to express this dissent. It did not have
to use this leverage often to demonstrate its potential power. Indeed, Russia has generally been a
reliable supplier of energy to the continent, in part, because oil and gas exports are its most important
source of income. But this made the events of 2006 and 2009 all the more shocking as they seemed
to demonstrate that Russia was willing to sacrifice its immediate commercial reputation for
geopolitical purposes.
4. One of the primary upshots of those Russian generated shocks has been a major European
push to diversify energy supplies in order to reduce dependence on Russia. Russian aggression, for
example, inspired the European Commission to investigate the opaque pricing of Russia’s gas
monopoly. It also certainly factored into the drafting of the EU’s Third Energy Package, which has
sought to liberalise Europe’s energy sector, challenge Russia’s monopolistic commodity pricing and
build resilience and new linkages into the energy infrastructure networks of Europe. Doing so would
make it easier to move energy in multiple directions throughout the continent should Russia again
cut off or threaten to cut off energy supplies. The European Commission has also demanded more
transparency, openness, and competition in European oil, gas, and electricity markets, not only
because the lack of competition and opaque decision making have given Russia leeway to use its
energy as a weapon, but also because doing so simply made economic sense.
5. The EU now has clarified a set of long-term goals to diversify the sources of gas used on the
continent, to expand the use of renewable energy, to increase energy efficiency, and to develop a
super grid that would help Europe tap into solar power from the south and wind power from the north.
Among other things, this would require the development of smart grids at local distribution points
that would help reduce peaks in electricity demand (White, 2015).
6. Building greater energy security in Europe demands diverse approaches across a range of
sectors. The EU’s Energy Union incorporates a number of sectors including energy, research and
innovation, transport, foreign policy, regional and neighbourhood policy, the environment, trade and
175 ESCTD 18 E rev.1 fin
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agriculture in a comprehensive package to ensure a broad conception of European energy security,
including environmental considerations. The EU has made the achievement of greater
interconnectivity of gas and electricity grids a central goal and sees this as a key vehicle for lowering
dependence on Russian gas and encouraging the diversification of energy sources, including an
important transition into renewables. It also seeks to ensure greater energy efficiency and a fair deal
for energy consumers. By 2020, the goal is to reduce greenhouse gas emissions by 20%, increase
the share of renewable energy in the energy mix to 20%, bolster efficiency by 20%, and achieve an
interconnection level of 10%. By 2030, these figures ambitiously rise to a 40% reduction of
greenhouse gas emission, an increase to 27% of the energy mix from renewable energy, a
30% increase in energy efficiency and an interconnection level of 15%.
7. Progress has been made on many of these fronts. In 2015, for example, renewable use saved
an estimated EUR 16 billion in fossil fuel imports. While the European economy grew in 2016,
greenhouse emissions fell, except in the transport sector, suggesting a delinkage between growth
and energy use (European Commission, 23 November 2017).
8. Energy security in Central and Eastern Europe is thus shaped by a multiplicity of factors, some
of which seem distant or not entirely consequential in regional terms. The massive expansion of the
oil and gas sectors in North America, for example, is having a profound impact on energy markets
in Europe, even if, for example, US oil and gas are generally not shipped directly to Europe. But the
so-called fracking revolution has propelled the United States into a new role as the world’s “swing
producer”. This has essentially helped place a lower ceiling on global oil prices and is also having
an impact on gas prices, even if Liquefied Natural Gas (LNG) is generally more expensive than
natural gas shipped by pipeline. Of course, evolving prices depend on a number of factors, including
production efficiency and falling extraction costs. If oil and gas prices rise quickly, US production,
including non-conventional energy like hydro-fracked gas and oil, will also increase, and these new
markets are helping to check price hikes.
9. The US gas and oil sector has made significant efficiency gains due to technological advances
in hydro-fracking and to a recent market shake-out which drove world prices downward. The
Organization of the Petroleum Exporting Countries (OPEC) had expected those price falls to force
many small American producers out of business. While a shake-out did occur, those firms that
survived the price falls emerged significantly stronger and more competitive. Highly efficient oil and
gas production in the US market means that shale gas and oil are flowing into the market at lower
prices than many had originally imagined. Consequently, the United States has now surpassed
Saudi Arabia as the world’s largest oil producer and is second only to Russia. US gas production is
also soaring. While 15 years ago the expectation was that US imports of gas would rise inexorably,
it is now exporting gas through several LNG terminals originally designed to receive gas and now
refitted to export it. Several new ports are under construction and significant exports of LNG from
Louisiana and Texas have helped create a gas glut that has exercised strong downward pressure
on gas prices around the world. The US entry into this market will have a long-term impact on world
markets and has the potential to weaken Russia’s market leverage in Europe if European and
American policymakers choose to encourage supply diversification. Low gas prices are also helping
it to replace coal as a fuel for electricity generation in some European countries, thereby helping to
move Europe towards its announced carbon reduction goals (Kraussoct, 2017). Finally, the growing
reliance on LNG will only increase the strategic importance of defending the sea lines of
communication.
10. Although gas is traditionally a segmented local market, the emergence of a vibrant and growing
LNG business and new port and pipeline infrastructure have made LNG an increasingly globally
arbitraged and fungible commodity. In other words, gas prices can no longer be set in local markets
alone, particularly as new LNG producers develop the capacity to move gas to distant markets due
to the construction of new pipeline networks. Lithuania’s new LNG reception facility in Klaipeda, for
example, has helped that country dramatically reduce its dependence on Russian gas and should
weaken Russia’s capacity to set prices in that region. The Lithuanian facilities have a total storage
capacity of 170,000 cubic metres, one jetty and a gasification capacity of 4 billion cubic metres. For
175 ESCTD 18 E rev.1 fin
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its part, Poland opened the Swinoujscie LNG terminal in 2015. Its initial regasification capacity is
5 billion cubic metres per annum, and with the construction of a third tank, its capacity is due to
expand to 7.5 billion cubic metres per annum, which would help the country meet roughly 50% of its
annual gas demand. These kinds of projects are clearly of great strategic value to the region. They
lower Russian market leverage and, by extension, the Kremlin’s potential capacity to deploy that
economic weight for non-commercial ends.
11. Russia, in turn, has had no choice but to respond to these changes. It is no longer positioned
to impose long-term fixed price contracts on its clients. These clients will increasingly have other
options at hand and while Russian gas remains important and relatively cheap, there are now market
forces that compel Russia to be more accommodating to its clients. As long as Russia’s clients have
other options, its leverage will be limited – this is precisely why so many Eastern European countries
are concerned about the Nord Stream 2 (NS2) project (see below). Europe’s leverage will also rise
with the construction of more two-way pipelines that allow gas to be moved in two directions rather
than in a unidirectional fashion. Countries with access to flexible lines have other import options
should energy supplies be cut in one direction.
12. One potentially important consequence of these market changes is that if Russia fails to
construct a more diversified economy, it will remain vulnerable to falling oil and gas prices. The state
budget is highly dependent on foreign exchange earnings generated through energy sales. One
would think that this vulnerability would encourage the Kremlin to engage in a degree of economic if
not political reform. But that hardly seems likely, given the level of corruption in the state and the
resistance to change this engenders. It is unfortunately more likely that low energy prices will
encourage Russia to adopt more aggressive postures to compensate for economic weakness and
to distract public attention from the fact that Russia’s leadership has failed to better prepare the
country for rapidly evolving global markets in the 21st
century. Europe thus must prepare for an
adversarial relationship no matter which way prices move.
II. VULNERABILITIES
13. Central and Eastern Europe confront two potential energy vulnerabilities: the need for secure
provision and inadequate infrastructure to ensure that supply. These vulnerabilities are often linked,
for example when existing infrastructure configurations translate into undesirable levels of energy
dependence on any single supplier, particularly when that supplier is inclined to exploit that leverage
diplomatically. Indeed, when considering energy security in Central and Eastern Europe, one must
specifically take into account how Russia has deployed its energy endowments as an instrument of
national power. Imported Russian gas has undoubtedly sustained domestic consumption in Eastern
Europe, but the cost of overreliance on Russian energy is potentially substantial as it leaves those
countries vulnerable to political suasion.
14. Concerns about this vulnerability have inspired a push for energy supply diversification. Thus,
a country such as Lithuania, which until recently met all of its gas needs with imports from Russia,
has made a concerted effort to diversify its sources of energy. The LNG facility in Klaipeda now
allows Lithuania to source gas from suppliers around the world. Although LNG is typically more
expensive than Russian gas, the difference in price should be considered a security premium that
many countries might judge well worth paying. Moreover, as suggested above, the price of LNG has
fallen as the supply grows. Finally, importing LNG from countries like Qatar and the United States
does not exclude purchasing energy from Russia. It simply means that there are increasingly other
options on the table should supply disruptions ever take place – and their very existence is likely to
discourage such disruptions.
15. It is also important to consider ownership patterns when assessing the security component of
energy use. In many countries, energy firms take on the character of monopolistic or oligopolistic
firms with all the problems and inefficiencies those structures generate. These include price-setting
behaviour, resistance to innovation, predatory behaviour toward potential competitors and the
175 ESCTD 18 E rev.1 fin
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exercise of untoward and ultimately undemocratic political influence. If national security in the West
is about defending democratic values, all of these behaviours might constitute a threat. There is a
myriad of cases in which national energy giants promote policies that could be seen as undermining
national security interests and democratic governance.
16. Gazprom is Russia’s largest energy-exporting company. It has been essentially state-owned
since 2005, by which time the Russian state had purchased more than 50% of the company’s shares
(BBC, 2005; Moore, 2005). Since then, Gazprom has shouldered the dual mission of generating
profits for its primary shareholder and serving the broader strategic interests of the Kremlin. That
company alone underwrites 13% of the state budget. It is thus burdened with functions that transcend
Western notions of profit maximisation and normal corporate responsibility. Not surprisingly, the
two missions are not always easily accommodated, particularly as clients and partners need to factor
in the potential that Gazprom might be instrumentalised for the Kremlin’s purposes. This dynamic
adds a degree of risk to doing business with Gazprom and other Russian energy firms (Polak, 2017).
These firms generate huge revenues for the Russian state, which, in turn, have been used to
underwrite an array of state-led activities that are antithetical to Western interests. These include
election interference in Western countries, provocative military deployments, cyberattacks, the
occupation of Crimea and the conflict in Eastern Ukraine.
17. Indeed, since 2005, Russia has visibly deployed its energy resources to achieve political and
strategic ambitions as defined by the Kremlin. Russian energy revenues, for example, directly
financed pro-Russian foreign leaders like Viktor Yanukovych in Ukraine and Alexander Lukashenko
in Belarus. They also helped underwrite national election campaigns in both countries in the
mid-2000s. Such funding is strategically consequential and has obviously generated a kind of
political debt toward the Kremlin. While Viktor Yanukovych is no longer in power in Ukraine,
Alexander Lukashenko continues to dominate Belarusian politics and has essentially transformed
his country into a Russian protectorate.
18. Russia has also deployed its energy power in less apparent ways even in Western countries,
for example, providing gas preferential rates with the expectation that the political elite in recipient
countries will adopt more accommodating positions with regard to Russia even in times of diplomatic
tension. This dynamic probably shaped the approach of several Western countries that opposed
strong sanctions against Russia following the Crimea invasion (Reuters, 2014). While Russian gas
and oil endowments have proven a particularly powerful source of political and diplomatic leverage,
Russia’s significant holdings of nuclear fuel can also serve a similar purpose. Russia is a primary
provider of natural uranium to Finland, Bulgaria, the Czech Republic, Slovakia, and Hungary
(Buchan, 2014). It also gains potential leverage through its electrical grid system, upon which several
Western or Western-oriented countries still rely.
19. Possible cyberattacks on sophisticated grids moving renewable energy pose another set of
challenges, although this is an issue of concern for all energy industries. But as distribution networks
grow “smarter” and more sophisticated, as they must do to make renewable energy a viable pillar of
Western energy strategy, they will become ever more vulnerable to cyberattacks. Indeed, they may
be particularly vulnerable, not only as they require highly sophisticated industrial control systems,
advanced distribution networks and advanced storage solutions, but also because they pose a direct
threat to Russia insofar as they lower its market and diplomatic leverage over the West. Wind farms
are linked by highly sophisticated control systems that often tie into computer systems designed for
efficiency and not for security as such.
20. In 2013, for example, hackers infected an array of renewable energy facilities and undermined
critical control systems. In Ukraine, malware struck the control system of an electricity distribution
network, leaving nearly a quarter of a million customers without power (Ruhle and Trakimavicius,
2017). US officials recently revealed that malware of Russian origin has been discovered embedded
in a range of US power plants. The FBI characterised the attack as “a multi-stage intrusion campaign
by Russian government cyber actors who targeted small commercial facility networks where they
staged malware, conducted spear phishing and gained remote access into energy sector networks”
175 ESCTD 18 E rev.1 fin
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(Borger, 2018). These systems need to be built with both efficiency and security in mind, otherwise
they become vulnerable to attacks with potentially devastating and life-threatening consequences.
21. It is also important to consider traditional military threats to critical infrastructure including
power plants, pipelines, and energy storage facilities. These threats could emanate both from
traditional military forces and from terrorist actors who tend to focus on asymmetrical tactics in which
single attacks can have wide-spread and significant impacts. Although NATO members are
responsible for protecting critical infrastructure, cooperation both within the Alliance and with partner
countries is essential for intelligence sharing about potential threats, crisis response and
management, cooperative security training and sorting through collective defence implications.
NATO has been dealing with this challenge and has worked on enhancing resilience, preparedness,
response and recovery, the exchange of information, training and exercise.
III. NORD STREAM 2
22. Construction of the offshore natural gas pipeline known today as Nord Stream 1 was started
in 2006 and completed in 2011. The 1,222km line begins in Vyborg in Russia, runs to Greifswald in
Germany, and is owned and operated by Nord Stream AG, of which Gazprom holds 51% of the
shares. It has an annual capacity of 55 billion cubic metres, and when the follow-on Nord Stream 2
project is completed, its capacity will double to 110 billion cubic metres by 2019. As a result of current
EU restrictions on Gazprom, however, only 22.5 billion cubic metres of Nord Stream’s capacity are
currently used. This has raised questions about the viability of Nord Stream 2 in addition to strong
strategic concerns harboured by a number of NATO member countries.
23. Indeed, the controversial Nord Stream 2 project is rife with national security implications,
although how affected countries judge the programme varies considerably. The proposed pipeline
would run alongside the existing pipeline and would likely be operational by 2020. The cost of the
1,200km (746 mile) pipeline has been estimated at EUR 9.5 billion (USD 10.3 billion) and
construction is scheduled to begin in 2018 (Deutsche Welle, 2018).
24. The controversial Nord Stream 2 pipeline project has illustrated how energy security
calculations are now shaping investment decisions in Europe and how divisive these are becoming.
The president of the European Council, Donald Tusk, has stated that the pipeline is not in Europe’s
interest, and nine EU member governments have claimed that the proposed pipeline violates EU
rules that prohibit gas companies from owning delivery infrastructure. Moreover, they argue, the
pipeline would not be made available to other suppliers. That project would also allow Russia to
bypass Ukraine and ship gas directly to Western Europe, thereby driving a wedge between Western
Europe and Ukraine (Rivkin and Zuzul, 2018). This prospect has triggered serious and high-stakes
infighting among European states, specifically pitting a number of Central and Eastern European
states (mainly Poland, Hungary, Romania, Slovakia, Bulgaria, the Czech Republic, and the Baltic
states), which perceive this particular project as part of a Russian divide and conquer strategy,
175 ESCTD 18 E rev.1 fin
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against Germany, which has characterised the arrangement in more economic terms. Poland’s
authorities responsible for competition policy recently initiated proceedings against six European
energy companies, including Gazprom, claiming that they had entered agreements to finance Nord
Stream 2 without Poland’s consent (The Economist Intelligence Unit, 2018). The fact that the project
has fomented such discord among Allied states, however, can already be understood as a win for
the Kremlin. Undermining Western solidarity, of course, remains a primary strategic ambition of the
Kremlin, and Russian-sponsored energy projects have proven a remarkably effective way for it to
achieve these ends.
25. Proponents of the project in Germany see it as bolstering national energy security, insofar as
it will provide direct access to plentiful and cheap Russian gas while eliminating the possibility that
Russian-Ukrainian tensions might affect its own energy supplies (a significant share of Russian gas
is now shipped to Europe across Ukraine). Several Central and Eastern European countries as well
as Sweden, Denmark and the European Commission, however, argue that the project diminishes
energy security by making the European Union, and particularly its largest gas importer Germany,
more dependent on Gazprom for gas supplies and by concentrating the delivery of up to 80% of
imported gas through one pipeline. This has struck a blow to European solidarity by pitting German
energy policy against the security interests of the Baltic and Nordic states and Poland, all of which
strongly oppose the project. Ukraine is also naturally opposed to a pipeline that would bypass its
own pipeline infrastructure and thus deprive it of a critical source of national economy.
26. Some of these concerns appear to be registering in Germany, where Chancellor
Angela Merkel recently acknowledged widespread concerns on the "political" and "strategic" aspects
of the Nord Stream 2 gas pipeline. In April she said that the Nord Stream 2 project is not possible
without clarification of how Ukraine's transit role can continue, declaring: “From this you can already
see that this is not just an economic project, but that, of course, political factors must also be taken
into account." At a summit meeting with Russian President Vladimir Putin in May, Chancellor Merkel
sought assurances that Russia would continue to export gas through Ukraine’s pipelines even after
Nord Stream 2 becomes operational. President Putin has indicated that he would be willing to do so
if these shipments “make economic sense” – which hardly represents an iron-clad promise. He is
clearly leaving himself a great deal of wiggle room on the matter, and it remains to be seen if this will
be enough to convince sceptics of Mr Putin’s good intentions (Chazan, 2018).
27. The European Commission has also raised specific concerns about Nord Stream 2. The
European Commission’s vice president for Energy Union, Maros Sefcovic, for example, has argued
that “creating a well-diversified and competitive gas market is a priority of the EU’s energy security
and Energy Union strategy […] NS2 does not contribute to the Energy Union’s objectives. If the
pipeline is nevertheless built, the least we have to do is to make sure that it will be
operated transparently and in line with the main EU energy market rules” (Global Risk Insights,
2017).
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28. The European Commission argues that the proposed pipeline violates current European
energy rules as outlined in the Third Energy Package. Those rules forbid energy companies from
holding majority shares in both supply and distribution assets. Moreover, competitors must also have
access to those pipelines to thwart the emergence of monopolistic and oligopolistic suppliers.
German authorities have rejected this interpretation and claim that the proposed project complies
with current EU law. In fact, there has been a legal void on rules governing pipelines from outside of
the Union, and last year the Commission asked the Council of the EU for a mandate to close this
loophole. In a subsequent proposed amendment, the Commission called for the equal application of
the Third Energy Package’s rules to all pipelines, including NS2, so that the following conditions
would have to be met: ownership unbundling (requiring pipelines not be owned directly by gas
suppliers); non-discriminatory tariffs; third party access; and transparency (European Commission,
8 November 2017).
29. The European Commission wants a more competitive, open and integrated energy market
operating entirely under EU rules that apply to all gas pipelines to and from third countries. Those
pipelines should be subject to the same rules and be equally transparent. The Commission is
seeking to eliminate conflicts of interest between infrastructure operators and gas suppliers, and it
wants guarantees that tariff setting will be non-discriminatory. Ideally, Europe would negotiate as a
block on gas prices and prevent suppliers from pursuing divide and conquer strategies. However, it
also agreed to grant existing cross-border pipelines certain derogations on existing rules on a case
by case basis, if such derogations are not detrimental to competition or security of supply. According
to many independent observers, however, the proposed Nord Stream 2 project currently does not
meet these criteria as it is majority-owned by the supplier Gazprom. Additionally, because it is not
an existing pipeline, it does not appear to qualify for these derogations.
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30. Concerns about the NS2 project are not only European. In meetings in Warsaw in January
2018, then US Secretary of State Rex Tillerson characterised the proposed pipeline as a threat to
Europe’s security interests (Reuters, 2018). US President Donald Trump has echoed these
concerns. The United States Congress has also expressed concerns about the Nord Stream 2
project and specifically included pipelines projects in sanctions passed last year. These sanctions
were formally related to the Russian invasion of Crimea, but they were also doubtlessly shaped by
concerns about Russian interference in US elections. The bill signed by President Trump leaves the
decision to apply these sanctions to the president and requires that he do so in consultation with
European Allies. This too constitutes a rather large loophole. US officials have indicated that the five
European energy companies that are financing the Nord Stream 2 project could face sanctions and
have offered to make more expensive US LNG available as an alternative energy source (Foy and
Buck, 2018). Some supporters of the project have claimed that the US is simply opposing a project
that would threaten its own future exports of LNG to Europe. But that hardly appears to have been
a factor in US political deliberations. Most market analysts believe that the greatest potential market
for US LNG is Asia, not Europe, although the United States will undoubtedly be shipping more to
Europe in the future as its own LNG capacity increases (Gawlikowska-Fyk and Wisniewski, 2017).
Poland, for example, has agreed to purchase LNG from the United States and will not renew a
contract with Gazprom that expires in 2022. US LNG imports to Europe rose 22% in 2017 and are
likely to continue growing (Rivkin and Zuzul, 2018).
31. The Nord Stream 2 issue has become particularly delicate in German politics and was the
subject of tough discussions in the run-up to the formation of the country’s new governing coalition
there. Some in Germany have cast the issue as pitting those wanting cheap energy against those
supporting solidarity with more vulnerable Allies in the Baltic states. Denmark has also decided that
it will make approval of any energy pipeline projects contingent not only on standard criteria for such
projects, but also on a national security assessment. Denmark alone would not be able to put a stop
to the proposed project, although it could block the pipeline from running through its territorial waters.
IV. OLD INFRASTRUCTURE IN CENTRAL AND EASTERN EUROPE
32. It is hard to generalise about Central and Eastern European energy markets as they differ in
size and energy mix. Poland and the Czech Republic rely heavily on coal, Hungary uses a high
percentage of nuclear power and Slovakia is more balanced. All import significant, though varying,
amounts of gas, and the degree of dependence on Russian gas varies considerably throughout the
region. Estonia and Romania import relatively little energy due to oil and gas reserves, while Slovakia
and Hungary need to import 60% of their energy. Lithuania is the worst off in this regard as 78% of
its domestic demand is met with imports (CEEP, 2016).
33. Deficiencies in Central and Eastern Europe’s energy infrastructure have exacerbated strategic
energy vulnerabilities in Europe. The lack of interconnecting links, north-south connections and
two-way pipelines poses a particularly acute problem. Three of the four major pipelines in Europe
flow east to west: the Brotherhood (Russia-Ukraine-Slovakia-the Czech Republic with subsections
from Ukraine to Hungary), Yamal-Europe (Russia-Belarus-Poland-Germany) and Trans-Balkan
(Russia-Ukraine-the Republic of Moldova-Romania-Bulgaria) pipelines. Central and Eastern Europe
also lack sufficient gas storage facilities beyond those in Ukraine, and there is no important hub for
trading gas—something that further inhibits competition. Although a number of steps have been
taken to address the challenge in recent years, problems persist. There are, for example, no
connecting lines between Poland and Slovakia or Poland and Lithuania, and several connections
still flow in only one direction, such as the pipelines between Croatia and Hungary or Romania and
Hungary (CEEP, 2016). The Baltic states remain relatively isolated in energy terms, although
Lithuania will build a gas link to Poland. Poland has introduced reverse flows on the Yamal pipeline
linking it to Germany, which would allow it to bring gas from Germany if needed. It is also
championing the Northern Gate project, which should bring 10 billion cubic metres per annum of
Norwegian gas to Poland and other Central European and Baltic countries by 2022 if it goes ahead
(Gotev, 2016). This would provide a secure alternative to Russian gas from Nord Stream 2. The
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Czechs and Slovaks have also introduced reverse flows on the Brotherhood pipeline, while Hungary
has built new connections with Croatia, Romania and Slovakia. Slovakia is pushing for the so-called
Eastring pipeline, which would link it to Hungary, Romania and Bulgaria, which would tie Western
gas hubs to the Balkans (CEEP, 2016). In the event of disruptions to the supply of gas from Russia,
two-way pipelines would add far greater resilience to the system by allowing partner countries to
ship gas to countries undergoing supply shocks.
34. Energy infrastructure problems are not limited to the gas sector, and some do not directly
involve matters related to dependence on Russia. A number of electricity grids in Central and Eastern
Europe are old and outdated, cannot cope with renewable energy and suffer uncontrolled loop flows.
The Baltic region, for example, is still linked to the IPS/UPS electrical power grid inherited from the
Soviet Union (CEEP, 2016). This has led to a problem of overcharging during times of high electricity
usage, which heightens the risk of blackouts as far away as Poland and the Czech Republic. There
are plans to make this system synchronous with the Continental European system (European
Network of Transmission System Operators for Electricity, ENTSO-E) although significant
investments will be needed to make this link-up feasible. Full integration is a priority for the Baltic
states, which are not comfortable relying on the IPS/UPS system that includes both the Russian and
Belarusian electricity grids. Partial remedies were achieved through Estlink 1 and 2, which tied
Estonia into the Finnish grid, the LitPol link between Lithuania and Poland and the NordBalt line
between Sweden and Lithuania (Joint Research Centre, 2018). Lithuania is also deeply concerned
about a huge nuclear power plant the Russians are building in Belarus, 50 km from Vilnius, that fails
to meet basic International Energy Agency (IEA) standards. The Lithuanian government fears the
plant represents an effort by Moscow to dominate the region’s electrical market for both economic
and strategic purposes. Alexander Lukashenko essentially confirmed this when he referred to the
nuclear plant as “a fishbone in the throats of the European Union and the Baltic states” that they
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would not be able to remove. Russia’s Rosatom plans to build 19 new reactors around the world,
including in Hungary, Finland, and Turkey (Standish, 2017).
Electrical Connections in the Baltic Region
35. Latvia used its Presidency of the European Union to advocate for more grid connections and
to build a genuine single European energy market. The goal was to make energy suppliers more
secure and member countries less dependent on Russia. In practical terms, this meant setting a
goal to integrate the Baltics into the European Network by 2025. It is worth noting that Russia has
generally been a reliable energy supplier in the region and that leaving the IPS/UPS system, in which
Russia controls frequencies and balances the grid, will cost billions of euros. The links between
Lithuania and Poland, and Sweden and Lithuania provide some resilience but do not resolve the
fundamental electricity vulnerabilities of the region (White, 2015).
V. ADAPTING TO THE NEW CLIMATE AGENDA
36. The climate change agenda offers both challenges and opportunities to Central and Eastern
European countries. Global climate change represents a key strategic challenge to Europe, and
concern about this man-made phenomenon is already shaping interactions among allies and trading
partners (Raines and Tomlinson, 2016). Although there are areas in which immediate energy
security ambitions are clashing with longer term climate goals—the use of domestically produced
brown coal comes to mind here—there are also areas of overlap (Buchan, 2014).
37. The growing share of renewables in the overall energy mix provides an illustration of the latter
case. Indeed, one of the most attractive elements of emerging renewable energy technologies is not
only that renewable energy is relatively clean, but also that it can lower energy dependence on
energy-supplying countries that are either unstable or actively engaged in efforts to destabilise the
international order. Just as the explosive rise of the LNG industry, linked in part to the growth of
hydro-fracking in North America, has created a new globally fungible energy commodity capable of
undercutting Russia’s oligopolistic control of Central and Eastern European gas markets, so too is
an ever more efficient renewable energy industry contributing to energy security in Europe. Over the
past decade, renewable energy has risen from 15% to 30% of the electricity mix in the EU (Ruhle
and Trakimavicius, 2017).
38. As is the case with rising LNG use, however, significant investments are needed to increase
the share of renewables in the broader energy mix. A change in traditional mindsets is also required,
as there remains a great deal of scepticism about these technologies even as profits in the industry
begin to soar. Germany and Denmark have both made large investments in renewable energy, and
Germany recently achieved a milestone when, for a brief period of time, all of its electricity needs
were met by renewable energy (NATO PA, 2018).
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39. A joint Dutch and German project to support renewable capacities through cross-border
auctions reveals how sophisticated this market is becoming and the degree to which it is now subject
to normal market price setting, which is helping it achieve serious efficiency gains. During one of
these cross-border auctions for photovoltaic (PV) solar energy tenders, for example, PV tenders sold
for record low prices. Wind power prices are also falling rapidly, and this renewable is growing
increasingly competitive with traditional fuels for generating electricity. But serious bottlenecks
remain, including the enduring problem of intermittency—in other words, coping with those periods
when there is little wind or sun to power generators. Until that problem is resolved, and it likely will
not be anytime soon, traditional energy sources will be required to backstop electricity networks.
This obviously comes at a cost, as it demands that legacy systems remain on line even if the returns
on investment in these systems plunge due to plentiful and ever cheaper renewables.
40. The challenge for Central and Eastern Europe lies not so much in the technologies themselves
as in the sheer costs of transitioning the economy to best deploy these technologies. Renewable
energy cannot simply be run through existing energy infrastructure. It requires significant investment
in new and smarter grids to move energy from windmills and solar farms to regions where insufficient
power is being generated at any given moment. Even off-grid solutions, including home-generated
power, require investment and regulatory reform. There are clear financial roadblocks to transitioning
to these major systems, as well as strong political resistance from legacy energy firms and national
monopolies that stand to lose from this kind of paradigmatic change.
41. That said, if diversification is understood to contribute to energy security by reducing
dependence on any single supplier, renewables will represent a key and ever more important
element of that solution. Even if renewable energy prices are higher than carbon-based fuels—and
their price is rapidly falling—there is nonetheless a security premium embedded in these prices. In
other words, there are environmental and security benefits linked to the use of these energy sources
over carbon-based fuels that are not fully reflected in their price. This is one reason many
governments have elected to subsidise renewable energy use, and they have done so to facilitate
the transition from so called 19th
century carbon-based energy to 21st
century renewables. This is no
small undertaking. The transition will be very expensive and complex, and it will require critical
public/private partnerships and investments to drive the industry forward. The potential security
benefits are likely significant.
42. There are also security benefits linked to the use of domestically produced coal, and this is an
argument heard in several Central and Eastern European countries that currently produce coal and
rely on its use. This is undoubtedly true insofar as domestic coal use can reduce dependence on
Russian gas or Middle Eastern oil. But coal’s future is problematic given its rather dire environmental
consequences. Although it will continue to be used, short of a breakthrough in dealing with the carbon
emissions problem, its real costs may be prohibitively high for it to endure as a viable energy option
for much of the region. This, however, is not a view shared in all EU countries. There is, for example,
dissent from Poland, which is well-endowed with brown coal, the use of which it sees as critical to
its own energy security.
VI. CORRUPTION, ENERGY AND THE ENERGY SECURITY CHALLENGE
43. Energy markets and the incomes they generate have long been both a source and target of
corruption. The significant rents generated by the industry, the persistence of politically protected
monopolies and oligopolies in the sector and the important role played by states create a welter of
opportunities for those who would use those levers for self-dealing or for broader political purposes—
all to the great disadvantage of energy consumers and public well-being. As a general rule, the less
transparency and competition in the sector, the more opportunities for corruption. Those with access
to the generation and distribution of energy and related industries are best positioned to monetise
this access through corrupt practices or to translate this access into broader political leverage (Ruth,
2002). Given the size and importance of the energy sector, when it is corrupted or used for influence
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peddling, it can have broad systemic implications with significant spill-over effects on the
international system.
44. There are myriad cases of corruption in Eastern and Central European states linked to the
energy sector. Not surprisingly, many of these involve Russian companies and so-called middle men
controlling prices and access to energy commodities (Aslund, 2010). The problem, of course, is not
limited to Central and Eastern Europe, and there are many cases of energy-industry-driven
corruption in Western Europe and North America (Kupchinsky, 2009).
45. The corruption-energy nexus is particularly threatening to weak states and to those
transitioning to democratic and market norms (Dempsey, 2013). Weak states are more vulnerable
to penetration by external actors with significant resources and driven by a focused agenda. There
have been myriad instances of corrupt relations between Gazprom and local oligarchs in Europe
who have essentially been paid kickbacks in exchange for supporting favourable energy deals with
Russian firms (Open Democracy Roundtable, 2017). These practices have long made it difficult to
subject the energy sector to normal democratic scrutiny, and they have provided Russia with a key
source of leverage in the domestic affairs of a number of European states. Moreover, this kind of
corruption undermines open competition and limits investments in countries that need to attract
foreign capital and stand to benefit from more open competition. Corruption has slowed the evolution
of the energy sector in many countries, reduced competitiveness and raised costs to consumers and
energy-dependent business alike. Bribery and kickbacks undermine the rule of law and public faith
in democratic institutions and practices. There are countless incidents of Russian interference in the
energy sectors of Ukraine, Lithuania, Hungary, Poland, Slovakia, Bulgaria and in the Western
Balkans (Dempsey, 2013). There are important cases of conflict of interest and ethical matters in
which politically linked Westerners earn millions by pushing projects that actually weaken Western
security. The risk here is that such lobbying, which has been apparent even in some of NATO’s
leading countries, subverts the integrity of the democratic process and undermines faith in political
systems that are so easily penetrated by actors whose intention is actually to undermine Western
security and increase the vulnerability of Alliance members and partners (BBC, 2017).
VII. THE UKRAINE CASE
46. Energy corruption in Ukraine has been strategically consequential and terribly detrimental to
the country and its citizens. Ukraine’s energy sector is rife with vulnerabilities. It is one of Europe’s
least energy-efficient countries and is two to three times as energy intensive as neighbouring Poland
and Slovakia. Although part of the problem relates to the legacy structures and practices of the Soviet
Union, poor governance, political instability, corruption and conflict with Russia have all complicated
efforts to address these structural problems. The energy sector accounts for 12.6% of GNP, but its
costs are very high, and this engenders a misallocation of resources that would be far better invested
in other industries. In this sense, the energy sector in Ukraine is as much a hindrance as it is a
generator of economic activity. It is in dire need of reform, but political instability, a very poor
regulatory system, corruption, war and isolation have all complicated that country’s energy
transition—although some important reforms have been undertaken.
47. The Maidan revolution, the Russian occupation of Crimea and Russia’s armed aggression
against Ukraine have all shaped the country’s energy profile. After the Crimean invasion, Russia
ended discounts on gas sold to Ukraine, which had once been used to compensate Ukraine for the
use of the Russian naval base in Sevastopol. It also ended coal deliveries from Donbas, which is
now occupied by pro-Russian militia. These changes collectively constituted a shock to Ukraine’s
energy sector and have led to important changes including price liberalisation. The occupation of
Crimea, the conflict in Eastern Ukraine and Russia’s militarisation of the northern Black Sea have
resulted in the loss of valuable Ukrainian gas fields to Russia. They have also raised risk premia in
the region, which some have argued might have been one of Russia’s goals in its aggression against
Ukraine. This has discouraged investment in Ukraine’s gas sector and lowered its potential to provide
Europe with an alternative to Russian gas (Barrasso, 2018). As a result, the sector remains
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underinvested in, its gas fields are underexploited, and its governance structures are inadequate to
the needs of the country.
48. Ukraine also hosts vital pipelines linking Russian gas to European markets. These pipelines
have an annual capacity of 145 billion cubic metres and thus carry more gas than both Nord Stream
pipelines combined. As mentioned above, new pipelines bypassing Ukraine threaten the Ukrainian
transit business, although Ukraine also has substantial gas endowments itself. Gazprom has refused
to adhere to both EU regulations and Ukrainian legislation that would apply these rules in a new
transit agreement. Russia is also refusing to implement the Stockholm arbitration court’s decisions
of 2017 and 2018.
49. Tensions with Russia inspired Ukraine to join the Energy Community of Eastern and
Southeastern European countries working to adopt the EU’s energy market legislation—although
this has proven particularly daunting in Ukraine’s case given the power of those vested in the status
quo. It also began to push for reverse flows of gas from Poland, Slovakia and Hungary in order to
lessen its dependence on Russian gas. Whereas in 2013 Russia was the only supplier of gas
imported into Ukraine, today Ukraine imports no gas from Russia. The introduction of reverse flow
pipelines from Slovakia in 2014 allowed Ukraine to import gas from other suppliers. Production of its
own gas rose and now meets three-fifths of national consumption. The country has a relatively large
shale gas endowment, but its capacity to exploit those reserves remains limited and, again, the
conflict with Russia as well as pervasive corruption impose a high-risk premium for foreign
companies. Ukraine, however, remains committed to developing its conventional gas capacities.
Both the International Monetary Fund (IMF) and the EU have strongly encouraged Ukraine to
restructure this behemoth to introduce more competition in what are essentially rigged markets.
50. There has been some good news, however. In July 2018 the Supervisory boards of Naftogaz
and Main Gas Pipelines of Ukraine signed a Memorandum of Understanding that committed them
to separate the production and transmission portions of Naftogaz—something the EU and the United
States have strongly encouraged. This should help open up the Ukrainian market and could lower
the risk of corruption in the business.
51. Political resistance to these changes has been fierce as Naftogaz has become something of
a cash cow for parts of the political class and oligarchs with a vested interest in the status quo.
Currently, this state-owned company simply does not meet international standards of transparency,
efficiency and accountability. It contains myriad conflicts of interest that impede reform and ultimately
inflict heavy costs on Ukrainian taxpayers and energy consumers. But the political system at large
also pays a price, as this company is at the centre of an array of murky dealings that undermine
public faith in the rule of law.
52. Naftogaz has also been engaged in a long dispute with Gazprom over previous contracts and
distribution and transit issues. The ongoing case has held up the restructuring of Naftogaz – or, at
the very least, is has provided a convenient excuse to delay these reforms. Russia clearly sees the
Nord Stream 2 project as a way to circumnavigate this legal dispute while, in the larger sense,
punishing Ukraine for its broader resistance to Russia’s regional ambitions. If Nord Stream 2 is built,
Ukraine stands to lose EUR 2 billion a year in transit revenues (Antonenko et al., 2018). Ukraine
thus has an interest in settling the dispute with Russia and reforming its energy industry governance
structures so that it operates in a significantly more transparent and honest fashion and in a manner
that fully meets European governance standards. The problem, of course, is that Russia is not at all
likely to abandon its aggressive posture and has made it clear that it has a vested interest in
destabilising Ukraine.
53. Ukraine also needs to enhance energy efficiency to increase security. It managed to reduce
gas consumption from 50.4 billion cubic metres in 2013 to 33.3 billion cubic metres in 2016, although
this reduction was largely linked to the economic crisis and the fact that it has lost control of a large
portion of its energy-intensive industrial base in the Donbas region, now controlled by pro-Russian
militia groups. After reaching a credit agreement with the IMF, the government significantly reduced
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energy subsidies. Higher energy prices have naturally triggered both a reduction of consumption and
an added incentive to increase energy savings, both at the household and municipal levels. It has
also led to a degree of government savings, as the state-owned gas company, Naftogaz, was
subsidising Russian gas for Ukrainian consumers. More vulnerable citizens now benefit from direct
cash support to help pay for energy for home heating and cooking. This is more effective than simply
lowering the cost of energy, as doing so reduces incentives to save energy. The government also
passed a law requiring all households to have heat and hot water meters, which will provide critical
information to consumers seeking to save money and energy. It will also embark on a building
modernisation programme to introduce greater energy efficiency in the country’s building stock. All
of this is essential but not sufficient as the government still spends more on wasted energy than on
efficiency measures (Antonenko et al., 2018).
54. Ukraine is one of the largest consumers of electricity in Europe. Many of its anthracite-
powered plants are in the war zones of the east, but most of its capacity is in thermal power (24.5GW
of Ukraine’s total power generation of 55.3GW). Nuclear power accounts for 13.8GW, hydro 5.9GW
and renewables only 0.9GW. Problems of pricing, security, access to raw materials and low
investment plague the industry. Coal-burning plants long relied on anthracite coal from the eastern
regions of Donetsk and Luhansk, but shipments of that coal have stopped, and Ukraine has relied
on imports from Russia. The government now intends to convert anthracite-burning plants to
lower-grade bituminous coal use in order to lower this dependence. The country’s electricity
infrastructure is aging and not up to European standards. Integration with Europe’s grid would require
huge investments and would result in new pressures to meet European environmental standards.
55. Ukraine’s current stock of power generating plants will soon have to be replaced. The
government intends to expand the number of nuclear power plants in the country and is seeking to
diversify its supply of nuclear fuels in order to become less dependent on Russian sources. It also
has ambitions to raise the share of renewable energy in the national energy mix to 11% by 2020.
But this will demand large investments at a time when the budget is extremely tight. Ukraine’s
transmission lines are among the least reliable in Europe, as they are responsible for the loss of as
much as 12% of generated electricity—a figure that is more than twice as high as the Organisation
for Economic Co-operation and Development (OECD) average (Antonenko et al., 2018). Although
the European Bank for Reconstruction and Development (EBRD) has helped finance system
upgrades, it is estimated that an investment of about EUR 5.1 billion is still needed. This will be
essential if Ukraine is ever to integrate into the European grid as the government has indicated it
hopes to do by 2035 (Logatskiy, 2017).
56. Finally, in 2017 the Ukrainian government adopted a new Electricity Market Law that will be
operative in 2019. It will introduce more open competition in electricity markets, including the freedom
to buy and sell electricity, greater choice for consumers and third-party access to the grids. The goal
has been to break up existing monopoly and monopsony power through greater competition. This is
clearly a move in the right direction, but there is strong entrenched resistance to such reforms even
though Ukraine’s system is in deep crisis and riddled with debt. The government continues to resist
the idea of privatising key energy assets and this inspires a degree of pessimism as to how far the
current reform effort can go.
VIII. SOUTHEASTERN EUROPE
57. There are essentially three ways to move energy overland between Asia and Europe: through
Russia, through Iran and through Azerbaijan. Given the unique strategic challenges posed by Iran
and Russia, the relative strategic importance of Azerbaijan and the South Caucasus has increased
because of the region’s energy endowment and of several important pipelines linking the Caspian to
Europe. Because of the unresolved Nagorno-Karabakh conflict, the corridor is narrowed to
95 kilometres. Currently three critical pipelines pass through this region: the Baku-Tbilisi-Ceyhan
pipeline linking Azerbaijan to Turkey, the Baku-Supsa pipeline, which brings Azerbaijani oil to the
Black Sea, and the South Caucasus pipeline from Azerbaijan to Turkey, which will soon be part of
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the South Caucasus system that will deliver gas from the Caspian to Italy. This corridor is thus both
highly valuable and vulnerable. Russia has a clear interest in discouraging the movement of
Azerbaijani energy to Europe and it seems very willing to exercise both diplomatic and military
leverage in the South Caucasus to further this ambition (Gurbanov, 2018).
58. Southeastern Europe faces many of the same problems as Central and Eastern Europe. It too
is relatively dependent on Russian gas, plagued by aging infrastructure and left vulnerable because
of a lack of interconnections and two-way pipelines. The Trans-Adriatic Pipeline (TAP), which will
bring Azerbaijani gas from the Shah Deniz 2 field to Southern Europe, is part of a proposed grand
Southern Gas Corridor (SGC), which is seen as one potential remedy to the rigidly structured gas
markets of the region. The SGC is slated to play a fundamental role in the EU’s overall strategy to
enhance European energy security. The project has become all the more important now that the
Nord Stream 2 project is underway. Chancellor Merkel’s recent visit to Azerbaijan provided an
opportunity for her to show her dedication to the notion of diversifying European energy supplies
despite the Nord Stream 2 project. The Chancellor faced criticism from the Trump administration at
the NATO Brussels summit for the Nord Stream project and has suggested that American LNG might
be a safer alternative to Russian gas. Germany is the world’s largest importer of natural gas, and
Russia has the largest endowment of natural gas. That there is an important energy trade between
the two is hardly shocking. German authorities maintain that this trade is driven entirely by
commercial consideration. The problem lies in how that trade is structured and what it means for
Germany’s partners, who worry that Russia could put itself in a position to disrupt the flow of energy
to the continent (Karasz, 2018). Chancellor Merkel’s endorsement of the effort to move Azerbaijani
gas from the Shah Deniz 2 fields to Europe was timed to demonstrate that Germany is willing to
include broader security concerns in its energy strategy (Chazan, 2018).
59. Completion of the Southern Gas Corridor (SGC) now seems likely and represents an
interesting contrast to previous failed efforts to strengthen regional energy links, like the Nabucco
project. That said, the SGC does confront public resistance in southern Italy, which will host the
terminus for the TAP (Gurbanov, 2018). The SGC includes the Shah Deniz 2 gas field in Azerbaijan,
the South Caucasus Pipeline extension (Azerbaijan-Georgia), the Trans-Anatolian Pipeline through
Turkey (TANAP) and the TAP. This broad project is seen as a far better option than the now-
cancelled South Stream pipeline that would have moved Russian gas under the Black Sea to
Bulgaria. That particular project was cancelled, as it was incompatible with EU competition
regulations—a standard that should be applied to Nord Stream 2. South Stream also caused serious
security concern in Brussels and in Washington. It is noteworthy that the Trump administration has
now extended a specific waiver on US sanctions on Iran and those doing business with Iran to
encourage development of the Shah Deniz gas field, something it has not done, by contrast, for BP,
which has been working with the National Iranian Oil Company to develop the Rhum natural gas
field in the North Sea (Gordon, 2018). In any case, Russia has been very active in the region’s
energy markets. Russia’s Foreign Minister Sergey Lavrov recently noted that his country is not
walking away from the Southern European market and hopes that its TurkStream project will move
Russian gas to Southern Europe.
60. Corruption, political interference and low levels of investment have posed acute problems for
the energy sector in the Western Balkans, where the stakes are particularly high as the region as a
whole confronts an array of obstacles to transition and Euro-Atlantic integration. High-level corruption
cases in Albania, Bosnia and Herzegovina, Croatia, Kosovo, the former Yugoslav Republic of
Macedonia1
, Montenegro and Serbia are indicative of the deep-seated problems in the sector
(Prelec, 2014). Corruption cases have covered the entire gamut of industrial activities from
hydroelectric construction, through privatisations, to tendering for new projects and government
investments in the sector. Even more worrisome perhaps is that journalists, NGOs and state
prosecutors who have sought to expose this lawlessness have faced intimidation and official
pressure to silence the voice of whistle-blowers (Likmeta, 2014). A 2014 study suggested that tens
of millions of euros have been lost as a result of corruption in the energy sector in Southeastern
1 Turkey recognises the Republic of Macedonia with its constitutional name.
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Europe. This is particularly worrying as the European Union has made a priority of helping the region
refashion its energy infrastructure to help it meet its energy sustainability goals. By definition, moving
to more efficient and sustainable energy markets requires progress in the fight against corruption.
Unfortunately, corruption remains one of the most compelling obstacles to successful democratic
and market transition throughout this region.
NATO and Energy Security
61. NATO’s own role in building energy security has been the subject of some discussion and
debate for a number of years. Energy security writ large is generally more a matter of structuring
markets than it is about hard defence, so there are obviously other institutions beyond military ones,
like the International Energy Agency, that have enormous responsibilities in formulating international
efforts to bolster energy security. That said, defending critical infrastructure is very much part of
NATO’s remit, and providing that security has become all the more challenging given the rise of
cyber war techniques. Energy itself is a strategic asset, and it is vital to the functioning of military
forces. Defence planners must ensure both that the societies they are defending have access to this
vital strategic asset and, of course, that their militaries do as well. Threats to those supplies are
diverse and can emanate not only from state actors, but also from sub-state actors such as pirates
operating along or near maritime choke points. Terrorist attacks on vital energy assets have also
increased sharply in recent years and this has made it essential to harden the defence of these
assets. NATO provides an important vehicle for sharing information, intelligence and best practices
to lower the risks of such attacks and to cope with them should they occur. The Alliance has also
worked to lower fuel costs for its forces while raising environmental awareness in member
militaries—work that is also shared with partner countries.
62. Lithuania is now hosting the NATO Energy Security Centre of Excellence to develop and share
expertise across the Alliance on all aspects of energy security. In modern, highly integrated
economies, attacks mounted even by small groups of terrorists can have a devastating economic,
social and even political impact. Critical energy infrastructure is thus a favourite target for those
seeking to inflict massive costs on societies through the conduct of low-cost terrorist operations. It is
also worth noting here that energy disputes have long been a source of international tensions and
have been factors in previous wars.
63. At the 2008 NATO Bucharest Summit, Allied heads of state and government gave NATO a
mandate to work on energy security matters. Again, this posed a challenge for an organisation
largely focused on traditional military matters. The Alliance, however, has subsequently structured
its work on energy security in three areas: raising strategic awareness of those energy matters with
direct security implications, protecting critical energy infrastructure and enhancing energy efficiency
in the military (Grubliauskas, 2014). NATO relies on other institutions, such as the International
Energy Agency, to enhance its own situational awareness, but it has become something of an
intelligence clearinghouse on energy-related matters and their links to hard security. NATO also
consults with its partners on energy security issues as diverse as resource competition, climate
change and the ways these shape the broader security landscape.
IX. CONCLUSION
64. Diversification and assurance of energy supply are key to energy security for Europe and
North America alike. But these pose a particular challenge for Eastern and Central Europe, which
has long relied heavily on Russian gas and oil, leaving the region vulnerable to Russian suasion.
The development of new interconnections, north-south links, two-way pipelines and LNG reception
facilities will help enhance energy security, as will investments in transformative and clean renewable
energy sources. The growth of the LNG market and the construction of LNG terminals in Europe is
now transforming natural gas into a more “fungible” commodity that moves internationally and is
priced globally. Building even more hubs and reception ports in Europe will only enhance security.
As US LNG production increases, it could strongly contribute to Europe’s energy security both by
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supporting the construction of LNG import capacity and pipelines and by increasing gas exports to
the continent. Both would expand the list of gas suppliers to Europe, thus making European and
international gas markets more fungible and competitive while reinforcing transatlantic energy links
(Collins and Mikulska, 2018).
65. But there are also reasons for concern. The construction of the Nord Stream 2 pipeline makes
little geopolitical sense for Eastern Europe and could leave it more vulnerable to energy blackmail.
The project is now underway but continues to foment discord between Eastern and Western Europe
and there are concerns in Brussels that Russia will be tempted to exercise price discretion to reward
or penalise countries over which it seeks to exercise influence (BBC Monitoring, 2018.) That pipeline,
now under construction, will likely deepen Europe’s reliance on Russian gas, give Russia new
sources of leverage over western democracies, further weaken Ukraine, and provide additional
income to a Russian government that is increasingly intent on destabilising Europe and undermining
democratic institutions on both sides of the Atlantic through both traditional military and non-military
means. Efforts are needed now to mitigate the worst potential impact of the project and particularly
to ensure that Ukraine is not left to its own devices. Fortunately, LNG is now poised to compete with
Russian gas in several markets. Its falling price and growing availability, along with the growth of
renewable energy, have reduced Russia’s price-setting leverage on the continent and could help
mitigate the impact of Nord Stream 2. LNG will invariably remain more expensive than Russian gas
piped into the continent, but security has its costs and this so-called externality needs to be more
systematically factored into energy pricing and energy decision making. Efforts such as the proposed
Three Seas Initiative to link up LNG infrastructure between ocean terminals in Poland and Croatia
make good strategic sense. The Three Seas Initiative seeks to unite 12 countries in the region
between the Baltic, Adriatic and Black Seas through energy infrastructure. Finding new ways of
bringing energy from the Caspian to Europe should remain a priority.
66. Although improved infrastructure is key to bolstering Central and Eastern European security,
so too are enhancements in the regulatory environment. Linked-up international approaches are
needed, such as the construction of a genuine European Energy Union. The Union could negotiate
gas and oil contracts as a block, collectively plan for new infrastructure, work out responses to
potential supply emergencies, and foster regional cooperation efforts. Ensuring open market
competition and transparency is also an essential component of developing genuinely secure energy
markets. Making Central and Eastern Europe more energy efficient can help lower dependence on
imports from unstable or threatening regions. Infrastructure investment is also needed in the
electricity sector, particularly in power generation and transmission lines. Coping with loop flow
problems and building systems that can readily handle renewables are essential to European energy
security as a whole and demand collaborative solutions.
67. Fossil fuel subsidies persist in much of Central and Eastern Europe. Not only is this a burden
on national budgets, it also slows the process of energy transition to a more efficient use of carbon
fuel and an increasing use of cleaner and more strategically secure renewables. Subsidising
carbon-based fuels use is often designed expressly to protect vested interests in the status quo.
Such subsidies invariably slow the emergence of new energy sectors that promise to generate jobs
in the future and build greater energy security.
68. Energy control and grid management systems are becoming ever more sophisticated and
efficient, but they are also increasingly vulnerable to cyber or other attacks. These systems need to
be made more secure, and perhaps even redundant, to resist hacks which, at their worst, can
represent an act of war designed to paralyse critical national systems. National security officials and
the private sector need to deepen consultation and ensure that an effective partnership is in place
to safeguard these systems. This will be as critical a challenge as diversifying energy supplies over
the next several decades. As NATO bolsters its own cyber defence capabilities, it can play a role in
helping to coordinate efforts among Allies and partners to defend this critical infrastructure.
69. Poor budgetary transparency and oversight both in the public and private energy sectors
create opportunities for corruption. It is therefore essential for the public to demand this transparency
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and for governments to insist upon it. Failure to do so will almost invariably result in corruption, and
when the scale of this mounts, it will pose a clear threat to democratic governance, economic health
and national and regional security. The breakup of energy monopolies will help open energy markets
and, by extension, render them more secure, resilient, and capable of serving national economic
and security interests. Doing so can attract investment from the private sector, which, for apparent
reasons, must be a partner in building a more secure energy future for the continent.
70. Codes of conduct for international companies operating in Europe are essential and need to
be applied universally. Open competition and a level playing field are critical conditions for attracting
investment. Along these lines, it has made no sense to exempt a company like Gazprom from
European rules that prohibit gas companies from owning the very pipelines that move gas to
markets. These rules also prohibit pipeline companies from limiting access to those pipelines.
Fortunately, under Article 9 of the EU's antitrust regulation, the European Union has recently
imposed a set of rules on Gazprom that should help limit anti-competitive behaviour. These include:
- No more contractual barriers to the free flow of gas. Gazprom has to remove any restrictions
to cross-border gas resale that are placed on customers.
- An obligation to facilitate gas flows to and from isolated markets. Gazprom will enable gas
flows to and from parts of Central and Eastern Europe that are still isolated from other
member states due to the lack of interconnectors, namely the Baltic States and Bulgaria.
- Structured process to ensure competitive gas prices. Relevant Gazprom customers are
given an effective tool to make sure their gas price reflects the price level in competitive
Western European gas markets, especially at liquid gas hubs.
- No leveraging of dominance in gas supply. Gazprom cannot act on any advantages
concerning gas infrastructure, which it may have obtained from customers by having
leveraged its market position in gas supply.
The Commission claims that these obligations will essentially address its competition concerns and
achieve its objectives of enabling the free flow of gas in Central and Eastern Europe at competitive
prices (European Commission, 2018). But vigilance on these matters remains essential.
71. Gazprom’s monopoly over the gas sector in several European countries is equally
unacceptable. With international support, these countries need to muster the political will to diversify
their energy base and generalise the rules of the game so that the playing field is even. Codes of
conduct are also needed to exercise more control over former state officials and politicians who
move quickly from positions as regulators to that of lobbyists for Russian and other energy firms.
Ultimately, parliaments have an essential role to play in ensuring that energy markets are diversified,
open and transparent. It is their essential duty to establish procedures and laws to ensure a broad
energy base and competitive and transparent markets unimpeded by political favouritism and
corruption.
72. NATO’s efforts both to factor energy security considerations into its strategic vision and to
defend critical energy infrastructure from physical and cyberattacks make eminent sense. This
awareness is essential in the maritime sector, as ever more LNG is transported via ships.
175 ESCTD 18 E rev.1 fin
19
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ECONOMICS AND SECURITY COMMITTEE
219 ESC 18 E rev. 1 fin
Original: French
RESOLUTION 449
on
OPPORTUNITIES AND CHALLENGES IN A CHANGING SPACE
ARENA*
The Assembly,
1. Acknowledging that space represents a critical arena of both global competition and
cooperation, a bastion of the global economy and technological development and a vital scientific
frontier;
2. Understanding that space has become an important military theatre with space-based
satellites playing an essential role for ground, sea and air forces for many national militaries including
those of NATO members;
3. Noting that the space sector is undergoing fundamental changes due to digitalisation,
components miniaturisation, and the growing role of private actors;
4. Recognising that the so-called realm of “new space” promises enormous scientific and
economic rewards but also poses new risks;
5. Affirming that among these risks are the potential presence of bad actors, the development
of weapons systems that operate in orbit and from Earth, the vulnerability of communications – from
earth observation and digital space architecture to cyber and even physical attacks – as well as the
proliferation of man-made debris in vital orbits;
6. Concerned by the increasingly disruptive nature of space warfare programmes in China and
Russia, including China’s growing use of Anti-Satellite (ASAT) capabilities and Russia’s satellite
jamming and spoofing capabilities;
7. Applauding international collaboration in space across a range of areas including access to
launch vehicles, and shared information on accidents in launch and in space, as well as scientific
projects like the International Space Station and the Mars Rover;
8. Recognising that NATO operations are highly dependent on national space capabilities in
everything from intelligence, ground surveillance, navigation, early warning and radar to disaster
management;
9. Applauding the overarching Space Policy which NATO agreed to develop at the Brussels
Summit in 2018 and the commitment of Allies to promote the non-militarisation of space;
* Presented by the Economics and Security Committee and adopted by the Plenary Assembly on
Monday 19 November 2018, in Halifax, Canada
219 ESC 18 E rev. 1 fin
2
10. Acknowledging that there is a need to update international laws governing space operations
on matters ranging from the militarisation of space and space mining to debris generation;
11. URGES member governments and parliaments of the North Atlantic Alliance:
a. to work to ensure that space remains an arena of global cooperation despite its importance to
national military and intelligence establishments;
b. to make a priority of establishing commonly shared rules and norms to provide more effective
governance of the global commons in space, particularly as those commons grow more
crowded with state and non-state actors;
c. to strengthen rules and norms that aim to minimise the problem of debris in orbits in which vital
satellite systems are operating, including sharp restrictions on testing and deploying
anti-satellite weapons systems;
d. to deepen collaboration with private companies to ensure that their satellites are protected
from any cyberattack;
e. to develop more effective fora engaging major players in space with the goal of fostering
meaningful dialogue and decision making on space policy;
f. to encourage NATO to develop a focused space policy, interoperability and capability sharing
across the Alliance, not because space will be the next frontier of conflict, but because NATO
capabilities are increasingly dependent upon space-based assets.
________________
ECONOMICS AND SECURITY COMMITTEE
220 ESC 18 E rev. 1 fin
Original: English
RESOLUTION 450
on
ENERGY SECURITY:
A STRATEGIC CHALLENGE FOR THE ALLIANCE*
The Assembly,
1. Acknowledging that energy security is a major concern for the North Atlantic Alliance as
overreliance on any single supplier of energy for Europe leaves NATO members strategically vulnerable;
2. Applauding the European Commission’s investigation into the opaque pricing of Russia’s gas
monopoly and efforts to increase connectivity in energy markets;
3. Supporting the efforts made by the European Commission to reform European energy markets
by introducing liberalisation measures, building new linkages in energy infrastructure networks, and
challenging Russia’s monopolistic commodity-pricing practices;
4. Recognising the important contributions that new pipelines networks, like the Southern Gas
Corridor from Azerbaijan to Southern Europe, and the planned EastMed gas pipeline from the
South East Mediterranean sea to Europe, can make to collective energy security;
5. Noting that advancements in hydrofracking, Liquified Natural Gas (LNG), and renewables offer
partial alternatives to energy sourced through unstable regions of the world;
6. Aware that Russia’s use of natural gas as a tool of political coercion, as it was used against
Ukraine in 2006 and 2009, can trigger major supply interruptions for Europe;
7. Alarmed by the destabilising effects and undue influence that overreliance on Russian energy
can have on Europe and the Alliance, especially when Russia actively engages in foreign election
interference as well as other forms of political subterfuge while continuing to occupy Crimea and support
Russian-led military forces in the temporarily occupied territories of Ukraine in the Donetsk and Luhansk
regions;
8. Aware that conventional threats to energy infrastructure from state and non-state actors remains
a chief concern of NATO members;
* Presented by the Economics and Security Committee and adopted by the Plenary Assembly on
Monday 19 November 2018 in Halifax, Canada
220 ESC 18 E rev. 1 fin
2
9. Recognising that even if energy security is mainly the concern of governments and international
institutions like the European Union and the International Energy Agency, there is nonetheless an
important role for NATO to play in ensuring energy security across the Alliance;
10. Welcoming NATO’s efforts both to factor energy security considerations into its strategic vision
and to defend critical energy infrastructure from physical and cyberattacks;
11. Cognisant that even if individual members have differing perspectives on how to best ensure
energy security, the Alliance remains resolutely committed to promoting the secure, affordable, and
uninterrupted flow of energy in Europe and North America;
12. URGES member governments and parliaments of the North Atlantic Alliance:
a. to promote transparency, diversification, and security within European energy markets and
throughout the North Atlantic region;
b. to accordingly invest in renewable energy and other energy sectors that provide a partial
alternative to Russian gas and oil;
c. to work to bring more oil and gas from the Caucasus, Central Asia and the Eastern Mediterranean
to European and world markets and to identify potentially profitable and secure infrastructure to
make this possible;
d. to be prepared for cyberattacks aimed at energy infrastructure;
e. to counter corruption in the energy sector;
f. to demonstrate a commitment toward greater solidarity and security by building more
interconnectors and LNG hubs, while working for an even higher level of electrical grid integration;
g. to ensure that Ukraine is not isolated in energy security terms despite Russian efforts both to build
pipelines around that country and to raise the risk of investing in Ukraine’s energy industry.
_______________
POLITICAL COMMITTEE (PC)
INSTABILITY IN THE SOUTH
General Report
by Julio Miranda CALHA (Portugal)
General Rapporteur
177 PC 18 E rev.1 fin | Original: English | 18 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................................................1
II. THE SITUATION IN SYRIA AND IRAQ: AN UPDATE ...........................................................1
SYRIA...........................................................................................................................1
IRAQ.............................................................................................................................3
III. DEVELOPMENTS IN NORTH AFRICA .................................................................................4
ECONOMIC STAGNATION AND YOUTH UNEMPLOYMENT .....................................4
ILLEGAL MIGRATION AND HUMAN TRAFFICKING ...................................................6
JIHADISM / MILITANT ORGANISATIONS / TERRORISM ...........................................6
IV. SECURITY ISSUES IN THE SAHEL AND THEIR IMPACT ON THE STABILITY IN THE MENA
REGION ................................................................................................................................7
A. DEVELOPMENTS IN MALI ..........................................................................................7
B. AL-QAEDA IN THE ISLAMIC MAGHREB’S ‘SAHELISATION’......................................8
C. BOKO HARAM AND THE LAKE CHAD BASIN CRISIS................................................8
MARITIME SECURITY IN THE GULF OF GUINEA......................................................8
V. REGIONAL SECURITY IN THE MENA REGION AND NATO ...............................................9
VI. CONCLUSIONS .................................................................................................................. 11
BIBLIOGRAPHY.................................................................................................................. 13
177 PC 18 E rev. 1 fin
1
I. INTRODUCTION
1. The Arab uprisings of 2011 (and their national aftermaths) have led to a collapse of the regional
order, thus transforming the Southern Mediterranean shores into a basin of persistent instability.
The continuing volatility and conflicts in NATO’s southern neighbourhood directly affect the security
of the Alliance. Threats emanating from terrorist groups and the migration crisis are largely due to
economic, social and political factors as well as weak governance in NATO’s Mediterranean
partners.
2. At the Warsaw Summit NATO Heads of State and Government agreed to put a premium on
pursuing a 360-degree security approach. In this context, the Allies agreed to increase their support
“to the efforts of the international community in projecting stability and strengthening security outside
their territory, thereby contributing to Alliance security.”
3. While progress has been made in tackling the manifold challenges, the overall security and
stability of the region remains volatile and the situation in some countries has even deteriorated. Due
to the complexity of the crises, the situation is not expected to improve soon. Therefore, if the Alliance
wants to stabilise its southern neighbourhood it needs to continue, and indeed increase, its attention
and support for its partners in the Mediterranean.
4. After providing a brief update on the recent developments in Syria and Iraq your Rapporteur
briefly analyses the key drivers promoting insecurity and instability in North Africa. The paper argues
that the continuing volatility of the region is also impacted by developments to the South, particularly
in the Sahel zone and the Gulf of Guinea. The Rapporteur concludes by providing a brief overview
of NATO’s efforts in support of its Mediterranean partners.
5. The report is an update of the Assembly’s monitoring of the developments in the Middle East
and North Africa (MENA) region and serves as a basis for discussion among the members of the
Political Committee and the Assembly as a whole.
II. THE SITUATION IN SYRIA AND IRAQ: AN UPDATE
SYRIA
6. The war in Syria, which entered its seventh year in March 2018, has had a devastating effect
on the population and the infrastructure of the country. The conflict is a major source of instability far
beyond Syria’s borders, fuelling radicalisation, refugee flight and tension between outside powers.
Since the beginning of the conflict in 2011, vast parts of the country have been destroyed, more than
400,000 people have been killed, approximately 6.5 million people have been internally displaced
and almost 5.6 million Syrian refugees have registered with the United Nations High Commissioner
for Refugees (UNHCR).
7. The military, intelligence and logistics support provided by Russia, Iran and Hezbollah has
enabled the Assad regime to regain control of large swaths of the country. With the military balance
tipped in their favour, Syrian government forces, backed by their Russian and Iranian allies, have
recaptured the Damascus suburb of Eastern Ghouta after a five-year siege. Several reports have
accused the Assad regime of using chlorine gas as part of their airstrike campaign. If these
allegations are confirmed, the incident in Eastern Ghouta once again demonstrates the blatant
disregard of the Syrian regime for the international agreements it has signed, including the Chemical
Weapons Convention. The international community needs to hold the Assad regime accountable
for the use of chemical weapons against its own people. Your Rapporteur wants to point out that in
a joint statement on August 21, 2018 France, the United Kingdom, and the United States warned
the Syrian regime that they would not tolerate the use of chemical weapons in any assault on Idlib.
177 PC 18 E rev. 1 fin
2
8. While Russian President Vladimir Putin, Turkish President Tayyip Erdogan, and Iranian
President Hassan Rouhani failed to agree on a ceasefire at a meeting in Tehran on 7 September
2018 Russia and Turkey announced an agreement to establish a demilitarised zone around Idlib
province on 18 September. However, at the time of writing the forces of the Syrian regime are
preparing to launch an offensive against the rebels’ last stronghold in Idlib in the north-west of the
country. Idlib province is mainly controlled by the jihadist alliance Hayat Tahrir al-Sham (HTS), the
core of which is al-Qaeda’s former Syrian affiliate Jabhat al-Nusra. Although Turkey, Russia, and
Iran had agreed to establish a de-escalation zone in the area in September 2017 fighting has
intensified since December 2017, when government forces, boosted by Russian air support,
launched a major military campaign to dislodge HTS and conquer the province. There is
considerable concern about the consequences of a military assault on Idlib; an official from the
United Nations Office for the Coordination of Humanitarian Affairs (OCHA) warned that an attack
could create the century's "worst humanitarian catastrophe" (AFP, 2018). Idlib, the last remaining
stronghold of the opposition, is home to an estimated 3 million civilians, at least 1.2 million of whom
are internally displaced, and an estimated 70,000 rebel fighters.
9. The involvement of foreign actors has further complicated the already complex situation in
Syria. In the North-Western province of Afrin, in the close vicinity of the conflict in Idlib, Turkey has
launched Operation “Olive Branch” against the People’s Protection Units (Yekîneyên Parastina
Gel: YPG) and Women’s Protection Units (Yekîneyên Parastina Jin: YPJ), the armed wings of the
Kurdish Democratic Union Party (Partiya Yekîtiya Demokrat: PYD). The Turkish offensive began in
January 2018, shortly after the United States signalled an open-ended military presence in Syria as
part of a broader strategy to prevent the resurgence of Daesh. In this context, a US military
spokesperson announced plans to create a 30,000-strong Syrian border protection force drawing on
the Kurdish-led Syrian Democratic Forces (SDF). While Turkey’s stated objective is to remove the
PYD from its southern borders, observers have argued that another aim of the operation is to
convince the United States to reverse its support for Kurdish forces as the anti-Daesh campaign
draws to a close.
10. Turkey’s operation “Olive Branch” in Northern Syria also exposed differences in the Allies’
Syria policy. As part of their campaign against Daesh, the United States has provided the
YPG-dominated SDF with military equipment and supported their ground-combat operations with
airstrikes and Special Forces operations. Meanwhile, under the leadership of the PYD, de facto
autonomous governance structures were established in the YPG / YPJ-held territories (commonly
referred to as “Rojava”, short for “Rojavayê Kurdistanê” / “Western Kurdistan”). Turkey considers the
recognition of an autonomous Kurdish region in Syria in the close vicinity of its border as a major
security threat. More specifically, Ankara is concerned that this would allow the PYD, which it regards
as the Syrian branch of the PKK, to use Northern Syria as a staging ground for attacks on Turkey.
Moreover, Turkey is apprehensive that an autonomous Kurdish region in Syria would encourage
similar moves by Kurdish separatist groups within Turkey.
11. These events unfold against the backdrop of continuing international efforts to defeat Daesh.
After the liberation of Raqqa by US-backed SDF forces in October 2017 Daesh no longer controls
any major Syrian city. However, Daesh’s battlefield losses have not eradicated the organisation or
its ideology. Instead, it seems likely that the group will adjust its tactics and transition from open
combat to insurgency. Moreover, other fighters may seek refuge in ungoverned spaces across the
region or return to their home countries, where they could continue to inspire and enable attacks. In
any case, the lack of a joint, coordinated, Allied approach towards Syria risks eroding the
achievements in the fight against Daesh and other terror groups.
12. The situation on the ground is compounded by the fact that negotiations to end hostilities and
find a political settlement have not produced any progress either. The two main peace initiatives held
another set of talks in January 2018 – the UN-led Geneva process convened in Vienna, while a
Syrian National Dialogue Congress organised by Russia, Turkey and Iran took place in Sochi. Both
peace conferences focused on constitutional issues, but longstanding disagreement over the fate of
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Syrian president Bashar al-Assad continues to stall the negotiations. As the military position of the
Assad regime is improving, its diplomatic stance is hardening.
IRAQ
13. In Iraq, Daesh is on the defensive as well. The Iraqi Security Forces (ISF), backed by coalition
air and special operations, were able to regain control over one third of the country that had been
under Daesh’s control at the height of the group’s power. On 9 December 2017, half a year after the
liberation of Mosul, Iraqi Prime Minister Haider al-Abadi proclaimed victory over Daesh in Iraq and
the end of major military campaigns. However, like in Syria, the group’s territorial contraction does
not mean the end of Daesh as an organisation, but rather a shift to insurgency tactics. In addition to
frequent small-scale attacks against security forces and civilians, the group maintains the ability to
conduct high-profile attacks. For instance, it claimed responsibility for two concerted suicide
bombings in central Baghdad on 15 January 2018, killing at least 38 people.
14. The root causes that led to the emergence of Daesh in Iraq remain. Prime Minister al-Abadi
has engaged in efforts to reverse the sectarian policies of his predecessor, Nouri al-Maliki, who
consolidated power among Shi’a elites. However, years of Daesh’s occupation and targeting of the
Iraqi Shi’a and Christian populations in particular have exacerbated sectarian tensions.
Reconciliation is likely to be a difficult endeavour, and the low turnout in the national parliamentary
elections in May reveals the population’s growing disillusionment with the ruling elites and the
political system. The violent protests that erupted in the south of the country in July and September
2018 were clear showcases of the Iraqis' growing discontent over corruption, unemployment and
lack of basic services such as electricity and clean water. According to the 2017 youth
unemployment index of the World Bank, almost 18% of the 15-24 old, who represent 62.8% of the
Iraqi population, are unemployed. Soaring unemployment, especially in the areas that were once
controlled by Daesh, continues to fuel further instability. At the time of writing no government has
been formed; it appears doubtful that Haider al-Abadi, who acts as caretaker Prime Minister, will be
able to secure a second term.
15. Over three years of intense combat have left vast parts of the country in ruins. In February
2018, Kuwait hosted an international fundraising conference dedicated to Iraq’s post-war
reconstruction. While participants made pledges worth USD 30 billion, mostly in credits and
investments, the conference fell short of raising the USD 88 billion the Iraqi government estimates
necessary to rebuild the country’s shattered economy and infrastructure. In addition, about
2.6 million Iraqis remain internally displaced and 8.7 million are in need of humanitarian assistance.
While Iraq does have meaningful energy resources that could be used for reconstruction, corruption
remains an important impediment to attracting international investors. Transparency International’s
2017 Corruption Perceptions Index ranked Iraq as the 11th
most corrupt country (169th
out of
180 countries).
16. The conflict has also put additional pressure on the already strained relationship between the
federal government in Baghdad and the Kurdistan Regional Government (KRG) in Erbil. Proposed
by KRG President Masoud Barzani, the KRG held a referendum on Kurdish independence in late
September 2017. The federal government in Baghdad declared the referendum "illegal" and did not
recognise its results. In addition to introducing punitive measure against the KRG, including a ban
on international flights to the regions under Kurdish control, Prime Minister Haider al-Abadi also
ordered the ISF to retake Kirkuk. This effectively restored Baghdad’s control over the disputed
territories that Kurdish Peshmerga fighters had taken from Daesh in 2014. The loss of Kirkuk plunged
Kurdistan into economic and political problems and led to the resignation of KRG President
Masoud Barzani. The ban on international flights to the Kurdish controlled regions was lifted in
March 2018. Most recently, the Iraqi parliament approved the new budget, which cuts the KRG’s
share from 17% to about 12,6%. Efforts to move beyond the standoff have largely proved
unsuccessful so far.
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17. Manoeuvring between state and sub-state or non-state actors remains a challenge within Iraqi
security forces as well. Most notably, the Popular Mobilization Forces (PMF), an umbrella
organisation of about 60 militias that formed as the ISF collapsed under Daesh advances in 2014,
both strengthens and contests state security structures. A law passed in November 2016 vaguely
defines the PMF both as an independent military institution and as part of the official security forces
under the auspices of the Prime Minister’s office. However, the 60,000-strong PMF cannot be
understood as a unified bloc. While some of these groups are expected to disband or integrate into
state security forces, others formed long before 2014 and are likely to resist any moves aiming to
curtail their independence. Although a number of security reforms have been implemented there are
still numerous forces and militias which operate outside the control of the federal government. Some
PMF factions are now entering the political sphere, as part of the political alliance Fatah, or
Conquest, which has gained the second place in the Iraqi elections. In any case, how to deal with
these groups will be one of the challenges in building a stable and peaceful Iraq after defeating
Daesh.
18. Another important issue that will influence the future development of Iraq is its bilateral
relationship with its neighbours, particularly with Iran. It remains to be seen if, and how, the new
government in Baghdad will (re-) define Iraq’s relationship with Iran, particularly with regard to
Tehran’s influence in the country.
III. DEVELOPMENTS IN NORTH AFRICA
19. Instability in Syria and Iraq has repercussions beyond their borders and exacerbates an
already volatile security situation in North Africa. The uprisings of 2011 toppled the governments of
Tunisia and Libya, while the political ramifications in Algeria, Mauritania and Morocco were not as
dramatic. Despite their profound differences, however, the five countries face similar challenges that
impact European and Euro-Atlantic security. Albeit to varying degrees, they are all confronted with
challenging demographic developments (youth bulge), a stagnant economy, illegal migration and
violent forms of political Islam. The situation in Libya, in particular, continues to adversely affect the
security in the region. Vast swaths of its territory elude government control and Libya’s society is
deeply divided between different factions. The action plan for Libya, proposed by the United Nations’
Special Envoy to Libya, Ghassan Salamé, to revive and extend the Libyan Political Agreement (LPA)
has not been implemented. At the time of writing more than 100 people have been killed in the fights
between rival militias in Tripoli despite a UN-backed ceasefire since late August.
ECONOMIC STAGNATION AND YOUTH UNEMPLOYMENT
20. Economic and social challenges are key drivers of regional instability. Despite their differences,
all countries in North Africa suffer from high levels of unemployment. In 2017 about 12% of the total
population in North African countries was out of work, a number that is twice as high as the average
unemployment rate in middle income countries. Mitigating these challenges is complicated by a
particular age structure in North African societies, which is commonly known as the ‘youth bulge’.
Except for Mauritania, birth rates across the region have been decreasing in recent years, and the
countries under investigation are about to reach a “demographic turning point”. Currently, however,
young adults account for a large proportion of the population in North Africa while the job creation
rate lags behind the growth of the working-age population. The political instability that has troubled
the region in recent years, has exacerbated the situation, causing a decline in tourism and foreign
direct investment.
21. These factors put additional pressure on the region’s already strained labour markets. The
numbers draw a clear picture: with about one third of the 15 to 24-year-old population out of work,
the youth unemployment rate in North Africa is higher than in any other region in the world. Moreover,
those who manage to enter the workforce often suffer from precarious and informal working
conditions. High-skilled, university-educated young people are frequently underemployed, i.e. they
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are unable to find adequate jobs according to their skills and availability. In sum, many young people
are stuck in economically vulnerable situations or in jobs that do not meet their expectations.
Particularly disadvantaged are women and those living in rural areas.
22. The Arab uprisings of 2011 showed that economic hardship of this magnitude involves serious
risks for the region’s socio-political stability. The turmoil that swept through the area seven years ago
started with Tunisia’s Jasmine Revolution and was prompted by frustration over deteriorating
socio-economic circumstances. The push for Ben Ali’s ouster was first and foremost motivated by
the belief that democracy would entail a more inclusive development and new economic
opportunities. In a poll for the Arab Barometer later in 2011, 68% of Tunisians stated economic
conditions were of primary concern for the country whereas only 2% saw the democratic transition
as the country’s most important challenge.
23. The issues of economic stagnation and youth unemployment remain highly relevant across
the region. In January 2018, many Tunisians marched the streets of Tunis again. Opposing the
recently passed budget law, which entails new austerity measures, protesters called for “a fall of the
budget”, slightly adapting the 2011 demands for a fall of the regime. The re-emerging protests are
indicative of a growing sense of injustice and frustration caused by the post-revolutionary leaders’
failure to deliver on their promises to redress the population’s economic grievances. The successive
failure of nine cabinets to curb unemployment and inflation have led President Beji Caid Essebi in
July 2018 to call for the resignation of Prime Minister Chahed. On the other hand, Tunisia’s
continuing decentralisation efforts can, over time, generate a more equitable distribution of
resources, thus improve service delivery across the country.
24. In Egypt, the government launched an ambitious economic reform plan in 2016 to attract
foreign direct investment and convince international donors of the government’s ability to recalibrate
the economy. Although the reforms were successful in securing a USD 12 billion International
Monetary Fund (IMF) loan, they have also increased economic hardship for the majority of
Egyptians. At the same time, fears of instability and terrorism took their toll on the country’s tourism
sector, one of the Egyptian economy’s key streams of revenue and an essential source of foreign
currency earnings. While more than 14 million visitors came to Egypt in 2010, numbers dropped
below 5.3 million in 2016. The government of Abdel Fattah al-Sisi has not been able to deliver the
prosperity and security it promised, and the austerity measures that were introduced harshly impact
Egypt’s middle class and the poor in particular.
25. The civil war in Libya had detrimental effects on the country’s vital infrastructure as well as on
oil and gas production. Smuggling and human trafficking have become highly lucrative, thus alluring
young adults with more opportunities and higher revenues. Smuggling is increasingly seen as an
ordinary occupation, rather than a crime. While there have been a few signs recently that Libya’s oil
production is slowly recovering, the fractured political landscape and the rampant corruption cast a
shadow over the country’s economic development.
26. Algeria’s and Mauritania’s socio-economic situation is also volatile, due to declining prices for
oil in Algeria and extractive resources in Mauritania. Riots by disenchanted youth in Algeria’s South
in 2016 already indicated that the country’s social peace is threatened. The unresolved succession
question in Algeria and the constitutional issue in Mauritania (i.e. whether
President Mohamed Ould Abdel Aziz will change the constitution to allow him another term) further
exacerbate socio-political tensions.
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ILLEGAL MIGRATION AND HUMAN TRAFFICKING
27. North Africa continues to be both a destination as well as a transit hub for illegal migrants from
the Sahel and Sub-Saharan Africa. Seeking to reach Europe, refugees and migrants often traverse
the Sahara and then wait in Algeria for a suitable opportunity to reach Europe via Morocco, Tunisia
or Libya. Entering directly by crossing Libya’s Southern border is just as common. The European
Union estimates that about 90% of illegal migrants come from or through Libya. Taking advantage
of the porous borders and general lack of state authority in the country, African migrants that travel
to Libya either search for economic opportunities or use it as a stepping stone to migrate across the
Mediterranean to Europe.
28. Another reason why Libya, already home to more than 200,000 internally displaced people
(IDP), is a particular cause for concern is the proliferation of the slave trade. Many migrants are
extremely vulnerable to ill treatment and abuse by traffickers and armed groups. The International
Organization for Migration (IOM) drew attention to this issue in 2017. There are numerous reports
about Sub-Saharan migrants being sold and bought, then held captive in disastrous conditions,
where they often suffer numerous forms of abuse, including forced labour, torture and sexual
violence.
29. To protect migrants from criminal networks along travelling routes, the African Union, the
European Union and the United Nations established a joint task force in November 2017. The second
half of 2017 saw a significant drop in the number of migrants attempting to reach Europe through
the central Mediterranean. This is likely due in part to the efforts of one-member state, Italy, which
engaged in a cash-for-migration-control strategy for Libya. The medium-to-longer term impact on
Libya, particularly with regard to institution building, remains to be seen, as this approach also
resulted in the co-option of militias which had been deeply involved with human smuggling before.
More generally, a European focus on limiting the migration flow from the MENA and Sub-Saharan
regions risks strengthening the power and influence of militias and other groups whose main concern
is resource predation.
JIHADISM / MILITANT ORGANISATIONS / TERRORISM
30. The continuing instability of the MENA region provides favourable conditions for jihadist
groups, as it facilitates recruitment and allows them to operate relatively freely. This has led to a
revival of al-Qaeda in the Islamic Maghreb (AQIM) and allowed Daesh to expand westwards.
31. In Libya, in addition to divisions along tribal lines, three nominal governments are vying for
dominance. The resulting political instability and competition for natural resources are key factors of
the chaos and insecurity in Libya. The country’s fragmentation and its vast ungoverned spaces allow
non-state actors, including violent extremist groups, to operate and build support. Daesh franchises
made significant territorial gains in Libya in 2015, making the country its first target to expand outside
of Iraq and Syria. Although the group lost its stronghold in Sirte in December 2016 and no longer
controls territory in Libya, it remains active throughout the country. Libya’s precarious security
situation has serious repercussions on the proliferation of violent extremist groups in the entire
region. The civil war resulted in the unregulated proliferation of weapons, explosives and military
equipment throughout the region via established trafficking routes.
32. The consequences are acutely felt in Tunisia as well, where a surge of terrorist incidents since
the 2011 uprisings threatens the fragile democratic transition. Terrorist groups increased their
activities considerably after 2011, as demonstrated by the wave of high-level attacks in 2013 and
2015. The developments in Tunisia and Libya seem to confirm lessons from Syria and Iraq, “that
jihadists’ influence is more a product of instability than its primary driver”.
33. In Egypt, Daesh-affiliated groups continue to wage an insurgency in the Northern part of the
Sinai Peninsula. While their attacks initially targeted security forces, terrorist groups are increasingly
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focusing on civilians, most notably Coptic Christians and Sufi Muslims. The attack on the al-Rawda
mosque in November 2017 killed more than 300 people, making it the deadliest terrorist attack in
Egypt’s recent history. Moreover, jihadist groups have demonstrated their ability to expand their
activities beyond Northern Sinai to Central and Southern parts of the Peninsula as well as to urban
centres in the Nile Delta. The security forces’ harsh crackdown on all Islamist groups and the
government’s heavy-handed approach towards the opposition in the context of the Presidential
elections in March 2018 risk polarising communities and further fuelling radicalisation.
34. In addition to jihadi activities in the region, North Africa is one of the top sources of foreign
fighters who leave their home countries to join militant groups in Syria and Iraq. Tunisia has produced
the highest number of foreign fighters per capita globally. Authorities in the region have to find ways
to stem radicalisation before people are able to leave the country. They will eventually have to face
the challenge of how to prevent returning fighters from filling the ranks of AQIM- and Daesh-affiliates
in North Africa and reintegrate them into society.
IV. SECURITY ISSUES IN THE SAHEL AND THEIR IMPACT ON THE STABILITY IN THE
MENA REGION
35. Stability in North Africa is not only affected by developments within these countries’ borders,
but also to a large extent by spill-over from the Sahel region. In the South, the Mediterranean littoral
states share borders with the Sahelian states of Mauritania, Mali, Niger, Chad and Sudan, all of
which face numerous security challenges, including a lack of control over their territories and the
inability to manage their borders effectively.
36. Due to weak governance, high levels of population growth, persistent poverty, armed conflict,
and the devastating consequences of climate change the security situation in the Sahel is extremely
precarious. The Libyan conflict has further exacerbated the region’s fragile security situation. In
addition to the high number of IDPs in the county, the fighting has unleashed a stream of displaced
people, weapons and armed combats from Libya to the Sahel. The collapse of the Libyan state has
caused a proliferation of non-state actors across borders and regions, rendering the traditional
division in security terms between North Africa and the Sahel obsolete.
A. DEVELOPMENTS IN MALI
37. The 2012 jihadist insurgency in Mali alerted the world to the fragility of the Sahel region. The
collapse of the Libyan state prompted a surge of arms and trained militants into Mali. Returning
fighters swelled the ranks of AQIM and affiliated jihadist organisations as well as Tuareg rebellion
groups in Mali, where they joined forces to launch a large-scale insurgency against the Malian state.
These groups had widespread access to weapons and held deeply violent and anti-Western
ideology. The French-led intervention in January 2013, Operation Serval, was aimed at dismantling
these groups before they gained more power and influence.
38. Although the intervention managed to push back the insurgency and restored the legitimacy
of the Malian state, the security situation in Mali’s Northern and Central provinces remains unstable.
Little progress has been made in implementing the “Bamako Agreement” of 2015, which was
supposed to initiate an era of peace and stability in the country. As a result, disillusionment and
frustration among the population are growing – as is the risk that demobilised militants may take up
arms again. Instead, insecurity has increased and spread to other areas of Mali. Jihadist attacks
have increased in numbers, sophistication, and scope not only in Northern and Central Mali but also
in Western Niger and Northern Burkina Faso. There are also signs that Daesh and
al-Qaeda-affiliated militants cooperate and that fighters from other MENA regions are swelling their
ranks.
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B. AL-QAEDA IN THE ISLAMIC MAGHREB’S ‘SAHELISATION’
39. The developments in Mali are indicative of the broader security concerns caused by violent
extremist groups that emerged in North Africa and shifted their focus to the Sahel. Established during
the Algerian civil war, the Salafist Group for Preaching and Combat (GSPC) continued to operate
after the war had ended and eventually pledged allegiance to al-Qaeda in 2007. Since then, the
group has rebranded itself as al-Qaeda in the Islamic Maghreb (AQIM) and developed into the
region’s most significant terrorist organisation in terms of number of members and potential for
violence.
40. Rather than defeating the terror organisation, Algerian counterterrorism efforts have pushed
AQIM to relocate to Algeria’s southern neighbours. There, the group found a safe haven in the Sahel
region’s vast open spaces and porous borders. Exploiting the Sahelian states’ weak counterterrorism
capabilities AQIM established itself and forged close ties with local communities and tribes. It was
able to incorporate pre-existing grievances in the narrative of militant Islamism, for instance with
parts of the marginalised Tuareg population in Mali and Niger. Over the past decade AQIM was thus
able to extend its foothold beyond Algeria to Niger, Tunisia, Mauritania, Chad, Libya and Mali.
C. BOKO HARAM AND THE LAKE CHAD BASIN CRISIS
41. Besides Libya’s South-West (the Fezzan), the Lake Chad basin is considered a key centre of
jihadism and a transit hub for smuggling people and goods. The basin region, spanning the borders
between Chad, Cameroon, Nigeria and Niger, is an example of the devastating consequences of
environmental degradation and violent conflict. The drying-up of Lake Chad to less than 10% of its
size in 1963 has had severe consequences for the approximately 50 million people living in the area.
Water shortages, crop failures and collapsed freshwater fisheries have accelerated poverty and
tensions between different groups competing for the scarce resources that remain.
42. Apart from these long-term challenges, the region is strained by an almost decade-long terror
campaign by the jihadist group Boko Haram. Established in Northern Nigeria in 2002, the group
became increasingly violent after the death of its founder in 2009 and spread in the broader Lake
Chad area to Cameroon, Chad and Niger. In 2014, the Multinational Joint Task Force (MNJTF),
comprising forces from Benin, Cameroon, Chad, Nigeria and, until recently, Niger, launched a
crackdown on Boko Haram. As a result of growing military pressure, the group’s members split into
three factions – one extremely violent faction, a second that pledges allegiance to Daesh and a third
that aligns with al-Qaeda. Boko Haram was classified as the world’s deadliest terrorist group in 2014,
but casualty numbers dropped significantly following the group’s military defeat by the MNJTF.
43. Nevertheless, the security situation in the Lake Chad basin remains extremely fragile, causing
severe humanitarian hardship and security repercussions beyond the directly affected area.
According to the latest UN report on West Africa and the Sahel, more than 5 million people in the
basin area are currently receiving humanitarian assistance and some 2.4 million people suffer from
forced displacement.
MARITIME SECURITY IN THE GULF OF GUINEA
44. Another source of instability in the region is the Gulf of Guinea, where piracy has surged in
recent years. Attacks have primarily taken the form of low-level robberies targeting oil tankers and
cargo vessels. Recently, however, kidnappings for ransom have become more prevalent, as the
decline of global oil prices has reduced the financial benefits resulting from oil theft. These attacks
are increasingly violent with assailants using more sophisticated weaponry such as AK-47s and
various types of machine guns.
45. This adversely affects the advancement and prosperity of Africa’s vital blue economy. Ninety
percent of Africa’s trade is carried by sea with the Gulf of Guinea functioning as an important transit
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hub, most notably for petroleum products. Maritime security is crucial to extract revenue from the
5.4 million barrels of oil produced in the Gulf every day. In the wrong hands, gains from oil theft may
contribute to the financing of terrorist activities in the Sahel.
46. Moreover, piracy poses a direct threat to seafarers and vessels transiting or operating in the
region, including those flagged by NATO member states. Surpassing the waters off the Horn of Africa
in terms of piracy and armed robbery at sea, the Gulf of Guinea is now considered to be the most
dangerous region in the world for seafarers. According to the International Chamber of Commerce,
there were 46 incidents of piracy and armed robbery in the area in 2017, including 10 incidents of
kidnappings at sea. The number of unknown cases is estimated to be significantly higher, as
reporting these incidents negatively affects corporate safety records and has few tangible benefits.
Western crew members are frequently targeted, as they can be ransomed for more money in case
they are captured.
V. REGIONAL SECURITY IN THE MENA REGION AND NATO
47. In light of the multifaceted challenges emanating from the South, the 2016 Warsaw Summit
stipulated projecting stability and strengthening security in the MENA region as priority goals for
NATO. Since then, the Alliance has been involved in the region in a number of ways, including
military operations, training missions and partnership building.
48. A NATO Hub for the South, based at NATO’s Joint Force Command in Naples, was discussed
at the Summit in 2016 and agreed upon by NATO Defence Ministers in February 2017. The Hub,
formally known as NATO Strategic Direction South (NSD-S), is designed to improve the Alliance’s
awareness and understanding of the threats coming from Africa and the Middle East through the
collection and analysis of shared information and intelligence. The Hub for the South will also further
promote partnership, cooperation and dialogue with MENA partners. As such, the Hub is an
ambitious project meant to ensure that NATO is ready to project stability in the South at any given
time, by coordinating and synchronising the Alliance’s activities in a wide range of areas, from
counter-terrorism to tackling illicit trafficking of weapons, narcotics and human beings.
49. The Hub, which is an integral part of NATO’s “Package for the South”, was declared fully
operational at the 2018 NATO Summit. It is a welcome addition to EU-NATO cooperation, as it could
coordinate with the EU’s Permanent Structured Cooperation (PESCO) in the realm of
counter-terrorism.
50. NATO’s maritime operations in the Mediterranean are crucial to NATO efforts to stabilise the
region. To that end, the Allies agreed to launch Operation Sea Guardian in November 2016. Led by
NATO’s Allied Maritime Command (MARCOM), Operation Sea Guardian has succeeded Operation
Active Endeavour, launched in 2001 under the Article 5 framework. In contrast to Active Endeavour,
which was conceived purely as a counterterrorism mission, Sea Guardian aims to boost maritime
situational awareness, counter-terrorism efforts, and capacity building in and around the region.
Moreover, Sea Guardian is also providing the EU’s Operation Sophia with information and logistics
support in the Mediterranean. NATO Allies have also been involved in the EU training programme
for the Libyan coastguard to counter irregular migration and smuggling across the Mediterranean.
51. In response to Libya’s request for NATO’s assistance in providing advice to develop its security
architecture, the North Atlantic Council agreed in principle to provide advice to Libya in the area of
defence and security institution building, in accordance with the previous decisions of NATO's Heads
of State and Government at the Wales and Warsaw Summits. NATO plans to implement a measured
and step-by-step approach, taking into account the complex and fluid political and security situation
in the country, in complementarity with the support that is already being provided to Libya bilaterally
by Allies, as well as by the UN and the EU. The 2018 Brussels Summit affirmed that NATO remains
committed to providing advice to Libya in the area of defence and security institution building, and
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mentioned the possibility of developing a long-term partnership, which could potentially lead to
Libya’s membership in the Mediterranean Dialogue.
52. Allies also decided to support the Global Coalition Against Daesh through the deployment of
NATO’s AWACS surveillance flights, while several Allies committed to provide air-to-air refuelling
capabilities. NATO’s first AWACS operations had already started by October 2016. At the 2017
Brussels Summit, NATO member states decided to formally join the Global Coalition Against Daesh,
thus stepping up the Alliance’s efforts. As such, AWACS surveillance aircraft flight time sensibly
increased, and NATO agreed to share information with the Coalition. After Daesh’s territorial losses
in Syria and Iraq, NATO has recently reaffirmed its commitment to the Global Coalition, as it moves
from combat operations to stabilisation efforts. NATO’s membership in the Global Coalition enables
it to take part in the Coalition’s meetings at different levels, including on the coordination of training
and capacity building.
53. More recently, Allies have begun to gradually increase their involvement in Iraq. On
15 February 2018, at the request of the Iraqi government and the Global Coalition Against Daesh,
NATO Defence Ministers agreed to expand the Alliance’s military training mission in Iraq. Earlier,
from 2004 to 2011, Allied forces had trained 15,000 Iraqi officers under the NATO Training
Mission - Iraq (NTM-I). While the mission was discontinued in 2011 due to disagreements over the
status of forces agreement, the Alliance agreed to resume its training and capacity building activities
in 2015. In April 2016, NATO forces began training Iraqi officers, first in Jordan and later also in Iraq.
Training programmes are based on the ‘train-the-trainer’ approach and focus on countering
improvised explosive devices (IEDs), de-mining, military medicine, and civil-military planning.
Currently, this mission is based on a small core team, which organises and facilitates mobile training
teams, i.e. teams that only stay in the country for short periods of time. NATO Secretary-General
Jens Stoltenberg also signalled that the Alliance is considering a more permanent presence of NATO
instructors in Iraq and the possibility of building defence schools and academies. At the NATO 2018
Summit, the Alliance also announced the launch of a non-combat training and capacity building
mission in Iraq. The role of the mission will be advising Iraqi officials, as well as to “train and advise
instructors at professional military education institutions.” Overall, NATO’s mission in Iraq will be to
maintain “a modest and scalable footprint”, while supporting the ongoing efforts of the Coalition and
other international actors accordingly.
54. The deteriorating security situation in the Gulf of Guinea prompted regional as well as
international stakeholders to collaborate in the fight against maritime crime long before 2016. For
instance, the Gulf of Guinea littoral states agreed to establish integrated maritime security structures
in 2013. Since then, three regional surveillance centres and two coordination centres have started
to operate. Other responses to maritime crime in the region have been initiated by the African Union,
the Economic Community of West African States (ECOWAS), the Economic Community of Central
African States (ECCAS), the International Maritime Organization (IMO), the EU and the G7 Friends
of the Gulf of Guinea (G++FOGG). NATO is contributing to this security architecture with the Maritime
Domain Awareness for Trade – Gulf of Guinea (MDAT-GoG). Run by the French and British navies,
the MDAT-GoG pools security updates, reviews risks and provides guidance on vessel operating
patterns in the Gulf area.
55. More generally, NATO maintains a good level of cooperation with the African Union (AU).
NATO first assisted the AU in 2005, under the framework of the African Union Mission in Sudan
(AMIS), by providing airlift for troop rotations and training, in what was the Alliance’s first operation
on the African continent. NATO also supported the African Union Mission in Somalia (AMISOM) in
2007, again with airlift support for AU peacekeepers. Aside from specific operations, NATO provides
continuous operational, logistic and capacity building support, and is involved in the
operationalisation of the African Standby Force through exercises and training. NATO and the AU
continue to coordinate their activities and objectives with other organisations, in particular the
United Nations and the European Union, and with bilateral partners.
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56. In addition to NATO-led operations, Allies contribute to enhancing stability in the South through
a number of multilateral or bilateral frameworks. In the Sahel region, for instance, Allies are active
as part of Operation Barkhane (France’s broader regional counter-insurgency campaign that
superseded Operation Serval), the United Nations Multidimensional Integration Stabilization Mission
in Mali (MINUSMA), and the European Union’s training missions in Mali and Niger. In 2017, Burkina
Faso, Mali, Mauritania, Niger and Chad launched the Joint Force of the Group of Five for the Sahel
(G5 Sahel), a 5,000-strong multinational counter-terrorism force, to complement the aforementioned
missions and prepare for the exit of foreign troops in the long-term. The group is now backed by two
Security Council resolutions, has set up its headquarters in Sévaré in Mali and completed its first
mission in the border area of Burkina Faso, Mali and Niger last November. However, logistical and
funding constraints prevent the force from becoming fully operational, which has prompted the EU,
one of the group’s major donors, to double its financial assistance.
57. NATO’s Partnership Cooperation Menu (PCM) outlines all the cooperation activities open to
partners. It comprises a wide range of areas, including activities related to Military Education,
Training and Doctrine, Defence Policy and Strategy, Arms Control and Non-Proliferation, Defence
Investment, Civil Emergency Planning, Crisis Management, Armaments and Intelligence.
Participation by Mediterranean Dialogue (MD) countries in PCM activities has steadily increased
over the years. In 2016 as well as in 2017, more than 1,000 activities were offered to MD partners.
58. While NATO efforts to stabilise the MENA region have proved to be at least partially successful,
they are insufficient to address the multifaceted threats emanating from its Southern flank. In many
cases, NATO is not – and should not be – the first responder. Instead, the Alliance focuses on
supporting the efforts of national authorities and multilateral organisations, most notably the AU, the
EU and the UN, which are at the forefront of addressing security challenges in the South.
VI. CONCLUSIONS
59. The security challenges emanating from the southern flank remain of serious concern to the
Alliance which has therefore a strategic interest in a stable southern neighbourhood. NATO does
make an important contribution to the stability of its MENA partners through its political dialogue and
particularly through its assistance to MD and Istanbul Cooperative Initiative (ICI) partners. At the
2018 Brussels Summit NATO Heads of State and Government confirmed this commitment and they
decided to build a stronger and more dynamic relationship with NATO’s southern partners.
60. These decisions represent a gradual honing of NATO’s cooperation with the Southern
partners; they will deepen the footprint of the Alliance in the region, albeit only incrementally. As the
threats from the South are more diffuse than those emanating from its Eastern flank the Alliance has
now a “Framework for the South” - but not a fully-fledged strategy towards the MENA. This reflects
the constraints that NATO as an organisation is facing when tackling the challenges emanating from
the region. The underlying causes promoting instability and conflict on NATO’s southern flank are
manifold. They include, among others, acute food and water crises as a result of environmental
problems, a youth bulge and hyper-urbanisation, as well as lack of social and economic opportunities
which facilitate radicalisation and all kinds of extremism. These factors are aggravated by poor
governance and weak state institutions. As a political-military organisation the Alliance does not
dispose of the necessary instruments to address these issues or to assist MENA partner countries
in tackling them. Moreover, the expectations and demands of NATO’s MD and ICI partners also
differ while their bilateral relationships are sometimes complicated, if not partly antagonistic.
61. So where should NATO go from here? In the view of your Rapporteur, the Alliance needs to
address the immediate security threats – which currently are in Iraq and Syria, as well as in Libya.
62. Libya remains a security flashpoint. As long as there is no unified government there will be no
progress and the country will remain in a state of chaos. The involvement of foreign actors which
177 PC 18 E rev. 1 fin
12
pursue competing agendas and support rival factions is a main factor that has impeded the
implementation of the UN action plan. NATO Allies should therefore agree on a joint policy towards
Libya and use their diplomatic leverage to influence outside actors to force the actors on the ground
to agree to implement the UN action plan. Following this, NATO should provide advice to Libya in
the area of defence and security institution building.
63. While NATO is not a player in Syria, the Alliance has a strategic interest in ending the civil war
in the country. While the options for NATO, and NATO Allies, appear limited for the time being,
NATO should obviously continue its engagement within the international coalition fighting Daesh to
defeat the terror organisation on the battlefield. What is more, NATO Allies need to consider if and
how they will be prepared to be involved in any post-conflict settlement. While the Assad regime
appears to have won on the battlefield the Allies have leverage in shaping post-war Syria as the
reconstruction of the country is likely to require some kind of contribution on their part. To that end,
NATO Allies need to develop a common approach.
64. In Iraq, the Allies need to sufficiently resource the non-combat training and capacity-building
mission that was agreed upon at the 2018 Brussels Summit. Moreover, NATO Allies should consider
additional measures to assist Iraq in its efforts to stabilise the country and fight terrorism. For
example, in order to improve the effectiveness and sustainment of the Iraqi security structures NATO
could expand its activities that promote transparency, accountability and good governance within
Iraq’s national security institutions and other government structures. NATO has already organised
several workshops in the context of NATO Building Integrity Policy.
65. An effective way for the Alliance to increase stability on its southern flank is to help its regional
partners build resilience against security threats. NATO should therefore continue its engagement
with and support for its southern partners. What is more, the Alliance should also explore ways to
further develop its relations regional organisations like the League of Arab States, the Gulf
Cooperation Council, as well as with the AU. NATO should coordinate its initiatives with the
European Union. In contrast to the Alliance, the European Union - which includes 22 of the
29 Member states of the Alliance and shares the same interests in the MENA region - is playing an
important role in economic development, the promotion of good governance, democracy, rule of law
and human rights. For example, the European Union’s counter-terrorism policy comprises measures
which are crucial in improving governance of the partner countries in the South. If applied effectively
this can help Iraq, as well as other MENA countries, to address the underlying causes that drive
extremism and allow terror organisations as Daesh to thrive. However, NATO and the EU can only
provide assistance; the ultimate responsibility for developing good governance rests with the partner
countries. Therefore, NATO needs to encourage MD partner countries to work to foster inter-ethnic
and inter-sectarian reconciliation and to pursue an inclusive political process.
66. Finally, your Rapporteur wants to stress once again that it is crucial that NATO Allies provide
the necessary resources to implement the decisions already taken as well as the ones they will take
in the future. If the Allies were to limit themselves to distributing mere declarations without offering
the necessary military hardware to underpin the operations this would not only be counterproductive
to achieving the goals for these operations, but it would also be counterproductive in that it would
undermine NATO’s credibility in the longer term.
67. NATO’s Southern Flank will remain unstable and will require the attention of the Allies. Your
Rapporteur intends to continue to focus on this region.
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_______________________
POLITICAL COMMITTEE (PC)
Sub-Committee on NATO Partnerships
(PCNP)
SECURITY IN THE WESTERN
BALKANS
Report
by Raynell ANDREYCHUK (Canada)
Rapporteur
178 PCNP 18 E rev.1 fin | Original: English | 21 September 2018
TABLE OF CONTENTS
I. INTRODUCTION – THE WESTERN BALKANS AND EURO-ATLANTIC SECURITY........1
II. REGIONAL DYNAMICS – THE LEGACIES OF THE PAST AND CURRENT
CHALLENGES IN THE WESTERN BALKANS ..................................................................1
A. ECONOMY: THE STATE OF PLAY..........................................................................1
B. NATIONALISM AND BILATERAL DISPUTES ..........................................................2
C. TOWARDS MORE REGIONAL COOPERATION .....................................................3
D. GOVERNANCE AND RULE OF LAW.......................................................................4
III. THE IMPACT OF A CHANGING SECURITY ENVIRONMENT ON THE WESTERN
BALKANS..........................................................................................................................7
A. CHINA AND THE BELT AND ROAD INITIATIVE......................................................7
B. RUSSIA: HISTORICAL INFLUENCE, COMPETING PRESENCE ............................7
C. WESTERN BALKANS: A TRANSIT REGION...........................................................8
D. ISLAMISM, RADICALISATION AND FOREIGN FIGHTERS...................................11
IV. THE WESTERN BALKANS AND EURO-ATLANTIC INTEGRATION ..............................12
A. NATO’S ROLE IN THE WESTERN BALKANS: PEACEBUILDING AND
ENLARGEMENT ....................................................................................................12
B. EU: THE BUMPY ROAD TOWARDS MEMBERSHIP.............................................13
V. CONCLUSIONS: NATO AND THE WESTERN BALKANS – THE WAY AHEAD .............15
BIBLIOGRAPHY..............................................................................................................16
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I. INTRODUCTION – THE WESTERN BALKANS AND EURO-ATLANTIC SECURITY
1. Few regions in the world can claim a cultural, religious and demographic diversity richer than
the Western Balkans. One of the most famous quotes from Josip Broz Tito, former President of
Yugoslavia, states it quite clearly: “I am the leader of one country which has two alphabets, three
languages, four religions, five nationalities, six republics, surrounded by seven neighbours, a country
in which live eight ethnic minorities” (Hunter, 2017). As NATO focused on Afghanistan, the fight
against extremist groups and the challenges from the South, and an increasingly assertive Russia,
the Western Balkans region has somehow fallen off the radar screen.
2. This dearth of attention to the Balkans may also be attributed to the prolonged period of relative
stability that the region has enjoyed. After the Yugoslav wars in the 1990s and early 2000s, NATO
and the EU increased their presence in the region providing peacekeeping and state-building
capabilities to the war-ridden countries. This increased involvement and the accession to either
organisation by some of the newly independent states fostered a widespread assumption that
democratic reform in the region had now become irreversible. However, this was overly optimistic,
as developments in recent years have shown.
3. This short paper provides a general overview of the security situation in the Western Balkans.
It discusses the legacies of the Yugoslav era and its violent conclusion, the emerging security
challenges in the region, as well as the region’s Euro-Atlantic integration. Finally, the report
recommends that NATO and the European Union become more engaged and encourage the
countries of the region to continue their reforms with tangible and achievable goals, which will benefit
both the Western Balkans and the Euro-Atlantic area.
II. REGIONAL DYNAMICS – THE LEGACIES OF THE PAST AND CURRENT CHALLENGES
IN THE WESTERN BALKANS
A. ECONOMY: THE STATE OF PLAY
Regional Cooperation Council, “Balkan Barometer 2017”
178 PCNP 18 E rev.1 fin
2
4. Despite predicted improvements, many Western Balkan countries continued to struggle in
2018. At the end of 2017, the World Bank anticipated economic growth to stay above 3% for 2018
and 2019, due to rising consumption, low inflation rates and the improvement of the economic
situation worldwide. However, even if this growth figure could be achieved, it would take the Western
Balkans 60 years to reach income levels on par with the EU average. Furthermore, several countries
have still not overcome the 2008 financial crisis. Serbia, Bosnia and Herzegovina (BiH) and
Montenegro have not yet returned to a GDP level on par with what it was prior to the break-up of
Yugoslavia. Unsurprisingly, there is significant discontent with the economic situation among the
populations of the Western Balkans.
5. Unemployment remains the main economic concern throughout the Western Balkans.
According to the World Bank, it is one of the main factors hindering the development of the region;
the situation is particularly worrisome for younger generations, with youth unemployment rates
surpassing 50% in the former Yugoslav Republic of Macedonia*
, BiH and Kosovo. While highly
educated youth are able to find a job more easily, the non-competitiveness of salaries encourages
them to migrate, causing a brain drain which puts an additional burden on an already aging and
shrinking population. This phenomenon is particularly harmful for the less populous countries of the
region. High unemployment rates and massive migration make Western Balkans households heavily
reliant on remittances. The World Bank estimated that levels of remittance in the Western Balkans
are on average around 10% of GDP, with the peak being at 17% in Kosovo. While remittances are
believed to be helpful in the short run, they damage national competitiveness and increase the risk
of government corruption.
B. NATIONALISM AND BILATERAL DISPUTES
6. The Yugoslav wars remain in the memories of many people in the newly formed Western
Balkan countries. Coming to grips with the past has only been partially achieved and reconciliation
among the peoples of the Western Balkans is still a work in progress. In a region where historic
conflicts, ethnicity and religion are still entrenched, nationalism can all-too-easily be exploited by
populists. In this political climate, underlying tensions can resurface and be manipulated at any time.
The assassination in January 2018 of Oliver Ivanovic, a controversial Kosovo Serb politician who
supported the integration of the Serbians living in Northern Kosovo is a reminder of the enduring
tensions and risks caused by nationalism and border disputes in the region (Gallucci, 2018). Even
more telling of the depth of issues surrounding these disputes is that following the murder of Ivanovic
* Turkey recognises the Republic of Macedonia with its constitutional name.
178 PCNP 18 E rev.1 fin
3
the Belgrade and Pristina governments recognised the need to cooperate on the investigation, yet
months later had failed to do so.
7. Building trust among the countries of the Western Balkans has been a cumbersome process.
A climate of general mistrust among Western Balkan countries has created an environment where
countries tend to shun cooperation with each other. This is an obvious obstacle to Euro-Atlantic
integration, as cooperation would facilitate and speed up necessary reforms. As a matter of fact, all
the Western Balkan countries still have at least one territorial controversy with one of their
neighbours. This is a serious issue and the EU Enlargement Strategy of February 2018, in a clear
change of policy, stresses that no country will be allowed to join if it still has pending bilateral
disputes.
8. While most of these territorial disputes appear manageable in the short- or medium term, two
major issues have prevented closer cooperation between the countries of the region.
- Serbia, taking into account UNSCR 1244, still regards Kosovo as an integral part of its territory.
The two parties have failed to make any step forward since the EU-brokered 2013 Brussels
Agreement, which has faced serious implementation issues (Phillips, 2017).
- The name dispute with Greece has blocked the former Yugoslav Republic of Macedonia’s bids
to both the EU and NATO for many years. However, in mid-June 2018, following a new round
of negotiations Greek Prime Minister Alexis Tsipras and Zoran Zaev, Prime Minister of the
former Yugoslav Republic of Macedonia, announced a historic agreement on the name issue.
However, given the nationalistic protests in both countries, it remains to be seen if the
population will accept the agreement (Casule, 2018).
At the time of writing, the first hurdle to be cleared is a referendum set for 30 September in Macedonia
where the public will be asked “Are you for EU and NATO membership by accepting the agreement
between the Republic of Macedonia and the Republic of Greece?” Recent polls in the former
Yugoslav Republic of Macedonia suggest that there is no consensus on the name question.
Meanwhile in Greece, a recent opinion poll by the Proto Thema newspaper showed that “up to 70
percent of Greeks object to the name compromise”.
9. The territorial disputes in the Western Balkans are based on ethnic or religious divisions. This
is, in effect, both the cause and the result of the split-up of Yugoslavia. Some observers suggested
that one of the possible agreements between Serbia and Kosovo would envisage the province of
Northern Kosovo, populated by ethnic Serbs, being conceded in exchange for the recognition of
independence. While some locals have sought this resolution, it has until recently not been viewed
favourably by the NATO Allies and the EU, who now seem more open to the idea. The EU High
Representative for Foreign Affairs and Security Policy, Federica Mogherini, has indicated she wants
an agreement between Belgrade and Pristina to be reached by the end of her term, and the US
National Security advisor John Bolton has stated that he no longer opposes the idea (The Economist,
2018). Reasoning along those lines, however, would open a Pandora’s box of territorial claims - the
most concerning being the Serb-majority Bosnian constituency of Republika Srpska - which would
risk altering the current precarious stability of the region (The Economist, 2018).
C. TOWARDS MORE REGIONAL COOPERATION
10. For too long, the countries of the Western Balkans have regarded their relations with their
neighbours as a zero-sum game, which has prevented them from addressing the underlying issues,
such as the dire economic situation which continues to hamper progress. At this point in time, all the
Western Balkan countries have a lower GDP than any other successful applicant to the EU at the
time of entry (Peel and Buckley, 2018).
178 PCNP 18 E rev.1 fin
4
11. It is therefore necessary to encourage countries to start to pursue mutual, overarching goals
and overcome parochial interests. Valuable time has been lost, but there is hope in sight. For
example, the EU Western Balkans Summit of May 2018 emphasised increasing connectivity in areas
from infrastructure creation, notably highways and rail links, to expanding the EU’s Energy Union
into the Western Balkans through the completion of a Regional Electricity Market and the creation of
a single regulatory space under the Energy Community Treaty. These commitments follow last year’s
EU Western Balkans Summit of July 2017 which laid out a roadmap to improve regional integration.
At the Summit, the Western Balkan countries signed the Transport Community Treaty, with the
objective of building new infrastructure projects and improving existing ones. The EU will provide
part of the funds, with the goal of attracting new investors in the medium term. The Western Balkan
countries also agreed to form a Regional Economic Area (REA) to facilitate the flow of goods,
services, capital and highly-skilled labour. The project will not be EU-led, implementation will depend
on the goodwill of the parties. The creation of the REA is an important step forward. It is not an
alternative to EU membership, but it can help advance necessary reforms in the economic realm,
thus facilitating accession to the EU.
12. It is especially regrettable that the declaration to establish the Regional Commission for the
Establishment of Facts on War Crimes and Other Serious Violations of Human Rights on the Territory
of Yugoslavia (RECOM), was not signed at the Summit in London in July 2018. Prevailing issues of
competing narratives of the 1990s wars and frequent political tensions that these narratives facilitate
were to be addressed by a common fact-finding mission which would be a major step toward regional
reconciliation. It is hoped that RECOM, an initiative born out of regional civil society cooperation, will
be established in the future.
D. GOVERNANCE AND RULE OF LAW
13. Ever since the break-up of Yugoslavia, the dynamics between the newly formed states in the
region have been characterised by regional and intra-national tensions. Differences of language,
religion and ethnicity were exploited by populist and national leaders, who have all-too-often fuelled
them for political and personal gain. Magnifying and distorting populist and nationalistic themes, such
as playing up quarrels with bordering countries and ethnic minorities, has led to a marginalisation of
economic reform in public discourse in the countries of the region. In the past, the political elites in
the Western Balkans have focused more on maintaining the status quo that has kept them in power
than on pushing for necessary reforms (Less, 2016; Mujanovic, 2017).
178 PCNP 18 E rev.1 fin
5
14. As a result, the countries of the Western Balkans are still grappling with longstanding structural
deficiencies of the socialist era. There has been some process in introducing Foreign Direct
Investment (FDI)-friendly policies, with FYR Macedonia rising to 11th
in the World Bank’s Doing
Business Rankings, and Montenegro, Serbia and Kosovo all being top 50. However, the industrial
sector remains uncompetitive and needs urgent modernisation, the banking system is weak, and the
poor regional economic integration is further impaired by underdeveloped infrastructure. Corruption
even at the highest institutional level remains widespread, to the point that analysts have observed
symptoms of state capture (Fouéré and Blockmans, 2017). In Transparency International’s
Corruption Perceptions Index Western Balkan countries continue to trail behind their European
neighbours, with transparency rankings ranging between 64th
(Montenegro) and 107th
(the former
Yugoslav Republic of Macedonia).
15. In the countries aspiring to NATO and/or EU membership the adoption of anti-corruption
measures encouraged and promoted by the EU – such as the implementation of preventive
anti-corruption bodies, of national anti-corruption strategies, and of the Regional Anti-Corruption
Initiative (RAI) – were often not implemented and had little effect. Yet, addressing rule of law on a
regional basis has left reforms vague and does not allow for targeted improvements from the different
sets of problems that individual nations within the Western Balkans are facing. Moreover, within each
individual country, improvements by law enforcement agencies and the judiciary in applying the law
still do not root out low-level corruption, resulting in low levels of trust in the judiciary (Marovic, 2017).
According to the latest Balkan Barometer, 64% of people in the Western Balkans do not trust their
courts and judiciary, 71% perceive it as not independent, and 75% agree that the judiciary is affected
by corruption (RCC, 2018).
16. In 2016, according to the EU Communication on the status of enlargement, Western Balkan
countries had made little to no progress on the status of corruption since their applications, with one
country even sliding back. The Commission reported that the main obstacle towards reform is the
lack of political will to implement the legislation in practice, while existing anti-corruption bodies are
systematically and intentionally hampered by limited human and financial resources. The 2017
Freedom House’s Nations in Transit report highlights that civil society in the Western Balkans is
under constant threat, while elections are constantly plagued by visible irregularities. While the EU
Enlargement Strategy of 2018 does not provide an assessment of the current status of the fight
against corruption, its stark and frank language leaves no doubt that prosperity and a better quality
of life in the region can be reached only through serious measures against corruption for it to be
“rooted out without compromise”.
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17. The problems of poor governance and corruption have been facilitated by Western tolerance
of these practices, participants of the NATO Parliamentary Assembly’s 96th Rose-Roth seminar that
took place on 7-9 November 2017 in Ljubljana, Slovenia, learned. As the EU attempts to temper
“enlargement fatigue” it has rewarded pro-EU individuals or parties despite shortcomings vis-à-vis
the rule of law. This is also made worse by fears of regional instability present since the 1990s,
leading to what experts call a ‘retreat into stabilocracy’ – “the search for stability in Europe’s periphery
has motivated EU leaders to turn a blind eye to the intimidation of opposition and creeping
authoritarianism” (Tcherneva, 2017; Marovic, 2018).The region would be well served by a far higher
degree of transparency and accountability. All too often, cronyism and corruption are at the
foundation of wealth distribution, as political elites are motivated by a fear of losing access to public
monies, while voters are driven by the potential for patronage awards. Avenues must therefore be
opened up for new political actors.
18. The current state of freedom of the media across all countries of the region is also alarming.
The Media Clientelism Index of 2017 indicated that the situation for media freedoms in the Western
Balkans countries has gradually gotten worse during the 2016/2017 period. The report noted such
problems as “non-transparent political and financial influence” i.e. “stagnation of media reforms,
dubious transfer of ownership… and penetration of organized crime in media ownership”.
Additionally, the issue of “attacks on journalists and editors as well as on independent media outlets”
was observed in all countries across the Western Balkans. As the existing legislation to protect
media freedom largely goes ignored, media bias is a serious issue due to clientelism, politicisation,
corruption and insufficient political will to promote pluralism. Public service broadcasters have
structural flaws, making the news they produce unreliable: the broken and non-transparent funding
model causes their editorial policies to be very vulnerable to external pressure. Furthermore,
countries are not inclined to share precise information about the ownership of media outlets, nor
about the level of public financing towards private media, raising reasonable doubts about their
impartiality (Lilyanova, 2017b).
19. Independent reporters are often victims of physical and verbal intimidations, according to the
Balkan Investigative Reporting Network (BIRN), which monitors threats and attacks against freedom
of speech across south-east Europe. The World Press Freedom Index by Reporters without Borders
shows that freedom of the media in the region has consistently declined in the last decade.
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III. THE IMPACT OF A CHANGING SECURITY ENVIRONMENT ON THE WESTERN
BALKANS
20. The complex situation in the Western Balkans is further compounded by external factors and
external actors.
A. CHINA AND THE BELT AND ROAD INITIATIVE
21. Although a relatively new player in the Western Balkans, China’s economic and financial clout
in the region has increased significantly in recent years. Since 2012, China’s 16 + 1 model has
focused on Chinese engagement with 16 European countries – 11 EU Member States plus 5 nations
in the Western Balkans. Despite the model being set up as 16 + 1 in reality most of the deals struck
are bilateral between China and one of the 16 European nations rather than deals comprising many
nations. Of the $9.4bn worth of investment deals the 16 + 1 has brought to Europe, around $4.9bn
is concentrated in the 5 Balkans nations – Albania, Bosnia and Herzegovina, the former Yugoslav
Republic of Macedonia, Montenegro, and Serbia. This comes even though the 5 non-EU states
have a GDP roughly one-sixteenth the size of the 11 EU Member States (Hillman, 2018). Chinese
investment in the region has begun to fill a void for the Western Balkans as many western nations
and firms have financially ignored infrastructure improvements in these nations.
22. Chinese projects in the Western Balkans are an aspect of its growing global interests and
activities, known as the Belt and Road Initiative (BRI). The BRI is an ambitious project proposed by
the Chinese President Xi Jinping, to create new sea and land routes that resemble the old silk road,
connecting east and west. It has brought much investment to south-eastern Europe where projects
focus on transportation infrastructure. China is particularly engaged in Serbia; Beijing and Belgrade
have also taken steps to improve relations by establishing visa free travel which began in 2017. They
are aligned on several foreign policy dossiers, including the non-recognition of Kosovo – due to
China’s own separatist regions of Tibet and Xinjiang. Increasing Chinese activities in the Western
Balkans highlight the need for the EU to remain engaged in the Western Balkans, also because the
sustainability of some of the infrastructure projects and their compliance with EU laws are in question.
23. China has also invested in Albania, Bosnia, and the former Yugoslav Republic of Macedonia.
Recipient countries in the region see Chinese investments, which often come in the form of a loan,
as good, and perhaps also sometimes as a preferable alternative to the loans of the EU because the
former are generally not linked to conditions relating to reforms. This is also combined with the fact
that many Western nations remain wary of investing in the region.
B. RUSSIA: HISTORICAL INFLUENCE, COMPETING PRESENCE
24. In contrast to China, Russia has strong historical connections to the Western Balkans.
Moscow’s engagement in the region is also due to the close cultural, linguistic and religious
similarities between Russians and Orthodox Slavs. In particular, the connection with Serbia is quite
strong at a political level, as Russia firmly opposes Kosovo’s independence and vetoed a
UNSC resolution which would have qualified the massacre of Srebrenica a genocide. While Russia’s
engagement with the Western Balkans receded in the early 2000s, Moscow asserted its presence
again in the past decade under President Vladimir Putin. By offering incentives, e.g., via loans,
energy projects, trade and other investments, Russia has increased its engagement with the region,
thereby trying to delay the integration of the Western Balkans into the EU. Moreover, Moscow is
using every opportunity, including corruption and bribes, and at times the Russian Orthodox Church,
to advance its interests and to bolster anti-Western sentiment, in particular among Serbs, and to
undermine Western influence throughout the region. Russia’s efforts in the region are facilitated by
entrenched authoritarian elites, who are frustrated that the EU accession process is not proceeding
fast enough, and have stalled reform processes. At the same time, the economic situation in Russia
and the weak rouble limit Moscow’s ability to compete with the EU at a regional level.
25. Russia’s dominance, as the main gas exporter to Serbia, the former Yugoslav Republic of
Macedonia, and Bosnia and Herzegovina, allows for it to utilise one of its primary geopolitical
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leverage points - energy politics - across the region. Russia is actively exploiting the dependency of
the countries of the region on energy deliveries. Russia is not only trying to maintain its dominant
energy position, but even to expand it. However, it is unclear whether Russia will be able to succeed,
as some of the announced projects, such as the Druzhba-Adria pipelines or the South Stream
pipeline, are either delayed or put on ice. On any other economic issue, ranging from external aid to
FDI, the EU’s presence greatly outmatches Russia’s.
Martin Russell, “Russia in the Western Balkans”, EPRS, July 2017
26. As a result, Russia is far from being capable of significantly moulding the future of the region.
For the Western Balkans, the strategy envisaged is subtler, related to the already mentioned Russian
cultural and historical ‘soft power’. In this sense, Russia is trying to establish itself as a key player in
the information sector: the infamous Sputnik news agency opened in Belgrade in 2014 and is
providing its typically serviceable anti-Western narrative. Sputnik contributes to polarising public
opinion, presenting distorted and biased versions of the EU and NATO’s contributions to the region
(Byrne, 2017). Moreover, Russia provides support for civil society organisations and political parties
which are aligned with its political agenda. These policies can best be summed up as “crude
opportunism” as in the Balkans “[Russia’s] goal is to undercut and upset the existing institutions and
rules set by the West” (Bechev, 2017).
27. While current Russian engagement with the region can certainly be seen as an interference in
Euro-Atlantic integration, it is an indirect admission that the Kremlin’s influence in the Western
Balkans cannot go past “spoiler tactics”. The most recent example of such tactics has been noted
by the former Yugoslav Republic of Macedonia PM Zoran Zaev’s allegations that attempts to disrupt
FYR Macedonia’s name referendum in September can be traced to Russia. As a result, in July
Greece expelled two Russian diplomats for trying to undermine the recent name deal with the former
Yugoslav Republic of Macedonia. Moreover, unlike NATO and the EU, Russia has no boots on the
ground, economic relations with the region are decreasing and there are no plans to enlarge either
the Eurasian Economic Union or the Collective Security Treaty Organisation to include the Western
Balkans, providing for few tangible Russian avenues in the region (Bechev, 2017).
C. WESTERN BALKANS: A TRANSIT REGION
28. The geostrategic positioning of the Western Balkans between Europe’s West, East, and the
Mediterranean Sea has since the end of the Cold War turned it into a transit region. In the midst of
liberalisation and privatisation, a series of wars, and political transition away from communism, the
Balkans became an area for the illicit trade of goods from Asia and Africa into Western Europe, and
more recently a corridor in the refugee crisis.
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29. The European refugee crisis started in 2015 and affected, if indirectly, the Western Balkans.
At first, countries opted to facilitate the movement of asylum seekers; then, pressure from bordering
EU member states led to a domino effect of border closures (Greider, 2017).
Alice Greider, “Outsourcing Migration Management: The Role of the Western Balkans in the European
Refugee Crisis”, Migration Policy Institute, 17 August 2017
30. Frontex, the European Border and Coast Guard agency, estimates that there were more than
760,000 illegal border crossings on the Western Balkans route in 2015, a dramatic increase from the
40,000 of the previous year (Frontex). The Western Balkans, themselves countries of origin of
migration towards the EU, were both unequipped and unprepared to handle a crisis of such
proportions. As such, they only tried to speed up the passage of people towards the countries of
destination (Greider, 2017).
Frontex, Illegal border crossings on the Western Balkans route in numbers, 2017
31. As the crisis continued, EU countries started to limit the passage of refugees. In turn, Serbia
and Croatia started to introduce quotas for the number of people allowed to cross per day, while the
former Yugoslav Republic of Macedonia -Greek border became the theatre of violent incidents, with
reported use of tear gas to control the flow of migrants. The EU’s March 2016 agreement with Turkey
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to curb illegal migration effectively closed down the migration route to the EU coming from Greece.
In turn, the former Yugoslav Republic of Macedonia closed its border with Greece, effectively
trapping all the migrants left in the Western Balkans. Indeed, Western Balkan countries were
encouraged by the example of EU countries such as Bulgaria and Hungary to adopt a hard-line
approach, harshly repressing any attempt by refugees to proceed further North.
32. While the EU-Turkey deals certainly relieved some pressure on the region regarding the influx
of migrants, it is only a temporary stopgap solution. In June 2018, it was reported that more than
5,500 refugees and migrants from Asia and North Africa entered Bosnia. Albania is also seeing a
rise in migrants entering its borders. Between January and May, authorities caught 2,311 migrants -
up from 162 during that same period of 2017 and more than double the number of around 1,000 for
the whole of 2017. The route through Albania is thought to be a new route smugglers are using to
move people into the EU. Bosnia reported an unusually high influx of migrants directed towards the
EU coming from Pakistan, Algeria, Afghanistan and Turkey – signalling that the crisis is far from
over. However, the recent reports from Frontex suggest that the increase in use of the so-called
western Mediterranean route will shift the movement of people from the eastern route passing
through Eastern Europe and the Balkans to Southern Europe, especially Spain and Portugal.
33. Meanwhile, irrespective of the refugee crisis, although definitely bolstered by it, organised
crime and illicit trade have been an enduring issue in the Western Balkans since the breakup of the
former Yugoslavia. The region sits on the western branch of the “Balkan route” which is primarily
used to transfer drugs from Afghanistan (the world’s leading heroin producer) to Western Europe.
Whilst South East European countries are first and foremost transit countries, some evidence of
storage facilities suggests that heroin is being adulterated and repackaged in Albania, Kosovo and
FYR Macedonia. In addition to this, there has also been a rise in cannabis production in Albania,
which has easily entered Western European markets thanks to the transnational organised crime
networks that operate in the Balkans.
34. The Western Balkans are not only a drug smuggling route, but a major transit region and -
since the 1990s wars - a source of illegal arms into the EU. As such, the proliferation of organised
crime and trafficking in the Western Balkans are a concern for not only regional but also more widely
European security. Much like the illegal substance and arms smugglers, human traffickers also
benefit from the organised crime networks and legacies of the 1990s Yugoslav wars. During the
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wars, the spike in emigration, a lack of law enforcement, and political instability combined to create
conditions in which human traffickers began operating. The refugee crisis in Europe has once again
created similar conditions, sparking fears of increases in human trafficking as criminals go on to
capitalise on the despair of refugees travelling to Western Europe.
35. Bilateral cooperation between Western European NATO member states and the Balkan
governments has yielded significant results in terms of successful raids on trafficking rings
(US Department of State, 2017). It is recommended that this cooperation continue as the effects of
the refugee crisis continue to shake the region. One of the deepest concerns about organised crime
in the Western Balkans is how intertwined it is with both high and low-level corruption. However,
supporting the regional governments in their attempts to combat illicit trade is a crucial step in helping
sever these links. It is therefore highly recommended that the recent cooperation between NATO
and the UN Office for Drugs and Crime continue to develop. Thus far 450 counter narcotics officers
from Central Asia, Afghanistan and Pakistan have received training – these capacity building courses
would also highly benefit the Western Balkans.
D. ISLAMISM, RADICALISATION AND FOREIGN FIGHTERS
36. The Western Balkans have a significant Muslim population: Islam is practiced by 28% of the
population in the former Yugoslav Republic of Macedonia, by more than 50% in Albania and Bosnia,
and by 95% in Kosovo. However, religious fundamentalism spread considerably during and after the
Yugoslav wars, due to the influx of fundamentalist Salafist imams from abroad. Experts claim that
the objective of these preachers is to hijack the ethnic identity of Bosniaks (Bosnian Muslims) and
Albanians, who practice an essentially moderate interpretation of Islam, and replace it with a
hard-line extremist one. The newly formed states did not have the capabilities or the expertise to
tackle this phenomenon, leading to several terrorist attacks – albeit with a limited number of
casualties – and a few Islamist enclaves, such as the Bosnian village of Gornja Maoca.
37. The emergence of Daesh had a double effect on the Western Balkans. On the one hand, the
influx of refugees put pressure on already troubled economies; and on the other, Syria and Iraq
became the ideal destination for the aspiring jihadists of the region.
38. Regarding internal security issues, Daesh’s main online publication, Rumiyah1
, explicitly
threatened the Balkans in an article titled “The Balkans - Blood for Enemies, and Honey for Friends”
in June 2017 (Trad, 2017). So far, the terror organisation has not claimed responsibility for any attack
in the region. However, in November 2016, the group had planned simultaneous attacks in Albania,
Kosovo and the former Yugoslav Republic of Macedonia, with the top target being the Israeli national
football team, which was scheduled to play in Tirana, and its supporters. Twenty-five people were
arrested by the former Yugoslav Republic of Macedonia and Albanian police forces, in what was a
remarkable show of cooperation between the security services of the two countries.
39. It is estimated that between 900 and 1,000 fighters (often followed by their families) have
travelled from the Balkans to Iraq and Syria; while some of them had criminal records or had fought
in the Yugoslav wars, the majority of them did not have any previous fighting experience. As Daesh
has lost the swathes of land it controlled in Iraq and Syria it appears likely that the Western Balkans
will also be confronted with the problem of returning foreign fighters. This raises serious issues,
ranging from the legal consequences of the actions committed in Syria to rehabilitation and the return
to local civil society.
40. Kosovo has produced more foreign fighters per capita than any other Western nation since
Daesh declared its caliphate in 2014. Around 400 Kosovo citizens have joined the group and other
Islamist extremist groups since fighting in Syria began in 2012. With EU aspirations, Kosovo has
been tough on solving its radicalization problem, indicting more than 120 terrorism suspects and
arresting many more, including imams suspected of recruiting people to fight abroad. However, many
1 Literally translatable as “Rome”
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prison sentences are being shortened and some say that rehabilitation attempts are not always
effective, leaving still radicalised individuals free. Many Western powers are now working with
Kosovar authorities to aid in the attempts to rehabilitate, with fears that Kosovo may become a
launching pad for more attacks across the EU.
Asya Metodieva, “Balkan Foreign Fighters Are Coming Back: What Should Be Done?”, STRATPOL,
January 2018
41. Radicalisation will remain a problem even after the fall of Daesh. While Daesh did not claim
any terrorist attacks, the region was already a hotbed for extremists, often affiliated to nationalist
movements. Given the volatile situation in the region it is important that countries dealing with similar
issues that have more expertise continue assisting the Western Balkans. This is in their common
interest as some groups in the Western Balkans are connected with radicalised individuals in
Western Europe.
IV. THE WESTERN BALKANS AND EURO-ATLANTIC INTEGRATION
42. NATO and the European Union have played a prominent role in supporting post-conflict
development and the economic transition and in facilitating Euro-Atlantic integration of the Western
Balkans; while the latter objective has been achieved for some countries, other states still remain
out of one or both of these organisations.
A. NATO’S ROLE IN THE WESTERN BALKANS: PEACEBUILDING AND
ENLARGEMENT
43. NATO’s presence in the Western Balkans dates back to the early 90s. After the intervention in
Bosnia and Herzegovina and Kosovo in 1995 and 1999, NATO remained in the region as a stabilising
force, for example through Operation Allied Harmony in the former Yugoslav Republic of Macedonia.
NATO’s commitment to the region led to the accession of Slovenia, Albania, Croatia and, as recently
as 2017, Montenegro. Following the naming agreement between the former Yugoslav Republic of
Macedonia and Greece in June 2018, NATO during its July 2018 Summit formally invited the former
Yugoslav Republic of Macedonia to begin membership talks, saying the country could join the
organisation following a full resolution of the name dispute. Serbia and Bosnia and Herzegovina,
while valuable partners for the Alliance, are currently not pursuing NATO membership.
44. Serbia, which pursues a policy of military neutrality, is a NATO partner country that participates
actively in the Partnership for Peace (PfP) programme, without aspiring to become a NATO member.
BiH’s NATO membership aspirations have been hampered by continuing differences between
Sarajevo and Republika Srpska. NATO laid out a Membership Action Plan (MAP) for Bosnia and
Herzegovina in 2010, implementable under the condition that the political constituencies of the
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country transferred the control of their military facilities to the central government. This is fiercely
opposed by the political elites in Republika Srpska. In October 2017, Republika Srpska’s parliament
passed a resolution affirming the constituency’s military neutrality: a symbolic move, but one that
formally show protest against any further step towards NATO integration.
45. At the time of writing, the Kosovo Force (KFOR) is the only NATO military mission still active
in the region: after having secured the area, it now helps in the development of an effective security
sector in Kosovo, gradually transferring its competences to the Kosovo Police and other internal
bodies. In addition to that, NATO has Headquarters in Sarajevo and Military Liaison Offices in
Belgrade and Skopje to support defence reforms, foster dialogue and facilitate the participation in
the PfP programmes.
46. NATO’s activities in the former Yugoslavia were the catalyst that started the cooperation
between the Atlantic Alliance and the European Union. NATO had been conducting peace-enforcing
operations since 1992, after which both NATO and the EU supported the post-conflict peacebuilding
and peacekeeping activities in the region. In March 2003, the EU formally started its first fully-fledged
Common Security and Defence Policy (CSDP) mission, Operation EUFOR Concordia in the former
Yugoslav Republic of Macedonia, taking over from NATO’s Operation Allied Harmony. One year
later, the EU launched Operation EUFOR Althea in BiH, after NATO formally ended its Operation
Stabilisation Force in Bosnia and Herzegovina (SFOR).
47. The ongoing cooperation between the two organisations remains crucially important for both
regional and Euro-Atlantic stability. In the Western Balkans, the EU began to develop its capacities
in post-crisis stabilisation force, conducting both civilian and military operations, while NATO
remained the ultimate security guarantor in case of any escalation of hostilities. Other than the
missions already mentioned, the EU is still present in the Western Balkans, conducting missions with
a more civilian focus, such as EUPOL Proxima, which replaced EUFOR Concordia and aims to
develop the former Yugoslav Republic of Macedonia’s police system, and EULEX Kosovo. In June
2018, the EU announced it was refocusing its mandate for the rule of law mission to end the judicial
executive part of the mandate – which supported the adjudication of constitutional and civil justice
and prosecuting and adjudicating selected criminal cases - to exclusively focus on the monitoring,
mentoring, and advising objectives that provide support to the Kosovo rule of law initiatives and to
the Belgrade-Pristina dialogue.
B. EU: THE BUMPY ROAD TOWARDS MEMBERSHIP
48. At an institutional level, the EU has established 16 bodies that foster transnational integration
amongst the Western Balkans. These initiatives are further backed by countless financial and
diplomatic efforts. To name only a few:
- The Stability and Association Agreement (SAA). All the countries in the Western Balkans,
including Kosovo, have signed a SAA with the EU; through this instrument, the EU establishes
contractual duties and obligations tailored for each country, with the goal of stabilising the area
and preparing for EU membership (Directorate-General for Neighbourhood and Enlargement
Negotiations, DG NEAR 2016a).
- The Instrument for Pre-accession Assistance (IPA). Offering financial and technical help, the
EU ensures that countries are able to implement their reforms in key sectors. For the
2014-2020 period, the EU dedicated EUR 11.7 billion to the IPA, making it by far the largest
donor to the region (Directorate-General for Neighbourhood and Enlargement, DG NEAR
2016b).
- The Berlin Process. Since 2014, the EU has held yearly ministerial meetings in the framework
of the so-called Berlin Process, initiated in 2014 to favour EU-integration of the Western
Balkans. Each of the meetings of the Berlin Process framework has a theme with the July 2018
meeting focusing on areas of mutual concern, i.e. security. At this meeting, the six nations
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agreed to share police and intelligence data to fight terrorism and organised crime (The
Economist, 2018).
49. 2018 is widely considered to be crucial for the future of the Euro-Atlantic integration of the
Western Balkans, according to the EU Enlargement Strategy released in February. Furthermore,
until July, the Council of the European Union was presided by Bulgaria, which made the Western
Balkans one of its priorities, hosting the first EU-Western Balkans summit of head of states since
Thessaloniki in 2003 in its capital in May 2018.
50. The EU set 2025 as a potential date for the accession of Serbia and Montenegro, which are
currently considered the forerunner candidates. That said, the EU Enlargement Strategy notes that
none of the Western Balkan countries currently is a functional market economy, given clear elements
of state capture and collusion between the state and organised crime. Moreover, the Strategy also
stresses the prerequisite of full adherence to the EU’s values and the resolution of all bilateral
disputes before accession.
51. However, the EU’s approach is arguably dictated not only by the situation in the candidate
countries, but also by its own internal situation. Barely ten years have passed since the EU member
states unanimously decided to admit Romania and Bulgaria, even though their reform process in
certain key areas, including corruption and the rule of law, was far from over. In addition, the EU is
facing considerable internal challenges of its own, including Brexit and the deterioration of
democratic standards in some member states. Given this context, it will be difficult for the EU to
balance its enlargement agenda with its own internal reforms and structural changes after the
departure of the United Kingdom.
52. The limited success of the EU’s approach to the Western Balkans in the past may also have
been due to the fact that the democratic agenda and the regional cooperation model pursued by the
EU sometimes seemed oblivious of the reality on the ground. Indeed, persistent open disputes over
borders paired with ethnic, social and religious tensions remain highly charged. The new
Enlargement Strategy now commits the EU to six “flagship initiatives”, and one of them is meant to
support reconciliation and good neighbourly relations.
53. The official position of DG NEAR is that the EU is in no position nor wishes to impose anything
on the Western Balkans: accession and Euro-Atlantic integration, including what it takes to achieve
them, remain a free choice. Yet, for a region that remains riddled with unresolved border issues and
persistent ethnic tensions, the EU could have given a higher priority to the reconciliation process.
Commenting on the EU’s enlargement strategy, the NGO Impunity Watch argues that without a
stronger commitment by the EU to ensure reconciliation, the ethnic divisions of the region will
supersede the efforts towards regional cooperation (Stappers and Unger, 2018). There are clearly
competing views within the European leadership on how and when the accession of the Western
Balkans should take place. EU Commissioner Johannes Hahn has stated his disagreement with the
views of French President Emmanuel Macron on delaying the entry process of Western Balkan
candidates into the EU until internal reforms take place - arguing these things can happen
simultaneously, as for the EU not to lose influence in the region (Heath and Gray, 2018).
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54. The other five flagships initiatives mentioned in the EU Enlargement Strategy are designed to
strengthen the rule of law, reinforce engagement on security and migration, enhance support for
socio-economic development, increase transport and energy connectivity and create a Digital
Agenda. These are areas deemed to be in the interest of both the EU and the Western Balkans; the
concrete policies laid out by the EU so far only cover the 2018-2019 period. One wonders whether
certain measures (e.g. helping lower – not even removing – roaming fees) would have any impact
on the average citizen of the Western Balkans. On the other hand, commitments such as facilitating
Serbia and BiH’s bid to the WTO would facilitate and reassure private foreign investors and have an
impact on both countries’ economies.
55. Perhaps the biggest shortcoming of the EU and NATO’s approach to the Western Balkans was
to have kept them on “autopilot mode”. A renewed focus of the EU and NATO on the Western
Balkans is therefore overdue. The engagement of the EU and NATO should remain unwavering and
adapt to new challenges, as the region remains of crucial importance due to its geographical
proximity, and its cultural affinity and economic ties with the rest of Europe.
V. CONCLUSIONS: NATO AND THE WESTERN BALKANS – THE WAY AHEAD
56. The security of the Western Balkans is crucial for European and Euro-Atlantic security. What
happens there affects us all. While this region has come a long way already in overcoming the difficult
legacy of the past, the countries of the Western Balkans still confront a range of internal and external
challenges. These include limited socio-economic progress, the temptation of nationalism and
populism, old and new forms of corruption, disinformation and lack of information about NATO and
the EU, the influence of radicalism, Russia’s attempt to interfere in local politics and democratic
processes, and migration movements from and through the region.
57. The developments in recent years have shown that the European Union and the Alliance
cannot take progress in Western Balkan democracy for granted: the risk of backsliding is ever
present. There are many worrying signs that a kind of vacuum has been created in the region which
is being filled by forces with a decidedly anti-democratic and anti-Western agenda. There was a false
assumption that democratic reform in the region was inevitable, but this was overly optimistic. More
active international engagement is essential to encourage and sustain reform processes. While it is
true that the Alliance is facing multiple challenges, it cannot afford to let the Western Balkans off its
radar. The Western Balkans are of eminent importance to Europe and indeed to Euro-Atlantic
security. Not only is the region at our door step, several countries from Southeastern Europe are
already NATO member states. Moreover, another country in the region, the former Yugoslav
Republic of Macedonia, will join once the naming dispute is resolved, and NATO Allies continue to
support the membership aspiration of Bosnia and Herzegovina.
58. There must not be a security vacuum. NATO’s continued military presence and its political
engagement with partner countries of the Western Balkans are crucially important for regional
stability. The EU should show its political support and affirm that its door will remain open for the
accession of the Western Balkan countries when they are ready. The EU needs to foster and push
for the continuation, and indeed the deepening, of the reform processes. For this, it is important to
be involved politically and not to only foot the bill. The process of European and Euro-Atlantic
integration can have a transformative effect that helps strengthen democratic institutions and
consolidate respect for human rights and for the rule of law – which are the foundation for economic
progress and political stability.
59. The relations among the Western Balkan countries must not be considered as a zero-sum
game. The countries of the region need to understand that they are much better off when they
cooperate. In no other region than in the Western Balkans has close cooperation between NATO
and the EU been as instrumental for stability and security. Both organisations can do more to
encourage the countries of the region to work together and not against each other.
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Azinović, Vlado (ed.), “Between Salvation and Terror: Radicalization and the Foreign Fighter
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06-12-2017
______________________
POLITICAL
COMMITTEE (PC)
Sub-Committee on Transatlantic
Relations (PCTR)
NORTH KOREA'S
CHALLENGE TO
INTERNATIONAL
SECURITY: IMPLICATIONS
FOR NATO
Report
by Gerald E. CONNOLLY (United States)
Rapporteur
179 PCTR 18 E fin | Original: English | 18 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ............................................................................................................ 1
II. NORTH KOREA’S CHALLENGES TO REGIONAL AND INTERNATIONAL
SECURITY ..................................................................................................................... 1
III. THE ROLE OF CHINA AND RUSSIA ............................................................................. 5
IV. THE KINETIC OPTION................................................................................................... 6
V. IMPROVING DPRK SANCTIONS: IMPLEMENTATION, ENFORCEMENT, AND
EXPANSION................................................................................................................... 7
VI. NATO AND MARITIME INTERDICTION......................................................................... 9
VII. CONCLUSIONS AND RECOMMENDATIONS ............................................................. 10
BIBLIOGRAPHY........................................................................................................... 12
179 PCTR 18 E fin
1
I. INTRODUCTION
1. The Democratic People’s Republic of Korea (DPRK – North Korea) poses considerable
challenges for regional and international security. Despite recent diplomatic engagement with the
DPRK, the security situation on the Korean peninsula remains a global flashpoint. This report
emphasises that the developments on the Korean peninsula and the policies pursued by the regime
in Pyongyang pose a serious security threat to NATO and its partners. As a result, the threat
demands greater engagement by NATO and NATO Allies.
2. The volatile security position in North-East Asia has direct security implications for NATO
Allies. In addition to threatening the two NATO partner countries in the region – the Republic of Korea
(ROK) and Japan – the DPRK has also directly threatened the United States. Additionally,
Pyongyang is now capable of levelling credible military threats against all Allies. As NATO Secretary
General Jens Stoltenberg stressed at the 2018 Munich Security Conference, “North Korea continues
to develop its nuclear and ballistic missile programmes, which pose a threat to us all. All Allies are
now within range of North Korean missiles. Pyongyang is closer to Munich than it is to Washington
DC and therefore we must put maximum pressure on North Korea to abandon its nuclear
programme, by political and diplomatic means and, not least, through effective economic sanctions.”
Secretary General Stoltenberg also declared that North Korea’s ballistic and nuclear weapons
programmes “pose a global threat which requires a global response” (Kelly, 2017). At the 2018
Brussels Summit Allied Heads of State and Government expressed full solidarity with NATO partners
in the region -- Australia, Japan, New Zealand, and the ROK – and called on all nations to maintain
decisive pressure on the DPRK, including by fully implementing existing UN sanctions.
3. Additionally, the DPRK has established illicit arms smuggling networks throughout the
Middle East and North Africa (MENA) that help Pyongyang finance its ballistic and nuclear weapons
programmes. The funding derived from these operations sustains DPRK nuclear activities, which
undermine non-proliferation efforts. The small arms and ballistic missiles technology trafficked
throughout the Middle East by the DPRK threaten NATO’s interest in regional stability.
4. This report first identifies the security threats emanating from the DPRK. It then examines how
China and Russia have made only limited contributions to de-escalating the crisis, in part because
of the ways in which they have undermined the international sanctions regime. The report explores
the military, or kinetic, option for eliminating the DPRK threat – highlighting the grave consequences
of a war on the Korean peninsula. While the recent diplomatic activities – including the Singapore
Summit between US President Donald Trump and Chairman Kim Jong-un – are ongoing, it remains
to be seen if the DPRK regime is willing to abandon its nuclear and missile programmes and if a
negotiated settlement can be reached. The international community should therefore redouble all
efforts to resolve this threat, which this report concludes should include a more forward-leaning
approach from NATO and NATO Allies. The world must remain clear-eyed about the DPRK’s record
of violating previous nuclear agreements and stand ready to continue the campaign to isolate
Pyongyang in the absence of verifiable progress towards denuclearisation and the ceasing of other
destabilising behaviour. The report specifically identifies the enforcement and expansion of the
DPRK sanctions regime as well as increased maritime interdiction efforts as areas where NATO and
its member states can make valuable contributions to countering the DPRK threat. This report serves
as a basis for discussion among members of the Political Committee and has been updated for the
Assembly’s 2018 Annual Session.
II. NORTH KOREA’S CHALLENGES TO REGIONAL AND INTERNATIONAL SECURITY
5. The spectre of conflict has loomed over the Korean peninsula since the early days of the Cold
War. However, recent advances in the North Korean ballistic and nuclear weapons programmes
coupled with the aggressive policies pursued by North Korean dictator Kim Jong-un have made the
Peninsula a top issue on the international security agenda.
179 PCTR 18 E fin
2
6. The DPRK has long been an outlier in the international arms control regime. The country
withdrew unilaterally from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in
January 2003; never joined the Comprehensive Nuclear-Test-Ban Treaty (CTBT) and has
conducted six increasingly sophisticated nuclear tests since 2006.
7. In September 2017, North Korea carried out its sixth nuclear test, which the regime claimed
was a test for a hydrogen bomb. Intelligence services estimate that the DPRK’s nuclear arsenal may
comprise 20-30 nuclear weapons. The US Department of Defense (DoD) estimated the number to
be greater than 50.
8. In addition to its increased nuclear testing under Kim Jong-un, the DPRK also accelerated its
ballistic missile testing. Since 2012, the DPRK has conducted more than 80 ballistic missile tests. In
2017, North Korea conducted 20 ballistic missile launches, including three intercontinental ballistic
missiles (ICBMs). The US intelligence community assesses that North Korea now has the capability
to produce the engines for advanced ballistic missiles and is no longer reliant on importing engines
(UN POE, 2018).
9. The latest missile test conducted in November 2017 represents a significant development for
the DPRK ballistic missile programme. The Hwasong-15 reached an altitude of 4,475 kilometres with
a flight time of 53 minutes. It is estimated that the Hwasong-15 has a range of 13,000 kilometres.
The US Department of Defense has assessed that the DPRK is making steady progress toward
having the technical ability to reconfigure a nuclear warhead for eventual deployment on a
long-range ballistic missile.
179 PCTR 18 E fin
3
10. Taken together, these developments in the DPRK’s ballistic and nuclear weapons programmes
soon will put the US mainland and European capitals within range of a North Korean nuclear-armed
ballistic missile. It is important to note that the UN Panel of Experts – convened to assess, among
other things, North Korea’s illicit weapons programmes – found in its March 2018 report that the
DPRK has yet to demonstrate the successful atmospheric re-entry of its ICBM technology.
11. In his New Year’s address to the people of the DPRK in 2018, Kim Jong-un threatened to start
mass-producing nuclear weapons and missiles. The DPRK has developed and expanded its nuclear
programme in violation of international agreements and the regime in Pyongyang continues to defy
UN Security Council resolutions. On several occasions in the past, the regime has threatened to
attack South Korea, Japan, and the United States.
12. The DPRK arsenal also includes chemical and biological weapons. Pyongyang’s chemical
weapons development dates back to the 1950s. The DPRK is not a party to the Chemical Weapons
Convention (CWC). The country is believed to have the third largest chemical weapons stockpile
worldwide. The 2016 Defence White Paper of the Republic of Korea’s Ministry of National Defence
estimates the DPRK’s arsenal to contain between 2,500 to 5,000 tons of nerve agents, blister agents,
blood agents, and other chemical weapons. The DPRK used the nerve agent VX to assassinate
Kim Jong-nam, Kim Jong-un’s half-brother, in Kuala Lumpur Airport (Malaysia) in 2017.
13. In addition, it is suspected that the DPRK maintains an offensive biological weapons
programme - despite being a party to the Biological and Toxin Weapons Convention (BTWC) and
the Geneva Protocol. The DPRK is at the very least capable of producing and weaponizing biological
weapons and the 2016 Defence White Paper from the ROK Ministry of National Defence estimates
that Pyongyang has anthrax and smallpox agents, among others.
14. The DPRK is the most militarised society in the world. Approximately half of the population is
either actively serving in the two-million strong armed forces, in the reserves, or supporting the
military sector. The DPRK has the world’s fourth largest military and the largest artillery force. Most
of the estimated 13,000 artillery pieces are within striking distance of Seoul. With an estimated
defence spending that surpasses 25 % of the country’s GDP, the DPRK has the world’s largest
military both in terms of manpower and defence spending proportional to population and national
income. Between 2004 and 2014, it spent an annual average of USD 3.5 billion on military
expenditures.
15. The DPRK’s nuclear, ballistic, chemical, biological, and conventional weapons programmes
pose a direct threat to global and regional security, but the illegal smuggling of these weapon
technologies to state and non-state actors adds another dimension to the DPRK threat.
16. North Korea has supplied ballistic missile technology and missile parts to countries in the
Middle East and North Africa region, including Egypt, in violation of international sanctions. After
being notified by the United States of potentially illicit North Korean cargo aboard the shipping vessel
the Jie Shun, Egyptian authorities in 2017 were compelled to intercept the ship, which was carrying
30,000 rocket-propelled grenades and components worth USD 26 million. This constituted the
largest seizure of munitions in the history of the DPRK sanctions regime. The UN Panel of Experts
March 2018 report notes that the crates containing the weapons “were prominently marked 'Al-
Sakr Cairo' followed by an address identical to that on the shipping documentation, which listed the
consignee as Al-Sakr Factory for Developed Industries,” which is Egypt’s primary missile research
and development company.
17. Numerous African countries reportedly have purchased arms and other military equipment
from North Korea in recent years, in contravention of UN sanctions. These include Angola, Burundi,
the Republic of Congo, the Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Libya,
Mozambique, Sudan, Tanzania, and Uganda. Additionally, North Korea has provided military training
to a handful of African countries, also in violation of UN sanctions. This cooperation dates back
179 PCTR 18 E fin
4
several decades. For example, during the 1980s, North Korean troops backed Angola’s left-wing
People’s Movement for the Liberation of Angola (MPLA) government, supported President Robert
Mugabe in Zimbabwe against Joshua Nkomo, and assisted the Democratic Republic of Congo’s
President Joseph Kabila’s efforts to regain control over the country.
18. Recent reports, including that of the UN Panel of Experts, highlight the continuing trade in
weapons between North Korea and Syria. Pyongyang and Damascus have a longstanding
relationship dating back to the Cold War. Current trade between the two countries includes the sale
of items to Syria that could be used for the production of chemical weapons. The Syrian civil war has
been particularly profitable for North Korea as it has generated additional demand for North Korean
weapons. Pyongyang is suspected to have sent technical advisers, engineers, and possibly combat
troops to Syria to assist the Assad regime against the opposition. Cooperation with the DPRK also
allowed Syria to construct a nuclear reactor based on the design of North Korea’s Yongbyon reactor.
Israeli airstrikes destroyed this reactor in 2007.
19. Experts estimated that the revenues from the DPRK’s cooperation with Iran on nuclear and
missile technology and arms sales alone could be as high as USD 2-3 billion annually. There is also
evidence of DPRK arms sales to the Houthi insurgents in Yemen and to Hezbollah in Lebanon.
Around the world DPRK embassies and diplomats continue to use a broad range of deceptive
measures to generate revenue for the regime, according to UN reports. For example, recent reports
highlight the pivotal role of the DPRK embassy in Cairo in selling missiles, military hardware and
services to many countries in the MENA region.
20. In August 2018, a UN report noted that “[North Korea] has not stopped its nuclear and missile
programs and continued to defy Security Council resolutions through a massive increase in illicit
ship-to-ship transfers of petroleum products, as well as through transfers of coal at sea during 2018.”
The report also highlighted that North Korea has been cooperating militarily with Syria as well as
attempting to sell weapons to Houthi rebels for their fight in Yemen. The independent experts also
found evidence of Pyongyang’s violation of an export ban on textiles by sending more than
USD 100 million in goods to China, Ghana, India, Mexico, Sri Lanka, Turkey, and Uruguay between
October 2017 and March 2018.
21. Though not directly within the scope of the security challenges posed by North Korea, your
Rapporteur would be remiss if this paper did not mention the DPRK regime’s abhorrent treatment of
the North Korean population of 25 million people as well as the abuse and imprisonment of
foreign visitors.
22. The oppressive regime in Pyongyang has a human rights record that is among the worst in the
world for continued systematic, wide spread, and gross human rights violations. The Commission of
Inquiry (COI) established by the United Nations Human Rights Council concluded that the regime in
Pyongyang has committed multiple crimes against humanity, including extermination, murder,
enslavement, and torture. Hundreds of thousands of North Koreans have perished in prison camps
(International Bar Association, 2017). The DPRK regime diverts domestic resources and sometimes
blocks international aid from reaching vulnerable North Korean populations. North Korea is the only
country in the world where a literate, industrialised, urbanised population suffered a famine in
peacetime.
23. For many years, the North Korean regime has imprisoned foreign nationals and used their
cases for political leverage. In January 2016, DPRK authorities arrested US citizen
Otto Frederick Warmbier, an American student studying in the Rapporteur’s home state of Virginia
and sentenced him to 15 years of hard labour for “anti-state acts” allegedly committed during a visit
to North Korea. Mr. Warmbier died shortly after being released from detention due to systematic
mistreatment while incarcerated in the DPRK. The North Korean government continues to imprison
foreign nationals, including a large number of Japanese and South Korean citizens (Ryall, 2018).
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III. THE ROLE OF CHINA AND RUSSIA
24. In the case of North Korea, the People’s Republic of China (PRC) has a wolf by the ear, and it
can neither hold him, nor safely let him go.
25. Recent demonstrations of independence from Beijing by Kim Jong-un showcase how unwieldy
the DPRK-PRC relationship can be: Kim Jong-un has purged pro-Chinese North Korean officials,
including the brutal execution of his uncle Jang Song-thaek. Kim Jong-un also chose the week of
the BRICS (Brazil, Russia, China and South Africa) summit in Beijing to detonate a nuclear weapon.
In addition, he had North Korean agents assassinate his half-brother Kim Jong-nam, who had been
living in Macao under Chinese protection.
26. That being said, the relationship has also developed into one of necessity: Pyongyang is
economically dependent on China. The PRC accounts for 80-90 % of the DPRK’s foreign trade, and
in 2016, China provided 6,000 of the 15,000 barrels of crude oil North Korea consumed per day
(Energy Information Administration, 2017). Moreover, diplomatic relations between the DPRK and
the PRC have increased considerably immediately before and after Kim Jong-un’s summits with
South Korean President Moon Jae-in and US President Donald Trump. While Kim Jong-un had not
visited China since he took power in 2011, he visited Beijing three times in 2018 to meet with Chinese
President Xi Jinping.
27. China has a significant interest in the stability of the Korean peninsula. The PRC is particularly
concerned about a collapse of the DPRK that would likely result in huge refugee flows across the
border. Moreover, an imploding North Korea would have a serious negative economic and social
impact on the regions of north-eastern China that are dependent on cross-border trade. China also
considers the DPRK as a buffer against the democratic ROK and, by extension, the United States.
Additionally, Chinese officials and scientists have expressed fear over possible radioactive material
leaking from the now closed Punggye-ri nuclear testing facility, which could contaminate
neighbouring Chinese provinces of Heilongjiang, Jilin, and Liaoning (Taylor, 2018). For these
reasons, China may support the cessation of nuclear testing in the DPRK.
Map of North Korea and DPRK nuclear sites
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6
28. Although the PRC generally implements its obligations under the United Nations Security
Council resolutions targeting the DPRK, Chinese companies and banks are suspected of assisting
the DPRK regime in circumventing existing sanctions, thereby enabling the latter to finance its
nuclear and missile programmes. Chinese companies continue to facilitate DPRK exports of coal
and iron ore and the import of vital fuel products. China blocked US efforts in 2017 to place an oil
embargo on North Korea.
29. There are some recent signals that China is willing to use its immense leverage over
North Korea to influence the current crisis. China appears to have reduced imports from North Korea
by 78.5% and 86.1% in January and February of 2018 (CNBC, 2018). However, these actions may
be meant to signal to Kim Jong-un that this crisis will be resolved on China’s terms. It was not until
Kim Jong-un agreed to meet with ROK President Moon Jae-in and US President Donald Trump
that Kim Jong-un rushed to Beijing for a meeting with President Xi.
30. Russia and the DPRK have a longstanding relationship stemming from proximity and close
Cold War ties. Recently, Moscow has made overtures to Pyongyang that it seeks a closer
relationship consistent with Russia’s intentions to increase trade with North Korea and promote its
own Far East development agenda. Moscow is a primary aid donor to the DPRK and it recently
forgave USD 10 billion of Soviet-era debt. Russia is also host to 40,000 North Korean labourers
(Ha and Zilberman, 2018). Bilateral trade between Russia and North Korea doubled in the first
quarter of 2017. In 2017, Russia emerged as North Korea’s second-largest trading partner. Trade
was around USD 78 million. Although this is down from a peak of USD 112 million in 2013, it was a
slight increase on 2016 despite a dramatic expansion of international sanctions against Pyongyang.
31. The Russian ports of Nakhodka and Kholmsk have been used for the transhipping of
North Korean coal exports after the UN Security Council banned them in August 2017. There are
also reports that Russian oil exports to North Korea are much higher than publicly known. According
to unconfirmed reports in December 2017, gasoline prices dropped in North Korea and some
suggest that increased Russian exports were behind the drop in prices. North Korea’s illicit
procurement activities and increased trade with Russia have somewhat reduced Pyongyang’s
economic dependence on China. The UN Panel of Experts has published findings on possible
Russian sanction violations involving imported DPRK iron, steel and coal; the operation of DPRK
bank and arms sales representatives in Russia; and extensive shipping related violations beyond
the transhipment of North Korean coal.
32. From South Ossetia and Abkhazia to Crimea and Syria, Russia has pursued a geopolitical
strategy of fomenting conflict, uncertainty, and instability abroad. It is consistent with this strategy to
work against the resolution of the crisis on the Korean peninsula if Russia perceives the North Korean
threat as a source of strategic uncertainty. Though it has supported DPRK sanctions at the UN,
Russian enforcement of UN sanctions is weak to say the least. In late August 2018 Russia blocked
the original report of the UN Security Council Sanctions Committee on North Korea on the
implementation of sanctions against North Korea and its nuclear programme, which had initially
named Russian ships when citing “a massive increase in illicit ship-to-ship transfers of petroleum
products,” for North Korea (The Guardian, 2018).
IV. THE KINETIC OPTION
33. Increased provocation and threats by Pyongyang, advances in DPRK ballistic and nuclear
weapons technology, and the inability or unwillingness of North Korea’s two largest patrons to
convince the regime to pursue denuclearisation has produced grave concerns and immense
frustration among the international community.
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34. In August 2017, after two ICBM tests by North Korea, US President Donald Trump publicly
threatened to consider a military strike against the DPRK. The kinetic option would have profound
global security implications. More than 25 million people living in and around Seoul are within range
of North Korean artillery. Casualty estimates for a conflict involving only conventional weapons are
as high as 300,000 in the opening days of a large-scale conflict with the DPRK. Those estimates
only grow if one considers the DPRK’s potential deployment of its arsenal of nuclear, chemical, and
biological weapons. The costs of recovery and reconstruction following a military conflict could be
astronomical and would likely generate requests for massive amounts of assistance from NATO
countries.
35. The Korean peninsula is one of the most militarised regions in the world and any security crisis
would have the potential to spill over into neighbouring countries, particularly Japan and China, as
well as Russia. One does not need to enumerate the various military operations from surgical strikes
to the deployment of ground combat troops into North Korea to appreciate that the military option is
fraught with unintended consequences and risks immense death and destruction. It should be an
option of last resort and remains the least preferred alternative to resolving the crisis on the
Peninsula.
V. IMPROVING DPRK SANCTIONS: IMPLEMENTATION, ENFORCEMENT, AND
EXPANSION
36. One alternative to the kinetic option that has received a degree of international support is the
establishment and development of a robust sanctions regime targeting North Korea. The UN Security
Council (UNSC) adopted 11 resolutions between 2006 and March 2018 addressing North Korea’s
malign activities and illicit weapons programmes. Seven of those resolutions have been adopted
since 2016 as the pace and intensity of work on UN DPRK sanctions has increased. As permanent
members of the Security Council, China and Russia have supported the adoption of these
resolutions and the associated sanctions.
37. The resolutions adopted before 2016 primarily targeted the DPRK’s activities directly related
to its arms programmes and proliferation. Among other restrictions, the resolutions implemented an
embargo on arms trade as well as nuclear and missile dual-use technologies, and established cargo
inspections for shipments to and from North Korea suspected of carrying prohibited products. The
continued development of North Korean nuclear and ballistic missile technologies have proved that
the weapons-related bans were insufficient.
38. Therefore, sanctions have been imposed on several sectors of the North Korean economy and
have further limited the DPRK’s access to international financial systems. Starting with
Resolution 2270 of 2 March 2016, the UNSC adopted sectoral sanctions, which currently cover more
than 90 % of North Korean exports.
39. Financial services sanctions prohibit, among other things, new joint ventures with DPRK
entities or individuals, the transfer of gold to or from the DPRK, public or private financial support for
trade with the DPRK, any relationship with DPRK banks, and the provision of insurance to DPRK
vessels or vessels believed to be involved in prohibited activities.
40. Asset freezes have been authorised against individuals trading bulk cash, evading sanctions,
or supporting the DPRK’s nuclear-, missile-, or weapons of mass destruction (WMD)-related
programmes. UN Member States have also been asked to expel DRPK diplomats engaged in
sanctions evasion, DPRK nationals who represent certain designated entities, and any foreign
national working for a DPRK bank or financial institution.
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41. Interdiction and inspection-related sanctions have been expanded to include the designation
of additional shipping vessels subject to assets freeze, seizure, or denial of entry into port. Since
2017, UN Member States are now required to de-register, seize, inspect, and impound vessels that
are believed to be involved in prohibited activities.
42. Bans have been placed on selling or supplying North Korea with aviation fuel, gasoline, jet
fuel, rocket fuel, and all condensates and natural gas liquids. Security Council resolutions adopted
in 2017 also limit refined petroleum products and crude oil.
43. UN bans on natural resources have had an impact on the North Korean economy. North Korea
is rich in natural resources, but UN sanctions now prohibit the trade of DPRK lead and lead ore,
copper, nickel, silver, zinc, gold, titanium ore, vanadium ore, rare earth elements, agriculture, wood,
and coal.
44. Sanctions also prohibit the trade of DPRK seafood and fishing rights, the export of DPRK
textiles, and the sale to the DPRK of industrial machinery, transportation vehicles, iron, and steel.
Some important humanitarian exemptions exist in the UN sanctions regime.
45. Despite the myriad restrictions (of which this report only includes a partial list) on the North
Korean economy intended to punish its threatening behaviour and deter the pursuit of illicit weapons
programmes, the regime in Pyongyang remains a pariah state committed to the development of
increasingly sophisticated ballistic and nuclear weapons technology. There are several reasons the
international sanctions regime has thus far failed to bring about the desired results.
46. First, the North Korean economy is relatively isolated and the DPRK has developed methods
of effectively evading sanctions. It has used a broad range of measures, including the use of shell
companies and foreign-flagged vessels, the transhipment of DPRK goods for export, sending
North Korean workers abroad to produce revenue from remittances. The regime also engages in
overtly criminal operations, such as drug trafficking, counterfeiting foreign currencies, and the digital
hijacking of bank accounts. According to the UN Panel of Experts’ latest report, the DPRK managed
to generate USD 200 million in 2017 through the export of coal and other commodities on the
sanctions list, mostly to China, Russia, Malaysia, and Vietnam. Despite NATO countries’ support for
and compliance with UN sanctions, Europe remains a locus for North Korean sanctions-evasion
activities. Several recent incidents were documented in the Panel of Experts 2018 report. In 2017,
Austria closed 12 bank accounts associated with North Korean embassy personnel; DPRK iron and
steel exports were sent to France, Germany, and Slovakia throughout 2016 and 2017; and DPRK
embassy property in several European countries has been advertised as available for lease as
recently as 2018.
47. Second, enforcement of and compliance with the DPRK sanctions regime can be improved.
The Russian transhipping hubs mentioned earlier in this report could be shuttered. The 2017 Panel
of Experts report included a list of 16 banks – several of them operating out of China – that have not
been designated by the UN but which the Panel implicated in several violations of UN sanctions.
This list includes, among others, First Eastern Bank, Rason; First Trust Bank Corporation; Ryugyong
Commercial Bank; Koryo Commercial Bank; Haedong Bank; Hana Banking Corporation; and
Kumgyo International Commercial Bank. These banks could be sanctioned.
48. Oversight and regulation of the maritime insurance industry should be strengthened. As
recently as January 2017, the Luxembourg- and London-based company West of England P&I and
the US-based company American Club P&I provided insurance to DPRK ships and ships travelling
to the DPRK in violation of UNSCR 2270 (2016) and UNSCR 2321 (2016) (Huish, 2017). The
UN Panel of Experts has recommended that, “maritime protection and indemnity insurers include a
clause in all contracts, stipulating that all transfers involving violations of the resolutions, in particular
prohibited ship-to-ship transfers and petroleum products transferred to the Democratic People’s
Republic of Korea, be voided.” However, self-regulation of the industry is not the most effective
179 PCTR 18 E fin
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method of sanctions enforcement. Denying maritime insurance to North Korean shipping can be one
of the most effective tools to deter North Korea’s behaviour.
49. Third, there is still room to expand the DPRK sanctions regime. NATO Allies could be
encouraged to expedite the repatriation of DPRK labour ahead of the 24-month timeline included in
UNSCR 2397 (2017). Maritime insurance restrictions could be expanded to all DPRK vessels and
vessels engaged in trade with the DPRK. Instead of limits on refined petroleum products and crude
oil, the UN could pursue outright bans similar to those placed on the sale of some natural resources.
Countries could also adopt and enforce secondary sanctions targeting the banks that continue to
support trade and business with North Korea. This would effectively cut off those banks from the
international financial system and impose a cost few would be willing to bear.
50. Finally, the international community must make clear once again the carrot it is willing to offer
to convince North Korea to abandon its nuclear weapons programme. Such incentives are essential
to the success of sanctions regimes intended to deter undesirable behaviour. In response to illicit
Iranian nuclear activities, the UN established a robust sanctions regime that drove Iran to the
negotiating table. But it was the promise of relaxed sanctions and increased international trade that
convinced Iran to reverse its nuclear programme and adopt the Joint Comprehensive Plan of Action
(JCPOA), with which it is in compliance to this day. Articulating incentives for denuclearisation is an
essential component of any diplomatic engagement with North Korea. The recent meetings and
declarations between US President Donald Trump and North Korean leader Kim Jong-un as well as
between Chairman Kim Jong-un and South Korean President Moon Jae-in are intended to secure
the verified denuclearisation of the DPRK in a peaceful manner. Secretary of State Mike Pompeo
has visited North Korea at least four times to further this diplomatic effort and in October 2018
reportedly came to an agreement during a meeting with Kim Jong-un to plan a second meeting
between President Trump and Kim Jong-un.
51. However, at the point of writing it is too early to tell if the DPRK leadership is prepared to
implement its international obligations in exchange for a declaration that ends the Korean War and
a roll back of the international sanctions’ regime. After the Singapore Summit, there were widespread
reports that the US intelligence community (IC) had confirmed that the DPRK was expanding
activities at the factory that produced the country’s first ICBM. Another US IC report detailed DPRK
efforts in the wake of the Summit to conceal its nuclear activities. There is significant concern that
the DPRK is misleading the international community regarding the magnitude and content of its illicit
nuclear program. (Washington Post, June 2018). With these setbacks in mind, it is necessary to
enforce a robust sanctions regime until the DPRK demonstrates a verifiable commitment to
denuclearisation. And just as was the case with the JCPOA, NATO countries could play a role
supporting, financing, or brokering an agreement on denuclearisation.
VI. NATO AND MARITIME INTERDICTION
52. Beyond sanctions and directly relevant to the NATO mission is the need for more robust
maritime interdiction activities targeting shipments in violation of UN DPRK sanctions – particularly
interdiction efforts that disrupt North Korea’s arms distribution networks in the MENA region.
53. To increase the pressure on the DPRK, the international community has sanctioned
companies and vessels that are involved in illicit trade. In this context, the UN announced a new
round of sanctions in March 2018 against 21 companies and 28 vessels involved in smuggling
prohibited goods in and out of the DPRK (Nichols, 2018). Other recent measures introduced to
prevent North Korea’s illicit shipping activities include US sanctions of six cargo ships in
January 2018 and the UN Security Council blacklisting of four vessels in December 2017. To help
enforce sanctions against illicit shipments, the US Treasury Department issued a global shipping
advisory that identifies the methods North Korean vessels use to evade sanctions, including turning
off transponders, changing ship identities, and conducting ship-to-ship transfers. The restrictions
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placed on the sale of DPRK goods and arms are only effective if they are enforced, which will require
global maritime operations that intercept, inspect, and impound illicit DPRK shipments.
54. NATO and NATO Allies have an interest in supporting these enforcement efforts and
countering the proliferation of WMDs. The recent Panel of Experts report details the illegal
cooperation between Syria and North Korea on chemical and ballistic missile weapons programmes.
The report includes information on “more than 40 previously unreported shipments from the
Democratic People’s Republic of Korea to the Syrian Arab Republic between 2012 and 2017 by
entities designated by Member States as front companies for the Scientific Studies Research Centre
of the Syrian Arab Republic.” The Panel of Experts also published findings that DPRK technicians
continue to “operate at chemical weapons and missile facilities at Barzah, Adra and Hama,” and that
13 shipping containers bound for Syria were concealing enough DPRK acid-resistant tiles for a
large-scale industrial chemical weapons project.
55. Syrian dictator Bashar al-Assad has repeatedly used chemical weapons on Syrian civilian
populations. The attacks constitute a particularly horrific and condemnable aspect of Assad’s
brutality and are in violation of the Chemical Weapons Convention. The use of chemical weapons
has escalated the war and contributes to the ensuing humanitarian crisis in Syria, which has already
resulted in more than 400,000 deaths and the displacement of 11 million Syrians – four million of
whom are in NATO member Turkey and one million of whom have sought refuge in Europe (Syrian
Refugees, 2016).
56. In October 2016, NATO launched Operation Sea Guardian to, among other things, perform
maritime interdiction, and counter the proliferation of weapons of mass destruction. For the
performance of maritime interdiction, assets may be “assigned for quick-response actions and may
use Special Operations Forces and experts in chemical, biological, radiological and nuclear (CBRN)
weapons to board suspect vessels.”
57. NATO has Standing Naval Forces (SNF) that provide the Alliance with a continuous naval
presence and carry out scheduled exercises, manoeuvres and port visits. They have been deployed
in the past. For example, Operation Unified Protector was critical to the implementation of a maritime
arms embargo on Libya in 2011. NATO has also been assisting Frontex (the European Union’s
border management agency), and Greek and Turkish national authorities in their efforts to tackle the
migrant and refugee crisis in the Aegean. Between 2009 and 2016, Operation Ocean Shield
contributed to international efforts to suppress piracy and protect humanitarian aid shipments off the
Horn of Africa. A similar operation could and should be established to counter illicit DPRK trade and
proliferation activities.
VII. CONCLUSIONS AND RECOMMENDATIONS
58. North Korea continues to present a grave security risk for international security as long as it
does not fully implement its international obligations, including the elimination of its nuclear,
chemical, and biological warfare capabilities and ballistic missiles, and the termination of all related
programmes. The area of the world within range of North Korea’s ballistic and nuclear weapons
continues to grow, and the DPRK’s illicit weapons programmes undermine existing non-proliferation
regimes and international arms control agreements. Pyongyang is also destabilising the highly
volatile MENA region in Europe’s neighbourhood. This is primarily due to its continuing proliferation
activities, which include the sale of conventional and nonconventional arms and the provision of
weapons-related technical expertise. In fact, the 2018 UN report states that “prohibited military
cooperation with the Syrian Arab Republic has continued unabated.” Therefore, Allies, and NATO
as an organisation, must clearly and directly focus on dealing with the threats emanating from the
DPRK.
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59. This report recommends that NATO Allies improve enforcement of existing DPRK sanctions
as well as support the expansion of the DPRK sanctions regime at the UN and/or through their own
national legislation.
a) NATO Allies should support the adoption of comprehensive restrictions on maritime
insurance for DPRK vessels and vessels engaged in trade with the DPRK.
b) NATO Allies should target banks that violate UN sanctions with secondary sanctions –
effectively cutting them off from the international financial system.
c) NATO Allies should increase their already-enhanced scrutiny over the actions of North
Korean diplomats operating in their countries, to ensure that they are not abusing their
diplomatic status by engaging in commercial or other activities.
d) NATO Allies should immediately implement the restrictions on North Korean labourers
adopted in 2017.
60. The DPRK’s limited international trade is primarily through shipping vessels. It has
approximately 240 vessels in its merchant fleet. Therefore, interdiction of illicit shipping emanating
from North Korea would increase significantly the pressure on the DPRK’s political leadership.
Interdiction efforts would also help restrict North Korea’s proliferation of WMDs. Maritime forces will
be needed to effectively implement interdiction efforts and it would be in the interest of all Allies, and
indeed the international community, to contribute to global maritime operations that seek to disrupt
illicit North Korean trade.
61. Therefore, NATO should:
a) implement the interdiction and counter-proliferation components of Operation Sea
Guardian in order to help address the DPRK threat to international security.
b) help prevent illicit trade with North Korea through the deployment of naval assets much
like the United Kingdom's recent deployment of a British warship to the waters around
North Korea (Kelly, 2018).
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221 PC 18 E rev. 1 fin
Original: English
RESOLUTION 451
on
REINFORCING NATO’S CONTRIBUTION TO TACKLING THE
CHALLENGES FROM THE SOUTH*
The Assembly,
1. Emphasising that a secure, economically and socially stable Middle East and North Africa
(MENA) is of strategic importance for the Alliance;
2. Acknowledging that the underlying causes fuelling instability and conflict in the region include
a broad range of economic, environmental, and social issues as well as ineffective governance;
3. Recognising that instability in the area has provoked massive migration flows towards
member states at the borders of the region, which have become for those countries a possible cause
of instability;
4. Recognising that the Alliance as an organisation does not have the necessary instruments to
address these underlying causes that fuel radicalisation;
5. Noting, however, that NATO does make an important contribution to the stability of the MENA
region through its political dialogue and particularly through its assistance to partner countries of the
Mediterranean Dialogue (MD) and the Istanbul Cooperation Initiative (ICI);
6. Recognising the essential role of Operation Barkhane for Euro-Atlantic security;
7. Appalled by the actions of the regime of Bashar al-Assad against its own population, including
the barbaric use of chemical weapons, but aware that only a negotiated political solution on the
basis of United Nations Security Council Resolution 2254 can produce a lasting solution to the
conflict;
8. Commending the Iraqi security forces and the Government of Iraq for their success against
Daesh and for the restoration of sovereign control over all Iraqi territory, but aware that Daesh and
other terror organisations remain a serious threat unless the underlying causes fuelling radicalisation
are addressed;
9. Stressing that the war in Syria and the instability in Iraq is a major source of instability far
beyond their borders, exacerbating an already volatile security situation in the MENA region and
beyond, adversely affecting trans-Atlantic security in its entirety;
* Presented by the Political Committee and adopted by the Plenary Assembly on Monday 19 November
2018, Halifax, Canada
221 PC 18 E rev. 1 fin
2
10. Recognising that the involvement of foreign actors which pursue competing agendas and
support the rival factions is a main factor that has impeded the implementation of the UN action plan
for Libya;
11. Recognising that hybrid strategies are not exclusively used against our countries, and that
we must envisage their potential use by different adversaries, some of which might come from the
South;
12. Noting that the volatile security situation of North Africa is not only affected by developments
within the region, but also by spill-over effects from other parts in Africa and that we cannot forget
that there is a serious terrorist threat with roots in the region, which demands greater attention to the
South;
13. Recognising the efforts made so far by Spain, Italy, Greece and other countries in the face of
the migration challenge resulting from insecurity and instability in North Africa, and the need to
provide assistance and support to those countries in managing migration flows in a sustainable,
inclusive manner;
14. Welcoming the decisions taken by Allied Heads of State and Government at the 2018
Brussels Summit that aim at building a stronger and more dynamic relationship with NATO’s
southern partners and highlighting the importance of NATO’s Hub for the South for improving the
Alliance’s awareness and understanding of the threats coming from the Middle East and Africa;
15. Noting that NATO’s cooperation with the African Union is an integral part of both NATO’s
Framework for the South and the Alliance’s efforts in projecting stability;
16. Emphasising the fact that 22 of the 29 Allies are also members of the European Union which
shares the same interests in the MENA region, and recognising that the EU is playing an important
role in economic development and in the promotion of good governance, democracy, rule of law and
human rights in the Middle East and in Africa as well as the efforts made by the EU in the region, by
means of the Common Security and Defence Policy (CSDP), with missions that are important for
the security of our allies, such as EUTM Mali, EUTM RCA and EUTM Somalia;
17. URGES member governments and parliaments of the North Atlantic Alliance:
a. to continue assisting NATO partner countries in the MENA region in capacity building and
other defence-related activities that help the partners create professional and accountable
security institutions, which is central to improving the stability of partner countries and the
whole MENA region;
b. to provide adequate financial and personnel resources to implement the non-combat NATO
training mission in Iraq and encourage the Iraqi government to address the shortfalls in good
governance;
c. to develop a joint, coordinated, Allied approach towards a political solution to the war in Syria
that is acceptable to all main stakeholders and also holds the Assad regime accountable for
its human rights violations and the use of chemical weapons;
d. to agree on a shared policy towards Libya in the area of defence assistance and security
institution building, as well as to use diplomatic leverage to force the actors on the ground to
implement the UN action plan;
e. to expand and deepen collaboration between NATO and the European Union in the MENA
region, including by assisting partners in building their capacities and fostering resilience;
221 PC 18 E rev. 1 fin
3
f. to enable NATO exploring ways to expand and deepen its relations with regional organisations
to help them improve their capacities to address security threats in the MENA region and in
other parts of Africa;
g. to further enhance the operability of the Hub for the South in Naples (NATO Strategic Direction
South – Hub);
h. to consider how NATO can strengthen military cooperation between Allies to stabilise the G5
Sahel countries.
_______________
SCIENCE AND TECHNOLOGY
COMMITTEE (STC)
RUSSIAN MEDDLING IN
ELECTIONS AND
REFERENDA IN THE
ALLIANCE
General Report
by Susan DAVIS (United States)
General Rapporteur
181 STC 18 E fin | Original: English | 18 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................................................1
II. RUSSIA’S MOTIVATIONS BEHIND MEDDLING IN ELECTIONS AND REFERENDA ..........1
III. WHAT WE KNOW: RECENT RUSSIAN MEDDLING IN ALLIED COUNTRIES .....................4
A. THE UNITED STATES .................................................................................................4
B. THE UNITED KINGDOM ..............................................................................................7
C. FRANCE.......................................................................................................................8
D. GERMANY ...................................................................................................................8
E. SPAIN...........................................................................................................................9
F. THE NETHERLANDS...................................................................................................9
IV. POLICY RESPONSES AND THE WAY FORWARD............................................................ 10
A. ELECTION INFRASTRUCTURE ................................................................................ 10
B. INFORMATION SYSTEMS......................................................................................... 11
C. SOCIAL AND MASS MEDIA....................................................................................... 12
D. OTHER APPROACHES ............................................................................................. 15
IV. CONCLUSIONS .................................................................................................................. 16
SELECT BIBLIOGRAPHY ................................................................................................... 17
181 STC 18 E fin
1
I. INTRODUCTION
1. Russia under President Vladimir Putin has become deeply dissatisfied with the liberal
international order—so much so that the Russian state is actively seeking to undermine it. It is
unclear what marked the turning point. Many point to President Putin’s speech at the 2007 Munich
Security Conference when he harshly criticized the United States, NATO and even the European
Union (EU) and called for a new world order. Others point to Russia’s military actions in Georgia in
2008 or in Ukraine since 2014. What is clear today is Russia’s desire to return to geopolitical
zero-sum games and reclaim what it considers its spheres of influence. To reshape the international
order along those lines, Russia seeks to undermine its most stalwart defenders in Europe and
North America. The Russian regime seeks to destabilize their democracies and, indeed, the very
idea of liberal democracy in order to prop up its own position.
2. Russia’s subversive efforts take many shapes and forms. While Russia has used force in
support of this strategy, most efforts are non-military and seek to probe and exploit weaknesses in
others through, inter alia, political and informational means, economic intimidation and manipulation
(NATO PA, 2015). In 2018, the Committee on the Civil Dimension of Security (CDS) of the
NATO Parliamentary Assembly (NATO PA) examines Russian overall hybrid operations in its special
report Countering Russia’s Hybrid Threats: An Update (NATO PA, 2018).
3. To complement the CDS report, the General Rapporteur of the Science and Technology
Committee (STC) has decided to focus this general report on one of the most worrying hybrid threats:
meddling in elections and referenda via cyber and information operations. The Russian way of cyber
and information warfare is to attack and/or exploit the very institutions that make liberal democracies
strong, particularly freedom of the press, freedom of speech, and free and fair elections. As is
becoming abundantly clear, Russia has targeted several elections and referenda over the last few
years. This conduct is unacceptable. Credible elections and referenda are at the heart of liberal
democracy. Elections are the expression of the will of the people and therefore the basis of a
government’s authority. Referenda are a highly valued form of direct democracy in many polities,
including the Rapporteur’s home state of California. If citizens lose trust in either of these processes,
their democracies are at severe risk.
4. The challenge of Russian cyber and information operations, including against elections and
referenda, is a strategic challenge for the Alliance. It requires responses at every level, in all forums
and through every channel. As elected representatives of the people, it is of utmost importance that
the lawmakers of the Alliance address the challenge and that the NATO PA devise clear and strong
recommendations for Allied governments and parliaments.
5. This general report, adopted in Halifax, Canada in November 2018, first addresses the different
motivational drivers behind Russian meddling in elections and referenda in the Alliance. Second, it
examines a few important elections and referenda in the Alliance where meddling took place or was
a serious concern. Third, it discusses a range of policy responses, which served as the basis for a
resolution, also adopted at the 2018 NATO PA Annual Session.
II. RUSSIA’S MOTIVATIONS BEHIND MEDDLING IN ELECTIONS AND REFERENDA
6. Despite the rhetoric of its leaders, Russia cannot compete toe-to-toe with NATO members. Its
Gross Domestic Product (GDP) amounts to about USD 1.3 trillion compared to the United States’
USD 19 trillion and the EU’s USD 17 trillion. By 2020, Russia is projected to spend USD 41 billion
on military spending compared to NATO’s USD 892 billion—at a time when Russia is militarily
overstretched due to its involvement in conflicts around the globe (Meakins, 2017). Moreover, its
government remains beleaguered by severe corruption and an inability to address growing social
problems, including severe poverty and inequality.
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2
7. Perceiving itself as being at a dangerous disadvantage against potential adversaries, Russia’s
“weakened geopolitical position forces it to play the role of spoiler to assert its interests” (Beaulieu
and Keil, 2018). Russian leaders have thus, inter alia, used cyberattacks and other instruments that
the Soviet Union once called “active measures” or information operations to discredit liberal ideals
and undermine democracies. Information operations are not a new addition to Russia’s toolkit, but
their reach and effectiveness have been increased by the vast and often unsecured cyberspace,
which “allows for the high-speed spread of disinformation” (Fried and Polyakova, 2018).
8. While digital technology is undeniably a force multiplier, it is imperative to recall that information
operations “are very human in design and implementation” (Watts, 2017). Those engaging in
information operations try “to shape the target’s preferences in line with the pre-defined aims of the
sender” which involves “an active learning process on the part of the target” (Splidsboel Hansen,
2017). Information operations thus rely very much upon cutting-edge social, behavioral and cognitive
sciences (Paul and Matthews, 2016).
9. The specific aims of Russia’s meddling vary, depending on the circumstances, and they are
not mutually exclusive. Indeed, analysts argue that the Russian leadership follows an “operationally
opportunist approach” (Beaulieu and Keil, 2018). First, Russian meddling aims to exacerbate
pre-existing tensions within a society. Wherever Russian meddling has been suspected, hackers
and trolls have demonstrated a sophisticated understanding of the anxieties that divide a country. In
the United States, Russian operatives purchased advertisements that inflamed religious and political
grievances to undermine its civil society (Lecher, 2017). In Germany, Russian bot networks exploited
debates over the government’s refugee policies to try to weaken Chancellor Angela Merkel (Meister,
2016). Moreover, in Spain, Russian media and Russian bot networks fanned Catalonian separatism,
contributing to one of Spain’s biggest constitutional crises of the modern era (Emmott, 2017). These
incidents show Russia’s use of technology to weaken a sitting government, undermine the opposition
or make liberal democracy appear undesirable (Alandete, 2017b).
10. Importantly, these divisions are not created out of thin air. Not every person who is involved in
a divisive political debate is a Russian agent, nor is every bot network operated by Russian
government operatives. Instead, Russian operatives insert themselves where they believe they can
make an impact. Operatives exploit existing animosities by amplifying and elevating the most
extreme voices to distort a country’s public discourse. Media outlets like RT, which operates on a
budget matching some of the biggest global media groups, provide conspiracy theorists and radical
groups with the opportunity to spread their message. During the 2016 US elections, Russian agents
masqueraded as US citizens on Facebook and Twitter to fuel highly partisan debates. Speaking
about Russian bot activity, John Kelly, the founder of a social media marketing firm, noted that “[t]he
Russians aren’t just pumping up the right wing in America. They’re also pumping up left-wing stuff
— they’re basically trying to pump up the fringe at the expense of the middle” (Rutenberg, 2017). As
Mr Kelly told the US Senate: “The extremes are screaming while the majority whispers” (Kelly, 2018).
In short, Russian meddling plays on existing fault lines in a society.
11. Second, Russian meddling seeks to undermine faith in liberal democratic institutions.
Since the so-called color revolutions of the early 2000s, Russian leaders have, in the words of
political sociologist Larry Diamond, “behaved as if obsessed with fear that the virus of mass
democratic mobilization might spread to Russia itself” (Diamond, 2016). By weakening democratic
institutions, Russian leaders see a way to weaken their perceived adversaries and level the playing
field. Suggestions of corruption or official misconduct can force democratic governments to turn
inward to deal with discontent and apathy within their own electorates. As early as the
2012 US presidential election, Russian media reported that US democracy was a “sham” and
suggested, “that US election results [could not] be trusted and [did] not reflect popular will” (Office of
the Director of National Intelligence, 2017). Following protests in Catalonia, observers argued that
Russian bots circulated messages suggesting Spain was violent and undemocratic
(Milosevich-Juaristi, 2017).
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3
12. Moreover, delegitimizing democracy helps Russian leaders sell their system of government to
citizens within Russia and abroad. As stated by the Minority Staff of the US Senate Committee on
Foreign Relations: “If Putin can demonstrate to the Russian people that elections everywhere are
tainted and fraudulent, that liberal democracy is a dysfunctional and dying form of government, then
their own system of ‘sovereign democracy’ […] does not look so bad after all” (Minority Staff of the
Committee on Foreign Relations, 2018). [Russian political leaders use the term “sovereign
democracy” to describe the current political system in the country.] A weak West distracts from
problems at home and provides a justification for holding onto power. Further, it makes Russia look
more attractive to potential allies who could be alienated by the perceived failures and hypocrisies
of the liberal democratic world order. If all politicians are corrupt and all elections are fraudulent, then
there is no point in pursuing democracy at all (Zygar, 2016).
13. Third, Russian meddling tries to advance politicians and political groups perceived as
amenable or friendly to Russian influence and discredit those seen as hostile. In Europe,
Western intelligence agencies have, for example, reported Russian support for parties and
organizations that undermine NATO and EU cohesion or advance Russian economic and political
interests (Foster, 2016). In France, then-candidate Emmanuel Macron, noted for his opposition to
many of Russia’s policies, suffered a major cyberattack that threatened to derail his candidacy. In
contrast, his main rival, known for her pro-Russian views, was invited to the Kremlin and received
extensive positive coverage by Russian media outlets.
14. A study by the Center for European Policy Analysis found that Sputnik, a Russian media outlet,
granted “disproportionate coverage to protest, anti-establishment and pro-Russian members of the
European Parliament” and did so in a deceptive fashion that “fit the [station’s] wider narrative of a
corrupt, decadent and Russophobic West” (Nimmo, 2016). Movements that exacerbated internal
tensions, threatened the cohesion of the EU and attacked NATO expansion tended to receive
support from the Russian state. Movements that supported the opposite tended to be attacked or
vilified.
15. Lastly, Russian meddling tries to foment chaos and uncertainty in Western countries. In
July 2016, RT and Sputnik News published false stories about a US airbase in Incirlik, Turkey being
overrun by extremists (Sputnik News, 2016). Observers reported intense activity by pro-Russian bot
networks and social media aggregators that amplified the story and spread conspiracies about the
imminent capture of nuclear missiles by terrorists (Fox, 2017). In January 2016, Russian-speaking
communities in Germany were consumed by rumors that the government had covered up the rape
of a girl by migrants. Russian media outlets and later also Russia’s Foreign Ministry spread the story,
which insinuated that the official version of events was not to be trusted (Rutenberg, 2017).
16. Alina Polyakova of the Atlantic Council argues that the goal of such stories and of Russian
meddling more broadly is to “manufacture some sort of political paralysis while at the same time
raising the level of pro-Russian voices” to “destabilize politics and sow chaos” (Luhn, 2017).
Individuals are induced to distrust their governments and mainstream media outlets in favor of
conspiracies and rumors. The line between fact and fiction becomes blurred, making it easier for
false or deceptive narratives to enter the public discourse (Fox, 2017). This confusion can be used
to undermine the fabric of a society. It can also be used to support narratives within Russia about an
impending global calamity that necessitates strong domestic leadership (Weisburd, Watts, and
Berger, 2016).
17. In short, Russian misinformation and disinformation seek to accomplish multiple, interrelated
goals to undermine the West and promote the interests of Russia’s leaders. They allow Russia to
spread narratives that can influence, to its advantage, the way individuals, both at home and abroad,
interact with political systems. Without resorting to direct military confrontation or substantial
investments, Russian leaders thus seek to shape international affairs in their favor.
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4
III. WHAT WE KNOW: RECENT RUSSIAN MEDDLING IN ALLIED COUNTRIES
18. Attribution in cyber space is notoriously difficult. This fact is especially true for information
operations, which seek to create an environment of doubt, mistrust and confusion. Targets often
prefer to conceal or downplay security breaches rather than face the embarrassment of public
exposure. Social media platforms used to spread false or misleading narratives tend to be secretive
with their data. The government agencies charged with investigating these incidents traditionally
operate discreetly. Moreover, many of the components involved in information operations, including
hacks, misreporting and bot networks, are just as available to private citizens as they are to state
actors.
19. As such, it is difficult to discuss Russian interference without caveats. Although the Russian
government is widely believed to have sponsored operations to discredit and destabilize liberal
democracies, the extent and specifics of these operations remain unclear in many instances. In
general, few government or parliamentary documents provide detailed, substantiated accounts of
influence operations across the Alliance. Consequently, this section relies, in part, on public reporting
and government statements to better understand allegations of Russian election and referendum
interference in the United States, the United Kingdom, France, Germany, Spain and the Netherlands.
These cases are illustrative because they involved a high number of credible reports alleging
Russian cyber meddling and/or active steps initiated by governments and parliaments to prepare for
any foreign meddling.
20. To keep this report concise, it focuses on cases of election and referendum meddling in Allied
countries only. However, many of the patterns have been very similar in other countries, notably the
former Yugoslav Republic of Macedonia1
, Georgia, Moldova, Montenegro (before it joined the
Alliance), Sweden and Ukraine. Indeed, Russia first tested its cyber and information capabilities to
influence domestic politics in NATO partner countries, especially in Georgia and Ukraine. Allies have
already identified many lessons and best practices from their partners’ experiences, as the
Committee heard at the 2018 Spring Session. Going forward, the Alliance should continue to learn
from partners, but also contribute to their resilience against such operations.
A. THE UNITED STATES
21. The US Presidential election of 2016 presents the most high-profile case of Russian meddling
in elections. Four principal efforts were pursued: theft of information; selective dissemination of
information; a propaganda campaign; and efforts to hack into voting systems across the country
(Van de Velde, 2017).
22. Several key executive branch, Congressional and expert assessments have already been
released publicly, but the investigations into Russian interference remain on-going. At the executive
and Congressional levels, notable documents include:
- the January 2017 US Intelligence Community Assessment produced by the CIA, NSA, and
FBI;
- the March 2018 House Permanent Select Committee on Intelligence Report adopted by the
Majority Party;
- the March 2018 Minority Views on the House Permanent Select Committee on Intelligence
Report; and
- the July 2018 Senate Select Committee on Intelligence’s initial findings on the 2017
Intelligence Community Assessment.
23. What has become abundantly clear from all official and expert investigations is that Russia
interfered with and sought to undermine public faith in the US democratic process. Although Russia
1 Turkey recognises the Republic of Macedonia with its constitutional name.
181 STC 18 E fin
5
and, previously, the Soviet Union have frequently attacked liberal democracies and sought to
influence the outcomes of specific elections in the United States, Russia’s actions in 2016
represented a significant escalation in activity, scope and directness.
24. Overt intrusions into public and private organizations as well as propaganda and
disinformation enabled the Russian campaign. As reported in the January 2017 Intelligence
Community Assessment, Russian intelligence officials targeted the personal and professional email
accounts of officials associated with both parties (Office of the Director of National Intelligence,
2017). Clinton campaign chairman John Podesta had his email compromised after he mistakenly
clicked on a spear-phishing email (Osnos, Remnick, and Yaffa, 2017). In his January 2017 testimony
before the US Senate Select Committee on Intelligence, the then-director of the FBI,
Mr James Comey, similarly claimed that Russian intelligence targeted and gained “limited access”
to the Republican National Committee by compromising old email accounts and state-level
Republican party organizations (Senate Select Intelligence Committee, 2017). However, according
to the January 2017 Intelligence Community Assessment, Russia “did not conduct a comparable
disclosure campaign” (Office of the Director of National Intelligence, 2017). Think tanks, lobbying
groups, and other politically relevant individuals were also targeted as early as March 2016 (Office
of the Director of National Intelligence, 2017).
25. Using this illicitly collected information, Russian officials launched a propaganda and
misinformation campaign that relied on state-funded media, third-party intermediaries and paid trolls.
Throughout the campaign, the fictitious DCLeaks and Guccifer 2.0, as well as WikiLeaks, contacted
journalists and published emails, private phone numbers, campaign documents and other
documents. Deputy Attorney General Rod Rosenstein made clear that DCLeaks and Guccifer 2.0
“were created and controlled by the Russian GRU [the Russian Main Intelligence Directorate]” (De
La Garza 2018). These publications generated negative campaign coverage from established
trendsetting news outlets, such as The New York Times (Watts and Rothschild, 2017).
26. Further, these events were extensively reported by Russian media outlets, including
English-language outlets such as RT and Sputnik. RT, formerly known as Russia Today, is an
international cable and satellite television network modelled after Western 24-hour news networks
like CNN and the BBC. Sputnik, a government-run news commentary website and radio broadcast
service, models itself after brash internet news sites like Buzzfeed. Both organizations are widely
accused of serving as vehicles of Russian propaganda and amplifying extreme voices in their host
countries (Rutenberg, 2017). Indeed, in 2017, the US Department of Justice required RT America to
register under the Foreign Agent Registration Act. During the election, these sites used information
disclosures to bolster their narrative about the failings of Western liberal democracy.
27. These activities were exacerbated by a coordinated campaign on social media platforms to
highlight these disclosures, spread false stories and delegitimize the US government. On Facebook,
officials have uncovered at least 120 fake Russian-backed accounts that spread messages seen by
29 million US citizens (Solon and Siddiqui, 2017). These pages include attempts to organize
129 offline, real-world events that were seen by 338,300 people in the United States (Volz and
Ingram, 2018). It is unclear how many of these events were attended and how many people
participated (Seetharaman, 2017). As of January 2018, Twitter had identified at least
50,258 Russian bot accounts that posted information related to the US election.
28. On both Facebook and Twitter, Russian accounts allegedly spread messages thought to be
disruptive to US civil society or beneficial to Russian goals. This disruption effort included stealing
identities and posing as fake US citizens, operating social media pages and other internet-based
media targeted at a US audience and amplifying the views of real but divisive US citizens
(Department of Justice, 2018). Messages sought to exploit and enrage both sides of controversial
issues, including gun rights, immigration, LGBT rights and police use of force (Lecher, 2017).
They also sought to directly influence the outcome of the 2016 US presidential election. This
“firehose of falsehood,” as RAND Corporation researchers describe it, produced high volumes of
181 STC 18 E fin
6
misinformation over many different channels to demoralize and divide the public (Paul and Matthews,
2016).
29. In addition to these attacks, US officials claim that Russia targeted some voter databases
during the 2016 election. On 22 September 2017, the US Department of Homeland Security informed
21 states that Russia had attempted to access state voter databases (Borchers, 2017). The Senate
Intelligence Committee assessed that “[i]n a small number of states, these cyber actors were in a
position to, at a minimum, alter or delete voter registration data; however, they did not appear to be
in a position to manipulate individual votes or aggregate vote totals” (Burr et al., 2018). Though these
databases can contain the usernames and passwords of election officials or the names, dates of
birth, gender, driver’s licenses, and partial Social Security numbers of voters, it is unclear what the
hackers planned to do with this information.
30. The 2018 US midterm elections took place in the interval between the writing of this report
and its discussion at the 2018 NATO PA Annual Session. These elections were widely expected to
be a target for Russia and possibly other foreign governments attempting to influence US politics.
Indeed, a few instances of meddling had already emerged at the time of writing. In July and August
2018, Facebook, Twitter, and Microsoft announced the removal of accounts. On 31 July 2018,
Facebook removed 32 pages and accounts from Facebook and Instagram without attributing
responsibility on who stood behind the attempt to influence the midterm elections (Roose, 2018). An
additional 652 group pages and accounts were removed by Facebook and 284 accounts by Twitter
on 22 August (Lapowsky, 2018). Both Russian and Iranian accounts were included in this group,
which also highlights the broader threat of foreign meddling coming from countries beyond Russia
(Solon, 2018). The Microsoft Corporation also deleted and seized accounts reportedly created by
the GRU, which were targeting the Hudson Institute and the International Republican Institute – both
prominent conservative think tanks. Over the past two years, Microsoft has furthermore shut down
84 fake websites over allegations of using phishing emails to gain access to networks (Dwoskin and
Timberg, 2018). Spear-phishing attacks on US members of or candidates for Congress appear to
have continued since the 2016 elections, which has prompted individual political campaigns to hire
expensive cyber and information experts on staff.
31. In response to signs of continued attempts at interference, the US executive branch and
Congress have taken active steps to secure the midterm elections. Since January 2017, over 60 bills
related to election security have been introduced in the US Congress. In the 2018 omnibus spending
bill, the US Congress included USD 380 million in funding for the Help America Vote Act (HAVA).
Efforts to institute clear sanction mechanisms against election interference have also been
advocated. Senators Marco Rubio and Chris Van Hollen have championed the bipartisan Defending
Elections from Threats by Establishing Redlines Act (Deter Act) as one avenue to dissuade foreign
interference in the midterms. In September 2018, President Donald Trump signed an executive order
on Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election. In a
joint statement, Senators Rubio and Van Hollen expressed their hope to go further on mandatory
sanctions for those who might attack the US electoral systems (Van Hollen and Rubio, 2018).
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B. THE UNITED KINGDOM
32. After reports of Russian interference in the US presidential election emerged, members of the
British public expressed concerns about potential Russian meddling in the United Kingdom’s 2016
EU membership referendum and its 2017 general elections. On 8 June 2017, the day of the United
Kingdom’s general election, the British Government Communications Headquarters (GCHQ) warned
British energy companies that their systems might have been compromised by “advanced
state-sponsored hostile threat actors.” However, it is not known if this incident was related to the
elections. Indeed, there were no known hackings or intrusions during the referendum and general
elections campaigns (Williams-Grut, 2017). The government states that “to date, [it] has not seen
evidence of successful interference in UK elections” (Roberts and Nokes, 2017).
33. Russia’s influence in public discourse is unclear. While Prime Minister Theresa May accuses
Russia of “planting fake stories” to “undermine free societies” and “sow discord in the West”, attempts
to study Russia’s influence in the United Kingdom have revealed different estimates
(BBC News, 2017). Oxford University, for example, found 105 Twitter accounts, tweeting 16,000
times, were linked to Russia. Overall, only 0.6% of tweets with the Brexit hashtag were linked to
Russian news sources. Using a list of profile names provided to the US Congress, Edinburgh
University found that 419 Russian Twitter accounts tweeted about both the US presidential election
and the EU referendum (Booth et al., 2017). The Guardian newspaper found that these accounts
were cited more than 80 times by the British press (Hern et al., 2017). A third study by City University
of London found 13,500 bot accounts tweeting about the referendum. These bots operated as a
“supervised network of zombie agents” and were deactivated or removed by Twitter shortly after
polling closed. Bots “tweeted mainly messages supporting the Leave campaign”, but researchers
did not find evidence of widespread fake news and did not attempt to identify the owner of this
network (City Press Office, 2017). Meanwhile, Swansea University and Berkeley University claim to
have found 156,252 Russian accounts that mentioned Brexit in the days before the referendum
(Reuters, 2017). The disparities in these estimates are the result of differing methodologies and
Twitter’s refusal to share much of its data with researchers.
34. These and other reports have triggered official investigations. In October 2017, the House of
Commons Digital, Culture, Media and Sport Committee began a wide-ranging inquiry linked to
Russia during the Brexit referendum and the 2017 general election. In November 2017, the
Intelligence and Security Committee announced that it would investigate issues around Russian
activity against the United Kingdom (Intelligence and Security Committee of Parliament, 2017).
A separate investigation on digital campaigning by the Electoral Commission is also underway
(Posner, 2017).
35. In July 2018, the Digital, Culture, Media and Sport Committee released an interim report on
disinformation and fake news (UK House of Commons Digital, Culture, Media and Sport Committee,
2018). The Committee acknowledged the role that Russia has played in manipulating popular
sentiment during referenda and national elections in Europe and the United States. The Committee
offered suggestions on how to make tech companies more responsible for disinformation and fake
news being spread on social media platforms. Additionally, the Committee called for a broader
investigation into the scale of the problem in order to offer recommendations for actions.
36. Since June 2018, the actions of two prominent Brexit campaigners have drawn increasing
scrutiny in the United Kingdom. Andy Wigmore, spokesman for the Leave.EU campaign, and Arron
Banks, a major financial backer for Brexit, have faced criticism for their contacts with the Russian
embassy in the run-up to the Brexit referendum, including an alleged exchange of confidential legal
documents with officials at the Russian embassy and discussions about business deals (Cadwalladr
and Jukes, 2018; UK House of Commons Digital, Culture, Media and Sport Committee). According
to the Digital, Culture, Media and Sport Committee, the UK National Crime Agency is still
investigating the matter at the time of writing.
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C. FRANCE
37. During the 2017 French presidential election, then-candidate Emmanuel Macron and his party
reported that they had suffered cyberattacks and false reports on social media. In February 2017,
Mr Macron’s digital campaign reported: “thousands of attempted attacks [against Mr Macron’s]
servers [from] tens of thousands of computers […] at the same time” (Beardsley, 2017). Macron
campaign officials faced phishing attacks that exposed their networks to external actors
(Hacquebord, 2017). On social media, Mr Macron was the subject of several fake stories (Chrisafis,
2018). The source of these attacks remains unclear.
38. Most prominently, Mr Macron was the target of a major coordinated leak designed to damage
his candidacy. On 5 May 2017, 36 hours before the French run-off election, a 9-gigabyte file
appeared on internet forums and open-source sharing sites (Greenberg, 2017a). The document
purported to contain Macron campaign emails, documents, accounting files, contracts and other
information meant to embarrass the campaign. According to the Macron campaign, the file also
contained “numerous false documents intended to sow doubt and disinformation”
(Greenberg, 2017a). The release appeared strategically designed to exploit French laws prohibiting
campaign coverage less than 48 hours before the election. Despite a press ban on the publishing of
the content, the leak quickly spread over social media (Dearden, 2017). As in the US presidential
election, the file and related hashtags were amplified by bots, far-right activists and WikiLeaks (Volz,
2017).
39. Most French cybersecurity experts have declined to attribute this incident to Russia officially.
After the election, the French government’s chief of cybersecurity claimed that there was insufficient
proof to attribute such an attack (Associated Press, 2017). Other French sources have commented
on the amateurism of the attack compared to most state-sponsored cyberattacks. Indeed, the
Macron team prevented several attacks by inundating the attackers with fake accounts to slow down
and discredit the intrusion (Challenges, 2017).
40. However, experts outside France have suggested Russia as a likely perpetrator. Then
US NSA Director Michael Rogers stated that the United States “had become aware of Russian
activity” in the French election and that US officials told their French counterparts about this
(Greenberg, 2017b). In April 2017, a private cybersecurity firm, Trend Micro, reported that the attack
on Mr Macron bore characteristics similar to the attack against the US Democratic National
Committee (Hacquebord, 2017).
41. Like other Allies, France has taken active steps to address cyber and information operations.
One notable recent action was the July 2018 adoption of a law on the manipulation of information
during the election period. The so-called fake-news law permits courts to rule whether articles
published up to three months before an election are credible or should be taken down. It allows
candidates to sue for the removal of fake news stories and forces social media platforms such as
Facebook and Twitter to disclose the funding for sponsored content (Young, 2018).
D. GERMANY
42. Germany has faced several threats allegedly connected to Russia. In May 2015, Russian
hackers sent phishing emails to members of the German government, including the office of the
chancellor. The emails installed a Trojan virus on the computers of MPs and staff members who
clicked on it. Over the next three weeks, the hackers scoured the German Parliament’s network and
collected 16 gigabytes of data (Beuth, Biermann, Klingst, and Stark, 2017). Notably, the hackers
relied on human error, targeting the Parliament near a national holiday when the IT department was
closed. In 2016, meanwhile, Russian media outlets circulated a false story about an alleged rape to
delegitimize the German government (Meister, 2016). After protests by Russian-speaking Germans,
the incident earned a rebuke by German officials, who accused Moscow of “political
propaganda” (Witte, 2017). Between March and April 2017, a private cybersecurity firm also
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identified unsuccessful attempts by Russia to infiltrate organizations aligned with Germany’s
two largest political parties (Barker, 2017). In March 2018, the German government confirmed
reports that its government-run intranet, used to securely exchange information between different
ministries and government offices, had been breached by a Russian hacking group. The attack
appeared to focus on the Foreign Ministry and was being treated as “an ongoing process, an ongoing
attack” (Oltermann, 2018).
43. In the 2017 German federal elections, however, Russian meddling appeared to be absent.
While Russian media outlets promoted a high volume of stories that fostered negative views of
Europe and Germany’s leadership, stolen files from the German Parliament failed to surface.
Researchers at the London School of Economics, meanwhile, reported a “coordinated
Russian-language [bot] Twitter network”, but their algorithms suggest that these networks were
smaller than those deployed in other countries (Applebaum et al., 2017). Researchers with Oxford
University found that 15% of Twitter traffic associated with “Alternative for Germany” – a party with
pro-Russian views – had automated attributes, while major political parties averaged between
7.3 and 9.4% (Neudert et al., 2017). There is no public evidence to suggest Russia’s involvement in
this bot activity, nor do most observers think bot activity substantially influenced the election.
E. SPAIN
44. Spain claims that Russian meddling exacerbated tensions surrounding the 2017 Catalonia
referendum (Emmott, 2017). In November 2017, Spanish ministers claimed that content related to
Catalonia was sent from “Russian territory” and “other locations”, such as Venezuela
(Alandete, 2017a). These claims were supported by a researcher at the Elcano Royal Institute, a
Spanish think tank. In a report on the Catalonian referendum, the researcher reported that trolls and
bots disseminated true and false messages on Facebook and Twitter with the goal of provoking
outrage toward the Spanish government. The messages characterized Spain as violent and
undemocratic and reinforced images of Western instability (Milosevich-Juaristi, 2017).
45. Observers have supported some of these claims. In one study carried out by a researcher at
George Washington University, the author found that stories by Russian outlets, such as RT and
Sputnik, were circulated far more frequently than stories by other global outlets and ten times as
frequently stories by as Spanish media counterparts (Alandete, 2017b). “Zombie accounts” spread
pro-secessionist and anti-Spanish messages online (Alandete, 2017a). Meanwhile, El Pais, a major
Spanish newspaper, found that tweets by Julian Assange and Edward Snowden in support of
Catalonian secession were likely amplified by bot activity, with more than 60 retweets occurring every
minute, and attributed this bot activity to Russia (Alandete, 2017c). The Atlantic Council’s Digital
Forensic Research Lab found evidence to support claims that Russian propaganda had influenced
the debate around Catalonia. Notably, researchers found that Assange’s tweets received “extra
amplification’’ from pro-Russian bots (Nimmo, 2017).
F. THE NETHERLANDS
46. Concerned by the meddling in the US Presidential elections in 2016, the Netherlands took
active steps to prepare for potential Russian interference in the Dutch general elections in
March 2017, including through active outreach to US officials by former NATO PA President and
then-Minister of Foreign Affairs Bert Koenders (Brattberg and Maurer, 2018). However, Russian
interference had already entered Dutch politics on two previous occasions. In October 2015, a group
of Russian hackers involved in several other major hacks reportedly breached the Dutch Safety
Board in the period leading up to and after the release of its report on the 2014 downing of flight
MH17 over eastern Ukraine. In the run-up to the April 2016 referendum on the EU-Ukraine
Association Agreement, Russian interference in the debate was seen as well, for example through
agents passing themselves off as Ukrainians to influence local political debates.
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47. To secure public trust in elections, the Netherlands had already banned the use of electronic
voting in 2007 (Brattberg and Maurer, 2018). Before the March 2017 election, the government further
strengthened election infrastructure by forbidding the electronic counting of ballots and the use of
USB flash drives and email by election officials (Chan, 2017). Additionally, the government raised
awareness of past Russian interference in foreign elections while also informing the Dutch public
about disinformation and fake news. Furthermore, social media companies instituted a fact-checking
function for Dutch newspaper articles (Brattberg and Maurer, 2018). Ultimately, the General
Intelligence and Security Service concluded that Russia was not able to “substantially influence” the
2017 Dutch elections beyond the spreading of fake news. Independent experts argue that the fact
the elections were carried out “without any noteworthy interference” could either be explained by
“active preparations or an apparent lack of Russian effort at interference”, possibly because the
Russian government did not want to draw further ire in the Netherlands.
IV. POLICY RESPONSES AND THE WAY FORWARD
48. In almost all reported cases of suspected Russian meddling, a familiar pattern has emerged.
First, political parties or government institutions report unauthorized intrusions into their networks.
Emails are compromised. Personal data is stolen. These intrusions are then followed by significant,
indiscriminate leaks, circulated on social media and magnified by bots, trolls and other accounts.
Finally, these leaks are reported on by traditional, trendsetting press outlets that publicize the most
sensational revelations. Meanwhile, outlets sympathetic to or controlled by the Russian government
publish false or misleading stories that encourage polarized debates and conspiratorial thinking. The
result is a bubble of confusion, wherein large amounts of leaked and false information give the
impression of a scandal (Toucas, 2017).
49. As detailed in previous sections, there is little doubt that Russian leadership has exploited
freedom of speech and of the press to delegitimize democratic institutions in NATO member states.
Nor is there any doubt that Russia’s involvement in such operations will continue in the immediate
future.
50. The following sections detail a few policy responses to Russian meddling. These
recommendations should not be understood as comprehensive or exhaustive as the situation is still
developing and much of the surrounding analysis remains outside the public view. Rather, these
sections reflect on promising practices by NATO members, approaches recommended by experts
and other points commonly broached as part of the discussion on Russian interference (see for
example: Fly, Rosenberger and Salvo, 2018 or Salvo and Beaulieu, 2018). Specific solutions will
vary from state to state and from target to target. For clarity, policy responses are categorized into
four sub-topics: policies that affect election infrastructure; policies that affect information systems;
policies that affect social and mass media; and other possible measures.
A. ELECTION INFRASTRUCTURE
51. To date, there are no known cases of hackers altering vote totals in any election. However,
there are indications of Russian interest in election infrastructure, such as voter registration systems,
voting machines, tally servers and election-night reporting. Member states of the Alliance should
therefore carefully analyses the potential threat. In the United States, for example, senior intelligence
officials claimed to have “substantial evidence” that Russian-backed hackers gained access to, but
did not alter, state websites and voter registration systems in seven states during the 2016
presidential election.
52. To discourage attacks on these systems, the US Department of Homeland Security designated
election systems as “critical infrastructure” on 6 January 2017 in order to enhance communication
between the federal government and election officials while unlocking additional funding for election
security (Newman, 2017). Two bipartisan bills, the Secure Elections Act and the Protecting the
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American Process for Election Results (PAPER) Act, have been proposed in the US Congress to
enhance these efforts by eliminating paperless electronic voting machines, providing additional
funding and assistance to election bodies, and mandating post-election security audits (Stewart,
2018). At the sub-national level, individual states have taken precautions such as the pre-election
testing and certification of voting systems as well as requiring ballot reconciliations and audits
(National Conference of State Legislatures, 2018).
53. Building on lessons learnt and best practices, your Rapporteur would, in particular, encourage
fellow Committee members to explore taking the following steps through their national parliaments
and governments:
- conduct regular risk assessments of election infrastructure and remedy any identified gaps or
vulnerabilities;
- institutionalize pre-election preparations against election interference;
- mandate post-election security audits;
- provide adequate funding and assistance to election bodies; and
- designate election infrastructure as critical infrastructure.
B. INFORMATION SYSTEMS
54. More common are hacks that compromise the security of humiliating confidential information.
As a researcher at the Center for Strategic and International Studies reports, “dumping authentic
private information in the public domain is key for an attacker to gain credibility and build an audience
they intend to manipulate” (Toucas, 2017). Authentic information serves as a hook for a larger
misinformation campaign.
55. Governments can stop or deter some attacks by encouraging vulnerable organizations to
adopt traditional cybersecurity measures. For example, most experts believe that organizations
should have information technology departments with organization-wide visibility and access. They
should be staffed with trained and professional employees who can purchase the necessary
hardware and software without prohibitive delays. Meanwhile, all employees and managers should
be aware of the threats that they face and how they might avoid unnecessary exposure through
proper cyber hygiene. Workers should know to avoid clicking links or downloading content from
unknown sources. They should know not to share passwords and personally identifiable information.
Also, they should be aware that information posted on social media might be used against them.
If individuals suspect a cyberattack, they should know who to contact.
56. Additionally, organizations should have clear and actionable protocols to expedite a response
in the event of an intrusion and ought to know when it is appropriate to notify the relevant law
enforcement or intelligence agencies. In the United States, for example, staffers at the Democratic
National Committee were slow to engage the FBI about alleged Russian intrusions into their network
(Lipton et al., 2016). In Germany, parliamentarians rejected cybersecurity assistance from the
Federal Office for Information Security because they were concerned “the agency could seek to spy
on them” (Beuth et al., 2017).
57. Independent of Russia’s activities, there is growing awareness of the need to develop robust
cybersecurity capabilities. In 2016, the EU adopted the Network and Information Systems (NIS)
directive, the first piece of EU-wide legislation on cybersecurity. The directive requires member
states to develop incident response teams and a national authority competent in the area
(Cybersecurity and Digital Privacy Unit, 2017). EU member states should promptly transpose the
directive into national law if they have not done so already. In addition to various laws at the state
level, the United States federal government passed the 2015 Cybersecurity Information Sharing Act
to allow intelligence agencies to share information about cybersecurity threats with technology and
manufacturing companies (Karp, 2016). At the same time, several NATO member states have
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created military cyber commands to specifically counteract unwanted intrusions. France created
such an organization in December 2017, following the presidential election, and similar institutions
exist in the United States and Germany (Gramer, 2017). All NATO member states have developed
a cybersecurity strategy in some form, though such strategies must be regularly updated to remain
relevant (NATO Cooperative Cyber Defence Centre of Excellence, 2018).
58. Several national governments have also implemented laws and regulations that make
organizations liable for breaches. The French National Commission on Informatics and Liberty
(CNIL) is a cybersecurity regulatory body empowered to inspect corporate networks and enforce
national data protection laws. In 2015, it conducted 550 inspections and fined at least one company
EUR 50,000 for inadequate security measures (Raul et al., 2016). The United Kingdom, despite its
anticipated exit from the EU, expects to implement the NIS Directive into its national law and,
following public consultation in January 2018, confirmed that it would fine organizations up to
GBP 17 million (EUR 20 million) for failing to cooperate with cybersecurity authorities, to report an
incident or to implement appropriate security measures.
59. Internationally, there have been several sustained multilateral efforts to counter Russia’s
cyberattacks and information operations. In July 2014, the Alliance established the NATO Strategic
Communications Centre of Excellence in Riga, Latvia, to research and identify information warfare.
60. The Cyber Defence Policy and an accompanying action plan, approved by all members at the
NATO Wales Summit in September 2014, reaffirmed the Alliance’s position that international law
applied in cyber space and that Article 5 could be invoked in response to a cyberattack. The meeting
also launched the NATO-Industry Cyber Partnership to strengthen NATO’s relationship with the
private sector and achieve specific cybersecurity objectives (Maldre, 2016). At the 2016 NATO
Summit in Warsaw, cyber space was recognized as a domain of operations for NATO. Cybersecurity
and defense played a significant role at the 2018 Brussels Summit as well. Among other actions,
Allies agreed on a way to integrate sovereign cyber effects into Alliance operations and missions
and decided to establish a Cyberspace Operations Centre in Belgium to provide situational
awareness and coordinate NATO operational activity. Your Rapporteur welcomes these next steps
in NATO’s cyber defense policies. However, your Rapporteur argues that NATO must become
quicker in analyzing cyber threats and better in responding in a coordinated, multidisciplinary way if
it becomes necessary. Your Rapporteur also encourages further efforts, as parliamentarians in your
respective member states, to ensure individual plans of action, lines of authority, and lines of
coordination at the national, regional and local levels.
61. Enhanced coordination on cybersecurity and defense was identified as one of seven urgent
needs for NATO-EU cooperation. The July 2018 Joint Declaration on EU-NATO Cooperation noted
the intensifying work between the two organizations on hybrid threats, including cyberattacks. The
fact that NATO and the EU are both participants in the Centre of Excellence for Countering Hybrid
Threats in Helsinki, Finland is a boon in this regard. If circumstances permit, the EU could also be
invited to join the NATO Cooperative Cyber Defence Centre of Excellence in Tallinn, Estonia.
Moreover, the Digital and Social Media Playbook created by the NATO Science and Technology
Organization provides a continually-updated assessment tool to help officials understand the goals
and methods of cyber adversaries (NATO PA, 2017).
C. SOCIAL AND MASS MEDIA
62. While more robust cybersecurity measures can reduce risk, they cannot eliminate it entirely.
Technical and human errors are certain to create vulnerabilities for even the most diligent
organizations (Inglis, 2017). Furthermore, while access to private information can aid a
disinformation campaign, it is not necessary to wage it. Misleading or fabricated stories can thrive
even in the absence of hacks and leaks through social and mass media.
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63. There are primarily two responses to misinformation on social media: one that emphasizes the
responsibilities of technology and media companies and the other emphasizing the
responsibilities of governments. Regarding the first approach, legislators and journalists have
increased scrutiny of how media companies operate, especially in the wake of the Cambridge
Analytica scandal. Following one briefing, US Senator Mark Warner described the efforts of one
social media company as “show[ing] an enormous lack of understanding […] of how serious this
issue is, the threat it poses to democratic institutions, and [begging] many more questions than they
offered” (Fandos and Shane, 2017). British parliamentarians have similarly described corporate
efforts to probe the issue as the “bare minimum” (Shaban, 2018). Third-party experts, meanwhile,
have reported aggressive efforts by Facebook and Twitter to scrub data related to Russian
interference from their platforms, preventing independent assessments (Timberg and Dwoskin,
2017). Even within the companies, business officials “acknowledge now that they missed what
should have been obvious signs of people misusing the platform” (Thompson and Vogelstein, 2018).
64. In response to concerted public criticism, these companies have made some changes to
address the misuse of their sites by malicious actors. In April 2017, Facebook published “Information
Operations and Facebook” that outlined how a foreign adversary might exploit the platform to
manipulate public opinion. In the same month, it suspended 30,000 fake accounts that had been
created to influence the 2017 French presidential election (Weedon et al., 2017). In November 2017,
Google announced it would “de-rank” RT and Sputnik—a process wherein a site is de-emphasized
in search results—for their role in spreading disinformation (BBC News, 2017). Twitter identified and
suspended 3,814 accounts linked to Russia’s interference operation. These accounts, in total, had
approximately 2.7 million followers. The platform also announced that it would counteract highly
automated bot accounts through a number of detection tools based on public and non-public account
data and activity characteristics (Edgett, 2018). Other websites and apps have received far less
scrutiny. However, there is evidence of Russian disinformation campaigns on, for example, Reddit,
a social media and news aggregation website, or Instagram, a photo-sharing mobile app (DiResta,
2018). This issue should be followed up vigorously. Companies should continue to harness the
promise of emerging technologies by refining their approach to disinformation, using artificial
intelligence and big data analytics in particular.
65. Other efforts have focused on fact-checking and informing users of false content. In November
2017, Facebook announced a new portal that allowed users to determine if they liked or followed
any accounts linked to Russian propaganda (Yurieff, 2017). In January 2018, the company
announced changes to its news feed algorithm and, in October 2017, it announced plans to hire
more ad reviewers (Vogelstein, 2018). Prior to the 2017 German parliamentary elections, Facebook
began labelling false stories and alerting users to hoaxes (Stelter, 2017). A similar but more vigorous
effort took place before Italy’s 2018 parliamentary elections, wherein Facebook partnered with
fact-checking organizations to alert users who shared false information about the fact-checker’s
findings (Serhan, 2018). A number of independent fact-checking groups have also sprung up from
civil society, including StopFake, the Atlantic Council's Digital Forensic Research Lab, the German
Marshall Fund of the United States, Hamilton 68 or the Baltic “elves” (Fried and Polyakova, 2018).
66. Traditional media companies, meanwhile, have taken steps to educate the public on possible
misinformation. In France, eight news organizations, including Agence France-Press, L’Express and
Le Monde, joined forces with Facebook and Google to identify false stories circulating on social
media (Barzic et al., 2017). Le Monde, meanwhile, established its own fact-checking site, Les
Décodeurs, to help users determine the trustworthiness of a specific website (Albeanu, 2017). These
new ventures build upon past and current fact-checking efforts, which have been a staple of Western
newsrooms since the beginning of the 21st
century. Per one estimate, there are at least 34 permanent
fact-checking groups active across 20 different European countries (Graves and Cherubini, 2016).
Meanwhile, journalists report that newsrooms are having conversations “about [their] paper’s
standards for using material of questionable sourcing” and the potential motives behind a source
(Peters, 2017).
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67. Some lawmakers have found these efforts are necessary but not sufficient. Efforts have also
increased to regulate social media activity or make companies liable for illegal content in other ways.
In the United States, a bipartisan group of lawmakers proposed legislation to ban foreign-paid social
media political advertizing and make political advertizing on social media more transparent overall
by putting it under the same regulatory regime as broadcast TV and radio (Kelly and Warner, 2017).
Officials across NATO member states have also shown increasing interest in holding social media
companies liable for failing to counteract illegal activity facilitated through their platform
(Rozenshtein, 2017). The German Parliament approved a new law that requires social media
platforms to take down “obviously illegal” material within 24 hours of being notified and makes them
liable for up to EUR 50 million in fines if they fail to do so. French President Emmanuel Macron has
expressed a strong interest in giving media regulators extra powers to “fight any destabilization
attempt by any television channels controlled or influenced by foreign states” and regulating untruths
on social media (BBC News, 2018). This led to the bill on information manipulation in pre-election
periods (see above). The EU also runs Europol’s Internet Referral Unit which, per a July 2016 report,
assessed and referred for removal over 11,000 messages related to terrorist content.
Ninety-one percent of this content was removed (Europol, 2016). Though the group puts its focus
on extremist content, its activities could serve as a model for other efforts.
68. The second approach to misinformation puts the onus on governments by emphasizing their
responsibility to keep the public informed. Russian meddling exacerbates existing fissures in society,
but it does not create them. A misinformation campaign cannot take root if no domestic audience is
willing to accept the divisive and conspiratorial messages that Russian actors amplify. Thus, this
approach emphasizes the responsibility of democracies to establish sources of authority and ensure
that debates across the political spectrum operate using the same set of shared facts.
69. Many of these efforts focus on government task forces that target disinformation. The EU, for
example, operates the East Stratcom Task Force, a team of diplomats tasked with exposing Russia’s
online information through its website, EU vs Disinfo, and a network of over 400 experts, journalists,
and think tanks. The European Commission also published a Communication on Fake News and
Online Misinformation, for release in 2018, setting out the challenges and outlining key principles
and objectives that should guide actions and specific measures the Commission seeks to take
(European Commission, 2018). In support of its work on the document, an EU high-level group
published a detailed report, formulating a number of recommendations for a multidimensional
approach to online disinformation (High-Level Group on Fake News and Online Disinformation,
2018). The Czech Republic opened its Centre Against Terrorism and Hybrid Threats to counter
disinformation, hoaxes, foreign propaganda, and extremist messaging within its borders (Colborne,
2017). In December 2016, the US Congress expanded the mission of the State Department’s Global
Engagement Center, originally envisaged to counter terrorist propaganda, to include countering
state-sponsored propaganda and disinformation. However, despite lawmakers reallocating USD 120
million from the Department of Defense’s budget, it appears the Center has yet to access or spend
any money. In January 2018, the British government announced plans to create a new national
security unit tasked with “combatting disinformation by state actors and others”, but it remains
unclear how this unit will operate and what its mandate will be (Walker, 2018). The German Interior
Ministry similarly proposed the creation of a Center of Defense against Disinformation to identify
misinformation and educate the public on its dangers (Deutsche Welle, 2016). In the run-up to the
2018 parliamentary elections, the Italian government had an online portal that allowed people to
report false content online (Serhan, 2018). On a smaller scale, parliaments themselves can play a
role in countering misinformation by holding hearings and releasing reports that reveal false
narratives and the actors behind them.
70. As two experts from the Atlantic Council underline, “[w]inning the information war will require
a whole-of-society approach” (Fried and Polyakova, 2018). Other efforts thus focus on civil society
and the promotion of civic education and media literacy. In Italy, for example, the Ministry of
Education unveiled a new curriculum with courses intended to teach Italian students how to identify
false news stories and understand how social networks can be manipulated (Horowitz, 2017). In the
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United States, several schools have adopted programs to help students understand how false
narratives are created and how to identify them (Rosenwald, 2017). Since 2015, all French primary
and secondary schools teach a course on moral and civic education. While primarily motivated by
concerns over countering violent extremism, the course could serve as a useful forum to discuss
misinformation campaigns. Similar programs exist in other Allied states. Though it is not yet clear
how these programs will affect current public debates, several recent studies suggest that they help
citizens better engage in the political process (Figueroa, 2017).
71. A related approach focuses on strengthening research on cyber and information operations
and developing technological tools to deal with them. One EU high-level group, for example,
proposes “a network of independent European Centres for (academic) research on disinformation”
and urges the European Commission to consider an independent Centre of Excellence (High-Level
Group on Fake News and Online Disinformation, 2018). A RAND Corporation scholar has also
promoted the idea of a multidisciplinary Center for Cognitive Security (Waltzman, 2017).
D. OTHER APPROACHES
72. Russia uses information warfare because it appears to cause significant disruption at a low
cost. As such, democracies could choose to discourage influence operations by imposing real
consequences. For one, democracies should pursue actions through their court systems in cases of
election interference, as the US Department of Justice has done in its February and July 2018
indictments of several Russian citizens and companies. Another potentially important instrument is
sanctions. All NATO members instituted sanctions against the Russian Federation in the wake of
the illegal annexation of Crimea in 2014. These sanctions must remain in place until conditions
change. However, only one NATO member has implemented sanctions in response to election
meddling. In the summer of 2017, the US Congress, in a near-unanimous, bipartisan vote, tasked
the White House with imposing additional sanctions on Russia, in part because of its interference in
the 2016 elections. In March 2018, after a substantial delay, the White House enacted part of these
statutorily mandated sanctions. The US administration targeted five entities and 19 individuals,
including the Internet Research Agency and individuals identified by the ongoing special counsel
investigation as participants in Russia’s election meddling campaign. Your Rapporteur welcomes
these first steps and acknowledges increased enactment of sanctions in recent months but notes
that they fall short of the full range of sanctions authorized by Congress. Moreover, your Rapporteur
would strongly argue that further sanctions should be discussed at the national and collective levels
in response to additional evidence of Russian meddling in democratic processes.
73. Democracies can and should project national and multinational unity when faced with influence
operations. Russian interference exploits and tries to exacerbate polarization within a society.
Successful interference relies on political actors taking advantage of misinformation for short-term
gain, for example by exploiting leaks for political gain. To prevent any future incidence, interference
must thus be rebutted firmly and swiftly in a spirit of unity. Political leaders must be able to admit that
Russian interference is demonstrably taking place when necessary. Political rivals must work
together to condemn it with one voice via clear messages and actionable policies. By developing
norms and procedures that discourage exploitation of misinformation, political systems can improve
their resilience and deter future information warfare. The will of the people expressed through their
votes in elections and referenda must be protected forcefully.
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IV. CONCLUSIONS
74. In February 2018, US National Security Agency Director Dan Coats testified before lawmakers
in the US Senate Intelligence Committee. As part of his assessment of the worldwide threats facing
the United States and its allies, Mr Coats reported that: “We expect Russia to continue using
propaganda, social media, false-flag personas, sympathetic spokespeople and other means of
influence to try to exacerbate social and political fissures in the United States […] There should be
no doubt that Russia perceives its past efforts as successful and views the 2018 US midterms as a
potential target for Russian influence operations” (Senate Select Intelligence Committee, 2018).
75. As Mr Coats’ testimony indicates and this report shows, the problem of Russian election
interference is not going away. If anything, recent events suggest that it will be a more significant
part of Russia’s toolkit than ever before. With a budget amounting to a few million US dollars,
Russian forces can sow distrust and mayhem, build support for friendly politicians, and undermine
enemies. While some steps have been taken to counter Russian meddling by means of cyber and
information operations, Russia itself has faced few consequences for its interference. Many alleged
targets of Russia’s activities remain mired in internal debates that undermine any collective
response.
76. To prevent further erosion of liberal democratic principles, NATO member states will need to
take concerted efforts to strengthen their electoral processes. This need will become increasingly
pressing, as evidence mounts that other countries, including China and Iran, have employed tactics
similar to Russia’s. Some of those efforts are detailed in previous sections, but member states will
need to examine the pressures and circumstances affecting their country and develop a response
accordingly. Russia adapts its operations to its targets and, thus, responses will need to be adapted
as well. Your Rapporteur must underline, however, that individual and collective responses must be
rooted in our common values, including individual liberty, human rights, democracy and the rule of
law. These values can be exploited by an adversary, but they can also be our greatest asymmetric
advantage. If we do not uphold these values, we undermine the democratic processes that we wish
to safeguard and lose any advantage they provide.
77. As policymakers and agenda-setters, legislators play a particularly large role in this process.
Consequently, lawmakers will need to foster dialog within their countries about how to rebut and
respond to allegations of interference. They will need to work with their colleagues in other parties
to ensure that credible allegations are believed by their constituents and civil society at large. They
will need to ensure that allegations are investigated in a fair and impartial manner. While your
Rapporteur recognizes the difficulty of these tasks, she hopes that this report can inform discussions
and help member states recognize the threat posed by these operations. Indeed, your Rapporteur
appreciates the input on the first draft of the report during the Spring Session from members of the
Committee – and from associate members who have often suffered from Russia’s cyber and
information operations. In particular, your Rapporteur welcomed input on the lessons they and their
governments have drawn from cases where their countries were subjected to information warfare –
what worked well and what did not. The input was invaluable in preparing the concrete policy
recommendations in this final report as well as in the proposed resolution for the NATO Secretary
General and Allied governments and parliaments.
79. As the STC’s work over the last few years clearly shows, threats in the cyber and information
space are becoming absolutely critical. Before the terrorist attacks of 11 September 2001, the
United States suffered from a failure of imagination. The Alliance – whether individually or collectively
– must not suffer such a failure again. However, as Mr Coats has recently argued, “here we are
nearly two decades later, and I'm here to say the warning lights are blinking red again” (Coats, 2018).
The Committee and the NATO Parliamentary Assembly cannot relent and must continue to keep a
sharp eye on cyber and information threats. Your Rapporteur stands ready to support this work in
any way possible.
181 STC 18 E fin
17
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__________________
SCIENCE AND TECHNOLOGY
COMMITTEE (STC)
Sub-Committee on
Technology Trends and Security
(STCTTS)
DARK DEALINGS:
HOW TERRORISTS USE
ENCRYPTED MESSAGING,
THE DARK WEB AND
CRYPTOCURRENCIES
Report
by Matej TONIN (Slovenia)
Rapporteur
182 STCTTS18 E fin | Original: English | 18 November 2018
TABLE OF CONTENTS
I. INTRODUCTION ............................................................................................................ 1
II. CRYPTOGRAPHIC TECHNOLOGIES: A PRIMER......................................................... 2
A. MODERN CRYPTOGRAPHY................................................................................ 2
B. ENCRYPTED MESSAGING SERVICES ............................................................... 2
C. THE DARK WEB ................................................................................................... 3
D. CRYPTOCURRENCIES ........................................................................................ 5
III. HOW TERRORISTS USE CRYPTOGRAPHIC TECHNOLOGIES.................................. 7
A. COMMUNICATIONS, COMMAND AND CONTROL .............................................. 7
B. ACQUISITION OF WEAPONS AND OTHER ILLICIT GOODS.............................. 8
C. TERRORIST FINANCING ..................................................................................... 9
IV. CURRENT POLICIES AND FUTURE OPTIONS .......................................................... 10
A. MONITORING, REPORTING AND DISRUPTION BY ACTIVISTS,
CITIZENS AND OPERATORS............................................................................. 10
B. LAW ENFORCEMENT AND INTELLIGENCE OPERATIONS ............................. 11
C. NEW LAWS AND REGULATIONS ...................................................................... 12
D. WEAKENING OR TARGETING ENCRYPTION................................................... 13
V. CONCLUSION.............................................................................................................. 13
SELECT BIBLIOGRAPHY ............................................................................................ 15
182 STCTTS 18 E fin
1
I. INTRODUCTION
1. The wish to privately communicate has probably been with humankind forever. The first case
of encryption – the use of a private code to encipher and decipher messages – can be traced back
to ancient Egypt almost 4,000 years ago (Cypher Research Laboratories, 2014). Until the end of the
20th
century, the most powerful encryption technologies were largely in the hands of governments.
Today, such encryption technology is widely available, offering several key advantages to users,
including:
- Authentication: Users can be assured that other users are who they claim to be and not
somebody impersonating them.
- Integrity: Users can be assured that the data they receive from other users has not been
altered (intentionally or unintentionally) between “there” and “here” or between “then” and
“now.”
- Confidentiality: Users can be assured that data they receive from other users cannot be read
by third parties.
- Anonymity: Depending on the encryption and other methods employed, users can put
distance between their real identities and their digital pseudonyms, granting them various
degrees of anonymity.
2. Modern encryption technology has “become a bedrock of the modern internet” (Moore and
Rid, 2016). Indeed, encryption by default is “becoming the new normal in personal cyber security”
(Buchanan, 2016). After all, who would trust online banking or e-government services if we were not
reasonably assured that our data is secured by strong encryption? In liberal democracies, private
communications also fulfil a vital and legitimate role in support of fundamental human rights, such
as privacy and freedom of speech (Chertoff and Simon, 2014). Indeed, modern encryption
technology “is a crucial ingredient for any free political order in the twenty-first century” (Moore and
Rid, 2016). In authoritarian countries, the ability to communicate anonymously can be a matter of life
and death for activists, dissidents and journalists.
3. Like any other technology, modern encryption can have a dark side. Inevitably, its advantages
hold much attraction for malicious actors, including extremists and terrorists. Such groups are
typically organised in a decentralised manner, where individual members have little to no information
about other cells or top officials. Even Daesh, which adopted a more hierarchical and territorial
organisation in Iraq and Syria, has increased its decentralisation in step with the loss of territory. In
today’s world, such a fluid organising style would be near impossible to maintain if terrorists did not
have access to encrypted messaging services for propaganda, recruitment, communications,
command and control, financing and illicit acquisitions. Modern encryption technology has also
enabled the rise of two other cryptographic technologies with the potential to further enable extremist
and terrorist operations: the dark web, composed of intentionally hidden servers on the World Wide
Web, and cryptocurrencies, virtual currencies secured through the use of cryptography.
4. This report informs and supports the Science and Technology Committee’s (STC) continuing
focus on potentially disruptive technologies with important implications for defence and security
policies. The report was adopted in November 2018 at the NATO PA Annual Session in Halifax,
Canada.
5. First, the report examines the basics of modern encryption, encrypted messaging services, the
dark web and cryptocurrencies. Second, it analyses how extremists and terrorists use these
instruments for communications, command and control, financing and illicit acquisitions. Third, it
maps some of the most important policy debates surrounding these technologies. Finally, the
Rapporteur proposes some recommendations on the way forward.
182 STCTTS 18 E fin
2
II. CRYPTOGRAPHIC TECHNOLOGIES: A PRIMER
A. MODERN CRYPTOGRAPHY
6. Until the 1970s, the only way to encipher and decipher electronic messages was
symmetric-key cryptography, where sender and recipient must have the same key to unlock the
message. If someone gains access to the key or cracks the code, communications are no longer
secure. During the Cold War, as the complexity of warfare increased dramatically, so did the
complexity of ensuring the secure distribution of encryption keys. In the late 1960s, an employee of
the British Government Communications Headquarters was the first to propose a new encryption
method to solve the problem of key distribution. However, the real turning point came when
researchers at Stanford University had the same idea and published their results openly in 1976,
enabling researchers around the world to take their ideas further. This was the birth of asymmetric
public-key encryption – “one of the most pivotal inventions of the twentieth century” (Moore and Rid,
2016).
7. The mathematics behind asymmetric public-key encryption is intricate, but the idea is
simple. Those who wish to communicate in private are given a private key and a public key, which
are mathematically linked. Crucially, the public key is visible to anyone. If Alice wants to send a
private message to Bob, she will use Bob’s public key to encrypt the message. As Bob alone has
access to the private key, only he can open the message. Not even Alice can read her message
anymore. The crucial advantage is that Alice and Bob no longer need to meet to exchange keys or
rely on a middleman for distribution.
8. For two decades, the US government and its allies attempted to keep strong public-key
encryption out of the hands of the US public and its adversaries, classifying it as
‘munition’ in 1976 and imposing strict export laws (Bartlett, 2014). Nonetheless, as the basics were
publicly known and the available computing power outside government control rose dramatically,
public-key encryption began to spread – both to private citizens and states outside the West. Despite
efforts by the US government, strong public-key encryption could no longer be kept under control,
as privacy-minded individuals and libertarian “cypherpunks” employed the technology and
advocated its use. In 1996, public-key encryption was then moved to the commerce control list,
marking the end of what has become known as the Crypto Wars. Today, public-key encryption is
found everywhere, and it is hard to imagine where the internet would be without it. Most internet
users employ a degree of encryption by default and often unwittingly when they browse secure web
sites or send private online messages or emails for example. However, those who seek stronger
privacy protections – whether for benign or nefarious purposes – do not have to look very far. On
the internet, an endless trove of information exists on how to shield oneself from those who would
like to access one’s data – no matter whether it is governments, criminals or terrorists. In other words,
it is easy for those who want to decrease their online footprint to do so, as the requirements for digital
literacy and technical skills are low.
B. ENCRYPTED MESSAGING SERVICES
9. Popular social media platforms, like Facebook and Twitter, are increasingly – if not sufficiently
for some – cracking down on extremist and terrorist material. As a result, encrypted instant
messaging services have become central for communications, command and control, acquisition
and financing.
10. With roughly 1.5 billion users, WhatsApp is the most widely used messaging app in the world
(Statista, 2018). Since April 2016, it has offered public-key encryption by default, calling it end-to-end
encryption. Moreover, WhatsApp works with perfect forward secrecy, which means that users’
private and public keys change automatically and frequently (Greenberg, 2016). Perfect forward
secrecy largely solves the problem of intruders secretly stealing private keys and thus compromising
future communications. Even if an intruder manages to steal a key, he will only have exposed a small
182 STCTTS 18 E fin
3
amount of data. WhatsApp is still widely used by extremists and terrorists, due to its general
popularity, high encryption standards and the possibility of bypassing phone verification by using
virtual or temporary phone numbers (Stalinsky and Sosnow, 12 September 2017). However,
WhatsApp has begun to fall out of favour (Stalinsky and Sosnow, 3 January 2017). For one,
WhatsApp usually cooperates with law enforcement. Moreover, extremists have begun to suspect
that entry points for law enforcement and intelligence agencies exist in its encryption protocols.
11. As a result, the Telegram app has rapidly gained popularity with extremists and terrorists. The
app was launched in 2013 by Nikolai and Pavel Durov, co-founders of the VKontakte social
networking site in Russia. In 2014, the two libertarian-minded brothers refused to grant the Russian
government access to certain Ukrainian and Russian accounts on VKontakte. Today, they live in
self-imposed exile and no longer control VKontakte. End-to-end encryption is easily enabled on
Telegram. In particular, Telegram’s “secret chat” mode is considered to have military-grade
encryption protocols (Stalinsky and Sosnow, 3 January 2017). These chats do not leave any trace
on Telegram’s servers, and messages can be set to ‘self-destruct’ and cannot be forwarded to other
users. Moreover, it is easier to use a fake phone number on Telegram than on other platforms.
Analysts also argue that the company’s reporting of suspect channels is limited, and extremist and
terrorist channels are rarely suspended (Stalinsky and Sosnow, 3 January 2017). Telegram disputes
this.
12. Other highly encrypted instant messaging services exist, of course. Multiplayer online
computer games and many other apps, software or devices have built-in instant messaging services.
However, they have (not yet) gained as much popularity with terrorists as WhatsApp and Telegram
(Stalinsky and Sosnow, 3 January 2017). The open-source Signal app, for example, provides
first-rate encryption technology and has recently soared in popularity. Its cryptographic protocol is
also the basis of other closed-source apps, notably WhatsApp, and of the encrypted modes of
Facebook’s Messenger and Google’s Allo. It stores no metadata except the last day a user was
connected (Lee, 2017). An advantage is that its open-source nature means that it can easily be
duplicated, modified and used as a custom, closed-group communication tool, utilising private
servers for data exchange. However, Signal is much less user-friendly than Telegram or WhatsApp.
Also, large files cannot be sent, and audio quality can be spotty. Blockchain-enabled messaging
services exist as well, including Nynja which also offers an integrated marketplace and its own
cryptocurrency (a feature that Telegram is also considering launching). Other popular highly secure
apps include Kik, SureSpot, WeChat and Wickr.
13. Daesh has also created its own encrypted app called Alrawi. Designed for Daesh members,
it is only accessible through the dark web. This makes it very difficult to shut down, but also less
accessible. It has been suggested that it is not as secure as other encrypted apps. Some experts
believe it was created in reaction to crackdowns on other apps and is used for planning more serious
attacks and sharing sensitive communication. Others have argued that Alrawi may be more of a
public relations stunt (Niglia, Al Sabaileh and Hammad, 2017).
14. Beyond instant messaging services, other options for encrypted communications exist. For
example, the email service Protonmail has millions of legitimate users, but is also gaining in
popularity among extremists and terrorists. The company does not store messages on its servers,
holds no copies of encryption keys and offers the option of self-destructing messages. In 2017, it
also launched a dark web service, a Virtual Private Network (VPN) service and the possibility of
paying in Bitcoin (Stalinsky and Sosnow, 26 October 2017).
C. THE DARK WEB
15. Experts often describe the WWW as consisting of multiple layers (Microsoft, 2016). The first
layer is called the surface web. It includes all websites that can be indexed through the automated
crawler software of classic search engines. Like a fishing net dragged across the surface of the
ocean, however crawler software only analyses and indexes a small portion of the internet however
182 STCTTS 18 E fin
4
(Bergman, 2001). The websites which cannot be indexed by traditional crawler software constitute
the second layer – the deep web. The reasons why they cannot be indexed vary. Some websites
might be private and require login credentials. Others, by their very nature, cannot be indexed, such
as websites with dynamic or unlinked content.
16. The third layer of the internet is the dark web. The dark web consists of servers whose
IP addresses are hidden, which makes it nearly impossible to track down the location of web sites
that are hosted on them. While some of the websites hosted on the dark web are unindexed, the
vast majority can be found through indexing lists (such as The Hidden Wiki), user forums or
specialised search engines (for example Ichidan or Torch), even though these tools are often neither
comprehensive nor stable. In other words, dark web sites are not hidden per se. Potential users do
not need special skills or instructions beyond understanding the readily available information found
online. However, the potential that they will make mistakes – and thus compromise the anonymity
they seek – is large, which is good news for the trained law enforcement and intelligence agents.
17. Dark web sites – often called hidden services – are designed to be untraceable and to enable
the circumvention of content restrictions or surveillance (Moore and Rid, 2016). These features serve
many legitimate and legal functions (Chertoff and Simon, 2014):
- Journalists use the dark web to protect their sources or share files, for example through the
Secure Drop service used by such prominent newspapers as The New York Times, The
Washington Post and The Wall Street Journal.
- Dissidents bypass censorship where access to the internet is curtailed, for example by
accessing the dark web site of The New York Times.
- Human rights activists employ it in authoritarian states, for example in Iran, which has recently
begun a severe crackdown on dark web software.
- Many surface websites, for example Facebook, have dark web mirrors.
- Armed forces and intelligence services use it for communications, command and control and
intelligence gathering.
- Law enforcement polices it, uses it for sting operations and even maintains anonymous tip
lines.
18. It is currently impossible to gather exact data on the extent of the different layers of the WWW,
in particular given the large growth and fluidity of deep and dark web sites and the partial or total
anonymity of users. In 2016, Microsoft estimated that the surface web amounted to just 0.3% of all
WWW pages (Microsoft, 2016). As for the dark web, in a 2014 report, researchers found an average
of about 45,000 active sites during a six-month study (Owen and Savage, 2015). According to one
expert interviewed for this report, this number has been substantially reduced in recent years, as
groups like Anonymous take down servers hosting illegal content, in particular child pornography
sites. The expert argues that a little less than 10,000 sites exist on the dark web based on the Tor
software (see below), the most widely used software to access the dark web.
19. While some recent projects offer access to dark web sites from the surface web, most users
must employ special software. Tor (previously known as The Onion Router) is the most popular
software; another popular one is the Invisible Internet Project (I2P). The technology behind Tor was
originally developed by the US Naval Research Laboratory to protect US intelligence
communications. Since then, it was released under a free license and further developed by private
individuals and organisations. Given the former ties to US government agencies, some dark web
users argue against using Tor, as they suspect ongoing intelligence gathering.
20. Tor has two core functions. First, the software hides the Internet Protocol (IP) address and
other identifiers of those who want to browse the WWW anonymously. Second, Tor enables users
to access sites and hidden services on the dark web. It must be noted that the overwhelming majority
of people use Tor simply as an anonymous browser for the surface web. Visits to hidden services
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only account for 3% to 6% of Tor traffic (Moore and Rid, 2016). On a technical level, Tor relies on a
network of approximately 6,000 computers forming a global network of nodes (so-called relays and
bridges) (Tor Metrics, 2018). The user’s signal is encrypted in multiple layers – hence the onion
metaphor – and always passes through at least three nodes with IPs concealed from all other nodes.
21. Tor (and other networks) do not ensure complete anonymity on their own but must be coupled
with other techniques to do so. For example, users could employ ‘virtualised’ operating systems,
which could be contained on a USB stick and thus easily discarded or destroyed to get rid of
evidence. Nevertheless, methods exist to gain access to (some) of the information in decrypted form
as well as to the originating IP of the users, for example by controlling a large number of nodes or
by using server vulnerabilities that ‘leak’ their originating IP. As a result, some users (especially cyber
criminals) have started migrating to other projects which better protect their anonymity, including
peer-to-peer and blockchain-enabled projects.
22. Needless to say, the dark web has also attracted malicious actors, including extremists and
terrorists, as it is a near-perfect spot to anonymously conduct illegal activities. Indeed, some of the
most prominent uses of the dark web are drug and other illegal markets, financial services,
extremism, illegitimate pornography (in particular paedophilia), hacking services, gambling, murders
for hire, hacktivism and human trafficking (Moore and Rid, 2016; Chertoff and Simon, 2014).
D. CRYPTOCURRENCIES
23. The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)
defines virtual currencies as “a medium of exchange that operates like a currency in some
environments but does not have all the attributes of real currency” (FinCEN, 2013). As FinCEN
further notes, a “virtual currency does not have legal tender status in any jurisdiction”.
Cryptocurrencies are a specific form of virtual currency, secured through the use of cryptography
and originally invented to circumvent third parties such as banks.
24. Attempts to create successful virtual currencies in order to cut out traditional financial
institutions started, in earnest, in the 1990s (Goldman et al., 2017). Two prominent examples include
e-gold and Liberty Reserve. On e-gold, created in 1996, users could buy virtual grams of ‘gold’ with
real-world currencies to shield themselves from market swings. E-gold soon became a haven for
criminal activities and had to shut down in 2009. In 2006, Liberty Reserve stepped in to offer an
alternative to e-gold – mostly to criminal outfits. It was eventually shut down in 2013.
25. The real turning point for virtual currencies came in 2008 when a person or people using the
pseudonym Satoshi Nakamoto released a paper on the principles of a peer-to-peer virtual currency
which does not rely on trust between users or on centralised control like e-gold or Liberty Reserve.
In 2009, Nakamoto’s Bitcoin was available for the first time and cryptocurrencies were born. Early
adopters of Bitcoin often emphasised that the cryptocurrency could make government-controlled,
centralised money obsolete by replacing it with an alternative that is distributed and decentralised
(Marr, 2017). Unsurprisingly, criminals soon entered the market as well.
26. The current Bitcoin and cryptocurrency ‘craze’ really took off in 2017. Today, over 1,600 other
cryptocurrencies exist with just as many uses and specifics. Cryptocurrencies are causing a big stir
in financial markets, with a total market capitalisation of over USD 266 billion as of mid-July 2018 -
down by over 67% from its high point in January 2018, showcasing the volatility of the market
(Coinmarketcap, n.d.). Bitcoin is still the most widely used cryptocurrency, with a market
capitalisation of over USD 133 billion. This is more than twice the market capitalisation of the second
biggest cryptocurrency Ethereum.
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27. In theory, cryptocurrencies possess many advantages that make them attractive to users,
including:
- Anonymity/Pseudonymity: Most cryptocurrencies, including Bitcoin, only provide so-called
pseudonymity. The virtual identities used for transaction – i.e. users’ pseudonyms – do not
need to be linked to a real identity but must remain consistent throughout transactions. Thus,
if a link between a pseudonym and a real identity is made, the whole transaction history can
be connected to this identity. This is one reason why newer cryptocurrencies which come
closer to guaranteeing anonymity are gaining in popularity. For example, between mid-2016
and mid-2018, Monero, a highly anonymous cryptocurrency, has shot up in value 90-fold and
it is now becoming the normal payment method for criminals on the dark web.
- Mobility: Transfers can be made to and from any computer enabled to send or receive the
particular cryptocurrency.
- No trust requirement: Sender and receiver do not need to trust each other. Network nodes
verify identities, transactions and blockchains in every transaction.
- Non-interference: Decentralised, peer-to-peer cryptocurrencies (like Bitcoin) do not need
middlemen such as financial institutions, banks or governments. However, so-called
exchanges are proliferating with cryptocurrencies’ rising popularity. Exchanges serve as the
interface between real and virtual currencies and hold users’ virtual wallets.
- Scalability: As transfers entail only small processing fees for the foreseeable future, users can
transfer even small amounts efficiently. On a positive note, this has offered new tools for people
in developing countries with no or very little access to the formal financial system.
- Security: If private encryption keys are securely stored on personal devices or in the cloud,
cryptocurrencies are very secure. However, if they are stolen, Bitcoins or other currencies are
stolen as well.
- Speed: Bitcoin transfers take about 10 minutes to be confirmed, but many other
cryptocurrencies perform faster and even Bitcoin transactions can be sped up. While this is
longer than online payments with credit cards, the advantage for the recipient is that the sender
cannot take back the payment once it is confirmed.
28. Bitcoin transactions work in the following way (other cryptocurrencies work similarly)
(Driscoll, 2013). First, the sender creates a digital signature on the basis of a private key, authorising
the unlocking and spending of funds. A mathematical algorithm ensures that no one can copy or
forge the digital signature. The amount of Bitcoin is ‘sent’ to the corresponding public key which all
nodes in the network can see. The nodes use the public key and the digital signature to verify that
the sender owns the private key – without ever seeing it. Second, the network proceeds to verify the
transaction input. The network knows that it is an authorised message, but how can it know that the
funds are actually in possession of the sender? The sender therefore references earlier transactions
of unspent inputs. The network checks every other Bitcoin transaction ever made to ensure that the
inputs have not been spent. This is often called Bitcoin’s ‘public ledger’. Third, transactions need to
pass through the entire network to be verified, which is time intensive. Consequently, the sender
could try to trick the network by simultaneously assigning the same inputs to another transaction,
i.e. to spend the Bitcoins twice. The network cannot verify which transaction came first. Therefore, it
needs to create an order of transactions. Enter the so-called blockchain, which has attracted much
attention from insurance companies, governments, industry and healthcare providers. A node can
collect a set of transactions into a block and present it as the next block in the chain of transactions.
These blocks contain a very specific mathematical problem, which starts a race between nodes to
be the first to solve the problem – a problem so complicated that nodes can only keep guessing. The
first node to guess right wins a certain amount of Bitcoin – hence the term Bitcoin ‘mining’ – and the
transaction is irrevocably confirmed.
29. Truly anonymous cryptocurrencies are not yet as popular as Bitcoin and others. While
pseudonymity is already a large advantage for malicious actors, a public record exists of all
transactions carried out by a particular pseudonym. While complicated and time consuming, it is thus
possible to track transactions in the Bitcoin blockchain. However, some services on the dark web
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can mix Bitcoins from different transactions together. After the coin mixing, the same amount is
sent but with different coins. This makes it harder to trace transactions back to one person, but given
the massive growth in the cryptocurrency market, experts, companies and governments are finding
ways to solve this particular problem, too. Those who want to make their transaction less traceable
can make use of other shortcuts. For example, a cryptocurrency owner can pass the login
information and/or recovery passwords of an account to someone else who can then access the
account and its contents. In other words, there is no transfer to be traced.
III. HOW TERRORISTS USE CRYPTOGRAPHIC TECHNOLOGIES
30. Since the 1990s, extremist and terrorist organisations have been using internet technologies
for various purposes, including data mining, communications, planning and coordination,
propaganda, recruitment and mobilisation, training and fundraising (Weimann, 2015). As
governments, companies, organisations and activists continue to increase their efforts to confront
violent extremism and counter terrorism, extremists and terrorists are progressively turning to
cryptographic technologies.
31. Estimates of how many terrorists and followers are active on encrypted messaging services
and the dark web or conduct business in cryptocurrencies vary widely. Indeed, for the most part,
only anecdotal evidence exists. For example, the number of Telegram users could be anywhere
between 10,000 and 80,000 (Stalinsky and Sosnow, 3 January 2017). A snapshot for March 2016
shows that around 700 new Daesh-affiliated channels were opened (Barak, 2016). According to the
Israeli Institute for National Security Studies, more than 50,000 websites and 300 forums for terrorist
organisations were active on the dark web in 2011 (Rosner, London, and Mendelboim, 2013).
However, a thorough study conducted in 2016 analysed 5,205 live websites on the dark web (Moore
and Rid, 2016). It showed “the near absence of Islamic extremism”, with only 140 extremist dark web
sites. Evidence of cryptocurrency use is even more sparse, with only a few individual cases seen in
Gaza, Indonesia and the United States.
A. COMMUNICATIONS, COMMAND AND CONTROL
32. The surface web and instant messaging services have been a key instrument for extremist and
terrorist communications, command and control. For example, Daesh terrorists used Telegram as
their channel before, during and after the November 2015 Paris attacks (Stalinsky and Sosnow,
3 January 2017). To capitalise on these attacks, Daesh then used social media for propaganda
purposes, for example by uploading a video which showed the attackers during the time they spent
in Syria (Noack, 2016).
33. As the pressure on them increases, extremists and terrorists are migrating more and more
towards encrypted messaging services and the dark web, without giving up their surface presence
(Stalinsky and Sosnow, 3 January 2017). Indeed, extremists and terrorists have become very adept
at linking the surface web, dark web and messaging services in a highly dynamic fashion that plays
to every platform’s advantage: Facebook, Twitter and YouTube can reach large audiences, but are
more exposed; encrypted messaging services and dark web sites are more secure and better suited
for outreach to smaller groups and individuals but have limited reach.
34. The use of encrypted messaging services for external communications has increased
markedly in recent years. Telegram, for example, is used, inter alia, for recruitment, outreach,
announcements, content distribution, the dissemination of information, threats and intimidation,
claiming responsibility for attacks and pledges of allegiance (Stalinsky and Sosnow, 3 January 2017).
The app has also introduced new features in recent years that make the platform more attractive for
large-scale and even public communications. It allows the creation of group chats with thousands of
members. These group chats allow members to post their opinions and ask questions. This gives
them a sense of belonging and lets them see that they are not alone in thinking the way they do
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(Brown and Korff, 2009). Moreover, individuals and groups can launch public channels which anyone
can follow, making Telegram more like Twitter (Stalinsky and Sosnow, 3 January 2017).
35. So far, only limited external communications are carried out on the dark web. Its attractiveness
for propaganda purposes is likely limited because it is difficult for most people to access. In particular,
“novices may be deterred by taking an ‘illicit’ step early on, as opposed to simple, curious Googling”
(Moore and Rid, 2016). Most dark web sites would require an invitation and credentials. Moreover,
they are not as easy to locate as surface web sites. No central stable repository of sites exists. This
is the reason why, in many online forums, extremist supporters and terrorists suggested the creation
of a “Jihadwiki” (Weimann, 2015). As noted earlier, however, many indexing lists, forums and search
engines have emerged in recent years, making the exploration of the dark web easier.
36. In another sense, the dark web is also seeing more use, namely as a safe haven for
propaganda material. After the 2015 Paris attacks, Daesh announced that the Isdarat website, which
archives the group’s propaganda pamphlets, would be moved to the dark web due to increasing
pressure on its surface web sites (Insite, 2015). Despite the website being hosted on the dark web,
all media is still channelled through surface web sites such as Google Video.
37. In many radicalisation processes, sympathisers move from first encounters in real life or on
the surface web to encounters with more limited groups or individuals on instant messaging services.
Sympathisers are then slowly groomed and passed on to new contacts who can test them and lead
them further on their path of radicalisation. A key advantage is that an interested individual can be
‘tested’, become a member and even carry out a mission without any direct physical contact
(Magdy, 2016).
38. Encrypted messaging services are used extensively by groups like Daesh or al-Qaeda in the
Arabian Peninsula (AQAP) for internal communications, command and control. The possibility
of communicating quickly and anonymously with different parts of the world enables terrorist groups
to train, plan, and execute attacks. For example, Daesh, AQAP, Ansar al-Sharia in Libya and the
former Jabhat al-Nusra in Syria are reported to resort extensively to Telegram’s encrypted
communications (Barak, 2016).
39. While it is more difficult to use, the dark web can be and has been used for more targeted
communications, command and control. In 2013, encrypted communication was intercepted by the
US National Security Agency between al-Qaeda leader Ayman al-Zawahiri and Nasir al-Wuhaysi,
the head of AQAP. It was later discovered that this communication took place in the dark web. Chat
rooms hosted on Tor, like The Hub and OnionChat, personal messaging tools like Tor Messenger,
Bitmessage and Ricochet, which work like messenger applications hosted on the dark web, are
some of the options available to those who need to communicate with an added layer of anonymity
and strong authentications systems. However, some experts argue that such hidden services on the
dark web “are often not stable or accessible enough for efficient communication”
(Moore and Rid, 2016).
B. ACQUISITION OF WEAPONS AND OTHER ILLICIT GOODS
40. According to a 2016 Europol review, the internet and social media are being used by Daesh
for the acquisition of goods, like weapons and fake identity cards, that are necessary to perpetrate
a terrorist attack (Europol, 2016). While there is no way for extremists and terrorists to fully ensure
they are not being tracked, anonymous identities, postal boxes, and other low-technology ways of
hiding one’s identity make such purchases possible. In particular, Europol highlighted that encrypted
applications like WhatsApp, Skype or Viber are relatively safe ways for terrorists to acquire these
goods below the radar of intelligence and law enforcement agencies.
41. The dark web, especially Tor hidden services, is a well-known place for malicious actors to
buy a multitude of illicit goods. For the moment, few in-depth studies exist on how extremists,
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terrorists and other criminals use the dark web market for illicit purchases. Indeed, only a few
anecdotal stories are known to the public. After the 2015 Paris attacks, stories circulated that their
weapons had been procured over the internet, but these reports have not been confirmed
(Persi Paoli et al., 2017). It is confirmed, however, that a teenager who killed several people during
a shooting spree in Munich in July 2016 had purchased his gun on a dark web market. The UN has
also reported that some terrorist groups have been searching the dark web for information about
weapons of mass destruction (Besheer, 2017).
42. Experts at the RAND Corporation conducted the most in-depth study of the weapons market
on the dark web, although it provides only a snapshot of a period of one week
(Persi Paoli et al., 2017). Over the observed period, the researchers estimated that 52 unique dark
web vendors of weapons were active with 811 relevant listings. Pistols were, by far, the most
common item to be offered. Interestingly, digital products, such as manuals to manufacture firearms
and explosives at home as well as weapons blueprints for 3D printers, were the second most
common wares to be sold (of course, many of these digital products can also be retrieved with ease
on the surface web). The researchers extrapolated that 136 sales, amounting to about USD 80,000,
are generated over the dark web per month. This is marginal compared to the real-world illicit
weapons trade. Indeed, the scale of the market remains limited and it only appears to be a viable
option for smaller groups or individual actors. Furthermore, the ‘dark web community’ is cautious –
if not doubtful – about the viability of the dark web weapons market because of “scamming,
heightened policing, and low volume of weapons sales”. Overall, however, the RAND experts judge
that “the volume can be considered sufficiently high to be cause for concern for policy makers and
law enforcement agencies.”
43. The pseudonymity or even anonymity of cryptocurrencies would make it easier for terrorists to
pay for illicit goods. Indeed, all dark web transactions are carried out with cryptocurrencies. However,
legal real-world transactions with cryptocurrencies are also increasing in number and could become
a risk (Goldman et al., 2017). For example, private individuals in Texas can sell firearms to each
other without background checks (Brill and Keene, 2014).
C. TERRORIST FINANCING
44. Terrorist financing takes many shapes and forms. The international financial system is tightly
interconnected, and extremist and terrorist groups continue to find loopholes in the system.
Moreover, at a smaller scale, terrorists use a variety of loans, welfare benefits, gift cards,
person-to-person cash or digital transfers (Goldman et al., 2017).
45. In the digital realm, extremists and terrorists perpetrate cybercrime to enrich themselves, for
example by ransomware attacks, although experts believe that the volume of cybercrime in support
of extremism and terror is still rather low. Experts also see a trend for calls for donations and the
sale of paraphernalia moving towards encrypted messaging services (Stalinsky and Sosnow,
12 September 2017). It is moreover plausible that terrorists could enter or have already entered illicit
market places on the dark web to finance themselves, for example by selling illegal drugs, identities
or credit card information.
46. Ample real-world financing opportunities exist, but governments and experts have pointed out
that cryptocurrencies could add another avenue for terrorist financing. The pseudonymity/anonymity
cryptocurrencies ensure, their global reach and the lack of a clear regulatory frameworks all provide
opportunities (Goldman et al., 2017). Indeed, regulators have been pointing out the risks for a
number of years. For example, the European Banking Authority issued an opinion that put virtual
currencies in a high-risk category for terrorist financing (European Banking Authority, 2014).
47. While a few cases have been publicly known and extremists and terrorists have at times
advocated for cryptocurrency use, al-Qaeda, Daesh and others have not yet used cryptocurrencies
extensively. A host of factors can explain why (Goldman et al., 2017). First, it would require
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substantial technological sophistication to use existing cryptocurrencies at a large scale and with the
desired degree of anonymity. Second, in many areas where terrorist groups operate, internet
penetration is low and cyber infrastructure poor. Third, as terrorists, ultimately, want to create
real-world effects, they must convert cryptocurrencies into real-world currency, which “introduces
both an unnecessary layer of complexity and an increased vulnerability to the disruption of their
operations”. Most importantly, extremists and terrorists have many alternatives to cryptocurrencies.
Indeed, it remains entirely “possible to circumvent global rules governing terrorist financing with
sufficient ease and frequency that using [virtual currencies] is unnecessary.” In short,
cryptocurrencies “become a strategic threat in the counterterrorism context only when they can
compete with cash and other readily available means of financing and achieve [scale]”.
48. Based on such analyses, most government entities, regulators and even experts are still
unsure about risk levels. The 2015 US National Terrorist Financing Risk Assessment, for example,
argued that the risk remains unclear for now (US Office of Terrorist Financing and Financial Crimes,
2015). The UK government has reported no evidence of cryptocurrency cases in the United Kingdom
and argues that this risk is “unlikely to increase significantly in the next five years” (UK HM Treasury
& Home Office, 2017). Another expert warns against overstating the risk: “terrorist financing via
cryptocurrencies is a risk that could grow with time, but one that warrants a measured response”
(Carlisle, 2018).
IV. CURRENT POLICIES AND FUTURE OPTIONS
49. The use of cryptographic technologies by extremists, terrorists and other malicious actors
presents a host of challenges for policymakers, law enforcement, intelligence services, businesses,
private citizens and others. A variety of policies are in place and future options are available.
However, there are no silver bullets, and many of the options could either lead to other problems or
involve difficult political trade-offs. This section does not aim to be exhaustive but will discuss some
of the most important elements and political debates about the way forward.
A. MONITORING, REPORTING AND DISRUPTION BY ACTIVISTS, CITIZENS AND
OPERATORS
50. As in real life, citizens should report any suspicious behaviour, content or messages in the
digital realm to the operators or relevant authorities. For several years, social media platforms,
including encrypted messaging services, have been criticised for letting too much illegal material
remain on their platforms for too long. Recently, this has begun to change, as governments have
reached out to them or changed laws to compel them. As a result, many detection and reporting
systems have improved. Going forward, new technologies, based on machine learning/artificial
intelligence and big data analytics for example, should further improve automatic detection and
removal mechanisms.
51. In addition to reporting by users and removal by operators, a number of activist groups carry
out voluntary monitoring, reporting and disruptive activities under the cover of anonymity that modern
encryption provides (Solon, 2017). The hacktivist collective Anonymous has long targeted Daesh
operations and even ‘declared war’ against the group after the 2015 Paris attacks. Other groups
include the Ghost Security Group, Di5s3nSi0N, Daeshgram, KDK and the Hellfire Club. Some of
these groups cooperate with law enforcement and intelligence agencies to counter extremism and
terrorism. Others, more controversially, go against extremist and terrorist activities by themselves.
52. The debate surrounding the monitoring, reporting and disruption of extremist or terrorist
content is a complex and very political one where hard questions arise. What is the line between
content that is illegal and must be removed and content that is covered under freedom of speech?
Who decides to remove the content - the government, private citizens or political activists? If content
is removed, should the people who remove it forward it to law enforcement or intelligence agencies
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or at least save the content for evidence purposes? Should governments actively encourage private
citizens and activists or even sponsor independent ethical hackers or citizen cyber conscripts, or
would that amount to vigilantism? And if the answer is yes, should they be encouraged to be merely
reactive or to actively try to penetrate extremist and terrorist groups. In short, this policy debate is
still very much unsettled.
B. LAW ENFORCEMENT AND INTELLIGENCE OPERATIONS
53. Law enforcement and intelligence agencies already possess many tools to counter extremist
and terrorist activities based on cryptographic technologies. Agencies should and do support the
reporting of suspicious activities, but they must also engage in robust operations to monitor and
thwart activities as well as attack extremist and terrorist networks.
54. Like in any investigation, law enforcement can try to compel companies, under existing laws
and regulations, to work with them. Most importantly perhaps, law enforcement can ask for access
to the data or metadata of suspects and activities. The success of this approach depends, first, on
the availability of data and/or metadata at the company. As more and more applications move
towards very secure encryption, less and less data and metadata will be available for access even
if companies and organisations want to cooperate. Second, some companies resist complying with
government enquiries because of ideological or business reasons; others because they are
headquartered in places beyond a government’s jurisdiction, where local governments may not have
the capacity or will to assist. While it is challenging, government agencies should pursue all avenues
allowed under the law.
55. Policing activities on encrypted messaging services and the dark web as well as financial
transactions with cryptocurrencies is necessarily more complex than policing the surface web. For
example, recent operations to take down major illegal markets on the dark web have been long and
complex and demanded investigative work both online and offline. Still, technological advances in
monitoring, analysing, accessing and disrupting cryptotechnology use by extremists and terrorists,
combined with the anonymity such technology also provides to government entities, should make
policing progressively easier (Jardine, 2014; Chertoff and Simon, 2014). For example, as two experts
point out: “A common misconception is that Tor is resistant to state-level surveillance and that its
users can therefore act with impunity. In reality, any suitably resourced entity can launch an attack
with high success rates while maintaining a minimal risk of detection” (Owen and Savage, 2015).
With the right training, staffing and resources, law enforcement and other entities can thus block or
manipulate nodes in the network, unmask Tor users and attack dark web sites (Owen and Savage,
2015; Moore and Rid, 2016).
56. More controversially, government entities can (and many do) also target encryption systems
in a covert fashion. They could for instance find weaknesses in encryption systems, leave them in
place and use them when they want to target individuals or groups. Law enforcement agencies and
intelligence services could attempt to gain access to data or metadata in a covert fashion, but they
could also seek system-level access and thus access the devices or dark web sites as a whole
(Buchanan, 2016). They could then read the text messages as they are being composed on the
device, record the phone calls as they take place and monitor other activities. However, such a step
would be an escalation from typical wiretap operations because targeted malicious software would
have to be deployed. This would be a move from passive collection to active surveillance. The
legitimacy and legality of such actions will vary from state to state and depend on whether a state’s
own citizens or foreign actors are targeted. Perhaps more critically, it would leave encryption systems
exposed – if government entities can find vulnerabilities, malicious actors could do so as well. What
is more, the tools and vulnerabilities used by governments could also leak out intentionally or by
accident. The Shadow Brokers case, for example, has been described as one of the worst security
breaches of a US intelligence agency. In 2016, a group calling itself the Shadow Brokers released a
multitude of highly potent hacking tools used by the US National Security Agency, which means that
they are now readily available for malicious actors.
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57. Law enforcement agencies also work on identifying and fixing security gaps in
cryptographic technologies. For example, while Bitcoin’s code is meant to protect it from being
hacked, a weakness could expose the currency to digital threats. At the end of 2017, INTERPOL
and the cybersecurity company Kaspersky found a flaw in Bitcoin’s public ledger which made it
susceptible to malware. In response, a joint project by INTERPOL and European law enforcement
agencies will address those elements of Bitcoin which facilitate the avoidance of law enforcement
detection – all the while respecting the privacy of Bitcoin users.
58. Another potent component of countering the illicit use of cryptographic technologies would be
to increase international cooperation at all levels of government and across many lines of efforts,
including on investigations, legal prosecution, and operational processes. One important aspect, for
example, is to update and adapt Mutual Legal Assistance Treaties (MLAT). MLATs are agreements
between different governments (unilateral or multilateral) to exchange information related to an
investigation. Allied states should also attempt to establish MLATs with countries of concern, even
though this will be difficult if countries do not share the same sense of urgency or values when it
comes to policing cryptographic technologies.
C. NEW LAWS AND REGULATIONS
59. In a changing threat and technological landscape, governments should reflect upon their laws
and regulations and, if they deem it necessary, should introduce new laws and regulations for
encrypted messaging services, the dark web or cryptocurrencies.
60. In all Allied countries, vigorous debates about data and metadata retention laws are taking
place. However, vast political differences exist on this question across the Alliance. Often, these
debates pit those who argue for strong privacy rights against those who argue that state security
could and should be enhanced by seeking companies to retain (more) metadata or data on their
servers (even if in encrypted form) and make them more easily accessible to government agencies
during investigations. Typically, companies strongly resist such steps. For one, they fear losing
business to other similar but more secure services, in particular those beyond the regulating
country’s jurisdiction. Additionally, many technology companies are political supporters of strong
privacy rights and oppose new laws and regulations on this ground. While such policy debates will
remain difficult, policymakers should not shy away from them, given the risk and threats emanating
from extremism and terrorism.
61. With the Bitcoin phenomenon continuing unabated, fundamental questions on how to regulate
cryptocurrencies are not yet settled. Robust counter-terrorist financing tools already exist in
national laws, in the financial sector and at the international level and they should be used to their
fullest. However, there is ample scope to adapt the regulatory framework and to engage companies
and organisations in the cryptocurrency sector to police themselves. Policy debates on how to adapt
current laws and adopt new ones to reduce the abuse of cryptocurrencies for money laundering and
terrorist financing are taking place all across the Alliance. States can look towards some of the
trailblazers in this regard. Outside the Alliance, Japan has generally accepted cryptocurrencies, but
it was also one of the first countries to change its legislation. It has introduced, for example, obligatory
annual audits and capital requirements for cryptocurrency exchanges as well as other anti-money
laundering measures. Many Allies and the European Union are also continuously strengthening their
efforts.
62. Blocking or forbidding certain services or whole technologies, for example
cryptocurrencies, is another option that is at times put forward. However, such an approach might
not be viable beyond the short term. For those seeking strong cryptographic technology services,
plenty of alternatives exist. It is a consistent trend that extremists and terrorists adapt quickly when
pressure on certain platforms increases. In the world of encrypted messaging services, for example,
“once a platform becomes less friendly to terrorists, they will migrate to another more secure channel”
(Stalinsky and Sosnow, 3 January 2017). In response, some experts have argued for industry-wide
182 STCTTS 18 E fin
13
standards or codes of conduct (Stalinsky and Sosnow, 3 January 2017). However, similar problems
arise here as well: there will always be individuals or companies who would cater to extremists and
terrorists. Some authoritarian states, notably China with its Great Firewall, have tried to fully shield
their country from certain services, but such an approach has not shown itself to be effective and
would most likely not be seen as legal or legitimate in Allied countries (Buchanan, 2016).
D. WEAKENING OR TARGETING ENCRYPTION
63. More radical and controversial options are sometimes put forward. One possibility would be to
regulate encryption strength, limiting the strength of encryption protocols in the civilian market
while keeping powerful encryption in government hands. Indeed, in the first half of the 1990s, the
United States had a two-tiered system in place for a brief period of time (Buchanan, 2016): strong
encryption standards were legal in the United States, but only weaker encryption protocols could be
exported. In a world with little computing power and few users, a certain degree of control over
high-level encryption technology was feasible. However, with digitalisation and globalisation, it is no
longer possible to control encryption software and the publicly-known mathematical principles behind
it. It is difficult to see how such a two-tiered system could be effective, implementable and even
politically acceptable today. This is especially true as emerging or over-the-horizon technologies like
artificial intelligence, big data analytics and quantum computing will make it easier to break today’s
strongest encryption technologies.
64. Another more intrusive response would be to require “backdoors” in encryption protocols,
which governments could use in criminal or terrorist cases. Theoretically, if citizens can trust the
government not to abuse its powers and if the keys to the backdoor remain secure in the
government’s hands, users could still have adequate cryptographic protection (Buchanan, 2016).
However, such an approach might face insurmountable challenges. First, it would require a very high
amount of trust in government institutions. It is questionable whether publics in Allied countries would
accept this approach, which raises important questions about privacy rights. Second, from a
technological standpoint, it is doubtful whether such a system could even work. Some experts argue
that it is mathematically impossible to introduce deliberate weaknesses while maintaining a high level
of security. Even if possible, introducing backdoors increases the complexity of encryption protocols,
making them very vulnerable to state and non-state hackers, thus leaving citizens at greater risk
from cyber criminals and hostile governments (Buchanan, 2016). Moreover, in such a situation,
developers would probably quickly try to design new encryption techniques to cater to a rising
demand for more secure applications (Moore and Rid, 2016).
V. CONCLUSION
65. This report has aimed to highlight the ways extremists and terrorists can and do take
advantage of encrypted messaging services, the dark web and cryptocurrencies. As shown, these
cryptographic technologies hold important potential for good for a wide variety of actors – from
individual citizens to the international community as a whole. However, malicious actors have quickly
found ways to use them in malicious ways. It is the task of policy- and decisionmakers to maximise
the benefits and minimise the risks from emerging technologies.
66. As the digital landscape is changing, all stakeholders must better understand the evolving use
of cryptographic technologies as well as their opportunities and risks. Awareness of and a proactive
approach to cybersecurity must spread across the whole of society. Through outreach, cooperation
and incentives, governments can support all stakeholders in this process. Moreover, the responsible
entities in governments, organisations and companies must be properly resourced, equipped,
educated and trained to adapt to the changes that cryptographic technologies bring.
67. Robust policing of and strong regulations for cryptographic technologies are necessary.
However, in this particular debate, it is a critical challenge for liberal democracies to continue to
182 STCTTS 18 E fin
14
preserve fundamental human rights, such as privacy and freedom of speech, while living up to the
challenge of keeping citizens safe from harm. Your Rapporteur agrees with those that see a need
for “[a] principled, yet realistic, assessment of encryption and technology” (Moore and Rid, 2016).
Policymakers must base their discussions on sound first principles, facts and the possibilities and
limits of technologies.
68. Your Rapporteur understands that, political views differ substantially across the Alliance on
where acceptable lines for liberal democracies lie on these matters. Yet, he hopes that this report
can spark a debate that leads to an agreement about a number of baselines for a transatlantic
response to the challenges of cryptographic technologies. Fundamentally, these questions must be
answered at the national level. Still, international dialogue and cooperation have been proven to be
a key to tackling some of the risks emanating from cryptographic technologies.
69. Your Rapporteur would like to propose a set of concrete policy recommendations for Allied
governments and parliaments.
- In all responses, the rights, liberties and freedoms of the people must be recognised,
guaranteed, protected and permanently upheld.
- The principles of proportionality and limited government must always be employed. Ordinary
people’s lives must not be turned into a hardship by disproportionate measures aiming at more
and more control over the society at large.
- Any measures to thwart extremist and terrorist use of cryptographic technologies must be
strictly designed for the counter-terrorism purposes.
- Policies should be embedded in the larger framework of countering violent extremism and of
counter-terrorism efforts.
- Risk and situational awareness should be raised across the whole spectrum of stakeholders.
Government outreach and working with citizens, activists such as ethical hackers, companies,
organisations, government entities and others is crucial in this regard.
- Stakeholders should continue to police and take down extremist and terrorist material on
messaging services and the dark web. Taking down one group, channel or website may just
mean others will take its place, but this is the nature of policing in free societies.
- Law enforcement and intelligence agencies should engage in robust investigations and
operations to monitor and thwart activities as well as attack extremist and terrorist networks.
- Research and development efforts to advance technological solutions to police cryptographic
technologies should be increased, in particular in artificial intelligence and big data analytics.
- Systematically weakening encryption methods does not provide a viable path forward, as it
would undermine security for all.
- International dialogue and cooperation on law enforcement and intelligence operations should
be increased, in particular on information sharing, investigations, legal prosecution and
operational processes.
- The powers of governments, including those of law enforcement, intelligence and security
services, as well as the use of these powers by the aforementioned entities, should be
subjected to efficient and effective democratic control and rendered accountable to the people.
- The entire Alliance should strictly renounce all subversive activities (through action or
omission) of its own government, intelligence and security complexes, be it national,
international or supranational (e.g. in collusion with organised crime and other malicious
entities or through newly-created proxies), which might be aimed at deliberately creating,
sustaining and/or condoning security risks, threats, synthetic malicious actors, preplanned
problem–solution dialectics, psychological operations, inside jobs, false flags, etc. – whatever
motive there might be. In other words, the end must not justify the means, and this in itself can
dramatically reduce the severity of security issues our citizens, our peoples are faced with.
182 STCTTS 18 E fin
15
SELECT BIBLIOGRAPHY
(For further information on sources, please contact the Committee Director)
Barak, Michael, The Telegram Chat Software as an Arena of Activity to Encourage the “Lone Wolf”
Phenomenon, International Institute for Counter-Terrorism, 24 May 2016
Bartlett, James, The Dark Net: Inside the Digital Underworld, London: William Heinemann, 2014
Bergman, Michael K., “White Paper: The Deep Web: Surfacing Hidden Value”, in Journal of
Electronic Publishing, vol. 7, no. 1, 2001
Besheer, Margaret, “UN: Terrorists Using 'Dark Web' in Pursuit of WMDs”, Voice of America,
28 June 2017
Brill, Alan and Keene, Lonnie, “Cryptocurrencies: The next Generation of Terrorist Financing?”
Defence Against Terrorism Review, vol. 6, no. 1, 2014
Brown, Ian and Korff, Douwe,, “Terrorism and the Proportionality of Internet Surveillance”,
European Journal of Criminology, vol. 6, no. 2, 2009
Buchanan, Ben, “Cryptography and Sovereignty”, Survival, vol. 58, no.5, 2016
Carlisle, David, Cryptocurrencies and Terrorist Financing: A Risk, But Hold the Panic, RUSI, 2 March
2017
Chertoff, Michael and Simon, Tobby, “Chapter Two: The Impact of the Dark Web on Internet
Governance and Cyber Security”, in Cyber Security in a Volatile World, Global Commission
on Internet Governance, 2014
Coinmarketcap, Cryptocurrency Market Capitalizations, n.d.
Cypher Research Laboratories, A Brief History of Cryptography, 2014
Driscoll, Scott, How Bitcoin Works Under the Hood, Imponderable Things (Scott Driscoll’s Blog),
14 July 2013
European Banking Authority, EBA Opinion on ‘virtual currencies’, 4 July 2014
Europol, Changes in Modus Operandi of Islamic State Terrorist Attacks, Europol, 18 January 2016,
FinCEN, Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using
Virtual Currencies, FinCEN, 2013
Goldman, Zachary et al., Terrorist Use of Virtual Currencies: Containing the Potential Threat, Centre
for a New American Security, 2017
Greenberg, Andy, “Hacker Lexicon: What is Perfect Forward Secrecy?”, Wired, 28 November 2016
Insite Site Staff, IS Shifts Propaganda Archive to the Dark Web, Insite Blog on Terrorism &
Extremism, 18 November 2015
Jardine, Eric, “Chapter Three: The Dark Web Dilemma: TOR, Anonymity, and Online Policing”, in
Cyber Security in a Volatile World, Global Commission on Internet Governance, 2014
Keatinge, Tom and Keen Florence, Lone-Actor and Small Cell Terrorist Attacks: A New Front in
Counter-Terrorist Finance?, RUSI, 2017
Lee, Alex, “Theresa May’s Crackdown on the Internet Will Let Terror in the Backdoor”,
The Guardian, 20 June 2017
Magdy, Sarah, “A Safe Space for Terrorists”, The British Journalism Review, vol. 27, no. 4, 2016
Marr, Bernard, “A Short History Of Bitcoin And Crypto Currency Everyone Should Read”, Forbes,
6 December 2017
Microsoft, Journey Through the World Wide Web, Microsoft, 19 July 2016
Moore, Daniel and Rid, Thomas, “Cryptopolitik and the Darknet”, Survival, vol. 58, no. 1, 2016
Niglia,A., Al Sabaileh, A. , and Hammad, A., Countering Terrorism, Preventing Radicalization and
Protecting Cultural Heritage: The Role of Human Factors and Technology, NATO, Brussels:
NATO Science for Peace and Security Series, 2017
Noack, Rick, “France’s Latest ‘Terrorist Attack’ Exposes Dark Side of Social Media”, The Washington
Post, 14 June 2016
Owen, Gareth and Savage, Nick, “Chapter Four: The Tor Dark Net”, in Cyber Security in a Volatile
World, Global Commission on Internet Governance, 2015
Persi Paoli, Giacomo et al., Behind the Curtain: The Illicit Trade of Firearms, Explosives and
Ammunition on the Dark Web, RAND Europe, 2017
Rosner, Yotam, London, Sean and Mendelboim, Aviad, “Backdoor Plots: The Darknet as a Field
for Terrorism”, INSS Insight, vol. 464, no. 1, 2013
182 STCTTS 18 E fin
16
Solon, Olivia, “Global Network of 'Hunters' Aim to Take Down Terrorists on the Internet”,
The Guardian, 21 July 2017
Stalinsky, Steven and Sosnow, R., Germany-Based Encrypted Messaging App Telegram Emerges
as Jihadis Preferred Communications Platform, Middle East Media Research Institute,
3 January 2017
Stalinsky, Steven and Sosnow, R., Jihadi Use of Encrypted Messaging App WhatsApp, Middle East
Media Research Institute, 12 September 2017
Stalinsky, Steven and Sosnow, R., Switzerland-Based Encrypted ProtonMail Emerges As Popular
Jihadi Platform – Especially Among ISIS Hacking Groups, Middle East Media Research
Institute, 26 October 2017
Statista, Number of Monthly Active WhatsApp Users Worldwide from April 2013 to December 2017
(in Millions), Statista, 2018
Tor Metrics, Servers, Tor Metrics, 2018
UK HM Treasury & Home Office, National Risk Assessment of Money Laundering and Terrorist
Financing 2017, UK HM Treasury & Home Office, 2017
US Office of Terrorist Financing and Financial Crimes, National Terrorist Financing Risk Assessment
2015, US Department of the Treasury, 2015
Weimann, Gabriel, “Going Dark: Terrorism on the Dark Web”, Studies in Conflict & Terrorism, vol.
39, no.3, 2015
______________________
SCIENCE AND TECHNOLOGY
COMMITTEE (STC)
NATO SCIENCE AND
TECHNOLOGY:
MAINTAINING THE EDGE
AND ENHANCING
ALLIANCE AGILITY
Special Report
by Leona ALLESLEV (Canada)
Special Rapporteur
183 STC 18 E rev.1 fin | Original: English | 18 November 2018
TABLE OF CONTENTS
ACRONYMS………………………………………………………………………………….I
I. INTRODUCTION ...................................................................................................................1
II. WHAT DEFINES NATO’S S&T EDGE?.................................................................................2
III. WHAT IS NATO’S ROLE IN ALLIANCE DEFENCE S&T?.....................................................3
A. THE NATO S&T COMMUNITY AT A GLANCE.............................................................3
B. THE ADDED VALUE OF NATO S&T............................................................................6
IV. THE WAY FORWARD ON NATO S&T: POLICY RECOMMENDATIONS..............................8
A. UNLEASHING THE FULL POTENTIAL OF THE NATO S&T COMMUNITY.................8
B. NURTURING A MORE DIVERSE NATO S&T COMMUNITY ..................................... 10
C. ENHANCING THE AGILITY OF NATO S&T ............................................................... 10
D. DEMONSTRATING THE VALUE OF S&T TO THE MILITARY COMMUNITY ............ 12
E. IMPROVING STRATEGIC ENGAGEMENT AND COMMUNICATIONS ..................... 12
F. REINFORCING THE SCIENCE AND TECHNOLOGY ORGANISATION.................... 13
1. The NATO Chief Scientist and the Office of the Chief Scientist ......................... 13
2. The Collaborative Support Office....................................................................... 14
3. The Centre for Maritime Research and Experimentation.................................... 14
G. EVALUATING NATO S&T ON MISSION DELIVERY.................................................. 15
H. INCREASING TRANSPARENCY ON DEFENCE S&T INVESTMENTS ..................... 16
V. CONCLUSION..................................................................................................................... 18
SOURCES AND BIBLIOGRAPHY ....................................................................................... 19
ANNEX 1: LIST OF INTERVIEWS....................................................................................... 20
i
ACRONYMS
ACT Allied Command Transformation
AFSC Alliance Future Surveillance and Control
C3 Consultation, Command and Control
CDT Cooperative Demonstration of Technology
CNAD Conference of National Armaments Directors
CMRE Centre for Maritime Research and Experimentation
COMEDS Committee of the Chiefs of Military Medical Services
CPoW Collaborative Programme of Work
CSO Collaboration Support Office
NATO HQ NATO Headquarters
NATO PA NATO Parliamentary Assembly
NCIA NATO Communications and Information Agency
NDPP NATO Defence Planning Process
NIAG NATO Industrial Advisory Group
OCS Office of the Chief Scientist
R&D Research and Development
S&T Science and Technology
STB Science and Technology Board
STC Science and Technology Committee
STCTTS Sub-Committee on Technological Trends and Security
STO Science and Technology Organization
183 STC 18 E rev.1 fin
1
I. INTRODUCTION
1. On 4 October 1957, the Soviet Union launched Sputnik, the world’s first satellite. Given the
military advantages the technology promised, the launch sent shockwaves through the transatlantic
Alliance, and Allies had to race to make up for lost time. NATO cannot be caught off-guard like this
again.
2. NATO’s most staunch commitment is that Allies stand united to deter any potential aggression
and, if deterrence fails, to collectively defend themselves. Consequently, NATO must possess the
full range of capabilities to fulfil its duty to deter and defend the citizens of the Alliance. NATO’s
unrivalled defense science and technology (S&T) edge remains the lifeblood of current and future
capabilities. Unfortunately, a real possibility exists that the Alliance could fall behind in defense S&T
in the coming years.
3. A brief look at missile technology, artificial intelligence (AI) and quantum technologies
illustrates the difficulty of maintaining NATO’s S&T edge:
- Missile technology: In March 2018, President Vladimir Putin boasted about new nuclear
weapons under development, including a heavy intercontinental missile, an ‘invincible’ cruise
missile and an unmanned nuclear-armed underwater vehicle. Shortly after, Russia
successfully tested its Kinzhal hypersonic missile. China is also investing heavily in missile
technology, including two hypersonic weapon systems tested on multiple occasions.
- AI: China is investing USD 150 billion in artificial intelligence to become the world’s leading AI
innovator by 2030. In 2017, China’s share of global AI equity funding was 48%, compared to
the United States’ share of 38% (CBInsights, 2018). Even though Russia appears to be behind
the AI curve (global ranking on AI investments: 33rd
place), President Vladimir Putin clearly
recognized AI’s potential when he said in 2017: “Whoever becomes the leader in this sphere
will become the ruler of the world” (Soumitra, Lanvin and Wunsch-Vincent, 2018).
- Quantum technologies: China is making huge strides in quantum technologies. The
government is spending USD 10 billion on a new national laboratory. In 2016, Chinese and
Austrian researchers successfully held the first intercontinental video call secured through
quantum encryption by way of a Chinese satellite. In 2017, China also launched a land-based
quantum communications network with the aim of connecting Beijing and Shanghai over 2000
km.
4. Since US Senator Henry Jackson’s visionary leadership over 60 years ago, the STC has
remained vigilant in guarding NATO’s S&T edge. Alas, in 2017, the Committee – supported by the
NATO Parliamentary Assembly as a whole – noted its worry “that NATO’s technological edge is
eroding” (NATO PA, 2017b). Consequently, the STC is redoubling its efforts to identify the
challenges in meeting Alliance goals and to lend political support to rectify any shortcomings. Your
Special Rapporteur is eager to carry forward this vital work, to communicate our findings to Allied
governments, parliaments and – vitally important – citizens and thus to effect a fundamental change
in mindsets.
5. Most Allies and NATO entities are beginning to understand the importance of maintaining the
S&T edge. However, your Rapporteur would argue that a much greater sense of urgency must
prevail. For one, NATO faces an increasingly volatile and unsettling international situation with
challenges and threats from all strategic directions. More importantly in the context of this report, a
changing global S&T landscape also presents new challenges in maintaining the edge: potentially
disruptive inventions and innovations are increasingly driven by smaller and more commercially-
oriented companies as well as by nations or companies outside the Alliance. In short, if the Alliance
does not intensify its efforts to maintain the S&T edge, the window of opportunity to adapt to the
changing circumstances will rapidly close. And if the window were to close, the Alliance could face
a capability gap so significant it would be challenging to remedy.
183 STC 18 E rev.1 fin
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6. This special report is a direct follow-up to the 2017 General Report Maintaining NATO’s
Technological Edge: Strategic Adaptation and Defence Research and Development, which focused
on defense research and development (R&D) spending and reforms (NATO PA, 2017b). In this
report, your Rapporteur seeks to answer to the following questions:
- What defines the S&T edge?
- What is NATO’s overall mission in maintaining the S&T edge?
- How can NATO evaluate its delivery of the S&T mission?
- Does NATO need new institutions, networks, policies or tools to fulfil its mission?
7. Your Rapporteur presented a first special report at the 2018 Spring Session, where Committee
members provided valuable input for its revision. To make this report as complete as possible, the
STC Director conducted interviews with 30 national and NATO officials on behalf of your Rapporteur
(see Annex 1). The analysis contained in this report draws extensively on these interviews.
8. You Rapporteur hopes to paint a good picture of where NATO S&T finds itself today, where it
should be tomorrow and where stakeholders dissent in their assessments. She knows that certain
recommendations may require refinement through more in-depth analysis, but the task at hand –
ensuring that NATO S&T remains fit for purpose – requires bold ambitions. The STC continues to
stand ready to support this task.
9. Your Rapporteur had to make choices to keep the report within a reasonable length. Therefore,
while NATO S&T has made S&T capacity building within the Alliance and with partner countries and
institutions one of the cornerstones of its agenda, this report is squarely focused on NATO and the
Allies. By excluding partnerships, your Rapporteur does not mean to diminish the vital role of
partnerships in maintaining the S&T edge. Indeed, in the current S&T landscape these will become
ever more important. In particular, the STC should continue to engage in proper discussions
regarding the future of research and development in the European Union as well as partnerships
with NATO’s enhanced-opportunity partners.
II. WHAT DEFINES NATO’S S&T EDGE?
10. Since this Committee was created in the 1950s, its members have been concerned with
preserving NATO’s advantage in S&T. However, little clarity exists about what defines NATO’s
advantage in S&T or what the Committee has begun calling the ‘S&T edge’. Alas, the research for
this report yielded no conclusive answer either. Many interlocutors questioned the premise of the
question, arguing that ‘S&T edge’ could not be properly defined. Even if it could, it would be very
difficult to measure – to the point of impossibility. Nevertheless, the conversations generated certain
illuminating points.
11. For many interlocutors, the more interesting and valid question was “What constitutes the
military edge?”. This question goes far beyond S&T. It must include analyses of military ‘hardware’
as well as military ‘software’, including doctrine, organization, training, leadership, or personnel.
Defense analysts have a long history of studying the military edge. Nevertheless, such analyses
often turned out inaccurate once conflict broke out or when new information shed light on past
analyses. Today, such analyses have become even more difficult.
12. If such traditional metrics are already this difficult, designing valid defense S&T metrics for the
Alliance would be even more complex. How do you evaluate whether a nation has the right mix of
scientists and engineers, effective S&T processes or a healthy defense industrial or research base
to support S&T? How do you account for very different approaches to defense S&T? And how would
one aggregate analyses at the Alliance level?
183 STC 18 E rev.1 fin
3
13. Only highly-trained specialists in the various S&T domains might be able to design and
measure such metrics. The problem is that such analyses would very quickly run into highly sensitive
areas where Allies would not want to share much information amongst themselves. Even if such
hurdles could be cleared, it is very difficult to see how the results could be communicated at an
unclassified level without revealing too much to any potential adversaries. And even if analysts could
come up with metrics, would voters, decision makers and defense practitioners be able to
understand what these metrics mean in practice?
14. Interlocutors who argued that metrics could be defined or, at least, roughly characterized
suggested several big-picture questions that could be examined (see Table 1). Unfortunately,
exploring these questions in an exhaustive and valid way goes beyond the scope of this report.
15. Regardless of metrics, some interlocutors strongly argued that the Alliance may be overtaken
in the medium to long term or may already have fallen behind in several S&T areas. Interviewees
pointed to a number of S&T areas which should be monitored closely (see Table 2).
Table 1: What could characterize the S&T edge? Table 2: S&T Areas of Concern
- What is the global annual distribution of science, technology,
engineering, and mathematics graduates?
- What is the global annual distribution of registered patents
and research articles?
- Which country has won the highest number of Nobel Prizes
in recent years?
- What are the capability and investment trends in key
technologies, for example supercomputers, quantum computers
or AI?
- How many hypersonic weapons tests have China and
Russia performed, compared with the Alliance?
- How much are China and Russia investing into artificial
intelligence, compared with the Alliance?
- How long would it take for China and Russia to replicate the
cutting-edge capabilities within the Alliance?
- anti-submarine warfare
- artificial intelligence
- autonomy
- big data analytics
- chemical, biological,
radiological and nuclear defense
- cyber defense and security
- directed-energy weapons
- electronic warfare
- heavier conventional capabilities
- hypersonic missiles
- meta-materials
- quantum technologies
- space technologies
- synthetic biology
16. In conclusion, however, a more nuanced ambition for the Alliance should prevail in the absence
of clear metrics, which is well reflected in NATO’s S&T mission: “maintain NATO’s scientific and
technological advantage by generating, sharing and utilizing advanced scientific knowledge,
technological developments and innovation to support the Alliance’s core tasks”. That being said,
while defining specific and quantifiable scientific metrics might sometimes prove elusive, merely
asking the question focuses the conversation and ensures that creative tension and a challenge
function remain in the system. Your Rapporteur encourages the Committee to continue to ask these
questions and instill the necessary dynamism into the Alliance.
III. WHAT IS NATO’S ROLE IN ALLIANCE DEFENCE S&T?
17. In an Alliance of sovereign states, the primary responsibility to maintain a robust defense S&T
base and to discover, develop and adopt cutting-edge defense technologies naturally lies with NATO
member states themselves. Allies must expend sufficient resources on military-relevant S&T and
continually re-evaluate and adapt their national processes and institutions. However, in an Alliance
united in purpose, extensive and meaningful coordination, cooperation and collaboration of defense
S&T adds significant value to national efforts, while establishing interoperability and the necessary
overarching command and control.
A. THE NATO S&T COMMUNITY AT A GLANCE
18. To achieve its S&T mission, the NATO S&T community brings together “national S&T
capacities, both people and infrastructure, as well as NATO’s own research and experimentation
capacity” see Figure 1). The Alliance has several NATO entities that support this community.
183 STC 18 E rev.1 fin
4
Figure 1: NATO S&T Community
19. Unified governance of NATO S&T is exercised through the NATO Science and Technology
Board (STB), composed of national representatives and NATO S&T stakeholders. The NATO Chief
Scientist chairs the STB with the support of two Co-Vice-Chairs from NATO’s International Staff and
International Military Staff. The STB promotes coherence of NATO S&T through objectives set out
in the NATO S&T Strategy, focuses work through medium-term NATO S&T Priorities (see Table 3)
and serves as a focal point for all NATO S&T programs of work.
20. The Science and Technology Organization (STO) is the main NATO entity focused on S&T.
Led by the STB, it is composed of three executive bodies.
- The Office of the Chief Scientist (OCS) at NATO
Headquarters (HQ): Managed by the NATO Chief
Scientist, the seven-person OCS acts as the bridge
between the Collaboration Support Office, the
Centre for Maritime Research and Experimentation
as well as NATO entities and senior leadership at
NATO HQ.
- The Collaboration Support Office (CSO) in
Neuilly-sur-Seine, France: The CSO in Paris
provides a collaborative environment and supports NATO S&T activities through six Panels
and one Group (see Table 4). In 2017, the CSO had a staff of 43. The CSO’s core activity is
to support and enable the STO Collaborative Programme of Work (CPoW).
Table 3: 2017 S&T Priority Areas
Precision Engagement
Advanced Human Performance & Health
Cultural, Social & Organizational Behaviors
Information Analysis & Decision Support
Data Collection & Processing
Communications & Networks
Autonomy
Power & Energy
Platforms & Materials
Advanced Systems Concepts
183 STC 18 E rev.1 fin
5
- The Centre for Maritime Research and
Experimentation (CMRE) in La Spezia, Italy: The
CMRE is a customer-funded in-house STO laboratory.
Its team of 161 staff (2017) organizes and conducts
basic and applied research as well as technology
development and demonstrations. Research areas
include autonomous surveillance; port and ship protection; maritime situational awareness;
and environmental knowledge and operational effectiveness. The Centre also acts as a
knowledge repository for NATO.
21. Several other NATO entities carry out their own S&T related activities and contribute to the
programs of work of other NATO S&T stakeholders:
- Allied Command Transformation (ACT): Based in Norfolk, Virginia ACT leads NATO’s
initiatives for the transformation of military structures, forces, capabilities and doctrines to
enable NATO to meet its level of ambition and fulfil its core missions. ACT's work concentrates
on five lines of efforts: future work; the NATO Defence Planning Process; requirements;
capability development; and force development.
- The Conference of National Armaments Directors (CNAD): The CNAD is the senior NATO
committee responsible for promoting armaments cooperation between Allies. Chaired by the
NATO Assistant Secretary General for Defence Investment, the CNAD supports Allies in
defense planning, standardization and interoperability efforts. The CNAD also acts as an
advisory body to the North Atlantic Council (NAC).
- NATO Industrial Advisory Group (NIAG): The NIAG is a high-level consultative and advisory
body of senior industry representatives under the CNAD. Its role is to facilitate Alliance
armaments cooperation; advise on the industrial and technological base; support capability
development; and act as an interface between industry and NATO.
- The Emerging Security Challenges Division: The Emerging Security Challenges Division at
NATO HQ addresses non-traditional risks and challenges. Mostly focused on policy, the
Division has two work strands engaged in S&T related work: a Defence Against Terrorism
Programme of Work and the Science for Peace and Security Programme.
- The Committee of the Chiefs of Military Medical Services (COMEDS): COMEDS is NATO’s
senior body on military health. It seeks improvement in coordination, standardization and
interoperability in military medicine as well as in information sharing between Allies and
partners.
- The Consultation, Command and Control (C3) Board: The NATO C3 Board focuses on
information sharing and interoperability, including on issues such as cyber defense,
information assurance and joint intelligence, surveillance and reconnaissance. The Board
reports to and advises the NAC, the Defence Planning Committee, and the CNAD.
- The NATO Communications and Information Agency (NCIA): The customer-funded NCIA’s
mission is to guard NATO’s networks; offer timely support during operations; deliver C3
technology throughout NATO; and support Allies in their development of capabilities in the
fields of C3, computers, intelligence, surveillance and reconnaissance.
Table 4: STO Panels and Group
Applied Vehicle Technology
Human Factors and Medicine
Information Systems Technology
NATO Modelling and Simulation Group
Systems Analysis and Studies
Systems Concepts and Integration
Sensors and Electronics Technology
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B. THE ADDED VALUE OF NATO S&T
22. Just as with any other policy area in the Alliance, the nations remain fully in the driver’s seat –
a fact which must be firmly kept in mind when analyzing how to improve NATO S&T. No NATO entity
dictates terms to nations on S&T – and none should. This should not be seen as a weakness,
however. It ensures that NATO S&T activities are connected to national priorities and directly support
national needs and requirements. Moreover, when the NATO S&T community establishes common
views and, for example, translates these into NATO S&T Priorities (see Table 3), they have been
validated by all 29 Allies.
23. Defense S&T remains firmly anchored within the nations, both in terms of capacities and
efforts. At the NATO level, nations choose to come together to coordinate, cooperate and collaborate
on S&T. Many nations have other forums where they can pursue international defense S&T if they
wish to do so. Thus, the quantity and quality of participation depends heavily on the political
importance the nation attaches to NATO as well as on national interests, priorities and budgets. As
a consequence, it is a question of continued interest for national and NATO S&T leaders to
understand how the NATO S&T community can remain a forum of choice.
24. Certainly, NATO S&T is not ‘the center of the universe’ within the Alliance. NATO S&T does
not have the resources to compete with defense S&T conducted by nations or even defense
companies with large budgets and only has a very limited ability to influence S&T trends.
Nevertheless, NATO S&T is a critical enabler to maintain the full range of capabilities necessary to
fulfil Alliance missions. The reason Allies choose to invest upwards of EUR 500 million in NATO S&T
(mostly through national budgets) is the substantial added value it provides a) in the identification of
risks and opportunities and the diffusion of knowledge and expertise, b) in concrete R&D efforts and
c) through a range of cross-cutting benefits.
25. Identification of risks and opportunities and diffusion of knowledge and expertise: For
many Allies – if not all – it is impossible to follow all military-relevant technological trends. For one,
governments are no longer the main driver across the whole S&T spectrum. Allies with limited
defense budgets can be especially dependent on the knowledge and expertise in the NATO S&T
community. The combined Allied perspective provides much better situational awareness and
enables NATO S&T to deliver timely, targeted advice and higher-quality cost-effective results.
26. The national and NATO officials interviewed for this process pointed to a number of concrete
ways how NATO S&T helps nations and NATO:
- monitoring and understanding key military and dual-use S&T trends;
- staying ahead of S&T trends to avoid strategic surprises;
- improving advice and strategic communications to relevant Allied and NATO decision makers
and entities;
- promoting information and knowledge sharing among Allies and within NATO institutions;
- building a consolidated and validated knowledge base in support of national and NATO lines of
effort;
- identifying opportunities for coordination, cooperation or collaboration;
- avoiding unnecessary duplication among Allies; and
- encouraging or facilitating the determination of collective S&T targets and priorities.
27. Concrete research and development efforts: NATO S&T goes beyond the identification of
risks and opportunities and the diffusion of knowledge and expertise. Across NATO entities, the
Alliance offers a range of tools to cooperate, coordinate and collaborate on concrete R&D efforts.
NATO S&T’s role in these efforts is to accelerate capability development through STO activities, as
the 2018 NATO S&T Strategy states. Main tools include prototyping, demonstrations, tests and
experiments – a topic further examined in the next section.
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28. Interlocutors noted in particular that the STO:
- helps sustain or increase S&T and R&D capacity in nations, in particular in those with a smaller
S&T base;
- encourages and facilitates high-quality S&T and R&D at the national level; and
- fosters NATO-level and multinational S&T and R&D collaboration.
29. During the interviews, interviewees also identified a range of concrete cross-cutting benefits
for nations and the Alliance as a whole.
- Burden sharing: In the current global S&T landscape and at current budget levels, no NATO
member state can shoulder the defense S&T burden alone. NATO S&T enables the sharing of
resources; establishes economies of scale; and creates synergies and network effects. Indeed,
the return on investment can be very large. One interlocutor argued that his nation leveraged up
to 10 times the money put into NATO S&T activities. Even nations with limited defense S&T
investment can contribute significantly through niche competencies. Such opportunities will
continue to grow. Emerging areas of investment, such as AI, big data analytics, autonomy or
cyber, are increasingly driven by software and algorithm development and often only require
smart brains – not large capital investments.
- Capacity building: NATO S&T brings together scientists, engineers and analysts from
government, industry and academia. This helps them gain new knowledge, experience and skills
– to the benefit of their nations. Nations who cannot (yet) effectively contribute to NATO S&T
efforts or absorb defense S&T developments can volunteer as chairs of activities and build up
their capacities over time.
- Interoperability and standardization: Interoperability and standardization are key to NATO
operations – they are the glue binding NATO’s militaries together on the battlefield. Thus, the
earlier in the R&D process member states can work towards interoperability, the better (and
cheaper) for the Alliance.
- Quality assurance: S&T thrives on peer review. In NATO S&T, national experts can submit their
ideas and work to a larger community in classified and non-classified settings – with the former
adding substantial value.
- Building trust and confidence: The Alliance is built on trust and confidence. Without this, the
Alliance could not function. During operations and, at worst, wartime, Allies will need to send
troops into harm’s way. Building trust at all levels, including at the S&T level, is therefore
immensely valuable.
- Demonstrating political commitment: Active participation in NATO S&T demonstrates political
commitment to other Allies. This is crucial, especially in times of political strain within the Alliance.
- Leveraging network effects: The NATO S&T community provides a network with a well-defined
structure. National representatives meet and interface with colleagues outside traditional bilateral
relations. This facilitates coordination, cooperation and collaboration in NATO S&T, but can also
be leveraged in other NATO entities and lead to bi- or multilateral projects outside NATO S&T.
- Ease of cooperation: NATO S&T is a government-to-government relation, taking certain
competitive elements out of the equation, especially at lower technology-readiness levels. Allies
value the low threshold for initiating collaboration, which normally only requires four nations to
start an activity.
- The US dimension: For many nations, especially those with limited defense S&T budgets, the
continued deep involvement of the United States in NATO S&T is a cornerstone, given that US
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defense S&T investment is multiple times the investment in the rest of NATO members.
Maintaining a broad and deep presence of the United States in the NATO S&T community must
remain a priority.
IV. THE WAY FORWARD FOR NATO S&T: POLICY RECOMMENDATIONS
A. UNLEASHING THE FULL POTENTIAL OF THE NATO S&T COMMUNITY
30. The 2012 NATO S&T Reform aimed to make NATO S&T more effective and affordable. It
required NATO S&T stakeholders to break down old barriers, build new effective connections and
form a more cohesive NATO S&T community. The community has made huge strides since then. In
general, the interviewed stakeholders underlined they were comfortable with the new S&T
framework. Within the community there is a growing interconnectivity. Nevertheless, not all barriers
have been completely removed nor all connections established or filled with life. The positive aspects
of a situation still in flux is that it offers the possibility to make dynamic change before bureaucratic
inertia sets in.
31. The distinct parts of the community need to continue building a lively ecosystem where NATO
S&T networks can connect and which communities outside the NATO S&T community can tap into
or contribute to. Interlocutors argued that this would lead to more coherence, more effective
exploitation of existing institutions and networks and more systematic cross-fertilization on key S&T
topics.
32. Interviewees singled out a number of communities with which the NATO S&T community
needs to better interact: academia; acquisition authorities; defense planners; traditional and
non-traditional defense industry; military authorities and operators; national S&T stakeholders;
political leadership; and the armaments community. Based on her research, your Rapporteur would
thus put forward a number of recommendations.
33. Other communities must be brought into the NATO S&T process earlier to increase the
relevance of S&T activities. For example, more defense planners should be brought into the CSO’s
work during the formulation of the CPoW.
34. The NATO S&T community must work towards more active and systematic engagement with
other communities in order to offer S&T perspectives on their problems and needs. For example, the
NATO S&T community should engage with national armaments planners to the fullest by engaging
with the CNAD framework whenever opportune and meaningful.
35. The NATO S&T community must increasingly engage in the NATO Defence Planning Process
(NDPP), making it a focal point for bringing the different stakeholders and communities together (see
Table 5). NDPP-driven future requirements are increasingly employed within the S&T community.
Nevertheless, substantial work remains to be done. The NATO S&T community should stay ahead
of the curve and focus on the 2023-2028 NDPP cycle.
36. The S&T Community must consult more
closely and directly with military operators
and users and communicate results in a
manner meaningful to them. It is clear that
military operators and users demand more
from the S&T community. The military
community desires quick results, which
requires mutual expectations management,
political leadership from the top and a more agile NATO S&T community that is sympathetic to the
military’s needs and requirements (see below). This is why prototyping, demonstration, tests and
Table 5: NATO’s Four-Year Defence Planning Process
Step 1 - Establish political guidance
Step 2 - Determine requirements
Step 3 - Apportion requirements and set targets
Step 4 - Facilitate implementation
Step 5 - Review results
Current status: Step 1
Start of next NDPP cycle: July 2023
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experiments are crucial (also see below). The new Structured Partnership between ACT and the
STO as well as more interaction with Allied Command Operations through this Partnership will further
reinforce this. If the NATO S&T community can deliver on this, buy-in from the military community
will increase drastically.
37. Building better relationships with national delegations at NATO is central to increasing national
buy-in for NATO S&T. It will be difficult and perhaps a strain on resources, but such an effort offers
a lot of potential. Building better relationships requires increasing contacts, establishing personal
relationships and exploring national needs. The OCS and other NATO HQ-based entities should
lead this effort.
38. While NATO and industry are coming closer together, engagement must be intensified.
Increased dialogue would enable S&T leaders to indicate what problems they need addressed, and
industry can offer insights into current and next-generation S&T. Such industry involvement should
start much earlier than it does today, in a more structured manner and at lower levels. It should also
include more non-traditional industry players.
39. The interconnectivity of IT systems and databases within NATO and with the nations must be
enhanced. To break down barriers and enable more tight interactions, useful data must be easily
shared between different stakeholders, including at higher classification levels, for example between
the STO and COMEDS.
40. The tight coupling between academia, industry and defense S&T must be strengthened within
nations and should be explored at the NATO level. The so-called Triple Helix between academia,
government and industry offers great potential for the creation of new knowledge, inventions and
innovations.
41. Lastly, frequent parliamentary engagement in national parliaments as well as through the
NATO PA is key to delivering better NATO S&T. Parliamentarians are crucial for providing support
to robust defense S&T programs. The NATO S&T community must help parliamentary work by
providing insight into relevant technological developments and investment opportunities. Your
Rapporteur notes that the interaction between the STC and the NATO S&T community – at both the
staff and leadership levels – has drastically increased both in frequency and quality, especially after
the 2015 and 2017 Letters of Intent between the NATO PA Secretary General and, respectively, the
NATO Chief Scientist and the NIAG Chairman. The interactions should continue to improve. NATO
and national S&T leaders should increase engagements with parliaments, for example with regular
updates on technology trends or by directly supporting NATO PA delegations on S&T matters. Your
Rapporteur encourages her colleagues to extend invitations to national and NATO S&T leaders to
engage in substantive and regular discussions in their national parliaments. Direct personal
discussions are key to understanding the challenges and opportunities that lawmakers must think
through to keep their armed forces and the Alliance as a whole at the cutting edge of S&T and,
ultimately, preserve the military edge. Your Rapporteur would like to underline that engagement with
members of parliament must be targeted and timely. Communications must provide parliamentarians
with evidence of the merit and impact of the work performed within the NATO S&T community by
showing its relevance to military matters but also to salient societal issues. Engagement must be
politically meaningful and digestible, without diminishing the scientific merit behind the messages.
The STC should stand ready to provide further insights into what the parliamentary needs are in
terms of S&T engagement.
42. Your Rapporteur would also like to note that parliamentarians have a responsibility to increase
their S&T situational awareness and knowledge. S&T is ever more present in societies, and
parliaments are conducting an increasing number of inquiries focused on S&T risks and
opportunities.
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B. NURTURING A MORE DIVERSE NATO S&T COMMUNITY
43. As in other parts of the defense and security world, the question of how the NATO S&T
community can increase diversity has become crucial. Indeed, the community needs to achieve an
improved gender and demographic balance and draw new members into emerging S&T areas where
the community’s knowledge base is thin. The most pressing concern in the NATO S&T community
appears to be the age balance.
44. The STO, for its part, has analyzed the demographics of its network and communicated the
results to Allies, who ultimately must drive the change. NATO entities have little leverage over
nations, which often want to send their most experienced scientists and engineers. Fortunately, a
number of Allies take the challenge of diversifying their defense S&T workforce very seriously. NATO
S&T leadership should use its vantage point to the fullest by supporting these efforts and convincing
others to do the same.
45. As the Committee learnt on its 2018 visit to San Diego and Silicon Valley, the competition for
the best and brightest S&T talent is fierce and the opportunities outside the government and outside
defense and security are vast. Allied S&T leaders must be visible and proactive enough to ensure
they can attract and retain scientists and engineers of the caliber we will need to maintain the S&T
edge. While the private sector can offer financial and certain other incentives that defense S&T
cannot, national and NATO S&T leadership must communicate the unique selling points of defense
S&T to those it needs to attract into the network. For example, the STO taps into an active network
of about 5,000 experts which, in turn, can reach out to an extended network of 200,000 colleagues.
The STO network thus constitutes the world’s largest collaborative research forum in the field of
defense and security. It also offers travel opportunities, a high quality of work and research
opportunities the civilian sector cannot provide.
46. Young scientists and engineers often lack enough incentives to engage in NATO S&T work.
Scientific and technical work carried out within a NATO context is difficult, albeit not impossible, to
transition into publications that count in career advancement. In other words, if young scientists and
engineers must go to greater lengths in NATO S&T to advance their careers, why would they bother?
The NATO S&T community must investigate how to lower the barriers for meaningful publications.
47. Moreover, the current model of temporary contracts makes it less attractive for young people
to apply for NATO positions. Such contracts take them out of national career advancement tracks
without being beneficial for their careers. Here, nations need to learn from each other on how to offer
opportunities that are not disruptive to budding careers.
48. Three recent laudable initiatives aim to expose more young scientists and engineers to NATO
S&T. First, the STB has begun giving out early career awards. Second, the STB hosted a young
career event in the side-lines of its last meeting where the young scientists and engineers could
present their work and expose it to the senior STB level. These early career efforts should continue.
Third, within the CMRE, a career path for young incoming scientists has been recently developed.
49. Moreover, the NATO S&T community should explore:
- how to send a better signal to young scientists and engineers;
- whether to devise a dedicated diversification policy;
- how to establish networks of young scientists and engineers; and
- whether S&T contests could be a good way to tap into new talent pools.
C. ENHANCING THE AGILITY OF NATO S&T
50. Given the challenges the Alliance faces, including an accelerating S&T landscape, increasing
agility in the NATO S&T community – in the people, tools, equipment and network – is of utmost
importance. Many interlocutors cautioned, however, that this would be difficult and take time. Once
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again, the nations are critical, as agility enters NATO S&T through their financial and personnel
contributions. Some interlocutors argued that NATO as an institution should not be the leader on
agility. For one, the strength of NATO S&T lies in long-term S&T rather than in quick results.
Moreover, nations tend to micromanage NATO efforts, which would be counterproductive for agility.
51. The NATO S&T community is indeed working diligently on increasing its agility. The OCS has
developed the von Karman Horizon Scanning tool to quickly perform a technology scan on a
particular S&T topic (time needed: two to six months) and ad hoc initiatives like the Maritime Security
Initiative focusing on submarine warfare and naval mine warfare. The CSO has increased its agility
through increased leadership by the Director of the CSO; through improved receptiveness and
sensitivity to demands by the STB and the NATO Chief Scientist; and through tools such as
Technology Watch and S&T Themes focused on operational needs. The CMRE has started to
analyze its future options and possibilities from a content, resources and business-model
perspective, under the leadership of its Director. ACT is refining the requirement process for
development and acquisition and is looking to improve industry cooperation. The NIAG will become
more agile by moving away from cumbersome long-term studies and into studies with quicker
turnaround times.
52. Throughout the interview process, a number of recommendations stood out favorably for your
Rapporteur:
- NATO S&T leadership should actively engage with nations, NATO S&T subject matter experts
and military operators and users on the importance of an agile mindset.
- The NATO S&T community should encourage more risk taking in NATO S&T, for example
through prototyping, demonstrations, test and experiments (see below).
- NATO S&T leadership should foster a more strategic approach to S&T in the NATO S&T
community.
- NATO S&T leadership should encourage nations to make available national experts who are
well versed in introducing agility.
- National best practices to increase agility should be collected, analyzed and shared. These best
practices should cover such areas as risk management; fast-track development; acquisition;
program management; and technology transition. The CNAD Framework for Innovation, which
analyzes national innovation initiatives, is a good example that should be applied in other areas.
- New policy tools to facilitate Alliance exploitation of emerging and disruptive technologies must
be developed, for example in AI, automation, cyber and big data.
- NATO S&T should continue to foster communities of interest and boost activities focused on
autonomy, big data and artificial intelligence, and operations in contested urban environments,
i.e. the current STO Themes. The STC will examine the implications of artificial intelligence in
the 2019 STCTTS Report.
- A better, more broadly visible and available information management system must be developed
to make NATO S&T readily visible and searchable by all relevant national S&T and capability
development authorities.
- Information sharing at a higher classification level, including of research data, must be eased to
stay at the forefront of S&T. In particular, easing national security clearance processes could
facilitate dialogue at the early stages.
- Prepare prototyping, demonstrations, tests and experimentation packages that are ready to be
implemented when the demand arises.
- Seed money tools should be developed which can be used without burdensome approval
processes, which could be used by military commanders or the NATO S&T leadership to support
demonstrations or rapid studies and analyses for example.
- Military commands could create technology ambassadors who could scan the S&T landscape
for potential solutions for operational needs.
- Processes at NATO, for example regarding capability development and requirement setting,
should be revised and streamlined.
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- Competition-based tools, which the NCIA, for example, has experimented with, should be
explored.
D. DEMONSTRATING THE VALUE OF S&T TO THE MILITARY COMMUNITY
53. Increasing the use of prototyping, demonstrations, tests and experiments to demonstrate to
military operators and users what S&T can already offer them today emerged as a key
recommendation throughout the research for this report. Interlocutors – both the stakeholders who
carry them out and those who are the beneficiaries – agreed that such efforts need to be stepped
up. Such efforts:
- accelerate capability development by bridging the so-called valley of death between
research and development;
- help nations understand where they stand on S&T compared to other Allies;
- showcase concrete practical military relevance today; and
- bring problem solvers into contact with those who must deal with problems in operational
environments.
54. The NATO S&T community already conducts prototyping, demonstrations, tests and
experiments, most importantly in the CSO, ACT and CMRE. The CSO continues to increase the
number of Cooperative Demonstrations of Technology (CDTs). In 2018, the number is expected to
rise to 18 (up from eight in 2017 and two in the previous years). ACT’s experimentation work is of
critical importance as well, as it takes place in a realistic operational setting. The CMRE is also
increasingly tying its experimentation work into military exercises. Industry’s interest in getting
involved in demonstrations, tests and experiments is steadily increasing as well.
55. The Alliance needs to elaborate better processes and tools to facilitate the insertion of S&T
into operational settings, especially Allied Command Operations exercises and ACT activities. NATO
S&T has now proven that its demonstrations and tests do not ‘ruin the exercises’, as some military
operators had feared. The interplay between operators, S&T and industry has also proven
productive. All involved have succeeded in breaking down barriers. However, processes should
become much smoother and move away from ad hoc interactions that are too dependent on
personalities.
E. IMPROVING STRATEGIC ENGAGEMENT AND COMMUNICATIONS
56. A key point noted in almost all interviews was the need to strengthen the NATO S&T
community’s strategic communications. If defense S&T – regardless of the forum – is out of sight, it
is out of mind – regardless of S&T’s objective merits. Ultimately, the NATO S&T community must
create advocates in other communities who are convinced of the value S&T brings to their problems
and needs. The S&T community cannot be its own lone advocate. Ideally, communicating the
importance of S&T needs to come from the political leadership. In this context, the NATO Chief
Scientist plays an instrumental to make STO and NATO S&T more visible at NATO HQ and beyond.
Concretely, communications should:
- convey messages in a language understandable and meaningful to the audience;
- provide concrete answers to the question: “So what?”;
- focus on concrete, individual success rather than presenting complete but abstract documents;
- offer concrete support and advice;
- showcase S&T’s impact and importance; and
- help ‘connect the dots’.
58. Some very practical suggestions were mentioned by interlocutors. For one, S&T-minded
ambassadors could come together for an ambassadorial event in order to raise the visibility of S&T
at NATO HQ. Also, NATO S&T should organize events at NATO HQ on salient and current issues,
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for example the value of S&T in responding to the Salisbury chemical attack or its contribution to
novel capabilities like the F-35. Moreover, a planned CDT at NATO HQ could further raise awareness
and visibility of NATO S&T and set a good example for future CDTs at NATO HQ.
F. REINFORCING THE SCIENCE AND TECHNOLOGY ORGANIZATION
59. Almost all interlocutors agreed that the overall set-up was right to deliver on the NATO S&T
mission and that the focus should be on getting the best within the existing organizational model.
Nevertheless, some questions on organizational adaptation remain open and very much debated in
the NATO S&T community. In particular, further adaptation of the NATO STO and its executive
bodies appears to be in order. The current manpower allocations were generated in 2012, when the
STO carried out a markedly smaller program of work and there were fewer demands on the STO’s
three executive bodies. Equally importantly, the strategic environment has changed markedly since
then as a result of Russia’s destabilizing activism in the Euro-Atlantic area, in particular its illegal
annexation of Crimea and its military intervention in Eastern Ukraine. Overall defense budgets
across the Alliance are rising to meet this challenge. Thus, a complete review of workload,
requirements, manpower and organization is appropriate, based on better data and a better
understanding of the evolving threat environment. Now that the STO has been in place for 6 years,
it is only proper to fully review it and recommend changes, as appropriate, to the NAC.
1. The NATO Chief Scientist and the Office of the Chief Scientist
60. Most interlocutors argued that creating a NATO Chief Scientist position at NATO HQ in 2012
had been a crucial decision. NATO senior leadership and entities in Brussels are beginning to
recognize the NATO Chief Scientist and the OCS, even though it has taken longer than many
anticipated. Interlocutors cited a number of important reasons having the STO represented with a
Chief Scientist at NATO HQ.
61. The STO is a NATO entity. As such, it needs to be represented at NATO HQ, where it can
build up political networks and relationships, which are fundamental for effective policy making in the
Alliance. Such trusted networks and relationships increase the agility of the STO as a whole. The
STO can now much more easily provide S&T advice to senior leadership and NATO entities based
in Brussels when appropriate or demanded, both formally and informally. Indeed, the Chief Scientist
is part of the NATO HQ Senior Leadership meeting. He regularly briefs the Military Committee,
delivers advice to the North Atlantic Council and works hand-in-hand with other parts of the S&T
Community to increase program coherence, for example with the Emerging Security Challenges
Division. To increase connectivity, some interlocutors called for the OCS to increase its interface
with the Private Office of the NATO Secretary General. For the national S&T representatives, who
only meet twice a year at the STB level, having the Chief Scientist in Brussels is also a key additional
resource to understand and potentially shape NATO policy. For example, tackling the evolving
relationship between the European Union (EU) and NATO on S&T could not be handled at the
appropriate political and senior level without the OCS in NATO HQ.
62. Some interviewees questioned whether an organizational structure with three executive bodies
in the STO continues to be the right model. The NATO Chief Scientist does not lead the STO as a
whole. The Directors of the CSO and the CMRE have their own responsibilities and authorities, which
can make day-to-day management complex and dependent on personal relationships. Some thus
argued that these positions should be subordinate to the Chief Scientist to allow for better oversight
of the STO on behalf of the STB. This question requires more analysis, as this view may be a minority
view. The current organizational structure of the STO comes from the NATO Reform of 2012.
63. The NATO Chief Scientist position is filled as a voluntary national contribution. A lively debate
exists in the STO whether this remains a sustainable model, as the filling of such a critical position
relies on the goodwill (and funding) of individual nations.
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2. The Collaborative Support Office
64. The CSO is supplied with core funding from the NATO budget (EUR 5.85 million in 2018). The
CPoW has seen significant growth, both in overall activities and in the crucial CDTs, since 2012. The
number of activities run each year has increased by 77% in the last ten years – from 141 in 2007 to
264 in 2017. This is a sign of the added value NATO S&T can provide to nations. A number of
interlocutors noted that, if the CPoW were to grow even more – which is expected – the CSO would
quickly reach a limit as to how many more activities it could support. Already, support for the more
strategic efforts is becoming increasingly difficult and the CSO does not have the means to support
all proposed CDTs. The CSO, in particular the Director, may have to engage in more direct outreach
to national representatives to get activities started. Indeed, some nations have appreciated such a
push in the past. Such efforts would require the dedication of time and staff as well as backup by
STB members. Some interlocutors called for a slight increase in manpower, with perhaps two to four
additional staff. One interviewee argued that the main need was to connect nations better with the
CSO, which required increased travel budgets to identify synergies.
65. Financial constraints and the lack of human resources, at times, hinder the valuable
participation in the CPoW of representatives from the rest of the NATO S&T community, particularly
ACT, the CMRE and the NCIA. Some interlocutors argued that these entities should examine ways
of increasing their participation in the CPoW. The CSO for its part should explore ways to improve
the value added through their participation in the CPoW.
66. If Allies want to be serious about NATO S&T, they also need to remain engaged and even step
up their support. Nations provide continuous support through international military personnel and
voluntary national contributions. If that support were to disappear, the CSO would collapse.
Currently, critical positions are left vacant because no nation is willing to put forward the necessary
voluntary national contributions or international military personnel, which make up more than a
quarter of the staff. Moreover, at times, the formulation of opinions in the panels and group is driven
by personal interests, rather than by a strategic approach. For example, the possibility of engaging
in high-risk/high pay-off activities is not given enough attention, according one interlocutor. Moreover,
some interviewees questioned whether there is enough renewal and agility in the program. Indeed,
visibility regarding underperforming projects is very limited, due to the lack of monitoring. One
interlocutor argued that a more strategic approach to CSO activities was not called for, pointing to
the national prerogatives.
3. The Centre for Maritime Research and Experimentation
67. The CMRE is the one institution in the NATO S&T community that almost every interviewee
argued is under heavy strain. Opinions vary widely on how to adapt the Centre (or not). The current
organizational model and even the future of the CMRE appear very much in question. With the NATO
S&T Reform, the CMRE became fully customer funded. The Centre has no core funding, putting
severe limits on its room for maneuver, especially in terms of business development, sustainment of
assets and long-term projects. Many interviewees argued the customer-funded model, as it stands
today, is not valid anymore. If left untouched, the CMRE will not be able to survive. A hybrid model
that retains a strong market-based logic, incorporates an element of core funding as well as new
tools and maybe charges customers more was proposed by several interlocutors.
68. One interlocutor argued that the CMRE is actually not really customer funded, as most of its
revenue stream still comes from one customer (ACT), and was not really in a market – the market
wants results tomorrow, but the CMRE is mostly focused on the long term. He argued that
governments should step in and pay for the vital long-term S&T the CMRE produces, and that he
Centre was a common asset and must be funded like one. Those holding this view advocated to
seriously explore NATO common funding opportunities. Beyond a set level of such common funding,
one interlocutor suggested that a percentage share of the CMRE’s revenue streams could be
matched with NATO funds. In other words, the more success the CMRE found on the market, the
183 STC 18 E rev.1 fin
15
more it could invest in the future. Some argued that it would also require the CMRE’s mission to be
updated and sharpened. One suggestion was adding a focus on research and experimentation in AI
and autonomy, given the vast data sets the CMRE continues to generate in these areas.
69. The market does not have a lot of customers beyond NATO entities and Allied and partner
nations. It is true that new opportunities exist in EU research programs. However, NATO-EU relations
are not yet fully formalized, including on crucial issues such as the exchange of classified
information. Could the CMRE then fully tap into this potential? Even if the CMRE could find more
novel customer-funding streams, another question beckons: would the Centre’s activities drift too far
away from core Alliance needs and requirements?
70. While the CMRE offers significant value to nations, military operators and users as well as
national S&T representatives do not always communicate this. Advocacy by the CMRE itself and by
ACT, its main customer, cannot be enough. Increased advocacy from nations and military
commands which clearly benefit from the CMRE is fundamental. And they are beginning to do so.
At Allied Maritime Command for example, there is significant appetite for the services the CMRE
provides, but more systemic interaction between the CMRE and Maritime Command needs to be
developed.
71. On balance, your Rapporteur strongly suggests that the current CMRE model be revisited. It
goes beyond the scope of this report to devise robust recommendations. However, she would argue
that it cannot be an option to just wait and see if an organisation can survive with a model that is not
truly geared for survival. If that were the case, tax payers – and your Rapporteur – would not
understand why the Allies needed to pay for an experiment facing such high odds. She would
therefore urge for a careful analysis with a view towards making the CMRE fit for purpose. The
CMRE is a world-class S&T institution, with capabilities that nations individually or in cooperation
would struggle to fill if the CMRE were to fail or would lead to unnecessary duplication. In a time
when nations are increasingly worried about maritime situational awareness and anti-submarine
warfare, making the CMRE fit for purpose must remain the goal – also as a way to send a strong
strategic signal that NATO takes these challenges seriously.
G. EVALUATING NATO S&T ON MISSION DELIVERY
72. As the NATO S&T community is strengthening its efforts and adapting to the new strategic
reality, it is imperative to evaluate the community on mission delivery. This will be a difficult endeavor,
and perfect indicators for such an evaluation may not exist.
73. For one, measuring how high-quality S&T is translated into capabilities is extremely difficult
because of the time lag between S&T and successful development. The invention of the transistor
in the 1960s has led to unparalleled applications several decades later, and the end is not yet in
sight. How does one measure this? Moreover, the rewards of NATO S&T are normally reaped in
nations and the visibility of successes quickly gets lost, even when they circle back into the NATO
S&T machinery. Unfortunately, NATO S&T does not “put a string” on its activities to track where the
efforts lead. This would be an obvious next step to showcase and track NATO S&T results.
74. No specific metric or ‘dashboard’ for the evaluation of S&T mission delivery exists at this point.
Several interlocutors admitted that the NATO S&T community was not doing well enough on
evaluating itself and called for a concrete plan to do so. One interviewee argued that it was
impossible to evaluate S&T much beyond the input side of the equation. The input side is indeed a
good start to evaluate NATO S&T because it is more easily measured and is partly captured in the
NDPP process.
75. Most agreed that the NATO S&T Strategy provides a good framework to characterize
implementation, in particular through its goals, lines of effort and investment areas (see Table 6).
Indeed, the STB will need to develop such a framework to report to the North Atlantic Council on the
183 STC 18 E rev.1 fin
16
implementation of the Strategy. One interlocutor argued that the Strategy was “timeless” and should
not be changed every few years. In this way, the community could build up a track record. One
interlocutor did, however, argue that the Strategy was still too vague for good metrics, especially
ones targeted at individual nations, and lacked accountability instruments.
76. Also, the NATO S&T Priorities (see Table 4 above and Figure 2) serve as a reference frame
for topical evaluation and overall coverage, by correlating NATO S&T activities and S&T Targets of
Emphasis, which are linked to NDPP defined requirements. Indeed, many interlocutors emphasized
the need to base evaluation on the NDPP process. Some interlocutors argued that S&T activity
strands should be analyzed to see whether they delivered (although it is unclear how delivery would
be measured). If they do not, they should be wound down.
77. National participation in
NATO S&T activities should
continue to be tracked and
analyzed and lead to a more
proactive NATO S&T approach to
engaging with nations. Drops in
participation should be analyzed
and followed up on, as they could
be a result of the (perceived) lack
of concrete benefits for that nation.
H. INCREASING TRANSPARENCY ON DEFENCE S&T INVESTMENTS
78. Currently, public NATO reporting on defense expenditure only has four very broad categories,
namely expenditure on ‘equipment’, ‘personnel’, ‘infrastructure’ and ‘other expenditure’. Defense
S&T and R&D falls under the equipment category. In other words, in NATO’s public reporting, a
dollar spent on buying off-the-shelf artillery is counted in the same way as a dollar spent on AI
research. While many Allies publish such numbers individually and publicly, it might be useful to do
so at the NATO level. NATO’s Defence Policy and Planning Division tracks these numbers, but these
statistics are classified.
79. Your Rapporteur explored whether NATO should publish defense S&T and R&D numbers for
the Allies, i.e. peeling them off the equipment category. Alas, no clear answer emerged. Of those
asked, more than half supported such a move; a fifth answered with a firm no; and the rest did not
know what the best move would be.
Table 6: 2017 NATO S&T Goals, Lines of Effort and Investment Areas
Goals • Accelerate Capability Development
• Deliver Timely, Targeted Advice
• Build Capacity through Partnerships
Lines of Effort • Stay at the Forefront of S&T
• Forge and Nurture Effective Partnerships
• Promote Prototyping and Technology
Demonstrations
• Enhance Alliance Decision Making
• Focus on Alliance Needs to Boost Impact
Investment Areas • Enhance the Network of Partners
• Intensify Strategic Communications
• Improve the Programs of Work
• Promote Coherence
Figure 2: 2017 NATO S&T Activity across the whole NATO S&T
Community
12% Precision Engagement
9% Advanced Human Performance & Health
8% Cultural, Social & Organizational Behaviors
11% Information Analysis & Decision Support
17% Data Collection & Processing
8% Communications & Networks
4% Autonomy
3% Power & Energy
8% Platforms & Material
20% Advanced Systems Concepts
183 STC 18 E rev.1 fin
17
80. Many – even among those who advocate publishing the numbers – underlined that it would be
very difficult to come up with correct and quality-assured definitions and data that would capture the
true state of affairs. One could end up comparing apples and oranges. Some even questioned how
robust the numbers under the NDPP truly are. Nations vary widely in how they conduct and account
for defense S&T and R&D. Some smaller Allies – by choice or due to limited budgets – do not
conduct much or any defense S&T, for example. Some Allies do not report all the military relevant
S&T and R&D data because the money spent is overseen by ministries or institutions outside the
Ministry of Defense’s purview. Allies have widely differing S&T and R&D systems, for example
regarding the balance of state and private funds, defense versus broader security-related S&T and
R&D spending as well as dual purpose and military S&T and R&D.
81. Those who did not advocate publishing the numbers often cited these difficulties, but also
pointed to other factors. Publishing the data might:
- reveal too much to potential adversaries;
- create internal tensions within the Alliance similar to the strain related to the Wales Investment
Pledge; or
- would not enhance the public debate, as the trade-off between long-term and short-term benefits
of defense S&T/R&D is a complex matter.
82. However, among the latter group, many argued that the NDPP numbers should be made more
visible within NATO institutions. Others also suggested that the NATO S&T community might want
to get more actively involved in data collection and scrutiny, as it gives insight into the Alliance’s and
Partners’ S&T portfolio choices.
83. Those who advocated full transparency used other arguments:
- Public and peer pressure on those Allies not spending enough on defense S&T and R&D should
lead to increases in those who undervalue defense S&T and R&D.
- The political mandate lies with the parliament and the people, and transparency should thus be
the default option.
- Many nations do publish these numbers already, and it would not be a huge leap to systematize
data collection and publishing.
- National S&T leaders could use such numbers to position their nation among its peers and
communicate this to political decision makers.
- Publishing these numbers could increase awareness and investment.
84. On balance, your Rapporteur would argue in favor of engaging in a serious discussion with
NATO and national leadership to see if these numbers could be published in a meaningful way. They
must at least be made more visible within NATO structures.
85. A related question, raised during the discussion of the first report at 2018 Spring Session, was
whether the Alliance should define specific budget levels for defense S&T and R&D to complement
the Wales Investment Pledge. On this question, the answer was almost uniform: defining specific
budget levels for defense S&T and R&D makes little sense. Your Rapporteur would agree.
86. Most importantly, Allies have very different levels of ambition when it comes to defense
S&T/R&D. Some nations see themselves as smart developers of military capabilities; others as
smart specifiers who want to understand enough S&T to engage with industry in how to develop
military capabilities; and a third category of nations see themselves as smart users and customers
who will buy off the shelf but understand the deals industry can offer them. As the global leader, the
United States will always spend much more on defense S&T/R&D than other Allies – not just in
absolute numbers, but also as a percentage of its overall defense budget. At the lower bands of
defense expenditure, however, the bandwidth to engage in serious defense S&T/R&D diminishes
drastically. Some nations almost exclusively opt for off-the-shelf solutions.
183 STC 18 E rev.1 fin
18
87. Setting a minimum level for all nations might also lead to a degradation of output in other areas.
If a nation would argue that sending personnel into military operations rather than spending marginal
dollars in defense S&T and R&D, would it be beneficial for the Alliance to force the nation? Setting
specific targets could also reduce the flexibility to move resources to favor development,
procurement, training, operations or other areas according to NATO needs and requirements. Also,
a nation with a small GDP and therefore a small absolute defense budget should perhaps
concentrate more on the acquisition of equipment developed by others rather than on developing its
own equipment. Others pointed to the fact that reaching the 2% and 20% numbers is hard enough.
In Europe, the European Defence Agency (EDA) has identified a 2% target for defense spending on
Research and Technology (R&T). However, EDA nations are, in aggregate, at less than 1%. One
interlocutor argued that defense S&T/R&D is less about certain targets and more about budget
stability, given the long lead times in turning S&T into capabilities.
V. CONCLUSION
88. This report has underlined that Allied governments and parliaments must ensure that the
Alliance stays ahead and maintains the S&T edge. The urgency of this strategic challenge is great.
As US Congressman and former STC General Rapporteur Tom Marino wrote in 2017: “NATO’s
technological edge is eroding. Therefore, to safeguard our freedom and shared values, strategic
defense R&D policy decisions are necessary and urgent” (NATO PA, 2017b).
89. To meet the challenge, it is essential, first, that Allies live up to the Wales Defence Investment
Pledge and move towards spending a minimum of 2% of Gross Domestic Product on defense and
more than 20% of defense budgets on major equipment, including related R&D. Your Rapporteur
welcomes that Allies have committed themselves to delivering annual national plans which detail
how they intend to meet the Defence Investment Pledge in three major areas: cash, capabilities, and
contributions. Your Rapporteur laments the fact that these national plans will not be made public.
Lawmakers and citizens of the Alliance need to know if NATO and the Allies are achieving their
commitments and goals.
90. Second, it is also essential that Allies adapt to the new S&T landscape at the national level, as
business as usual is no longer viable. Your Rapporteur thus welcomes recent national initiatives to
spur defense technological innovation, for example the new Defence Innovation Agency to be
established in France.
91. A third aspect to make NATO fit for purpose on defense S&T and R&D is to increase the added
value of NATO. Your Rapporteur believes that much work needs to be done in this area. This report
has laid out NATO’s role in maintaining the S&T edge and the NATO S&T community’s contribution
to this effort. Your Rapporteur has laid out a range of concrete and realistic policy recommendations
on how to advance NATO S&T and strengthen its contribution to maintaining NATO’s S&T edge.
These recommendations form the basis of an STC Resolution to be adopted at the 2018 Annual
Session. Your Rapporteur hopes that the Resolution will send a strong signal to NATO senior
leadership as well as Allied governments and parliaments to get serious about defense S&T in the
Alliance. In conclusion, the Committee should continue to closely follow NATO and national efforts
to maintain the S&T edge and Alliance agility, keep Allies and NATO on their toes and stand ready
to support them.
183 STC 18 E rev.1 fin
19
SOURCES AND BIBLIOGRAPHY
Sources:
The report draws extensively on publicly available information from NATO’s and NATO structures’
websites; NATO PA and NATO briefings; STC visits; and informal and formal discussions with NATO
S&T stakeholders (see Annex 1). For more information, please contact the Committee Director.
Bibliography:
CBInsights, Top AI Trends to Watch in 2018, 2018
Dutta, Soumitra, Lanvin, Bruno and Wunsch-Vincent, Sacha (eds.), Global Innovation Index 2018,
Cornell University, INSEAD & the World Intellectual Property Organization, 2018
NATO PA, Maintaining NATO’s Technological Edge: Strategic Adaptation and Defence Research and
Development, STC General Report [174 STC 17 E bis] presented by Tom Marino, 2017b
NATO PA, Resolution 443 on Maintaining NATO’s Technological Edge, 2017a
NATO, Warsaw Summit Communiqué, NATO, 2016
183 STC 18 E rev.1 fin
20
ANNEX 1: LIST OF INTERVIEWS
NATIONAL DELEGATIONS TO NATO HQ
Vera ALEXANDER, Deputy Permanent Representative, Canada
Lieutenant Colonel Beverly DE LALLO, Deputy Representative of the National Armaments Director, Canada
Frank DESIT, Representative of the National Armaments Director, France
NATIONAL MEMBERS OF THE NATO SCIENCE AND TECHNOLOGY COMMUNITY
Colonel Tim VAN LANGENHOVE, Director General, Royal Higher Institute for Defence, Belgium
Steen SONDERGAARD, Chief of Defence Research & Test Centre, Danish Defence Acquisition and Logistics
Organization, Denmark
Kusti SALM, Director of the Defence Investments Department, Estonia
Auke VENEMA, Director Research and Technology, Ministry of Defence, Netherlands
John-Mikal STORDAL, Director General, Norwegian Defence Research Establishment, Norway
Jon E. SKJERVOLD, Director Strategy and Policy, Norwegian Defence Research Establishment, Norway
Stig LODOEN, Chief Scientist Norwegian Defence Research Establishment, Norway
Bryan WELLS, Head of International and Strategic Research, Defence Science and Technology, United Kingdom
Peter COLLINS, Director of Business Planning, Leonardo S.p.A., United Kingdom
NATO HQ INTERNATIONAL STAFF
Camille GRAND, Assistant Secretary General, Defence Investment Division
Ernest J. HEROLD, former Deputy Assistant Secretary General, Defence Investment; former Co-Chair of the NATO
Science and Technology Board
Jonathan PARISH, Deputy Assistant Secretary General, Defence Policy and Planning Division
Robert WEAVER, Deputy Assistant Secretary General, Emerging Security Challenges Division
Graham EVANS, Deputy Director and Head, Defence Planning Directorate, Defence Policy and Planning Division
NATO HQ INTERNATIONAL MILITARY STAFF
Lieutenant General Jan BROEKS, Director General, International Military Staff
NATO STRATEGIC COMMANDS
Lieutenant General Jeffrey G. LOFGREN, Deputy Chief of Staff for Capability Development, Allied Command
Transformation
Vice Admiral Clive C.C. JOHNSTONE, CB CBE, Commander Allied Maritime Command, Allied Command
Operations
COMMITTEE OF THE CHIEFS OF MILITARY MEDICAL SERVICES
Major General Jean-Robert BERNIER, Chair, Committee of the Chiefs of Military Medical Services
Colonel Gerald ROTS, Liaison, Committee of the Chiefs of Military Medical Services
NATO INDUSTRIAL ADVISORY GROUP
John JANSEN, Chair, NATO Industrial Advisory Group
Rudy PRIEM, Vice-Chair, NATO Industrial Advisory Group
NATO SCIENCE AND TECHNOLOGY ORGANISATION
Thomas KILLION, NATO Chief Scientist and Chair of the NATO Science and Technology Board
Pavel ZUNA, Director, NATO Collaborative Support Office
Alan SHAFFER, nominee for US Deputy Undersecretary for Acquisition and Sustainment; former Director,
Collaborative Support Office
Catherine WARNER, Director, NATO Centre for Maritime Research and Experimentation
Susanne WIRWILLE, Strategy and Policy Section, Office of the Chief Scientist
Nico POS, Strategic Science and Technology Plans, Office of the Chief Scientist
________________
SCIENCE AND TECHNOLOGY COMMITTEE
222 STC 18 E fin
Original: English
RESOLUTION
on
SAFEGUARDING ELECTIONS IN THE ALLIANCE*
The Assembly,
1. Concerned that Russia’s aggressive actions, including the threat and use of force as well as
hybrid operations, are undermining Euro-Atlantic security and the rules-based international order;
2. Recognising the overall strategic challenge of Russian cyber and information operations to
Allied security;
3. Recalling NATO’s founding principles of democracy, individual liberty and the rule of law;
4. Strongly stressing the need to preserve the institutions that make democracies strong,
including freedom of the press, freedom of speech and free and fair elections;
5. Unequivocally condemning any foreign attempts to undermine elections and other
democratic processes, including referenda;
6. Denouncing in the strongest terms Russia’s recent targeting of elections and referenda in
Allied and partner countries as well as its broader attempts to destabilise democracies in Europe
and North America;
7. Convinced of the need to deter any foreign interference in elections and in any other type of
democratic processes or, failing that, be prepared for and resilient against such interference by
developing whole-of-government and whole-of-society approaches as well as national and
international responses at every level, in all forums and through every channel;
8. URGES member governments and parliaments of the North Atlantic Alliance:
a. to conduct regular risk assessments of election infrastructure and remedy any identified gaps
or vulnerabilities;
b. to institutionalise pre-election processes against potential election interference;
c. to consider mandating post-election security audits;
d. to provide adequate funding and assistance to election bodies;
e. to explore the possibility of designating election infrastructure as critical infrastructure;
f. to outline real and credible consequences in case of foreign interference, for example through
legal actions and sanctions;
* Presented by the Science and Technology Committee and adopted by the Plenary Assembly on
Monday 19 November 2018, in Halifax, Canada
222 STC 18 E fin
2
g. to make use of the possibility of holding consultations under NATO’s Article 4 when applicable;
h. to further develop public-private partnerships and outreach with civil society, private
companies and media outlets concerning election interference;
i. to encourage non-government institutions and organisations central to the democratic process,
such as political parties and campaigns, to adopt increased cybersecurity measures, facilitated
by government support if required;
j. to develop better information-sharing procedures with the non-government sector on cyber
and hybrid threats;
k. to further develop cyber and hybrid defence and security strategies, policies and institutions at
the national level, at NATO, the EU and beyond;
l. to develop clear and actionable protocols and action plans as well as lines of authority and
coordination at the national, regional and local levels to expedite responses in the event of
election interference;
m. to systematise and institutionalise cooperation on cyber and hybrid threats through the NATO-
EU strategic partnership;
n. to promote civic education and media literacy concerning the threat of foreign interference in
democratic processes;
o. to encourage greater transparency in the social media sector and reasonable access to social
media data for independent researchers;
p. to continue to explore if and how social media activity or companies could be regulated to
guard against foreign interference in democratic processes;
q. to explore how to increase the transparency of political advertising on social media and
whether foreign-paid social media political advertising could be banned;
r. to encourage conversations in the journalist community about standards of use for material of
questionable sourcing as well as about the potential motives behind a source;
s. to encourage and support independent fact-checking initiatives;
t. to engage in public information campaigns about the threat of foreign election interference and
instances of attempted or successful interference;
u. to encourage increased research on cyber and information operations and develop effective
tools, paying close attention to artificial intelligence, big data analytics and other emerging
technologies.
_______________
SCIENCE AND TECHNOLOGY COMMITTEE
223 STC 18 E rev. 1 fin
Original: English
RESOLUTION 453
on
MAINTAINING THE SCIENCE & TECHNOLOGY EDGE AND
ENHANCING ALLIANCE AGILITY*
The Assembly,
1. Recognising that the Alliance finds itself in a new and dynamic strategic reality, marked by
growing uncertainty, instability and risks;
2. Facing an era of rapid technological change with a shifting science and technology (S&T)
landscape and emerging technologies with the potential to disrupt the global strategic balance;
3. Recalling NATO’s most staunch commitment to stand united to deter any potential aggression
and, if deterrence fails, to collectively defend themselves;
4. Underlining the critical importance of cutting-edge capabilities to meet NATO’s level of
ambition and fulfil its core missions;
5. Stressing that NATO’s unrivalled S&T edge is the lifeblood of current and future capabilities;
6. Concerned that NATO’s S&T edge is eroding, resulting in increased risks for Alliance
credibility and freedom of action;
7. Emphasising that effective defence S&T relies on vigorous sustained investment and
continuous organisational adaptation;
8. Welcoming recent defence budget increases in the Alliance, but apprehensive about
continued stagnation in defence S&T and research and development (R&D) budgets;
9. Noting that NATO S&T is a critical enabler of maintaining the S&T edge in the Alliance, adding
significant value to defence S&T in individual Allied nations, notably in burden sharing, capacity
building, interoperability and standardisation;
10. Highly valuing the crucial role played by the Science and Technology Organization (STO)
and the other members of the NATO S&T Community;
11. Applauding the significant strides in making NATO S&T more effective, affordable and
coherent since the 2012 NATO S&T Reform;
* Presented by the Science and Technology Committee and adopted by the Plenary Assembly on
Monday 19 November 2018 in Halifax, Canada
223 STC 18 E rev. 1 fin
2
12. Noting the highly productive interaction between the NATO Parliamentary Assembly’s
Science and Technology Committee and the NATO S&T Community, notably through the Letters of
Intent with the Chief Scientist and the NATO Industrial Advisory Group (NIAG) Chairman;
13. Recognising the need for increased parliamentary S&T knowledge and expertise;
14. URGES member Allied governments and parliaments of the North Atlantic Alliance and the
NATO S&T Community:
a. to redouble national efforts to reach the 2% benchmark for defence spending by 2024 as all
Allies agreed at the 2014 Wales Summit and allocate at least 20% of their total defence
spending toward new equipment purchases and research and development;
b. to continue adaptation at the national and the NATO level to the changing strategic and S&T
realities;
c. to unleash the full potential of the NATO S&T community by a) improving NATO S&T’s military
relevance, coherence, resource exploitation and synergies; b) making the NATO Defence
Planning process a focal point; c) enhancing active, early and systematic engagement with all
NATO S&T stakeholders, in particular with the military community and Defence industry; and
d) increasing parliamentary engagement in national parliaments and through the NATO PA;
d. to nurture a more diverse NATO S&T community by a) improving the age and gender balance
in the NATO S&T expert network and b) developing new networks in emerging S&T areas;
e. to enhance the agility of NATO S&T by a) developing a more strategic S&T approach and
b) making available the highest quality scientists and engineers for NATO S&T; c) fostering an
agile, innovative and risk-tolerant mindset through, inter alia, sharing best practices across the
NATO S&T community; d) developing new policy tools to exploit emerging technologies;
e) exploring financial tools for ‘seed money’ in support of technology demonstrations and rapid
studies; f) developing an improved information management system, including at higher
classification levels; and g) fostering communities of interest and boosting activities focused
on autonomy, big data and artificial intelligence, and operations in contested urban
environments;
f. to demonstrate the value of S&T to the military community by a) increasing the quantity and
quality of prototyping, demonstrations, tests and experimentation and b) elaborating better
processes and tools to facilitate insertion of S&T into operational settings;
g. to improve strategic engagement and communications by a) conveying meaningful, timely and
targeted support and advice to NATO entities and leadership; and b) showcasing NATO S&T’s
impact and importance to NATO entities and leadership;
h. to reinforce the Science and Technology Organization by a) conducting a complete review of
workload, requirements, manpower and organisation in light of the new strategic and S&T
realities and increased demand for NATO S&T activities and b) conducting a thorough analysis
of the organisational and financial model of the Centre for Maritime Research and
Experimentation to make it fit for purpose at a time when NATO must strengthen its maritime
capabilities;
i. to evaluate NATO S&T on mission delivery by a) building on the 2018 NATO S&T Strategy,
Priorities, Targets of Emphasis and the NATO Defence Planning Process and b) regularly
analysing NATO S&T programmes of work to identify gaps and improve programme health;
223 STC 18 E rev. 1 fin
3
j. to increase transparency on defence S&T and R&D investment trends by a) making these
trends more visible among Allies and NATO entities at the classified level and b) engaging in
a serious discussion on publicly publishing statistics on Allied defence S&T and R&D spending.
______________