Reports
Peddling Peril Index (PPI) for 2017
by David Albright, Sarah Burkhard, Allison Lach, and Andrea Stricker
January 31, 2018
Download PDFThe Institute for Science and International Security is pleased to announce the release of the Peddling Peril Index for 2017. The PPI is a ranking of 200 countries, territories, and entities according to their capabilities and demonstrated success in implementing strategic export controls, with a focus on efforts to prevent nuclear and other strategic commodity trafficking. It is the first-ever publicly available ranking of export control systems and perhaps the only such ranking in existence. It makes targeted recommendations to improve the creation and implementation of strategic export controls.
The PPI project grew out of more than two decades of work by the Institute on understanding and characterizing illicit nuclear trade. A 2010 book, Peddling Peril, by David Albright, is the project’s namesake. The PPI was first envisioned at a 2015 workshop involving law enforcement officials, Congressional staff, and non-governmental experts. Participants agreed that there was no systematic measure of national export control systems globally, and thus a deep need to establish such an evaluation in order to better target and develop counter-proliferation efforts.
Strategic export controls are a critical countermeasure against trafficking in nuclear, missile, WMD, key dual-use goods, and military-related goods. No tool can completely stop determined countries like Iran and North Korea from illicitly acquiring goods they seek. But strategic export controls have proven important in slowing and complicating those efforts. They have stimulated responsible nations to seek better and earlier detection of secret state or non-state efforts. By detecting these efforts earlier and causing delays, export control systems provide more time for diplomacy and other counter-proliferation tools to seek solutions.
Nearly fourteen years have passed since the passage of United Nations Security Council resolution (UNSCR) 1540, which mandated in 2004 that all nations must put in place appropriate, effective export control systems to prevent the spread of the wherewithal to make weapons of mass destruction. Yet, the resolution today remains under-implemented and levels of state compliance are irregularly reported. Moreover, the resolution contains no measure that mandates the evaluation of the effectiveness of national export controls.
Methodology and Key Findings:
- The Peddling Peril Index assesses numerous indicators pertinent to non-proliferation. To determine a ranking, the PPI settled on five overarching “super criteria” with 88 “sub-criteria”.
The five “Super Criteria” are:
International Commitment to preventing strategic commodity trafficking;
Legislation in place that regulates and oversees trade in strategic commodities and criminalizes and aims to prevent strategic commodity trafficking;
Ability to Monitor and Detect Strategic Trade;
Ability to Prevent Proliferation Financing; and
Adequacy of Enforcement against strategic commodity trafficking.
The data and analysis allow for comprehensive, straightforward assessments that help to better characterize the sufficiency of strategic export control systems and other globally-recognized best practices for implementing and maximizing the performance of export control systems.
The PPI also provides an indication of states’ vulnerability to illicit procurement schemes.
The PPI evaluates countries in terms of “Three Fundamental Tiers” of countries to evaluate export control systems. This approach allows for the development of performance metrics and targeted recommendations that guide improvements in countries that are alike in many ways.
The three tiers are defined in broad terms as:
Tier One (57 countries): Major suppliers of, or capability to supply, nuclear facilities and components, nuclear-related commodities, and other ballistic missile, WMD, and related strategic commodities.
Tier Two (57 countries): Potential nuclear, missile, WMD, and related strategic commodity transshipment countries. These countries may have limited capabilities to manufacture dual-use items, or they may have limited nuclear infrastructure in place, such as nuclear research or power reactors or uranium mines.
Tier Three (86 countries): All other countries.
This manner of evaluating countries acknowledges that smaller countries and countries that trade less, and that have fewer resources to devote to export controls, cannot realistically be expected to match the performance of major world export economies.
The PPI for 2017 found that global implementation of export controls is currently bimodal. One peak illustrates that about one quarter of countries maintain fairly robust strategic export controls, e.g. comprehensive legislation and effective implementation, and the other shows that about three quarters of countries have far less effective systems.
For developed countries, controlling trade is a matter of national security, and they accordingly dedicate resources. For many other countries, however, trade is mainly regulated for economic reasons.
The PPI found that some 120 countries do not have strategic export controls.
No country received more than 80 percent of the total points and seven countries received negative scores.
The PPI created a set of recommendations tailored to each tier of countries that would reduce their likelihood of being exploited by illicit procurement agents and networks.
The report also includes several chapters assessing groups of countries of interest and their export control implementation.
Key Recommendations:
Even those states with sufficient strategic export controls, such as top-performing Tier One states, can improve the effectiveness of their controls.
For those countries that received negative scores, responsible suppliers and transshipment countries should exercise extreme caution when trading with them.
All states should commit to achieving the enactment of legislation in the top PPI category together with robust control lists, even though this should be viewed as a long-term objective for many Tiers Two and Three countries.
Assistance to lagging countries should be tailored to the specific level or capability of each state, modeling the tiering system used in the PPI.
Tiers Two and Three countries need to create at least a small human capability which can issue licenses as necessary, conduct outreach, and serve as points of contact to industry and other governments.
Full implementation of Resolution 1540 and its strengthening should be a priority for all countries, and the PPI names several measures that should be taken.
States should provide a mandate to an organization to conduct export control evaluations that countries could participate in on a voluntary basis.
There is a need for organizations, perhaps organized regionally and/or by commodity types – especially nuclear and biological – to assist customs or border security agencies and personnel in identifying, or classifying, unknown or potentially illicit goods in a timely manner. This is known as “technical reachback” and is acutely needed by Tiers Two and Three countries.
Countries should make it more of a national priority to prosecute crimes of illicit nuclear, missile, and WMD trafficking, including establishing specialized investigatory units, utilizing undercover operations, extending mandatory minimum sentences for violations, and extraditing violators.
We offer this first version of the Peddling Peril Index with optimism that we will have the opportunity to produce future versions that improve upon it. It is our hope that the PPI will be valuable to states, organizations, researchers, and the general public. We aspire for it to motivate strengthened export control efforts worldwide and reduce the chances that additional states or non-state actors will obtain the wherewithal to fabricate nuclear and other destructive weapons.
The full report can be found as a PDF version here.
Electronic and hard copy book versions will be made available soon. We will send out information about obtaining those versions as they are available.
Additional information and figures referenced in the report are available on the Peddling Peril Index webpage, http://www.isis-online.org/ppi
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