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U.S. Department of State

Great Seal Under Secretary for Management Bonnie Cohen
Testimony before Special Committee on the Year 2000 Technology Problem, U.S. Senate
March 5, 1999, Washington, D.C.

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International Y2K

UNDER SECRETARY COHEN: Good morning, Mr. Chairman and distinguished committee members. Thank you for the opportunity to appear before your committee to discuss international Y2K issues, their possible implications for the United States, and what the State Department is doing about it. In particular, I will describe the process the Department is establishing as part of an interagency U.S. Government effort to cope with unanticipated problems. As you note in your excellent report Mr. Chairman, the greatest Y2K impact may be international. Since we live in an interdependent world, lagging Y2K preparations in other parts of the world can affect our national interest. We are pleased that you are also soliciting suggestions for how the Congress and others can help address this complex problem with its many possible consequences for United States.

Our first obligation is to understand how Y2K problems might affect US national security and economic interests, as well as the lives of Americans, residing, or traveling, abroad on January 1, 2000. We take these duties very seriously and have begun to put in place a process to gather information on Y2K vulnerabilities in other countries. This is a challenging undertaking because our knowledge of international Y2K risks is far from comprehensive. Many governments continue to view their Y2K risks as national security problems and are thus very reluctant to share operational details they view as being secret. My testimony today will focus on how we are organizing ourselves at the State Department to accomplish our goals as part of an interagency process and will describe our initial interactions with other governments and international agencies now grappling with this tough problem.

I know from experience at State how difficult Y2K-related problems are to fix, but we are also determined to meet this challenge with your help in a responsible and effective way. We are also working closely under the leadership of the President's Y2K Adviser John Koskinen and the President's Council on the Year 2000. We are exploring Y2K preventive measures now. To improve interagency collaboration, Under Secretary Tom Pickering and I will be co-chairing along with Defense Under Secretary Slocombe a Y2K International Interagency Working Group under NSC auspices. This group consists of international affairs agencies who have a stake in helping to resolve Y2K problems, including Treasury, Commerce, Energy, Transportation, and USAID.

First, though, we need to make sure our own house is in order. State will be ready. I am pleased that the Department has been making rapid progress in achieving compliance. I chair a monthly steering committee attended by bureau Assistant Secretaries and other senior managers. With the full support of the Secretary of State, I have ordered a moratorium on all system development programs that are not Y2K related to ensure that those programs that are fixing our Y2K problems have the attention they deserve. We are also using our concerns about Y2K in the Department's aging computers to accelerate replacements around the world.

By March 31, 1999, over 90% of our 59 mission critical systems should be fully implemented. For example, our command and control telecommunications are already compliant. The remaining four systems will be ready before August 1999. I am also confident that non-mission critical systems, including those in our internal telecommunications and building facilities, will be fixed by the end of this year. In addition, we are developing contingency plans with our regional bureaus to ensure service continuity, domestically and overseas. By the end of April our embassies will have identified essential mission activities and have a plan in place for dealing with possible infrastructure failures in the host country. In recognition of Stateís accomplishments, OMB has upgraded the Department from Tier I to Tier II on Y2K readiness.

We have been active for some time now with our Canadian and Mexican neighbors and have established a trilateral mechanism to discuss our joint Y2K concerns. This mechanism has become an invaluable forum for exchanging information and considering solutions. Given the many ties that bind our three nations -- economic trade and large numbers of our citizens residing in each otherís countries -- this process is absolutely essential and necessary for our common good. Last week we had productive meetings with industry leaders in our three countries to ensure the uninterrupted flow of goods and services and continued cooperation of multilateral organizations. The most recent meetings occurred in Washington last week over three days.

I would like to begin with my brief overview of Y2K preparedness by other countries. What we know about the Y2K problem abroad comes from many sources. First, we have tasked our embassies around the world to discuss with host government officials each countryís Y2K efforts and preparedness to remediate problems and contingency plans for possible failures. While responses in some cases are uneven, in part because of reluctance by host governments to share information considered sensitive and vital to their national security, the surveys have been a first take at looking at country-specific Y2K problems. They are serving as a very useful benchmark. While some countries in the developed world are making generally good progress, the Departmentís inspectors note that in many other countries, especially in the less developed world, government responses have been inadequate, belated, and uneven.

As we hone in on our most pressing concerns about foreign vulnerabilities, we will go back to our embassies for more focused inquiries with host government officials. Another important source of information for the policy process is the Intelligence Community, led by the National Intelligence Council, which is drafting timely reports on critical Y2K concerns. Assistant Director of Central Intelligence for Analysis and Production Gannon will be testifying today on this important effort. Of particular importance is the close collaboration between the Intelligence Community and the Defense Department in assessing those Y2K problems of greatest concern to our military readiness. As the Intelligence Community builds up its all source data on this problem, State Department officers will distill this information to develop agendas for in-depth discussions by Ambassadors with host countries and for policy options for the serious decisions relating to the effect of Y2K readiness on international relations, both political and economic. Finally, we will be looking to the private sector and international organizations - such as those in telecommunications and finance - to address sector-specific problems.

As the National Intelligence Officer for Science and Technology testified on January 24 and as Deputy Director of Central Intelligence General Gordon testified on February 24, all countries will be affected--to one degree or another --by Y2K-related failures. While the range of possible Y2K impacts is unknown, we are collectively trying to focus on those areas where a Y2K problem may result in serious conditions and/or economic and military repercussions. I will not repeat their testimony here, but would note the emphasis the Defense and Intelligence communities have placed on determining the Y2K implications for missile systems and nuclear power plants. Of particular note is the bold Defense Department initiative to bring together U.S. and Russian military experts to monitor possible Y2K computer glitches that could accidentally set off false missile launch warnings. On trade implications, I will defer to my colleague from the Department of Commerce. From reading current assessments of Y2K risks around the world, it is obvious that we need to continue to aggressively raise the level of international awareness and action to encourage adequate preventive measures, as John Koskinen, Chair of the Presidentís Council on the Year 2000 Conversion, has been doing.

For instance, the State Departmentís Senior Coordinator for Nuclear Safety is working with other U.S. Government agencies on Y2K implications for unsafe reactors designed during the Soviet era. Our strategy focuses on assisting in the planning and preparing for possible consequences of a Y2K failure in a nuclear plant, or, more likely, in the electric grid to which it is connected. The sudden loss of load from a grid failure could require the shutdown of the nuclear plant supplying the grid. Safe shutdown of nuclear plants requires power, so emergency power systems must be in a state of full readiness at key dates. A contingency plan should be developed for each power plant, and managers must ensure that operators are fully trained and that all necessary supplies -- for instance, diesel fuel to run generators -- are in place.

I would like to highlight the work of our Consular Affairs bureau for its forward-leaning efforts to determine the Y2K implications for overseas Americans. The protection of American citizens traveling or residing abroad is the highest priority of the Department of State. We have been grappling with the tough questions about Y2K, not only from the perspective of our own consular systems for passport and visa issuance, which will be Y2K compliant, but also from the point of view of our customers, the traveling American public and the businesses that support them. Because Y2K disruptions could range from the mundane to the serious, it is essential that we keep the public informed on the issue so they can make responsible individual choices. We have directed consular sections at all U.S. embassies and consulates abroad to focus on Y2K issues affecting private U.S. citizens.

The Bureau of Consular Affairs has a broad public outreach strategy on Y2K. On January 29, the Department issued a worldwide public announcement alerting Americans to be aware of the Y2K issue and its possible impact on transportation, communication and financial systems. Additional public announcements will be issued as the year progresses and further information is available. Our special Y2K feature on the Consular Affairs home page via the Internet includes links to Y2K home pages for foreign governments, the U.S. Government, and international organizations. All consular information sheets, which we publish on every country in the world, will include country-specific Y2K information that will be revised, as new information becomes available. Y2K is also a prominent topic in all consular public speaking engagements for 1999 with groups such as the travel industry, student advisers and at Congressional staff briefings by the Bureau of Consular Affairs now taking place across the country. U.S. embassies and consulates abroad are now conducting outreach about Y2K to private Americans in their consular districts through our registration and warden systems and other American community contacts. The Bureau of Consular Affairs is preparing posters and pamphlets for use in this outreach effort. We have also initiated a series of meetings with our consular colleagues from countries with which we have long-standing collegial relationships to ascertain what efforts they are taking regarding Y2K preparedness for their overseas citizens.

The State Department's role, though, is not limited to diplomatic or consular issues. The Department will play a leadership role along with Defense Department, the National Security Council, the Y2K Council, as well as other federal agencies with proven capabilities, such as Commerce, Energy, Treasury, and Transportation. The Department is now standing up a small planning unit that will serve as the focal point in the Department for Y2K assessments and as the conduit for recommendations to the Interagency Working Group. The Department is also beginning to prepare for possible problems in other countries resulting from Y2K failures, should they occur, and is working with the US Agency for International Development's Office of Foreign Disaster Assistance. As this year draws to a close, there will be no vacation for essential Y2K personnel -- they will be on the job to make sure we are fully prepared to respond to any mission critical problems that might arise.

Finally, U.S. Government efforts will need to be closely coordinated with those of the international community. This is essential if we are to ensure that our Y2K remediation efforts are not redundant with others and that we work from our comparative strengths and in areas of our greatest interest. A major step forward on this has now taken place with the establishment of a UN sponsored and World Bank supported International Y2K Coordination Council. This group, working closely with the President's Y2K Council, will reach out to the private sector, coordinating groups and other actors who will play leading roles in fixing innumerable Y2K problems. We had a successful UN-sponsored Y2K meeting last December and another is planned for June.

In conclusion, you have asked what the Congress can do to help. Of fundamental importance is your effort to heighten international awareness. This committeeís participation in international events, its support of our outreach efforts, and its engagement of the press to highlight risks abroad have been very helpful. As our policy options become clearer through the analysis soon to be provided, we would welcome the opportunity to continue our dialogue on how our government can help minimize international Y2K risks to our economy and security. As we move forward on this interagency and multilateral endeavor we will continue to work closely with your committee.

Thank you.

[End of Document]

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