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Hearing on Russian Organized Crime

Statement of Louis J. Freeh, Director, Federal Bureau of Investigation, Before the House Committee on International Relations, Washington D.C., April 30, 1996.

Grave crime is no longer bound by the constraints of borders. Such offenses as terrorism, nuclear smuggling, organized crime, computer crime, and drug trafficking can spill over from other countries into the United States. Regardless of origin, these and other overseas crimes impact directly on our citizens and our economy.

We have developed a variety of anti-crime efforts both here and abroad to combat these dangerous threats. This effort has been undertaken with the support of the President, Attorney General Janet Reno, and Secretary Warren Christopher. One of the most effective ways to fight international crime is by building cop-to-cop bridges between American law enforcement and our overseas counterparts. Without these relationships, there cannot be the commonality of purpose and open communication required for success. More and more of these bridges are being built, and successes are flowing from them.

We are using a number of approaches to develop cooperative law enforcement programs with other countries. For example, our Legal Attache Program works closely with a large number of foreign police forces. Not only do they cooperate on specific cases, but our Legal Attaches -- who are highly-skilled senior FBI Agents -- also form a sort of distant early warning system to alert us to new and emerging crime threats.

Another very powerful tool is training: the FBI places a high priority on assisting our foreign law enforcement counterparts through training courses here and abroad. And just a year ago, we took a major cooperative step with other Federal agencies and other foreign nations with the creation of the International Law Enforcement Academy in Budapest.

These and other programs combine to help give the FBI the critical foundation needed to effectively combat international crime.

There is also another vital factor: I want to thank this Committee for its crucial recognition of the importance of these issues and for your support in meeting the crime challenges from abroad. This is a rare opportunity to extend the Rule of Law while mobilizing law enforcement to meet the explosion of international crime against America. I am exceedingly grateful for the support Congress has given us and pledge to continue to work with Congress as we develop a stronger global network of effective law enforcement. Your support of law enforcement training at the Department of State has been critical to the success of our programs.

The International Crime Problem

The political, social, and economic changes occurring in Eastern Europe and in the former Soviet Republics have provided significant, unintended opportunities for organized crime groups and criminal enterprises in these countries to expand internationally. Evidence that organized crime activity from these areas is expanding and will continue to expand to the United States is well-documented.

These criminal enterprises are not a new phenomenon to Russia. They existed under Communism. Appropriate legal tools were not created to control organized crime and corruption activities. When Communism declined in the Soviet Union, the organized crime groups quickly expanded their influence in the emerging move toward Capitalism, again because sufficient constraints and law enforcement tools were not present.

The FBI has many years of successful investigative and prosecutorial experience in the battle with La Cosa Nostra and other organized crime groups here in the United States. We view organized crime as a continuing criminal conspiracy having a firm organizational structure, a conspiracy fed by fear and corruption. This definition can also be applied to the organized crime threat facing Russia and many other countries. Members of a typical Russian organized crime group are found at every level of society. Organized crime activity in Russia includes monetary speculation, manipulation of the banking system, and embezzlement of state property, as well as contract murder, extortion, drug trafficking, prostitution, protection rackets, and infiltration of legitimate business activity.

To make matters worse, a number of Russian/Eurasian organized crime groups and criminal enterprises presently operate in the U.S.

Many of these criminal enterprises active in the U.S. have demonstrated a willingness to work in close concert with other non-Russian/non-Eurasian organized crime groups.

The United States and Russia fully realize the need for joint cooperation against crimes that harm both countries -- and other parts of the world as well. That is the reason the FBI has opened a Legal Attache Office in Moscow to work closely with Russian police against a variety of costly crimes. From July 1994 to the present, the number of cases worked by the FBI Agents in Moscow has increased from 20 to over 200.

If Congress agrees, and with the cooperation of the Department of State and the Department of Justice, we hope to expand our network of Legal Attache Offices around the world. The global needs are great -- and many nations, including Russia, are working diligently to fight crime that hurts the law-abiding everywhere.

One of the specific issues of great concern to the FBI and to Russian authorities is the theft and diversion of nuclear materials -- and the potential theft of nuclear weapons by terrorists or rogue nations.

Over the past year, legitimate concerns have been raised by the apparent vulnerability of radioactive materials to theft or diversion in several areas of Eastern Europe and Eurasia. The seizure of significant amounts of cesium in Lithuania and the seizure of uranium in the Czech Republic are examples of the concerns in the international community regarding the threat of nuclear proliferation.

The recent increases in radiological-nuclear material incidents throughout the world have caused the international law enforcement community to communicate better with each other.

Although there have been no seizures of nuclear material in the United States, two recent cases involved conspiracies to import radioactive material into this country. In New York, the U.S. Customs Service arrested foreign nationals attempting to negotiate the sale of radioactive zirconium metal into the U.S. Ultimately, 45 tons of the material were seized in Cyprus, enroute to the U.S. In the other case, the Canadian Customs Service intercepted radioactive isotopes originating in Russia being smuggled into the U.S. through Canada. The FBI assisted the Canadian law enforcement agencies in their investigation.

While some crime problems flow from East to West, others flow back from West to East. One of the most difficult law enforcement problems facing many of the newly-freed and Eastern European nations is drug trafficking. The scourge of drug trafficking has had a devastating impact on the entire global community. Russia, the Newly Independent States and Eastern Europe are certainly not immune to this epidemic. Criminal organizations in these emerging democracies are taking advantage of the relaxed borders and improved telecommunications systems that have emerged in recent years to facilitate their illegitimate operations. These countries are targets of opportunity for the major drug trafficking organizations, like the Colombian cartels, which seek to establish new and lucrative markets.

International Training

The FBI's international approach in combating Russian and other international organized crime groups includes general and specialized law enforcement training for foreign law enforcement agencies. During Fiscal Year (FY) 1995, the FBI trained 4,400 foreign law enforcement personnel. This training is particularly critical with respect to the police agencies of some of the newly-emerging democracies.

Most of this training is accomplished by funding generously made available by Congress to the Department of State through the Freedom Support Act (FSA) and Support for Eastern European Democracies (SEED) funding. The FBI and the Department of State, working together, are also responsible for the International Law Enforcement Training Academy in Budapest, which functions as the center for law enforcement training for officers from many Eastern European, Russian and Eurasian nations.

The Academy at Budapest provides an eight-week professional development program similar to our FBI National Academy Program at Quantico. During FY 1995, a total of three classes graduated from the Budapest Academy -- each of 33 mid-level police officers. Those officers came from the Czech Republic, Hungary, Latvia, Poland, Romania, Slovakia, Estonia, and Lithuania.

For FY 1996, the schedule is much more aggressive, calling for approximately 200 persons to be trained from the following countries: Albania, Belarus, Bulgaria, Croatia, Estonia, Hungary, Kazakstan, Kyrgyzstan, Latvia, Macedonia, Moldavia, Poland, Russia, Slovenia, and Ukraine.

We can be immensely proud of the Academy at Budapest. It is a direct outgrowth of our trip to Eastern Europe in 1994 and President Clinton's direction to U.S. Government agencies to join together to build the world's capabilities in fighting international crime. The Academy represents the combined efforts of the Department of State (DOS), the Department of Justice (DOJ), the FBI, the Drug Enforcement Administration (DEA), the Internal Revenue Service (IRS), the United States Secret Service (USSS), the Federal Law Enforcement Training Center (FLETC), the Alcohol Tobacco and Firearms (ATF), and other agencies and countries. It is truly a case where all of these law enforcement agencies are working together as partners toward a common goal. I cannot speak highly enough about the contributions ATF, DEA, Secret Service, IRS and the Federal Law Enforcement Training Center in the Department of Treasury have made in making the Academy succeed. The Academy brings together seasoned investigators as instructors and law enforcement officers from across Eastern Europe, Russia, and the Newly Independent States to learn policing under the Rule of Law. I am especially grateful to our host country, Hungary.

Just last week, I along with my other counterparts from the United States were honored to attend the dedication of the International Law Enforcement Academy. With the recent completion of renovations, the capacity of the Academy has been expanded. The dedication was an historic moment in international law enforcement.

The FBI also is involved in foreign police training in many other valuable ways. For example, in FY 1995, the FBI performed a total of 10 In-Country Training Needs Assessments. It works this way: at the invitation of the host government, we analyze that country's police training needs and capabilities. We then make a recommendation of how we believe we can best assist the host country's law enforcement capabilities through specifically targeted training. The assessments were conducted in Albania, Belarus, Bulgaria, Estonia, India, Kazakstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Paraguay, Peru, Poland, Romania, Tunisia, Ukraine, and Uruguay.

Through the FBI's In-Country Training Program, the FBI conducts one and two-week schools in foreign nations which concentrate on police operations and technical skills. We use seasoned, senior FBI street Agent instructors who use their extensive practical experience in training our foreign counterparts in policing under the Rule of Law. The instructors in these programs have an established expertise in criminal investigations, especially organized crime and white collar crime. Their credibility is not only essential for effective instruction but also is very effective in building the cop-to-cop bridges that we so critically need.

Since the first of the year, we have trained 212 officers of the Ministry of Interior for the Russian Federation (MVD) in seminars held in Russia and at the FBI Academy in Quantico. Along with the instruction geared to the investigation of crimes, we have provided training in ethics and internal police controls -- the first time that this has ever been done and an area which is critical to the success of policing under the Rule of Law.

Our In-Country Training Programs are primarily funded through the FSA and SEED funds we receive from the Department of State. The FBI, along with other law enforcement agencies, submit proposed international training plans to the Department of State at the beginning of the Fiscal Year. Depending on the funding that is available for law enforcement training, the Department of State then determines the funding amounts for each agency.

During the past two years, the FBI has received $8.3 million of these funds for our training initiative. We have been very pleased with the support we have received from the Department of State -- all the training we have proposed has been funded. In addition, the FBI has used $300,000 of its appropriated funding to provide limited training to law enforcement in other countries.

In FY 1995, the FBI provided FSA and SEED supported training seminars to over 1,800 law enforcement officers from Hungary, Poland, Slovakia, Czech Republic, Estonia, Latvia, Lithuania, Ukraine, Russia, Romania, and Moldova. In FY 1996, we will expand our training into Belarus, Slovenia, Kazakstan, Kyrgyzstan, Bulgaria, and Albania. The training provided is tailored to meet the needs of the participants. Topics addressed include bank robbery, drug trafficking, kidnapping, financial crimes, white-collar crime, organized crime and terrorism. Just recently, for example, we conducted a white-collar crime and corruption seminar in Kazakstan. All of this training has a direct impact on United States persons and corporations who have flocked to these countries in search of business opportunities.

In addition to the training funded by the FSA and SEED Acts, the FBI trained an additional 2,600 students through our other programs. These programs included the crime-specific investigative seminars, targeted crime scene analysis training as provided by our forensic experts, and management training for mid-level and executive law enforcement officers. Last year, 110 international officers also participated in the FBI National Academy program at Quantico. Their participation allows an additional "bridge" to be built from our state and local officers to those overseas.

One beneficial part of this training is the opportunity it provides the trainers and the trainees to interact about specific crime problems being encountered in their countries, how to address the problem, share experiences learned in the process and forge new relationships for future cooperation on matters of mutual interest and concern. In some of our investigations, the FBI has benefited by bringing actual case investigators to the U.S. from other nations to work side by side with FBI Agents. This is a continuation of the training we have provided and allows "hands-on" application and observation of investigative techniques successfully employed by the FBI in our organized crime investigations.

As examples of the successes the FBI has seen from contacts and liaison established as a result of this training, a Central European working group on international organized crime and a six-nation working group on international organized crime were established this past year. In addition to the FBI, they bring together law enforcement agencies from Eastern and Western Europe and Canada to discuss specific organized crime threats common to all countries represented. Lines of communication and working relationships are now established and practical law enforcement approaches to the organized crime problems of the regions are planned. As a direct result of this initiative, several countries were, for the first time, able to establish continuing liaison communications with other represented organizations on a direct professional level and to initiate joint investigations.

For example, a multi-national, case-specific fraud seminar was conducted by the FBI's Financial Crimes Section from February 18-22, 1996, in Berlin, Germany. The program dealt with bank failures and brought together investigators from the United States, Latvia, Netherlands, Russia, and Germany for a practical case training initiative.

The resulting product of these constructive meetings is an investigative organized crime task force, international in scope, that is targeting significant criminal organizations determined to be a major threat to many nations, including the United States.

The FBI also presented a nuclear non-proliferation conference at the FBI complex at Quantico, Virginia from April 18-21, 1995, and twenty-eight (28) SEED and FSA nations sent representatives, including, among others, Russia and Ukraine. The conference outlined the problems of nuclear materials and weapons proliferation from the countries of the former Soviet Union and counter-proliferation proposals and training initiatives. The conference is included as a FSA initiative to address this serious problem.

The Department of Defense and the FBI are currently in the final stages of submitting the DOD/FBI Counterproliferation Program report to Congress regarding plans to provide international training seminars on nuclear smuggling. This is part of our Nunn-Lugar funded international training seminars program on nuclear smuggling.

The FBI's Nuclear Biological Chemical Proliferation Unit is presently in possession of a report compiled by an FBI team that recently conducted a training assessment in the Czech Republic. During this assessment, which was coordinated by our Legal Attache in Vienna, the FBI representatives from the International Coordination Unit, the FBI Laboratory and the Engineering Section, met with various Czech law enforcement agencies, Czech nuclear safety officials, and faculty members of the Rez Institute.

This assessment yielded valuable information regarding the concerns and needs of the attending Czech officials. It is proposed that the information provided by the Czechs, with regard to their specific requirements, will result in establishing a training prototype for other countries requesting support in counterproliferation matters.

Interagency Working Group

As this Committee is fully aware, the Congress established the Interagency Working Group (IWG) to make recommendations as to training and other support received by Russia, the Newly Independent States, and other Eastern European countries. This has been a successful endeavor that greatly assists us in the proper coordination of our training efforts abroad.

The IWG allows all Federal law enforcement agencies to participate in Department of State FSA and SEED funded training initiatives within the former Soviet Union and Bloc nations, based on their respective law enforcement jurisdiction. Participation in the IWG prevents duplication and waste of resources. IWG priorities are formulated by the Departments of State, Justice and the Treasury, as dictated by the various law enforcement entities from those departments, participating on the IWG.

The FBI participates as a member of the IWG in carrying out the programs under the auspices of the FSA and SEED. Let me describe the FBI's role:

- The FBI, as the agency with the broadest Federal law enforcement responsibility, conducted a major portion of the training and technical assistance during FY 1995, with a similar schedule planned for FY 1996.

- The FBI has exclusive training in the area of organized crime. Other participating agencies like the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, and Firearms, likewise have exclusive areas of training based on their expertise and jurisdiction.

- In other areas, such as economic crimes, training by the United States Secret Service, U.S. Customs Service, FINCEN, and DEA compliments that done by the FBI.

Legal Attache Program

The FBI's Legal Attache Program is the single most significant factor in the Bureau's ability to detect, deter, and investigate international crimes in which the United States or our citizens are the victims. By stationing Agents abroad and establishing operational links with foreign police, the FBI substantially expands the nation's perimeter of law enforcement protection. Generously funded out of the Commerce, State, and Justice Bill, the FBI's Legal Attaches are truly our first line of defense.

International crime has grown enormously in recent years. Technological advances and the end of the Cold War prompted dramatic increases in global travel and telecommunications. Criminals have used these changes to their advantage, diffusing their operations around the world to avoid law enforcement scrutiny. The relentless globalization of crime threatens America both at home and abroad -- and all other law-abiding nations as well. For better or for worse, the global village is now a late-20th century reality.

Our experience shows that placing FBI Agents at critical posts abroad provides the most reliable, effective and timely means to combat international crime -- and often at the source. It is essential to station highly-skilled agents in other countries to prevent foreign terrorism and foreign crime from reaching the United States.

At present, the FBI has in place in our Legal Attache Offices 70 senior Agents and 54 support personnel in 23 nations around the world, funded out of FBI operational funds. During FY 1995, these offices handled over 11,200 matters. They are the conduit through which law enforcement information and cooperation flows between the United States and its foreign partners. Their goal can be defined succinctly: to keep foreign crime as far from American shores as possible, to keep foreign crime permanently at bay whenever possible, to help combat more effectively those crimes that do reach our borders. The whole point is to protect the American people from harm.

FBI Agents stationed overseas are not intelligence officers; they are not a shadow intelligence agency; and they do not engage in espionage. They are law enforcement Agents-- dedicated to fighting organized crime, terrorism, nuclear smuggling, violent crime, drug trafficking, and economic crime.

Let me give a few examples of the direct benefits made possible because our agents are overseas and have the cop-to-cop relationships with host authorities critical to effective law enforcement.

  • For over 15 years, FBI Agents in Rome have had a close working relationship with all the major Italian police services.
  • Through one joint investigation which began in 1991, it was determined that members of the Sicilian Mafia, Camorra, and 'Ndrangheta were collaborating with the Colombian drug cartels in shipments of cocaine to Italy and heroin into New York. In that investigation -- which utilized sophisticated investigative techniques, including electronic surveillance.
  • The FBI worked closely with the Italian police services, the Royal Canadian Mounted Police, and Colombian judicial authorities. As a result of our combined efforts, 89 people were arrested in the United States, Italy, Canada, and Colombia. Since their arrests, 30 of these people have been convicted in the United States alone.
  • Kobi Mowatt, a fugitive from the United States, was recently arrested in Tanzania with assistance from our FBI Legal Attaches. Mowatt, an alleged member of the notoriously violent "First and Kennedy Street Crew," from Washington, D.C., is charged with conspiring to participate in a racketeering organization by committing acts of murder, robbery, kidnapping, and drug dealing. He was charged in a 53-count indictment with participating in four homicides, including a triple murder here in Washington in 1994. With direct assistance from our Legal Attaches, and the considerable assistance of foreign police agencies, the FBI was able to track Mowatt through Russia until his capture in Tanzania.

Last month, he was brought back to the United States to stand trial.

In a major move against a growing Russian organized crime structure in the United States, the FBI last year arrested Vyacheslav Kirillovich Ivankov, allegedly one of the most powerful Russian crime leaders in this country, along with five of his associates on Federal charges of conspiracy to commit extortion. The arrests in New York followed an intensive

FBI investigation that was aided greatly by the Russian Ministry of Interior and the Royal Canadian Mounted Police and made possible because of our Legal Attaches and the relationships that have flowed from cooperation abroad. The arrest was based upon Federal arrest warrants which charge a total of nine individuals. According to Russian law enforcement authorities, Ivankov formed a substantial criminal organization in Russia before he entered the United States allegedly to manage and control Russian organized crime activities in this country. Russian organized crime groups use businesses in the former Soviet Union, Western and Central Europe, and the United States to serve as fronts for laundering the proceeds of illegal activities and for conducting highly profitable commerce in goods in the successor states of the Soviet Union, known as the Commonwealth of Independent States. In November 1994, several of the defendants allegedly began to extort several million dollars from American and Russian businesses. Intelligence information was shared on a continuing basis among the FBI, the Russian MVD and the Royal Canadian Mounted Police. FBI Legat participation was critical.

Last August, Eyad Ismail was apprehended abroad and brought back to New York to face an indictment charging him with taking part in the terrorist bombing of the World Trade Center that killed six people and injured over 1,000. As the complaint alleged, Ismail fled the United States the night of the bombing. He was taken into custody after an extensive investigation greatly facilitated by an FBI Legal Attache.

Last April, Ramzi Yousef and Abdul Hakim Murad were indicted in New York for a conspiracy and attempt to bomb United States commercial airlines serving air routes in the Far East. The indictment alleges that as part of the conspiracy, Yousef placed a bomb in a foreign airliner that exploded and killed one passenger. Yousef was already facing charges relating to the bombing of the World Trade Center in New York. With critical assistance from FBI Legal Attaches, Yousef was tracked to Pakistan, apprehended, and extradited to the United States to stand trial.

Murad was identified and likewise extradited to the United States. Both await trial.

Most recently, four Russians were charged in New York for conspiring to defraud 24 Russian companies, including a charity established to aid the victims of the Chernobyl nuclear disaster, of approximately $10.8 million.

Many other important cases have been made possible only because the FBI Legal Attaches are able to freely work with our foreign counterparts toward the mutually-shared goal of effective law enforcement under the Rule of Law.

The FBI is deeply grateful to Congress for the support and contributions for our Legal Attache Program. A relatively few Agents beyond our borders make a contribution out of proportion to their small numbers and the modest amount of dollars spent.

As part of the FY 1996 Appropriations process, our Appropriations Subcommittees have asked us to prepare a plan reflecting our assessment of both the short and long-term Legal Attache expansion needs. We have been working closely with the Departments of Justice and State to provide Congress with a carefully thought-out plan designed to better meet the challenges we face from exploding international crime and terrorism. This plan -- which is under final administrative review -- is a realistic, down-to-earth assessment of the vast changes that have occurred in recent years in the world, especially in Europe with the breakup of the former Soviet Union.

I am most grateful to our House and Senate Committees for their leadership. Quite candidly, Congress has taken planning for FBI Legal Attache Offices out of the choppy one-year cycle and prompted us to develop a long-term, comprehensive response to a rapidly changing and worsening international crime situation. Once completed, I am looking forward to discussing the plan with Congress.

I am extraordinarily grateful for the support Congress has given these programs. In my view, this represents capitalizing on a rare opportunity to protect our citizens by being both prepared and sufficiently aggressive as crime moves into the global arena.

At the same time, I wish to thank the Department of State and Secretary Christopher for supporting the FBI's foreign police training efforts and for their leadership on the IWG. Since my trip to Moscow and Eastern Europe in 1994 we have had an ongoing and productive dialogue about our training initiatives -- indeed, an extraordinary partnership has formed. In addition to Secretary Christopher, Deputy Secretary Strobe Talbott, former Assistant Secretary Richard Holbrooke, Ambassador Robert Gelbard, U.S. Ambassador to Hungary Donald Blinken, and many others -- both here and abroad -- have been instrumental in promoting these programs.

Note: The key points in this statement were also delivered before the Senate Appropriations Committee, Subcomittee on Foreign Operations, Hearing on International Crime, on March 12, 1996. This version contains expanded or updated passages.


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Directeur de la publication : Joël-François Dumont
Comité de rédaction : Jacques de Lestapis, Hugues Dumont, François de Vries (Bruxelles), Hans-Ulrich Helfer (Suisse), Michael Hellerforth (Allemagne).
Comité militaire : VAE Guy Labouérie (†), GAA François Mermet (2S), CF Patrice Théry (Asie).