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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

March 2012: 

Export Controls: 

Proposed Reforms Create Opportunities to Address Enforcement 
Challenges: 

GAO-12-246: 

GAO Highlights: 

Highlights of GAO-12-246, a report to congressional committees. 

Why GAO Did This Study: 

The U.S. government controls the export of sensitive defense and dual-
use items (having both military and commercial use). The five agencies 
primarily responsible for export control enforcement—the Departments 
of Commerce, Homeland Security (DHS), Justice, State and the Treasury—-
conduct inspections and investigations, and can levy punitive actions 
against violators. A challenging aspect of export control enforcement 
is the detection of illicit transshipments-—the transfer of items from 
place of origin through an intermediary country to an unauthorized 
destination, such as Iran. In 2010, the President announced reforms to 
the U.S. export control system to address weaknesses found by GAO and 
others. GAO was asked to address how the export control enforcement 
agencies allocate resources, as well as the challenges they face and 
the potential impact of export control reform on enforcement 
activities. GAO reviewed documents and met with enforcement agency 
officials as well as with U.S. and foreign government and company 
officials in Hong Kong, Singapore, and the United Arab Emirates, which 
have a high volume of trade and have been identified as potential hubs 
for illicit transshipments. 

What GAO Found: 

Agencies use a risk-based approach, including workload and threat 
assessment data, to allocate resources, but most do not fully track 
those used for export control enforcement activities. As their 
missions are broader than export controls, agencies can use staff 
resources for other activities based on need, making tracking 
resources used solely for export control enforcement difficult. Only 
Commerce’s Office of Export Enforcement allocates its resources 
exclusively to export control enforcement as that is its primary 
mission. Other agencies, such as State and the Treasury, have 
relatively few export control enforcement staff to track. While 
several agencies acknowledge the need to better track export 
enforcement resources and have taken steps to do so, they do not know 
the full extent of their use of these resources and do not use this 
information in resource allocation decisions. In some cities, agencies 
are informally leveraging export enforcement resources through 
voluntarily created local task forces that bring together enforcement 
resources to work collectively on export control cases. 

Enforcement agencies face several challenges in investigating illicit 
transshipments, both domestically and overseas, which potentially 
reduce the effectiveness of enforcement activities and limit the 
identification and investigation of illicit transshipments. These 
include: 

* License Determination Delays. License determinations—which confirm 
whether an item is controlled and requires a license, and thereby help 
confirm whether an export control violation has occurred—are often not 
timely, potentially hindering investigations and prosecutions. 

* Limited Secure Communications and Cleared Staff. Investigators have 
limited access to secure communications and staff with high-level 
security clearances in several domestic field offices, limiting 
investigators’ ability to share timely and important information. 

* Lack of Trend Data on Illicit Transshipments. While there is a good 
exchange of intelligence between enforcement agencies and the 
intelligence community-—to seize shipments and take other actions 
against export control violators—-officials noted that no formal 
process or means existed for these groups to collectively quantify and 
identify statistical trends and patterns relating to information on 
illicit transshipments. 

* Lack of Effectiveness Measures Unique to the Complexity of Export 
Controls. Investigative agencies lack measures of effectiveness that 
fully reflect the complexity and qualitative benefits of export 
control cases. 

Some of these challenges may be addressed by ongoing export control 
reform initiatives, but reform presents both opportunities and 
challenges. Revising the control list could simplify the license 
determination process, but could also result in the need for increased 
enforcement activity overseas to validate the recipient of the items 
as fewer items may require U.S. government approval in advance of 
shipment. As most staff located overseas have other agency and mission-
related priorities, their availability may be limited. The newly 
created national Export Enforcement Coordination Center is intended to 
help agencies coordinate their export control enforcement efforts as 
well as share intelligence and law enforcement information related to 
these efforts. However, it is unclear whether the center will address 
all of the challenges GAO found, as detailed plans for its operations 
are under development. 

What GAO Recommends: 

GAO recommends that Commerce, DHS, Justice, and State take steps 
individually and with other agencies through the national Export 
Enforcement Coordination Center to better manage export control 
enforcement resources and improve the license determination process. 
Agencies agreed with GAO’s recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-246]. For more 
information, contact Belva Martin at (202) 512-4841 or martinb@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Agencies Use a Risk-Based Approach to Allocate Resources but Do Not 
Fully Track Those Used For Export Control Enforcement: 

Reform Initiatives May Help Address Challenges In Investigating 
Illicit Transshipments But Detailed Plans Are Unknown: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Commerce: 

Appendix III: Comments from the Department of Homeland Security: 

Appendix IV: Comments from the Department of State: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Export Control Enforcement Activities, by Departments and 
Agency: 

Table 2: Key Investigative Tools for Investigative Export Control 
Enforcement Activities: 

Table 3: Primary Missions of the Agencies with Export Control 
Enforcement Responsibility: 

Table 4: Enforcement Agency Total Staff and Staff Allocated for 
Domestic Export Control Enforcement, Fiscal Year 2010: 

Table 5: Average License Determination Response Times (in Days): 

Table 6: ICE Number of Arrests, Indictments and Convictions for 
Defense and Dual-Use Items, Fiscal Years 2006 through 2010: 

Table 7: OEE Number of Arrests, Indictments, and Convictions for Dual-
Use Items, Fiscal Years 2006 through 2010: 

Figure: 

Figure 1: Location of Export Control Enforcement Investigative Agency 
Major Field Offices and Task Forces (as of 2011): 

Abbreviations: 

AECA: Arms Export Control Act: 

CBP: Customs and Border Protection: 

DDTC: Directorate of Defense Trade Controls: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DTSA: Defense Technology Security Administration: 

EAA: Export Administration Act: 

EAGLE: Export and Anti-proliferation Global Law Enforcement: 

FBI: Federal Bureau of Investigation: 

GPRA: Government Performance Results Act: 

ICE: Immigration and Customs Enforcement: 

OEE: Office of Export Enforcement: 

OFAC: Office of Foreign Assets Control: 

UAE: United Arab Emirates: 

[End of section] 

March 27, 2012: 

The Honorable Susan M. Collins: 
Ranking Member: 
Committee on Homeland: 
Security and Governmental Affairs: 
United States Senate: 

The Honorable Jon Kyl: 
Ranking Member: 
Subcommittee on Crime and Terrorism: 
Committee on the Judiciary: 
United States Senate: 

Each year, billions of dollars in defense and "dual-use" items--items 
that have both commercial and military applications--are exported to 
U.S. allies and strategic partners to further national security, 
foreign policy, and economic interests.[Footnote 1] The U.S. 
government protects these items through its export control system to 
ensure that they are transferred to foreign parties in a manner 
consistent with U.S. interests. The current system is governed by a 
complex set of laws, regulations, and processes and is implemented by 
multiple agencies, some with overlapping jurisdiction. Enforcement, a 
key function in the system, strives to prevent or deter the illegal 
export of defense and dual-use items such as controlled components 
that were shipped to countries like Iran, which were later found in 
weapons and devices used against U.S. forces in Iraq. Export control 
enforcement activities include inspecting items to be exported, 
investigating potential export control violations, and pursuing and 
imposing criminal and administrative penalties against violators. 
These activities also seek to keep defense and dual-use items from 
being illicitly transshipped through intermediary countries or 
locations, such as the United Arab Emirates (UAE), Hong Kong,[Footnote 
2] Singapore, and Malaysia, where a high volume of trade provides 
potential opportunities for the illicit transshipment of export-
controlled items to an unauthorized final destination, such as 
Iran.[Footnote 3] For the purposes of this report, illicit 
transshipment is the transfer of merchandise from its place of origin 
through an intermediary country to an unauthorized destination. For 
example, in September 2011, a Pakistani citizen pleaded guilty to 
conspiring to commit export violations in connection with a scheme to 
illegally export U.S. nuclear-related materials, by exporting these 
materials from the United States through the UAE, to several 
restricted entities in Pakistan. The Department of State and other 
federal agencies have recognized illicit transshipment as a major 
weakness in trade and national security. 

In 2006, we found that U.S. export control enforcement agencies faced 
considerable challenges and made several recommendations to improve 
interagency coordination, and we continue to include the U.S. export 
control system as a key component of a GAO high risk area on 
protecting technologies critical to U.S. national security 
interests.[Footnote 4] Noting challenges in the entire U.S. export 
control system, in April 2010, the President announced a reform 
strategy that included the creation of a single export enforcement 
coordination agency as a primary forum where agencies can coordinate 
and enhance export control enforcement efforts and resolve conflicts. 
However, some members of Congress have raised questions about existing 
export control activities including resources agencies are devoting to 
these activities. Moreover, they have expressed concerns that without 
addressing existing enforcement problems, reform of the export control 
system could exacerbate current shortfalls in the system designed to 
prevent countries and entities of concern from obtaining sensitive 
U.S. defense and dual-use items. In response to your request, we 
identified (1) how agencies allocate staff resources for export 
control enforcement activities, and (2) challenges that agencies face 
in investigating illicit transshipments and the potential impact of 
export control reform initiatives on enforcement activities. 

To conduct our work, we reviewed laws, regulations, and guidelines 
relating to the enforcement of U.S. export controls on defense and 
dual-use items and interviewed officials from the Departments of 
Commerce, Defense (DOD), Homeland Security (DHS), Justice, State, and 
the Treasury as well as private industry and foreign government 
officials. We also visited agency headquarters as well as three 
domestic and three international locations to obtain and analyze 
information on resources, knowledge of illicit transshipments, and 
challenges in investigating export controls for criminal violations. 
We corroborated information on resources with agency budget and other 
documents where possible. The domestic locations, Baltimore, MD; Los 
Angeles, CA; and San Francisco, CA; represent one or more of the 
following: a large percentage of the investigative caseload, ports 
with a high volume of trade of U.S. commodities, and a large presence 
of aerospace, electronics, and software industries and geographic 
dispersion. The international locations, Hong Kong, Singapore, and the 
UAE, represent three of the top 10 ports in the world for trade volume 
and have been identified by federal agency officials as potential hubs 
for illicit transshipments of defense and dual-use items. We also met 
with cognizant agency officials to discuss progress, opportunities, 
and challenges of the President's current export control reform 
initiatives. (See appendix I for more details.)[Footnote 5] 

We conducted this performance audit from February 2011 through March 
2012, in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

The U.S. government's control over the export of defense and dual-use 
items is intended to ensure that U.S. interests are protected in 
accordance with the Arms Export Control Act (AECA) and the Export 
Administration Act (EAA).[Footnote 6] Defense items can include tanks, 
fighter aircraft, submarines, firearms, satellites, missiles, and 
training; while dual-use items can include computers, radars, and 
telecommunication equipment. Jurisdiction over the export of defense 
and dual-use items is primarily divided between State and Commerce. 
Generally, unless an exemption applies, exporters submit a license 
application to State if their items are controlled on the U.S. 
Munitions List[Footnote 7] or to Commerce if their items are 
controlled on the Commerce Control List pursuant to the Export 
Administration Regulations to receive export approval. As part of the 
application review process, State and Commerce consult with other 
departments, including DOD and with Treasury in the case of sanctioned 
countries. Offices within Commerce, DHS, Justice, and State conduct 
enforcement activities. Treasury and Commerce administer the current 
sanctions program for designated countries. 

Export control enforcement actions consist of three primary functions--
inspecting and seizing goods, investigating potential violators, and 
levying punitive actions against violators of export control laws. 
[Footnote 8] As shown in table 1, these functions are largely 
conducted by various agencies within Commerce, DHS, Justice, State, 
and the Treasury depending on the facts and circumstances of the case. 
[Footnote 9] Multiple laws, regulations, and directives provide 
differing enforcement authority for U.S. agencies to inspect, 
investigate, and take punitive action against potential violators of 
U.S. export control laws. These authorities provide the Federal Bureau 
of Investigation (FBI) and Immigration and customs Enforcement (ICE) 
with overlapping jurisdiction to investigate defense potential 
violations, and FBI, ICE, and Commerce's Office of Export Enforcement 
(OEE) with overlapping jurisdiction to investigate dual-use potential 
violations. 

Table 1: Export Control Enforcement Activities, by Departments and 
Agency: 

Commerce: 

Bureau of Industry and Security; Office of Chief Counsel: 
Inspection[A]: [Empty]; 
Investigation: [Empty]; 
Punitive action[B]:[Check]. 

Office of Export Enforcement (OEE)[C]: 
Inspection[A]: [Empty]; 
Investigation: [Check]; 
Punitive action[B]: [Empty]. 

DHS: 

U.S. Customs and Border Protection (CBP): 
Inspection[A]: [Check]; 
Investigation: [Empty]; 
Punitive action[B]: [Check][D]. 

U.S. Immigration and Customs Enforcement (ICE): 
Inspection[A]: [Empty]; 
Investigation: [Check]; 
Punitive action[B]: [Empty]. 

Justice: 

U.S. Attorneys' Offices: 
Inspection[A]: [Empty]; 
Investigation: [Empty]; 
Punitive action[B]: [Check]. 

Federal Bureau of Investigation (FBI): 
Inspection[A]: [Empty]; 
Investigation: [Check]; 
Punitive action[B]: [Empty]. 

State: 

Directorate of Defense Trade Controls (DDTC): 
Inspection[A]: [Empty]; 
Investigation: [Empty]; 
Punitive action[B]: [Check]. 

Office of Legal Adviser for Political-Military Affairs; 
Inspection[A]: [Empty]; 
Investigation: [Empty]; 
Punitive action[B]: [Check]. 

Treasury: 

Office of Foreign Assets Control (OFAC): 
Inspection[A]: [Empty]; 
Investigation: [Empty]; 
Punitive action[B]: [Check]. 

Source: GAO analysis of information provided by each agency and export 
control laws and regulations. 

[A] CBP and ICE both have the authority to conduct inspections at U.S. 
ports, but, according to CBP officials, CBP has a primary role in this 
area. 

[B] For purposes of this report, punitive actions can be either 
criminal or administrative against potential violators of export 
control laws and regulations. Criminal actions taken against violators 
of export control laws and regulations can result in imprisonment, 
fines, forfeitures, and other penalties. Administrative actions 
against violators can include fines, suspension of an export license, 
or denial or debarment from exporting. 

[C] Commerce's Office of Enforcement Analysis provides analytic 
support to OEE. 

[D] CBP can seize items being exported contrary to law, including 
those subject to export controls, and can also issue penalties under 
the Foreign Trade Regulations for false or fraudulent reporting on or 
misuse of the Automated Export System. 

[End of table] 

Inspections of items scheduled for export are routinely conducted at 
U.S. air, sea, and land ports, as part of the U.S. Customs and Border 
Protection (CBP) officer's responsibilities for enforcing U.S. import 
and export control laws and regulations at our nation's ports of 
entry. CBP's enforcement activities include inspection of outbound 
cargo through a risk-based approach using CBP's automated targeting 
systems to assess the risk of each shipment, review and validation of 
documentation presented for licensable items, detention of 
questionable shipments, and seizure of shipments and issuance of 
monetary penalties for items that are found to be in violation of U.S. 
export control laws.[Footnote 10] According to CBP officials, almost 3 
million shipments per month are exported from the United States. 

Investigations of potential violations of export control laws for dual-
use items are conducted by agents from OEE, ICE, and FBI. 
Investigations of potential export control violations involving 
defense items are conducted by ICE and FBI agents. OEE and ICE are 
authorized to investigate potential violations of dual-use items. ICE 
is also authorized to investigate potential violations of defense 
items. The FBI has authority to investigate any criminal violation of 
law not exclusively assigned to another agency, and is mandated to 
investigate and oversee export control violations with a 
counterintelligence concern. The investigative agencies have various 
tools for investigating potential violations (see table 2) and 
establishing cases for potential criminal or administrative punitive 
actions. 

Table 2: Key Investigative Tools for Investigative Export Control 
Enforcement Activities: 

Investigative tool: Undercover operations; 
OEE[A]: [Check]; 
ICE: [Check]; 
FBI: [Check]. 

Investigative tool: Searches without warrants at the borders; 
OEE[A]: [Empty]; 
ICE: [Check]; 
FBI: [Empty]. 

Investigative tool: Wiretaps; 
OEE[A]: [Check]; 
ICE: [Check]; 
FBI: [Check]. 

Investigative tool: Overseas investigations[B]; 
OEE[A]: [Check]; 
ICE: [Check]; 
FBI: [Check]. 

Investigative tool: Access and use of forfeiture funds; 
OEE[A]: [Check]; 
ICE: [Check]; 
FBI: [Check]. 

Source: GAO analysis of export control laws and regulations and 
information provided by the agencies. 

[A] While OEE conducts short-term undercover operations, it does not 
have independent authority to use nonappropriated funds to finance 
such operations or to operate undercover proprietorships. According to 
OEE, it is seeking additional statutory authorities in the areas of 
overseas investigations, undercover operations, forfeiture authority, 
and wiretapping authority. 

[B] Enforcement agencies can conduct overseas investigations with host 
government concurrence. 

[End of table] 

Punitive actions, which are either criminal or administrative, are 
taken against violators of export control laws and regulations, and 
may involve U.S. or foreign individuals and companies. Criminal 
violations are those cases where the evidence shows that the exporter 
willfully violated export control laws. U.S. Attorneys' Offices 
prosecute export control enforcement criminal cases in consultation 
with Justice's National Security Division. These cases can result in 
imprisonment, fines, forfeitures, and other penalties. Punitive 
actions for administrative violations can include fines, suspension of 
an export license, or denial or debarment from exporting, and are 
imposed primarily by State or Commerce, depending on whether the 
violation involves the export of a defense or a dual-use item. For 
example, Commerce can impose the administrative sanction of placing 
parties acting contrary to the national security or foreign policy 
interests of the United State on a list that prevents their receipt of 
items subject to Commerce controls. The Treasury's Office of Foreign 
Assets Control (OFAC) administers and enforces economic sanctions 
programs primarily against countries and groups of individuals, such 
as terrorists and narcotics traffickers. The sanctions can be either 
comprehensive or selective, using the blocking of assets and trade 
restrictions to accomplish foreign policy and national security goals. 
In some cases, both criminal and administrative penalties can be 
levied against an export control violator. In fiscal year 2010, 
Justice data showed that 56 individuals or companies were convicted of 
criminal violations of export control laws.[Footnote 11] State 
reported over $43 million and Commerce reported more than $25.4 
million in administrative fines and penalties for fiscal year 2010. In 
2011, over a third of the major U.S. export control enforcement and 
embargo-related criminal prosecutions involved the illegal transfer of 
U.S. military, nuclear, or technical data to Iran and China. 

Agencies Use a Risk-Based Approach to Allocate Resources but Do Not 
Fully Track Those Used For Export Control Enforcement: 

Agencies use some form of a risk-based approach when allocating 
resources to export control enforcement as their missions are broader 
than export controls. As agencies can use these resources for other 
activities based on need, tracking resources used solely on export 
control enforcement activities is difficult. Only OEE allocates all of 
its resources exclusively to export control enforcement as that is its 
primary mission, and State and the Treasury have relatively few export 
control enforcement staff to track. Agencies' risk-based resource 
allocation approach incorporates a variety of information, including 
workload and threat assessment data, but has not generally included 
data on resources used for export control enforcement activities as 
agencies did not implement systems to fully track this information 
until recently. Given the overlapping jurisdiction of several 
enforcement agencies, in some cities agencies have voluntarily created 
local task forces that bring together enforcement resources to work 
collectively on cases--informally leveraging resources. 

Most Agencies--Whose Missions Are Broader Than Export Controls--Have 
Limited Data on Resources Used for Export Control Enforcement: 

Agencies determine their missions based on statutes, policy, and 
directives, and articulate their fundamental mission in their 
strategic plans.[Footnote 12] Based on our review of these documents 
as well as discussions with senior agency officials, agencies with 
primary export control enforcement responsibility have multiple 
missions that extend beyond export controls as shown in table 3, 
except for OEE. As such, these agencies are faced with balancing 
multiple priorities when allocating staff resources. 

Table 3: Primary Missions of the Agencies with Export Control 
Enforcement Responsibility: 

Department/agency: Commerce; OEE; 
Mission: Investigate potential violations of dual-use and commercial 
exports with a priority related to weapons of mass destruction, 
terrorism, and unauthorized military use. 

Department/agency: DHS; CBP; 
Mission: Detect and prevent terrorist and terrorist weapons from 
entering U.S. ports, and inspecting items and persons entering and 
leaving the United States. 

Department/agency: DHS; ICE; 
Mission: Investigate drug smuggling, human trafficking and smuggling, 
financial crimes, commercial fraud, intellectual property rights 
violations, document fraud, money laundering, child exploitation, 
immigration fraud, and potential defense and dual-use export 
violations. 

Department/agency: Justice; U.S. Attorneys' Office; 
Mission: Prosecute violations of federal criminal laws and litigate 
civil matters on behalf of the United States. Criminal prosecutions 
include cases involving terrorism, counterterrorism, government 
contractor fraud, and many others. 

Department/agency: Justice; FBI; 
Mission: Protect the United States against terrorist and foreign 
intelligence threats and enforce criminal laws. 

Department/agency: Justice; National Security Division; 
Mission: Supports export control enforcement through its technical 
expertise to prosecutors and law enforcement agencies. 

Department/agency: State; DDTC; 
Mission: Control the export and temporary import of defense articles 
and defense services covered by the United States Munitions List and 
brokering activities by U.S. and foreign persons. 

Department/agency: Treasury; OFAC; 
Mission: Administer and enforce economic and trade sanctions based on 
US foreign policy and national security goals against targeted foreign 
countries and regimes, terrorists, international narcotics 
traffickers, those engaged in activities related to the proliferation 
of weapons of mass destruction, and other threats to the national 
security, foreign policy or economy of the United States. 

Source: GAO analysis of agency information. 

[End of table] 

The agencies with export control enforcement responsibilities use some 
form of a risk-based approach to allocate staff resources, but several 
agencies, including CBP, FBI, ICE, and the U.S. Attorneys' Offices, 
did not implement systems to fully track the staff time spent on 
enforcement activities until recently. Only OEE allocates its entire 
investigative staff to this mission. As most enforcement resources are 
used to enforce a wide variety of laws, not just export control laws, 
if an important need arises, enforcement agencies have the flexibility 
to use these resources for other, non-export control related duties. 
Table 4 shows the total domestic staff, by agency that was allocated 
to conduct export control enforcement activities in fiscal year 2010. 
The number of officers, agents, and investigators who actually work on 
export control enforcement may be less than the number allocated for 
each agency. 

Table 4: Enforcement Agency Total Staff and Staff Allocated for 
Domestic Export Control Enforcement, Fiscal Year 2010: 

Agency: Commerce: OEE; 
Total staff: 109 investigators; 
Staff allocated for export control enforcement: 95 investigators[A]. 

Agency: DHS: CBP; 
Total staff: 20,455 officers; 
Staff allocated for export control enforcement: 658 officers[B]. 

Agency: DHS: ICE/Homeland Security Investigations; 
Total staff: 6,700 investigators; 
Staff allocated for export control enforcement: Data not publicly 
available. 

Agency: Justice: FBI[C]; 
Total staff: 12,092 agents; 
Staff allocated for export control enforcement: Data not publicly 
available. 

Agency: Justice: U.S. Attorneys[D]; 
Total staff: 4,005 criminal attorneys; 
Staff allocated for export control enforcement: 292 criminal 
attorneys[E]. 

Agency: State: DDTC; 
Total staff: 21 specialists; 
Staff allocated for export control enforcement: 10 specialists. 

Agency: State: Office of Legal Adviser for Political-Military Affairs; 
Total staff: 12 attorneys; 
Staff allocated for export control enforcement: 1 attorney. 

Agency: Commerce: Office of the Chief Counsel, Bureau of Industry and 
Security; 
Total staff: 12 attorneys; 
Staff allocated for export control enforcement: 9 attorneys. 

Agency: Treasury: OFAC; 
Total staff: 27 enforcement officers; 
Staff allocated for export control enforcement: None. 

Source: GAO analysis of agency information. 

[A] All investigators are used solely for export control enforcement 
activities and, according to Commerce, an additional 39 staff are 
available to provide analytic support. 

[B] CBP officers conduct outbound enforcement activities which include 
both the passenger and cargo environments. 

[C] FBI agents are not used solely for export control enforcement 
activities, but generally handle these cases through their 
Counterintelligence Division. The resources that FBI uses for these 
activities are classified. 

[D] U.S. Attorneys are not used solely for export control enforcement 
activities. 

[E] This figure represents the number of attorneys who have been 
specially allocated to work on terrorism and national security cases, 
which includes but is not limited to export enforcement cases. 

[End of table] 

These agencies have systems to track staff resources used for their 
primary missions and several have acknowledged the need to better 
track export control enforcement resources and have taken steps to do 
so. The Government Performance and Results Act (GPRA) of 1993 laid the 
foundation for results-oriented agency planning, measurement, and 
reporting in the federal government, highlighting the important role 
performance information plays in improving the efficiency and 
effectiveness of an agency.[Footnote 13] The GPRA Modernization Act of 
2010 reinforces these principles.[Footnote 14] One key element of 
these principles includes having accurate data agencies can use to 
allocate resources, among other things.[Footnote 15] However, most of 
the agencies responsible for inspecting, investigating, and 
prosecuting potential export control violations did not know the full 
extent of the use of staff resources on these activities, and as such, 
have not used this information in resource allocation decisions, as 
outlined in the examples below. 

* OEE allocates all of its investigators solely to export control 
enforcement, and as such, is the only agency that has been able to 
fully track the resources used on these activities. To formulate its 
budget and allocate its investigators, OEE conducts threat assessments 
with a priority related to weapons of mass destruction, terrorism, and 
unauthorized military use; and analyzes export control enforcement 
case workload, including the prior year's investigative statistics of 
arrests, indictments, and convictions. OEE also recently completed a 
field office expansion study to decide which cities would be the best 
locations for additional OEE field offices. In this study, OEE 
considered the volume of licensed and unlicensed exports and the type 
of high-tech items exported from different areas of the United States, 
and concluded that Atlanta, GA; Cincinnati, OH; Phoenix, AZ; and 
Portland, OR, were optimal locations, but has not received budget 
approval for expansion. 

* CBP reemphasized outbound operations in the creation of its Outbound 
Enforcement Division in March 2009 to help prevent terrorist groups, 
rogue nations, and other criminal organizations from obtaining defense 
and dual-use commodities; enforce sanctions and trade embargoes; and 
increase exporter compliance. CBP determines the number of staff to 
allocate to outbound inspections through a risk-based approach based 
on prior workload and a quarterly threat matrix--which includes the 
volume of outbound cargo and passengers, port threat assessments, and 
the numbers and types of seizures and arrests at the ports for items 
such as firearms and currency. As of fiscal year 2010, CBP had 
allocated approximately 660 officers for outbound enforcement 
activities, but these officers can be used for other than export 
control-related activities at any time, when needed. For example, the 
Port of Baltimore has officers assigned to perform outbound activities 
at both the airport and seaport, some of which focus on the 
enforcement of controlled shipments in the seaport environment. 
According to the Port Director, any of these officers can be 
redirected at any time and often are assigned to the airport during 
the busy airline arrival times, to perform inbound inspection duties--
based on priorities. Further, CBP does not track the hours that its 
officers across the country spend on export control enforcement 
activities, but is in the process of implementing a system to do so. 
CBP officials stated that determining the right mix of officers is 
complex and changes to its tracking system should allow for better 
planning and accounting for resources used for outbound activities in 
the future. 

* ICE's Homeland Security Investigations, Counter-Proliferation 
Investigations Unit focuses on preventing sensitive U.S. technologies 
and weapons from reaching the hands of adversaries and conducts export 
control investigations. To determine how many investigators it should 
allocate to this unit, ICE uses information including operational 
threat assessments and case data from the previous year, by field 
office, on total numbers of arrests, indictments, convictions, 
seizures, and investigative hours expended on export control 
investigations. For example, it assigns a tier level for each of its 
70 field offices, based on threat assessments--ranging from 1 for the 
highest threat, resulting in a larger number of agents assigned to 
these offices; to 5 for the lowest threat, with a lower number of 
agents assigned. To further prioritize resources, in 2010, ICE 
established Counter Proliferation Investigations Centers in selected 
cities throughout the United States, with staff focused solely on 
combating illegal exports and illicit procurement networks seeking to 
acquire vital U.S. technology. ICE concluded that it needed to form 
these centers to combat the specialized nature of complex export 
control cases and determined that its previous method of distributing 
resources needed refinement, noting that some ICE field office 
managers had difficulty in balancing numerous competing programmatic 
priorities and initiatives. According to ICE officials, they plan to 
mitigate these concerns by having staff and facilities focused solely 
on export control enforcement cases, which will allow ICE to track and 
use this information to better determine future resource needs. 

* The FBI, with both an investigative and intelligence mission, does 
not allocate resources solely for export control enforcement and 
officials told us they view these activities as a tool to gain 
intelligence that may lead to more robust cases. Nevertheless, cases 
involving export controls are primarily led by agents within the 
Counterintelligence Division. To determine the number of agents to 
allocate to this division, the FBI uses a risk management process and 
threat assessments. Several years ago, the FBI established at least 
one Counterintelligence squad in each of its 56 field offices. In July 
2011, the FBI established a Counterproliferation Center, merging its 
Counterintelligence Division and its Weapons of Mass Destruction 
Directorate to better focus their efforts and resources. The FBI is in 
the process of implementing new codes within its resource tracking 
system to obtain better information on agents' distribution of work, 
which will include time spent on investigations of defense and dual-
use items. 

* U.S. Attorneys' Offices have discretion to determine the resources 
that they will allocate to export control enforcement cases, based on 
national priorities and the individual priorities of the 94 districts. 
These priorities include law enforcement concerns for their district 
and leads from investigative agencies. In response to the risk 
associated with national security, which includes export control 
enforcement cases, staffing for national security activities has 
increased and several districts have created national security 
sections within their office. In 2008, the Executive Office for U.S. 
Attorneys provided codes for charging time and labeling cases to 
obtain better information on the U.S. Attorneys' Office distribution 
of work and those resources used for export control enforcement. 
However, some Assistant U.S. Attorneys told us that the time-keeping 
system is complicated as there are multiple codes and sub-categories 
in the tracking system and determining the correct codes is often 
subjective, making it difficult to track time spent on export control 
enforcement cases. Senior agency officials acknowledged this concern 
and are working with the U.S. Attorneys' Offices to provide better 
guidance to improve the accuracy of attorney time charges. 

* Other offices, such as State's Office of the Legal Adviser for 
Political-Military Affairs and Commerce's Office of the Chief Counsel 
for the Bureau of Industry and Security assist the enforcement 
agencies by providing legal support. For example, Commerce's Office of 
the Chief Counsel pursues administrative enforcement actions against 
individuals and entities, but also reviews and advises on OEE 
recommendations for other administrative actions, such as temporary 
denials of licenses. In addition, DDTC and OFAC pursue administrative 
enforcement actions against violators. For example, OFAC administers 
and enforces U.S. economic and trade sanctions against designated 
foreign countries. While not all of staff in these offices are 
allocated to export control enforcement, these offices have relatively 
few staff to track. 

In addition to a domestic presence, most export control enforcement 
agencies also allocate resources overseas, but only Commerce allocates 
resources exclusively to export control enforcement. For example, 
Commerce maintains Export Control Officers in six locations abroad; 
Beijing and Hong Kong, China; Abu Dhabi, UAE; New Delhi, India; 
Moscow, Russia; and Singapore, to support its dual-use export control 
enforcement activities. Given that these officers have regional 
responsibilities, they cover additional locations. For example, the 
Export Control Officer assigned to Singapore also covers Malaysia and 
Indonesia. While other agencies have field locations in many overseas 
locations, these resources are to support the agencies' broader 
missions and can be used for other duties based on the overseas 
mission priorities. For example, ICE has 70 offices in 47 foreign 
countries with more than 380 government and contract personnel which 
support all ICE enforcement activities, including export control. They 
can also be called upon to support various other DHS mission 
priorities. Specifically, the ICE agents we met with at the U.S. 
Embassy in Abu Dhabi also conduct activities in support of the full 
DHS mission and a great portion of their time is spent on visa 
security and a lesser amount on export control enforcement activities. 

Agencies Informally Leverage Enforcement Resources through Local Task 
Forces: 

The export control enforcement investigative agencies often have 
offices located in the same cities or geographic areas. In many of 
these cities, agencies' officials said that they informally leverage 
each others' tools, authorities, and resources to coordinate 
investigations and share intelligence through local task forces 
allowing them to use resources more efficiently and avoid duplicating 
efforts or interfering with each other's cases. In 2007, Justice's 
National Export Enforcement Initiative encouraged local field offices 
with a significant export control threat to create task forces or 
other alternatives to coordinate enforcement efforts in their area. 
Since then, almost 20 U.S. Attorneys' Offices have created task forces 
of their own initiative or in conjunction with another enforcement 
agency, primarily in cities where these agencies are co-located to 
facilitate the investigation and prosecution of export control cases. 
Figure 1 shows the location of investigative agencies' major field 
offices, as well as the location of export control enforcement task 
forces. 

Figure 1: Location of Export Control Enforcement Investigative Agency 
Major Field Offices and Task Forces (as of 2011): 

[Refer to PDF for image: illustrated U.S. map] 

Federal Bureau of Investigations, DOJ — 56 field offices: 
Albany, New York; 
Albuquerque, New Mexico; 
Anchorage, Alaska; 
Atlanta, Georgia; 
Baltimore, Maryland; 
Birmingham, Alabama; 
Boston, Massachusetts; 
Brooklyn, New York; 
Buffalo, New York; 
Charlotte, North Carolina; 
Chicago, Illinois; 
Cincinnati, Ohio; 
Cleveland, Ohio; 
Columbia, South Carolina; 
Dallas, Texas; 
Detroit, Michigan; 
Denver, Colorado; 
El Paso, Texas; 
Honolulu, Hawaii; 
Houston, Texas; 
Indianapolis, Indiana; 
Jackson, Mississippi; 
Jacksonville, Florida; 
Kansas City, Missouri; 
Knoxville, Tennessee; 
Little Rock, Arkansas; 
Las Vegas, Nevada; 
Los Angeles, California; 
Louisville, Kentucky; 
Memphis, Tennessee; 
Miami, Florida; 
Milwaukee, Wisconsin; 
Minneapolis/St. Paul, Minnesota; 
Mobile, Alabama; 
Newark, New Jersey; 
New Haven, Connecticut; 
New Orleans, Louisiana; 
New York, New York; 
Norfolk, Virginia; 
North Miami Beach, Florida; 
Oklahoma City, Oklahoma; 
Omaha, Nebraska; 
Philadelphia, Pennsylvania; 
Phoenix, Arizona; 
Pittsburgh, Pennsylvania; 
Portland, Oregon; 
Richmond, Virginia; 
Sacramento, California; 
St. Louis, Missouri; 
Salt Lake City, Utah; 
San Antonio, Texas; 
San Diego, California; 
San Francisco, California; 
San Juan, Puerto Rico; 
Seattle, Washington; 
Springfield, Illinois; 
Tampa, Florida; 
Washington, DC. 

Immigration and Customs Enforcement, DHS — 49 Special-Agent-in-Charge 
(SAC) and Assistant SAC offices: 
Atlanta, Georgia; 
Baltimore, Maryland; 
Boston, Massachusetts; 
Brownsville, Texas; 
Buffalo, New York; 
Calexico, California; 
Charlotte, North Carolina; 
Chicago, Illinois; 
Cleveland, Ohio; 
Dallas, Texas; 
Denver, Colorado; 
Detroit, Michigan; 
Douglas, Arizona; 
Fort Lauderdale, Florida; 
Honolulu, Hawaii; 
Houston, Texas; 
Jacksonville, Florida; 
Kansas City, Missouri; 
Los Angeles, California; 
Los Angeles/LAX, California; 
McAllen, Texas; 
Memphis, Tennessee; 
Miami, Florida; 
Mobile, Alabama; 
Newark, New Jersey; 
New Orleans, Louisiana; 
New York, New York; 
Norfolk, Virginia; 
Orange County, California; 
Orlando, Florida; 
Phoenix, Arizona; 
Philadelphia, Pennsylvania; 
Portland, Oregon; 
Sacramento, California; 
Salt Lake City, Utah; 
San Angelo, Texas; 
San Antonio, Texas; 
San Diego, California; 
San Francisco, California; 
San Juan, Puerto Rico; 
San Jose, California; 
Seattle, Washington; 
Tampa, Florida; 
Washington, DC; 
Yuma, Arizona. 

Office of Export Enforcement (OEE), Department of Commerce — 9 field 
offices: 
Boston, Massachusetts; 
Chicago, Illinois; 
Dallas, Texas; 
Houston, Texas; 
Los Angeles/LAX, California; 
Miami, Florida; 
New York, New York; 
San Jose, California; 
Washington, DC. 

TF Task Forces (TF) led by U.S. Attorneys' Office, DOJ — 19 task 
forces: 
Baltimore, Maryland; 
Birmingham, Alabama; 
Boston, Massachusetts; 
Brooklyn, New York; 
Denver, Colorado; 
Detroit, Michigan; 
Indianapolis, Indiana; 
Los Angeles/LAX, California; 
Miami, Florida; 
Newark, New Jersey; 
New Orleans, Louisiana; 
New York, New York; 
Omaha, Nebraska; 
Portland, Oregon; 
Sacramento, California; 
San Antonio, Texas; 
San Diego, California; 
Washington, DC. 

Source: GAO analysis of data provided by ICE, OEE, FBI, and the U.S. 
Attorneys' Office (data); Map Resouces (map). 

[End of figure] 

Most of the task force members we met with in Baltimore, Los Angeles, 
and San Francisco stated that they see benefits beyond the 
coordination of cases, including investigating cases together and 
sharing resources. 

Baltimore's Counterproliferation Task Force: ICE and the U.S. 
Attorneys' Office created this Task Force in 2010 and it has 
representatives from each of the enforcement agencies located in the 
area, as well as the defense and intelligence communities. Task force 
officials stated that they develop and investigate export control 
cases together and, to enhance interagency collaboration, ICE has 
supplied work space, allowing agents from other agencies to work side-
by-side to pursue leads and conduct investigations. Officials 
emphasized that the task force enables smaller agencies with fewer 
resources to leverage the work and expertise of the others to further 
their investigations and seek prosecutions. Sometimes the task force 
structures reap benefits that individual agencies cannot reach on 
their own, as exemplified by the Baltimore Counterproliferation Task 
Force. Among successes was a Maryland man sentenced to 8 months in 
prison followed by 3 years of supervised release for illegally 
exporting export-controlled night vision equipment. 

Los Angeles' Export and Anti-proliferation Global Law Enforcement 
(EAGLE) Task Force: The U.S. Attorney established this Task Force in 
2008 as a result of Justice's counter-proliferation initiatives. Its 
purpose is to coordinate and develop expertise in export control 
investigations. Currently, there are over 80 members from 17 Los 
Angeles-based federal agencies. According to a task force official, 
the EAGLE task force has resulted in increased priority on export 
control investigations and improved interagency cooperation since it 
was established. For instance, the enforcement agencies are now more 
effectively sharing information in their respective databases. A task 
force official noted that enhanced access to these databases allows 
agencies to reduce duplication of license determination requests and 
to easily retrieve information on a particular person or commodity's 
history using the search options. Additionally, through the task force 
structure, ICE and OEE agents have worked together to conduct 
additional outreach to industry affiliates. 

San Francisco's Strategic Technology Task Force: According to 
officials, this task force was formed by FBI in 2004, with a primary 
focus on conducting joint export control outreach activities to 
academia and industry with the other investigative agencies (ICE and 
OEE). This task force also includes participation by the military 
service intelligence units and other law enforcement agencies. FBI 
task force leaders stated that this task force has helped to 
coordinate outreach activities as well as to generate investigative 
leads. According to an agent from the FBI's San Jose field office, 
that office has a performance goal to conduct 90 percent of their 
export control-related investigations jointly with investigative 
agencies at ICE and Commerce. 

Although successful cases of joint collaboration among agencies can 
yield positive enforcement outcomes, as reported by the offices in the 
three cities we visited, the extent to which these alliances are 
effective is primarily dependent on personal dynamics of a given 
region, agency, and law enforcement culture. In addition, these local 
agency task forces for export control enforcement vary in structure, 
are voluntary, and do not exist nationwide. For example, while 
multiple investigative agencies have local offices in Chicago and 
Dallas with export control enforcement agents, agencies do not have a 
local task force in these cities to regularly coordinate on export 
control cases. While agency officials shared examples of agencies 
informally leveraging each other's resources, officials told us that 
they do not factor in such resources when planning their own agency 
allocations for a variety of reasons, including each agency's separate 
budgets and missions, which do not generally consider those of other 
agencies. 

Reform Initiatives May Help Address Challenges In Investigating 
Illicit Transshipments But Detailed Plans Are Unknown: 

Enforcement agencies face several challenges in investigating illicit 
transshipments, both domestically and overseas--including license 
determination delays; limited access in some overseas locations; and a 
lack of effectiveness measures that reflect the complexity and 
qualitative benefits of export control cases. Recognizing broader 
challenges in export control enforcement, the President announced the 
creation of a national export enforcement coordination center, which 
may help agencies address some of the challenges described below, but 
detailed plans to do so have yet to be developed. 

Investigators Face Several Challenges in Investigating Illicit 
Transshipments--Both Domestically and Overseas: 

The current export control enforcement system poses several challenges 
that potentially reduce the effectiveness of activities and limit the 
identification and investigation of illicit transshipments. Export 
control enforcement agencies seek to keep defense and dual-use items 
from being illegally exported through intermediary countries or 
locations to an unauthorized final destination, such as Iran, but 
agencies face challenges that can impact their ability to investigate 
export control violations, both domestically and overseas. First, 
license determinations--which confirm whether an item is controlled 
and requires a license, and thereby help confirm whether an export 
control violation has occurred--can sometimes be delayed, potentially 
hindering investigations and prosecutions. Second, investigators have 
limited access to secure communications and cleared staff in several 
domestic field offices, which can limit their ability to share timely 
and important information. Third, agencies have limited access to 
ports and facilities overseas. Fourth, agencies lack consistent data 
to quantify and identify trends and patterns in illicit transshipments 
of U.S. export-controlled items. Lastly, investigative agencies lack 
measures of effectiveness that fully reflect the complexity and 
qualitative benefits of export control cases. 

License Determination Delays. To confirm whether a defense or dual-use 
item is controlled and requires a license, inspectors, investigators, 
and prosecutors request license determinations from the licensing 
agencies of State and Commerce.[Footnote 16] These license 
determinations are integral to enforcement agencies' ability to seize 
items, pursue investigations, or seek prosecutions. DHS's Exodus 
Command Center operates the Exodus Accountability Referral System--an 
ICE database that initiates, tracks, and manages enforcement agency 
requests for license determinations from the licensing 
agencies.[Footnote 17] Exodus Command Center guidance identifies three 
different levels of license determinations: initial (to seize an item 
or begin an investigation), pre-trial (to obtain a search warrant, 
among other things), and trial (to be used during trial proceedings). 
The Exodus Command Center has established internal timeliness goals 
for receiving responses to requests for initial determinations within 
3 days; pre-trial certifications within 45 days; and trial 
certifications within 30 days. However, as shown in table 5, these 
goals are often not met, which can create barriers for enforcement 
agencies in seizing shipments before they depart the United States; 
obtaining search warrants; and making timely arrests. 

Table 5: Average License Determination Response Times (in Days): 

License determination (goal): Initial (3 days): Defense items; 
Response time: 
FY 2007: 8; 
FY 2008: 5; 
FY 2009: 7; 
FY 2010: 10. 

License determination (goal): Dual-use items; 
Response time: 
FY 2007: 19; 
FY 2008: 19; 
FY 2009: 23; 
FY 2010: 30. 

License determination (goal): Pre-Trial (45 days): Defense items; 
Response time: 
FY 2007: 126; 
FY 2008: 91; 
FY 2009: 64; 
FY 2010: 93. 

License determination (goal): Pre-Trial (45 days): Dual-use items; 
Response time: 
FY 2007: 10; 
FY 2008: 18; 
FY 2009: 29; 
FY 2010: 81. 

License determination (goal): Trial (30 days): Defense items; 
Response time: 
FY 2007: N/A[A]; 
FY 2008: 79; 
FY 2009: 64; 
FY 2010: 44. 

License determination (goal): Trial (30 days): Dual-use items; 
Response time: 
FY 2007: N/A[A]; 
FY 2008: N/A[A]; 
FY 2009: 58; 
FY 2010: N/A[A]. 

Source: Data provided by the Exodus Command Center. 

[A] Exodus Command Center officials noted that this information was 
not available. 

[End of table] 

According to State officials, they did not participate in developing 
the Exodus Command Center's goals, and State has different timeframes 
for responding to license determination requests. State officials 
noted that there is no statutory or regulatory requirement for the 
licensing agencies to provide license determinations and they must 
balance these activities with their primary mission of processing 
license applications. State officials told us their response to 
initial license determinations is a quick, unofficial assessment on 
whether or not an item is likely on the U.S. munitions list and it 
established a timeliness goal of 1-day to respond these requests. In 
2004, State established a 30-day goal for responding to pre-trial and 
trial certification requests, but due to increased caseload and 
difficulty in meeting this goal, it revised it to 60-days. According 
to State officials, the number of requests from federal law 
enforcement for pre-trial and trial license determinations has 
increased significantly over the past 5 years--from 79 in fiscal year 
2006 to 219 in fiscal year 2011, an increase of over 270 percent. 
Officials from State attribute some of the time it takes to process 
license determinations to the need to request interagency review and 
conduct additional analysis, as well as the complexity of the 
determination. For example, State sends all pre-trial and trial 
certification cases to DOD's Defense Technology Security 
Administration (DTSA) for its review, which can add to the time in 
responding to enforcement agencies' requests for license 
determinations. DTSA officials stated that these cases are reviewed 
through their normal licensing process and were not aware of any 
established timeframe goals, but stated that they expedite review of 
such license determination requests, for time-sensitive cases. As for 
complexity, according to State officials, those involving firearms, 
their components, and ammunition are relatively routine requests to 
respond to, whereas others involving multiple commodities, volumes of 
technical data, and complex services take more time and may involve 
multiple meetings and consultations among licensing agencies to make a 
determination. Further, State officials noted that they continue to 
educate law enforcement and work with ICE and FBI liaisons to ensure 
better information is provided in the request. 

Commerce officials also noted that they did not participate in 
developing the Exodus Command Center's goals. Commerce has a 30-day 
goal for responding to initial license determination requests, but 
according to Commerce officials, does not have a specific timeframe 
for responding to pre-trial and trial certifications because they 
conduct an in-depth review in their initial determination. Commerce 
officials noted that they do not have a three-level system for 
processing license determinations and that it processes standard and 
certified license determination requests. While Commerce's standard 
determinations are equivalent to State's initial determinations, 
Commerce's approach differs from State's in that it conducts a more 
thorough review for this initial determination requiring more time 
than the 3-day goal established by the Exodus Command Center. 
Commerce's certified license determinations are equivalent to State's 
pre-trial and trial certifications, but these can take less time to 
complete if an initial determination was conducted. Commerce officials 
noted that, while they previously tracked and reported the timeliness 
of license determination requests in their annual reports, as of 
fiscal year 2011, they no longer track this information because they 
are generally able to process these in a timely manner based on the 
urgency of the request. Commerce officials also noted that the Exodus 
Command Center data on Commerce's response times do not reflect all 
license determinations, as OEE investigators request license 
determinations directly from Commerce licensing officers and FBI 
investigators can route such requests through OEE. 

Limited Secure Communications and Cleared Staff. Limited access to 
secure communications, networks, facilities, and cleared staff by key 
investigative agencies including OEE and ICE can cause inconveniences 
and delays in the speed of export control investigations. While each 
of its field offices has access to secure telephones, none of the OEE 
field offices has its own secure networks or facilities--it accesses 
these through other agencies. According to some investigators that we 
spoke with, this limited access can sometimes create difficulties in 
communicating overseas, as well as working on cases jointly with the 
FBI. This lack of immediate access to secure networks and facilities 
can limit investigators' ability to share timely and important 
information, according to agency officials. A field office agent from 
the FBI stated that the inability to fully communicate with 
investigators from other agencies can be challenging when working 
jointly on cases--including a lack of high-level security clearances 
that can be needed to discuss certain export control cases. According 
to OEE officials, they plan to equip each of their field offices with 
secure networks and facilities, and expect to complete installation of 
the secure networks during 2012. In addition, OEE is working to 
provide Top Secret-Sensitive Compartmented Information clearances to 
the remaining 37 of its 95 investigators that lack this clearance. 
According to ICE officials, most of the ICE field offices have access 
to secure telephones and data networks, but about half of these 
offices lack secure facilities and typically use those of other 
agencies, when needed. 

Limited Overseas Access for Investigative Agencies. Enforcement 
agencies have differing levels of access to facilities and ports 
overseas when enforcing U.S. export control laws, which can limit 
their ability to carry out certain investigative activities. To pursue 
investigations of possible illicit transshipments, the U.S. government 
relies on the cooperation of host governments. According to agency 
officials, the success of enforcement activities abroad and the level 
of access granted is often determined by the U.S. government's 
relationship with the host government. For example, ICE in Abu Dhabi 
has fostered a relationship with the customs officials in the UAE and 
has worked with that government to create an academy and to provide 
UAE customs officials with various export control training sessions. 
According to the U.S. Deputy Chief of Mission and ICE attaché in the 
UAE, this collegial relationship has fostered better cooperation in 
several areas, including export controls. U.S. enforcement agencies 
overseas also rely on foreign counterparts to conduct enforcement 
activities. For example, the ICE attaché in Hong Kong told us that the 
Hong Kong government and its customs officials are helpful and 
responsive and that this relationship is further facilitated by the 
existence of a Customs Mutual Assistance Agreement, which allows 
direct contact and information exchange between U.S. and Hong Kong 
customs officials. In addition, Commerce has Export Control Officers 
stationed abroad and also has data sharing agreements with Hong Kong 
and Singapore to help ensure that U.S.-origin items are not 
retransferred without appropriate authorization. According to some 
State Department and agency officials overseas, while the existence of 
formal agreements with host governments, such as a Mutual Legal 
Assistance Treaty for prosecution or a Customs Mutual Assistance 
Agreement allow for information sharing and assistance with the United 
States, these formal agreements do not guarantee that U.S. law 
enforcement will have access to foreign persons, ports, and 
facilities. Some agency officials overseas noted that such access is 
often dependent on the U.S. relationship with the host government 
regardless of the existence of formal agreements. 

The lack of reciprocity in export control laws can also make it 
difficult to pursue export control violations abroad. The three key 
transshipment locations we visited, Hong Kong, Singapore, and the UAE 
each had their own national export control laws, and according to some 
State and overseas agency officials, these governments were most 
responsive to export control violations that fell under the 
international legal framework of United Nations' sanctions and major 
multilateral export control lists. Nevertheless, State officials noted 
that Hong Kong has had an extensive export and transshipment control 
system in place for over a decade. These officials also noted that 
they have identified and shared transshipment "best practices" that 
countries or locations can adopt to provide key legal authorities to 
better position them to enforce U.S. export control laws. In addition, 
investigators overseas told us that the lack of extradition treaties 
has limited their ability to pursue export control violators. The 
United States does not have an extradition treaty with the UAE, but it 
does have one with Hong Kong. While the United States has an 
extradition treaty with Singapore, it went into force over 70 years 
ago and, according to Singapore Embassy officials, it does not reflect 
current types of crimes and its renewal is unlikely. Despite these 
challenges, according to State, positive action relating to 
extradition has and continues to be achieved on a case-by-case basis. 

Lack of Trend Data on Illicit Transshipments. No formal process exists 
between the investigative export control enforcement community and the 
intelligence community to share data or quantify and identify 
statistical trends and patterns relating to information on illicit 
transshipments. Although the total universe of items being illicitly 
transshipped is unknown, intelligence and law enforcement information 
is collected by the intelligence community, attaches in overseas 
posts, and the domestic export control enforcement agencies.[Footnote 
18] According to an OEE official, there is a good exchange of 
actionable intelligence between the export control enforcement 
agencies and the intelligence community to seize shipments and take 
other actions against export control violators overseas. However, 
according to some enforcement and intelligence officials, intelligence 
leads are typically transmitted to either individual enforcement 
agencies or the enforcement community. Further, enforcement agencies 
maintain separate data related to their export control enforcement 
activities, which can include a variety of information such as 
shipment declarations listing countries of final destination and end-
use or end-users and inspection and investigation results. Because the 
enforcement agencies have varying mission priorities in export 
controls, the availability and maintenance of data by the various 
agencies that can be used to identify illicit transshipments are not 
necessarily consistent or harmonized with each other. 

Lack of Effectiveness Measures Unique to Complexity of Export 
Controls. The investigative enforcement agencies typically measure 
their effectiveness based on outcomes of enforcement activities, but 
these do not necessarily reflect the complexities involved with export 
control enforcement cases.[Footnote 19] Specifically, ICE has a 
primary performance measure of the percentage of closed investigations 
that result in a law enforcement consequence--arrests, indictments, 
convictions, and seizures as shown in table 6.[Footnote 20] OEE has 
similar enforcement metrics, and assesses impacts of their 
investigations by number of arrests, indictments, and convictions, as 
shown in table 7.[Footnote 21] The numbers of arrests, indictments, 
and convictions for export control violation cases have generally 
increased from fiscal years 2006 to 2010 for ICE and OEE.[Footnote 22] 

Table 6: ICE Number of Arrests, Indictments and Convictions for 
Defense and Dual-Use Items, Fiscal Years 2006 through 2010: 

Fiscal year: FY 2006; 
Arrests: 151; 
Indictments: 153; 
Convictions: 116; 
Total: 420. 

Fiscal year: FY 2007; 
Arrests: 197; 
Indictments: 200; 
Convictions: 153; 
Total: 550. 

Fiscal year: FY 2008; 
Arrests: 213; 
Indictments: 210; 
Convictions: 150; 
Total: 573. 

Fiscal year: FY 2009; 
Arrests: 432; 
Indictments: 285; 
Convictions: 219; 
Total: 936. 

Fiscal year: FY 2010; 
Arrests: 505; 
Indictments: 329; 
Convictions: 221; 
Total: 1055. 

Fiscal year: Total; 
Arrests: 1498; 
Indictments: 1177; 
Convictions: 859; 
Total: 3534. 

Source: Data provided by ICE. 

[End of table] 

Table 7: OEE Number of Arrests, Indictments, and Convictions for Dual-
Use Items, Fiscal Years 2006 through 2010: 

Fiscal year: FY 2006; 
Arrests: 11; 
Indictments: 17; 
Convictions: 36; 
Total: 64. 

Fiscal year: FY 2007; 
Arrests: 26; 
Indictments: 17; 
Convictions: 16; 
Total: 59. 

Fiscal year: FY 2008; 
Arrests: 20; 
Indictments: 57; 
Convictions: 40; 
Total: 117. 

Fiscal year: FY 2009; 
Arrests: 37; 
Indictments: 69; 
Convictions: 33; 
Total: 139. 

Fiscal year: FY 2010; 
Arrests: 22; 
Indictments: 62; 
Convictions: 31; 
Total: 115. 

Fiscal year: Total; 
Arrests: 116; 
Indictments: 222; 
Convictions: 156; 
Total: 494. 

Source: Data provided by OEE. 

[End of table] 

While these numbers provide quantifiable performance assessments for 
the agencies' workload related to export control violations, they do 
not necessarily reflect the complex nature of these cases or measure 
agencies progress in achieving their goals. GPRA, as amended, requires 
federal agencies to develop performance measures to assess progress in 
achieving their goals and to communicate their availability to 
Congress. Under this act, agencies are to develop measures that are 
objective, quantifiable, measurable, and to establish performance 
measures that define the level of progress to be achieved using these 
goals. However, current measures used by the enforcement agencies do 
not fully capture these elements. According to ICE documentation, 
export control investigations often take an average of 2 to 3 years to 
complete, and although significant to national security, these 
investigations result in enforcement statistics that are low in 
comparison with other law enforcement disciplines. The performance 
measures used by ICE and OEE during the period of this review 
emphasized quantifiable outcomes of enforcement actions and they are 
working towards developing measures that take into account the length 
of time and effort for investigators to gather intelligence that could 
potentially reveal a larger group of violators and to collect evidence 
from a wide variety of sources, including those located overseas. 
Although quantitative law enforcement metrics may be useful for the 
enforcement community in understanding the volume of activities that 
investigative agencies are processing, they may encourage agents to 
pursue less significant investigations in order to meet these 
performance standards. Measuring arrests does not indicate success at 
impeding criminal operations or whether the vulnerabilities present 
within export control enforcement system have been minimized. While 
developing measures of effectiveness that adequately capture the time 
and resources spent on such activities as intelligence gathering may 
be difficult and not easily quantifiable failure to consider broader 
measures may run counter to the overall goal of preventing or 
deterring illegal exports. According to ICE officials, its new 
performance measures, as well as its system to measure and track 
vulnerabilities nationally and in its field locations, will improve 
its ability to measure outcomes of enforcement actions. 

In 2010, we recommended that ICE establish performance measures for 
its investigative resources in a way to fully assess progress and 
better identify and decrease vulnerabilities.[Footnote 23] ICE 
officials told us that they have made progress toward this goal by 
implementing new performance measures for investigations, including 
those relating to export control enforcement. For example, ICE in Los 
Angeles is in the process of creating performance measures which 
include: one or more arrests, indictments, convictions and/or 
quantifiable disruption of an illicit procurement network in defense 
and dual-use items. It also plans to factor in special interest 
countries known to contain entities that post a credible public safety 
or national security threat, and have determined ten country 
destination codes that will be counted in measuring performance of its 
export control investigations. 

Reform Initiatives Offer Opportunities to Address Some Export Control 
Enforcement Challenges but May Present Others: 

Our past work highlighted the need for export control reform. Over the 
past 10 years, we issued 22 reports with key findings and 
recommendations directed at State, Commerce, DOD, DHS, Justice, and 
Treasury, to improve the U.S. export control system, including 
enforcement activities.[Footnote 24] In April 2010, the President 
announced a reform initiative to strengthen and streamline U.S. export 
controls by creating a single control list, licensing agency, 
information technology system, and enforcement coordination agency, 
aimed at addressing weaknesses in the system. The President is in the 
process of implementing several reform efforts. To coordinate export 
control enforcement activities, given that agencies have overlapping 
and duplicative authorities, in November 2010, the President announced 
the formation of a federal Export Enforcement Coordination Center to 
be established within DHS for administrative purposes. The 
corresponding Executive Order stated that to enhance enforcement 
efforts and minimize enforcement conflicts, executive departments and 
agencies must coordinate their efforts to detect, prevent, disrupt, 
investigate, and prosecute violations of U.S. export control laws, and 
must share intelligence and law enforcement information related to 
these efforts to the maximum extent possible consistent with national 
security and applicable law.[Footnote 25] The Export Enforcement 
Coordination Center, which became operational in March 2012, is to: 

* serve as the primary forum within the federal government for 
executive departments and agencies to coordinate and enhance their 
export control enforcement efforts and identify and resolve conflicts 
that have not been otherwise resolved in criminal and administrative 
investigations and actions involving violations of U.S. export control 
laws; 

* serve as a conduit between federal law enforcement agencies and the 
U.S. intelligence community for the exchange of information related to 
potential U.S. export control violations; 

* serve as a primary point of contact between enforcement authorities 
and agencies engaged in export licensing; 

* coordinate law enforcement public outreach activities related to 
U.S. export controls; and: 

* establish government-wide statistical tracking capabilities for U.S. 
criminal and administrative export control enforcement activities, to 
be conducted by DHS with information provided by and shared with all 
relevant departments and agencies participating in the center. 

To date, a Director from ICE and Deputy Directors from the FBI and OEE 
have been appointed to lead the Export Enforcement Coordination Center 
and FBI, ICE, and OEE officials stated that they have agreed to a 
general interagency Concept of Operations, and are in the process of 
developing standard operating procedures. However, the center opened 
in March 2012--a delay of 9 months due to problems with completing the 
building on time as well as some difficulty in reaching interagency 
agreement on the Concept of Operations. 

While the center may improve agency coordination, it is unclear 
whether it will address some of the specific challenges in 
investigating export control cases and illicit transshipments, as 
identified in this report. In our recently issued overview of 
government performance issues, we noted that many federal program 
efforts generally require the effective collaboration of more than one 
agency and that the GPRA Modernization Act of 2010 calls for a more 
coordinated and crosscutting approach, using outcome-oriented goals to 
identify and reduce unnecessary duplication, overlap, and 
fragmentation.[Footnote 26] GPRA requires each agency to submit a 
strategic plan at least every 4 years, to include a description of how 
the agency is working with other agencies to achieve its strategic 
goals as well as the strategies to be used and resources needed to 
achieve these goals. However, it is not clear to what extent the 
Export Enforcement Coordination Center will coordinate efforts to 
increase efficiencies across enforcement agencies. In November 2010, 
we reported that co-location of the export control agencies in a 
single headquarters'-based facility may help agencies share 
information, but further action may be needed to fully coordinate 
export control enforcement cases throughout the country.[Footnote 27] 
For example, agencies are unsure whether the center's yet-to-be-
developed standard operating procedures will encourage enforcement 
agencies to fully leverage resources, as local level offices are 
informally doing in some cities, or develop combined measures of 
effectiveness for export control enforcement. 

In addition, the Export Enforcement Coordination Center is to serve as 
a conduit between federal law enforcement agencies and the U.S. 
intelligence community. As noted in this report, no formal process or 
means exists between the investigative export control enforcement 
community and the intelligence community to quantify and identify 
statistical trends and patterns relating to information on illicit 
transshipments. While one of the goals of the center is to facilitate 
intelligence sharing, it has not yet been determined if this sharing 
of intelligence will go beyond specific investigative leads to obtain 
better information on trends and patterns relating to illicit 
transshipments of U.S. export-controlled items. However, an 
intelligence community liaison will be assigned to the center, which 
may allow for a better exchange of information between the enforcement 
and intelligence communities. 

Beyond the creation of the Export Enforcement Coordination Center, 
other reforms are underway which could impact enforcement. As many of 
these reforms are in their infancy and detailed plans have not been 
released, enforcement agency officials shared their views that the 
planned reform initiatives for export control enforcement present both 
opportunities and challenges. For example, we also reported in 
November 2010, that one of the reform initiatives involves major 
revisions to the Commerce and State lists of dual-use and defense 
items that are controlled for export from the United States. This 
initiative was intended to clarify regulations for companies seeking 
to export arms and dual-use items to more easily determine whether 
items are regulated by State or Commerce. According to a State 
Department official, the revision of the control lists and the goal of 
clearer adjudication of the items controlled could reduce the time 
required to review the license determinations--allowing investigators 
to better focus their limited resources on those items critical to 
national security. However, as we previously reported, the review and 
possible removal of items controlled under the arms control list is 
taking longer than the agencies had originally anticipated. Some 
enforcement agency officials have raised concerns about changes to the 
control list, believing that as the U.S. Munitions List and Commerce 
Control List are revised, it could result in a decreased visibility of 
exports, requiring increased targeting by CBP to inspect items before 
they are exported overseas. Agency officials also stated that, as a 
result, increased enforcement activities may be needed overseas to 
validate the recipient of the item as fewer items would need U.S. 
government approval in advance of shipment.[Footnote 28] As staff 
located overseas have other agency and mission-related priorities, 
their availability for increased enforcement and compliance activities 
may be limited. Commerce officials stated that their Export Control 
Officers stationed abroad allows them to dedicate resources to 
providing compliance and investigative activities for items impacted 
by export control reform. In addition, staffing changes may require an 
approval process involving the agency, State Department, and the Chief 
of Mission.[Footnote 29] Also, some of the U.S. Attorneys we met with 
were concerned about the possible lack of a license with reform 
efforts, which they indicated is often relied upon in court to meet 
the high standards of evidence needed to prosecute export control 
cases. Other U.S. Attorneys stated that they were not as concerned, 
noting that cases involving non-licensable items have been 
successfully prosecuted. Further, as major changes to the State and 
Commerce control lists are made, investigators may need to increase 
outreach efforts to companies to provide education on U.S. export 
control laws. Specifically, in its fiscal year 2011 Performance and 
Accountability Report, Commerce stated that it will need to increase 
its outreach efforts to educate exporters about changes in export 
control regulations and provide the necessary guidance to ensure 
compliance with new regulations.[Footnote 30] 

Another potential challenge with planned reform efforts includes the 
potential for separating criminal and administration enforcement 
functions currently administered by OEE. While this effort would 
require legislation, it could result in the transfer of OEE 
enforcement personnel to ICE and the administrative enforcement 
functions to a single licensing agency. According to OEE officials, by 
separating the criminal and administrative functions which are often 
linked in export control cases, civil fines and penalties levied in 
the current system may not be as actively pursued. Senior enforcement 
agency officials acknowledged that this and other enforcement 
challenges may be resolved through the Export Enforcement Coordination 
Center. 

Conclusions: 

Given the wide-ranging mission of most of the agencies involved in 
export control enforcement, it is essential that agencies track 
resources expended on export control inspections, investigations, and 
prosecutions to assess how these resources are contributing to 
fulfilling their missions and are focused on the highest priorities in 
export control enforcement. While agencies, such as DHS and Justice, 
have recognized the need to better track their resources, a more 
comprehensive approach, including enhanced measures of effectiveness, 
could help these and other enforcement agencies assess workload and 
efficiency in making resource allocations and in determining whether 
changes are warranted. The creation of the Export Enforcement 
Coordination Center presents such an opportunity for the entire export 
control enforcement community. The center has the potential to become 
more than a co-location of enforcement agencies, but can be a conduit 
to more effectively manage export control resources. As the center's 
operation progresses, it has the opportunity to address ongoing 
challenges in export control enforcement, including reducing potential 
overlap in investigations, and help agencies to work as efficiently as 
possible, maximize available intelligence and agency investigative 
data, and measure the effectiveness of U.S. export control enforcement 
activities. Challenges presented by delays in license determinations 
can affect the inspection, investigation, and prosecution of export 
control cases but may be outside of the mission of the center since 
they primarily involve the licensing agencies. Having goals for 
processing license determinations can help establish transparency and 
accountability in the process. Given that the licensing agencies and 
the Exodus Command Center have not agreed to timeliness goals for 
responding to such requests, these agencies may benefit from 
collaborating to help improve the effectiveness of the process. 

Recommendations for Executive Action: 

To better inform management and resource allocation decisions, 
effectively manage limited export control enforcement resources, and 
improve the license determination process, we are making the following 
four recommendations: 

We recommend that the Secretary of Homeland Security and the Attorney 
General, as they implement efforts to track resources expended on 
export control enforcement activities, use such data to make resource 
allocation decisions. 

We recommend that the Secretaries of Commerce and Homeland Security as 
they develop and implement qualitative measures of effectiveness, 
ensure that these assess progress towards their overall goal of 
preventing or deterring illegal exports. 

We recommend that the Secretary of Homeland Security, in consultation 
with the departmental representatives of the Export Enforcement 
Coordination Center, including Commerce, Justice, State, and the 
Treasury: 

* leverage export control enforcement resources across agencies by 
building on existing agency efforts to track resources expended, as 
well as existing agency coordination at the local level; 

* establish procedures to facilitate data sharing between the 
enforcement agencies and intelligence community to measure illicit 
transshipment activity; and: 

* develop qualitative and quantitative measures of effectiveness for 
the entire enforcement community to baseline and trend this data. 

We recommend that the Secretaries of Commerce and State, in 
consultation with the Secretary of Homeland Security, the Attorney 
General, and other agencies as appropriate, establish agreed upon 
timeliness goals for responding to license determination requests 
considering agency resources, the level of determination, the 
complexity of the request, and other associated factors. 

Agency Comments and Our Evaluation: 

We provided a draft copy of this report to Commerce, DHS, DOD, 
Justice, State, and Treasury for their review and comment. Commerce, 
DHS, Justice, and State concurred with the report's recommendations 
and, along with DOD, provided technical comments which we incorporated 
as appropriate. Treasury did not provide any comments on the report. 

As multiple agencies have responsibilities for export control 
enforcement, several of our recommendations call for these agencies to 
work together to effectively manage limited export control enforcement 
resources and to improve the license determination process. In their 
comments, Commerce and State agreed to work in consultation with DHS 
and Justice to establish timeliness goals for license determinations. 
In its comments, DHS stated its intent to work with the other agencies 
to improve the license determination process as well as take steps to 
deploy its resources in the most effective and efficient manner and 
provided target dates for completing these actions. In particular, DHS 
noted that ongoing tracking efforts by CBP and ICE will be used to 
improve their knowledge of resources expended on export control 
enforcement activities and that they will periodically review this 
information to determine the overall direction of the export control 
program. Additionally, DHS stated its intent to establish a working 
group with other agencies to develop performance measures related to 
export control enforcement to help estimate the effectiveness of all 
associated law enforcement activity. Written comments from Commerce, 
DHS, and State are reprinted in appendixes II, III, and IV, 
respectively. 

We are sending copies of this report to interested congressional 
committees, as well as the Secretaries of Commerce, Defense, Homeland 
Security, State, and Treasury as well as the Attorney General. We will 
also make copies available to others upon request. In addition, the 
report will be available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions on matters discussed in this 
report, please contact me at (202) 512-4841 or martinb@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO staff that 
made key contributions to this report is listed in appendix V. 

Signed by: 

Belva M. Martin: 
Director: 
Acquisition and Sourcing Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine how agencies allocate staff resources for export control 
enforcement activities, we interviewed cognizant officials and 
examined relevant documents such as agencies' budgets, strategic 
plans, memorandum, and other documentation on resources. We 
interviewed officials about their resources at the headquarters of 
Commerce, DHS, Justice, State, and the Treasury. We also discussed 
with DOD officials their role in providing investigative support to 
agencies responsible for export control enforcement. We developed and 
used a set of structured questions to interview each agency's resource 
planners to determine how they allocate resources, what information 
and factors they consider in resource allocation decisions, what their 
enforcement priorities are, whether they track resources expended on 
enforcement, if they had conducted an analysis of their resource need, 
and if they consider or leverage other agencies' resources. We 
obtained applicable criteria including the Office of Management and 
Budget Circular A-11 and departmental guidance on resource allocation 
and tracking. We also reviewed previous GAO and inspector general 
reports regarding the Government Performance and Results Act (GPRA), 
as amended, and resource management for enforcement programs. To 
determine current resource levels, we obtained geographic locations of 
all domestic staff conducting export control enforcement, actual 
expenditures on export control enforcement activities, and information 
on staffing levels from each agency for fiscal years 2006 through 
2010. We did not independently verify the accuracy of agency 
information on expenditures and staffing levels obtained, but we 
corroborated this information with cognizant agency officials. We 
considered agencies' overall resources for the broad enforcement 
authorities and the resources allocated to export control enforcement 
specifically. Finally, we analyzed agencies' budget requests, 
expenditures, and staff hours to determine agencies current resource 
commitment and how agencies have allocated resources to export control 
enforcement activities. 

To determine challenges that agencies face in investigating illicit 
transshipments and the potential impact of export control reform 
initiatives on enforcement activities, we interviewed cognizant 
officials, examined and analyzed relevant export control documents and 
statutes, and conducted sites visits both domestically and overseas. 
We interviewed officials about their enforcement priorities at the 
headquarters of Commerce, DHS, Justice, and State. We also discussed 
with DOD officials their role in providing license determination 
support to agencies responsible for export control enforcement. We 
developed and used a set of structured questions to interview 
enforcement agency officials in selected domestic and overseas 
locations and observed export enforcement operations at those 
locations that had air, land, and seaports. We selected sites to visit 
based on various factors, including geographical areas where all 
enforcement agencies were represented with a large percentage of 
investigative caseload; areas with a mix of defense and high-tech 
companies represented; ports with a high volume of trade of U.S. 
commodities; a large presence of aerospace, electronics, and software 
industries, and based on headquarters officials' recommendations on 
key areas of export control enforcement activities both domestically 
and abroad. On the basis of these factors, we visited Irvine, Long 
Beach, Los Angeles, Oakland, San Francisco, and San Jose, CA; 
Washington, D.C.; and Baltimore, MD domestically. Internationally, we 
interviewed United States Embassy and Consulate officials and host 
government authorities in Hong Kong, Singapore, and in Abu Dhabi and 
Dubai in the United Arab Emirates (UAE). We received briefings on the 
export control systems from the Hong Kong Government's Trade and 
Industry Department, Customs and Excise Tax Department, from 
Singapore's Ministry of Foreign Affairs, Singapore's Immigration and 
Customs Authority; as well as toured ports at these locations. We also 
received a briefing from the Hong Kong Customs Airport Command on air 
cargo and air-to-air transshipment of strategic commodities and 
visited the DHL Hub at the Hong Kong International Airport. In the 
UAE, we visited the Government of Sharjah, Department of Seaports & 
Customs, Hamriyah Free Zone Authority and met with the Director and 
Security and Safety Manager to discuss the Hamriyah Free Zone. We 
reviewed the findings and recommendations of past GAO reports, 
documentation from enforcement agencies, and interviewed U.S. 
government officials from these agencies as well as their field 
offices. We also met with several agency representatives of the Export 
Control Reform Task Force and reviewed recent White House press 
releases on the export reform initiatives. Further, we examined 
Federal Register notices on changing regulations related to the export 
control reform initiative. 

We conducted this performance audit from February 2011 through March 
2012, in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Commerce: 

United States Department of Commerce: 
The Secretary of Commerce: 
Washington, D.C. 20230: 

March 14, 2012:  

Ms. Belva M. Martin: 
Director: 
Acquisition and Sourcing Management: 
Government Accountability Office (GAO): 
441 G Street NW: 
Washington, DC 20548:  

Dear Ms. Martin:  

Thank you for the opportunity to comment on the draft report entitled, 
"Export Controls: Proposed Reforms Create Opportunities to Address 
Enforcement Challenges" (GA0-12-246).  

The Department of Commerce concurs with the recommendations made by 
the GAO to Commerce, the Department of Homeland Security, and the 
Department of Justice to take steps—-individually and with the State 
and Treasury Departments through the national Export Enforcement 
Coordination Center—-to better track, manage, and coordinate export 
control enforcement resources and to establish agreed-upon timelines 
for responding to license determination requests. I have enclosed 
additional detailed comments on the report.  

If you need further assistance, please contact Mark Crace in the 
Bureau of Industry and Security's Office of Administration. Mr. Crace 
may be reached at (202) 482-8093 or mark.crace@bis.doc.gov.  

Sincerely, 

John E. Bryson: 
 
Attachments: 

(1) BIS comments to GAO draft report. 

(2) Assistant Secretary David Mills' QFR response for the hearing on 
"Addressing Potential Threats from Iran: Administration Perspectives 
on Implementing New Economic Sanctions One Year Later," October 13, 
2011.  

[End of section] 

Appendix III: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528: 

March 20, 2012: 

Belva M. Martin: 
Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Re: Draft Report GAO-12-246, "Export Controls: Proposed Reforms Create
Opportunities to Address Enforcement Challenges" 

Dear Ms. Martin: 

Thank you for the opportunity to review and comment on this draft 
report. The U.S. Department of Homeland Security (DHS) appreciates the 
U.S. Government Accountability Office's (GAO's) work in planning and 
conducting its review and issuing this report. 

DHS is pleased to note GAO's positive recognition of Departmental 
efforts to better track and allocate resources devoted to export 
control enforcement, using a risk-based approach. DHS remains 
committed to working with its partners, including the U.S. Departments 
of Commerce, Justice, State and Treasury, to further leverage our 
resources and improve export control enforcement activities, as 
appropriate. 

The draft report contained four recommendations with which DHS 
concurs. Specifically, GAO recommended: 

Recommendation 1: That the Secretary of Homeland Security and the 
Attorney General, as they implement efforts to track resources 
expended on export control enforcement activities, use such data to 
make resource allocation decisions. 

Response: Concur. Before GAO concluded its field work, DHS began 
implementing efforts to address this recommendation. For example, U.S. 
Immigration and Customs Enforcement (ICE) is using a new strategic 
planning and results-based performance review process called Homeland
Security Investigation (HSI) Transparency/Results/Accountability/ 
Knowledge Sharing (TRAK), which facilitates the quantitative and 
qualitative analysis of available data. This process allows managers 
to focus on the successes and challenges unique to ICE's field 
offices, including resource allocation. Additionally, U.S. Customs and 
Border Protection (CBP) Office of Field Operations (OFO) Outbound 
Enforcement Division will work to improve how they track resources 
expended on export control enforcement activities. OFO will work on 
improving existing processes that capture baseline officer resources 
expended in support of export control activities. OFO estimates that 
it will complete the desired improvements by the end of CY 2012, to 
have ports of entry report the resource export control data requested 
by GAO. The measures derived in response to this recommendation will 
be reviewed periodically to determine the overall direction of the 
export control program. 

Recommendation 2: That the Secretaries of Commerce and Homeland 
Security as they develop and implement qualitative measures of 
effectiveness, ensure that they assess progress towards their overall 
goal of preventing or deterring illegal exports. 

Response: Concur. DHS has already moved to a more robust performance 
measurement system which measures the percentage of high 
impact/significant investigations that result in a dismantlement or 
disruption of criminal organizations involved in illegal exports. ICE 
uses this same system to examine the impact, effectiveness, and 
outcomes of counter-proliferation investigations. Further, ICE tracks 
systemic vulnerabilities nationally and within its respective field 
offices to prioritize its efforts. ICE HSI has also established 
procedures to facilitate data sharing between the enforcement agencies 
and intelligence community to measure illicit transshipment activity. 

DHS will work to develop qualitative measures of effectiveness to 
ensure that these assess progress towards the goal of preventing or 
detecting illegal exports. CBP's OFO will track the overall number of 
targeted export control enforcement referrals made by officers at the 
ports of entry and compare this information to the number of referrals 
made by officers that required positive or negative enforcement 
actions. A high ratio of positive enforcement actions compared to the 
total number of referrals would be indicative of success. A high ratio 
of negative enforcement actions compared to the total number of 
referrals would indicate areas that need improvement. The measures 
derived in response to this recommendation will be reviewed 
periodically to determine the overall direction of the export control 
program. 

CBP OFO personnel estimate they will be able to capture and report on 
export control effectiveness measures by the end of CY 2012. The exact 
nature of the information, sources, and documentation will be subject 
to negotiations among the agencies. 

Recommendation 3: The Secretary of Homeland Security, in consultation 
with the departmental representatives of the Export Enforcement 
Coordination Center, including Commerce, Justice, State, and the 
Treasury: 

a. leverage export control enforcement resources across agencies by 
building on existing agency efforts to track resources expended, as 
well as existing agency coordination at the local level; 

b. establish procedures to facilitate data sharing between the 
enforcement agencies and intelligence community to measure illicit 
transshipment activity; and, 

c. develop qualitative and quantitative measures of effectiveness for 
the entire enforcement community to baseline and trend this data. 

Response: Concur. DHS already has a number of initiatives that 
leverage resources across agencies. For example, the Export 
Enforcement Control Center (E2C2), led by ICE, acts as an interagency 
coordination center for export enforcement. In addition CBP, which 
operates the International Trade Data System (ITDS), is establishing a 
repository for all import and export data and requirements. Finally, 
the President's Export Control Reform Initiative is designed to bring 
efficiencies on a number of levels to export control. Using these 
initiatives as a starting point, DHS is committed to working with the 
U.S. Departments of Commerce, Justice, State, and Treasury to further 
enhance export controls and related enforcement activities. 

In addition, the DHS Office of Intelligence and Analysis oversees the 
enterprise-wide initiatives that provide a way ahead for cross-cutting 
architecture of information sharing services and capabilities. The 
Information Sharing and Safeguarding Governance Board and its 
subordinate body, the Information Sharing Coordination Council, 
coordinate efforts to implement data sharing processes to streamline 
the flow of information between enforcement agencies and the 
intelligence community ultimately leading to more effective law 
enforcement. 

DHS intends to establish a working group with its partners by the end 
of September 2012 to establish performance measures related to export 
enforcement that will help estimate the effectiveness of all 
associated law enforcement activity. The group will define measures by 
the end of March 2013, and implement new measures, as appropriate, by 
the end of June 2013. 

Recommendation 4: That the Secretaries of Commerce and State, in 
consultation with the Secretary of Homeland Security, the Attorney 
General, and other agencies as appropriate, establish agreed upon 
timeliness goals for responding to license determination requests 
considering agency resources, the level of determination, the 
complexity of the request, and other associated factors. 

Response: Concur. DHS will work with the U.S. Department of Commerce 
to establish agreed upon timelines for responding to license 
determination requests. DHS is committed to working with the 
Department of Commerce to use these initiatives to improve export 
controls, and, through the Export Enforcement Coordination Center, 
consulting with the Departments of Commerce, Justice, State, and 
Treasury to deploy our resources in the most effective and efficient 
way. 

Again, thank you for the opportunity to review and comment on this 
draft report. The technical and sensitivity comments on the report 
were previously provided under separate cover. We look forward to 
working with you on future Homeland Security issues. 

Sincerely, 

Signed by: 

Jim H. Crumpacker: 
Director: 
Departmental GAO-OIG Liaison Office: 

[End of section] 

Appendix IV: Comments from the Department of State: 

United States Department of State: 
Chief Financial Officer: 
Washington, D.C. 20520: 

March 9, 2012: 

Mr. Loren Yager: 
Managing Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-0001: 

Dear Mr. Yager: 

We appreciate the opportunity to review your draft report,
"Export Controls: Proposed Reforms Create Opportunities to
Address Enforcement Challenges," GAO Job Code 120966. 

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report. 

If you have any questions concerning this response, please contact
Steven Rice, Deputy Director, Bureau of Political-Military Affairs at 
(202) 663-2803. 

Sincerely, 

Signed by: 

James L. Millette: 

cc: GAO — Belva Martin; 
PM — Andrew J. Shapiro; 
State/OIG — Evelyn Klemstine. 

[End of letter] 

Department of State Comments on GAO Draft Report: 

Export Controls: Proposed Reforms Create Opportunities to Address
Enforcement Challenges: 

GAO-12-246, Job Code 120966: 

Thank you for the opportunity to comment on your draft report 
entitled, "Export Controls: Proposed Reforms Create Opportunities to 
Address Enforcement Challenges." With respect to the fourth 
recommendation GAO made in the draft report, the Department of State 
agrees with the recommendation and will work in consultation with the 
Departments of Homeland Security and Justice to establish timeliness 
goals for license determinations. These goals will reflect our agency 
resources, the complexity of the request and other factors. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Belva Martin, (202) 512-4841 or martinb@gao.gov. 

Staff Acknowledgments: 

In addition to the contact names above, John Neumann, Assistant 
Director; Lisa Gardner; Desiree Cunningham; Jungjin Park; Marie 
Ahearn; Roxanna Sun; Robert Swierczek; and Hai Tran made key 
contributions to this report. 

[End of section] 

Footnotes: 

[1] For the purposes of this report, the term defense items refers to 
defense articles, defense services, and related technical data, as 
specified in 22 U.S.C. § 2778, and the term dual-use refers to items 
that have both commercial and military applications, such as 
computers, radars, and telecommunication equipment. 

[2] Hong Kong is a special administrative region of China. 

[3] U.S. exports to Iran, including defense and dual-use items are 
severely restricted by U.S. laws and regulations. Current sanctions on 
Iran, which are administered by the Department of the Treasury, ban 
almost all U.S. exports to that country. 

[4] GAO, Export Controls: Challenges Exist in Enforcement of an 
Inherently Complex System, [hyperlink,
[hyperlink, http://www.gao.gov/products/GAO-07-265] (Washington, D.C.: 
Dec. 20, 2006); and GAO's 2011 High-Risk Series, An Update, 
[hyperlink, http://www.gao.gov/products/GAO-11-278] (Washington D.C.: 
Feb. 2011). 

[5] In March 2012, we reported on export control compliance and 
monitoring activities. However, the details were deemed sensitive, but 
unclassified by the agencies, and so are not described more fully in 
this report. 

[6] 22 U.S.C. § §2751-2799aa-2 and 50 U.S.C. app. §§ 2401-2420. The 
Export Administration Act is not permanent legislation. 50 U.S.C. app. 
§ 2419. Authority granted under the act lapsed in August 2001. 
However, Executive Order 13,222, Continuation of Export Control 
Regulations, which was issued in August 2001 under the authority 
provided by the International Emergency Economic Powers Act (50 U.S.C. 
§§ 1701-1707.), continues the controls established under the act, and 
the implementing Export Administration Regulations. Executive Order 
13,222 requires an annual extension and was recently renewed by 
Presidential Notice on August 12, 2011. 76 Fed. Reg. 50,661 (Aug. 16, 
2011). 

[7] U.S. defense items are also sold and exported to foreign 
governments through the U.S. government's Foreign Military Sales 
program. 

[8] Actions can also include compliance and monitoring, such as 
reviewing disclosures by exporters of possible export control 
violations, prelicense checks, and postshipment verifications. See 
GAO, Export Controls: Post-Shipment Verification Provides Limited 
Assurance That Dual-use Items Are Being Properly Used, [hyperlink, 
http://www.gao.gov/products/GAO-04-357] (Washington, D.C.: Jan. 12, 
2004); and Defense Trade: Arms Export Control System in the Post 9/11 
Environment, [hyperlink, http://www.gao.gov/products/GAO-05-234] 
(Washington, D.C.: Feb. 16, 2005). 

[9] Other departments, including Defense and Energy, may provide 
technical expertise on items to enforcement agencies. Also, Defense 
and the military services have investigative units that may provide 
support to the enforcement agencies. 

[10] According to CBP officials it refers most export seizures to ICE 
for potential case development, including information on all shipments 
where weapons are involved or CBP officers have some reason to believe 
there is a potential for criminal activity. A number of these 
referrals lead to ICE investigations. 

[11] Data provided by Justice for criminal convictions where 50 U.S.C. 
§ 1705 or 22 U.S.C. § 2778 was charged. 

[12] A strategic plan, according to the Government Performance and 
Results Act (as amended), articulates, among other things, the major 
functions and operations of an organization, and describes its long-
term general goals for implementing those functions or operations, 
including the resources needed to reach these goals. 

[13] Pub. L. No. 103-62. 

[14] Pub. L. No. 111-352 (2011). 

[15] GAO, National Export Initiative: U.S. and Foreign Commercial 
Service Should Improve Performance and Resource Allocation Management, 
[hyperlink, http://www.gao.gov/products/GAO-11-909] (Washington, D.C.: 
Sept. 29, 2011). 

[16] Depending on the license, the request can also go to Treasury's 
OFAC for sanctioned countries. 

[17] The Exodus Command Center was established in 1982--and now is 
part of DHS/ICE--as the single point of contact for investigators and 
officers in the field needing operational support from export control 
agencies. 

[18] Transshipment can occur anywhere in the world, but is more likely 
to occur in ports with high volumes of trade activity. 

[19] FBI is omitted as its measures of effectiveness include its 
intelligence function and these metrics are classified in nature. 

[20] ICE now has a performance system that measures the percentage of 
high-impact or significant investigations that result in a 
transnational criminal disruption and/or dismantlement, and is 
applying this measure to its export control investigations. In 
addition, ICE is tracking systemic vulnerabilities nationally and 
within its respective field offices to prioritize efforts. 

[21] OEE also measures effectiveness of headquarters' and field office 
performance and accomplishment on investigative actions that result in 
a prevention or deterrence of export violations; percentage of open 
cases focusing on OEE's export enforcement priorities; and 
administrative case results including the total dollar fines and other 
actions, such as denial orders. 

[22] It is likely that the data provided by ICE in table 6 also 
include some of the same cases provided by OEE in table 7, thus may 
contain double-counting. 

[23] In September 2010, we reported on ICE's allocation of 
investigative resources. However, the details were deemed sensitive, 
but unclassified, by the agency, and so are not described more fully 
in this report. 

[24] GAO, Export Controls: Agency Actions and Proposed Reform 
Initiatives May Address Previously Identified Weaknesses, but 
Challenges Remain, [hyperlink, 
http://www.gao.gov/products/GAO-11-135R] (Washington, D.C.: Nov. 16, 
2010). 

[25] Exec. Order No.13,558, 75 Fed. Reg. 69,573 (Nov. 9, 2010). 

[26] GAO, Managing for Results: Opportunities for Congress to Address 
Government Performance Issues, [hyperlink, 
http://www.gao.gov/products/GAO-12-215R] (Washington, D.C.: Dec. 9, 
2011). 

[27] [hyperlink, http://www.gao.gov/products/GAO-11-135R]. 

[28] According to State, as long as the applicant meets the exemption 
criteria, the export is considered approved by the U.S. Government. 

[29] National Security Decision Directive 38: Staffing at Diplomatic 
Missions and Their Overseas Constituent Posts and GAO, Overseas 
Staffing: Rightsizing Approaches Slowly Taking Hold, But More Action 
Needed to Coordinate and Carry Out Efforts, [hyperlink, 
http://www.gao.gov/products/GAO-06-737] (Washington, D.C., June 30, 
2006). 

[30] U.S. Department of Commerce: Performance and Accountability 
Report, Fiscal Year 2011. 

[End of section] 

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