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Ensuring the Effective Protection of Technologies Critical to U.S. National Security

This information appears as published in the 2013 High Risk Report.

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Technological superiority is critical to U.S. military strategy. As such, the Department of Defense (DOD) spends billions of dollars each year to develop and acquire sophisticated weapons to provide an advantage for the warfighter during combat or other missions. Many of these weapons and military technologies are sold overseas to promote U.S. economic, foreign policy, and national security interests. They also are targets for theft, espionage, and illegal export.

The U.S. government has a number of programs to identify and protect technologies critical to U.S. interests. These include export control systems for defense articles and services and dual-use items, the Foreign Military Sales program, anti-tamper policies, and reviews of transactions that could result in control of a U.S. business by a foreign person. These programs are administered by multiple federal agencies with various interests, including DOD and the Departments of Commerce, Homeland Security, Justice, State, and the Treasury. As GAO previously reported, each program has had its own set of challenges, which are largely attributable to poor coordination within complex interagency processes, inefficiencies in program operations, and a lack of systematic evaluations of program effectiveness. GAO designated this area as high risk in 2007 because these programs, established decades ago, were ill-equipped to address the evolving 21st century challenge of balancing national security concerns and economic interests. GAO believes that a strategic re-examination of existing programs is needed to identify changes that will ensure the advancement of U.S. interests.

Since GAO first designated the effective protection of critical technologies as a high-risk area, agencies have taken steps to improve their individual programs. For example, DOD implemented guidance to ensure that weapons sold through the Foreign Military Sales program are protected as required. Also, in 2012, the Department of the Treasury adopted a new electronic licensing system to share license information on U.S. exports to Iran with other agencies, including U.S. Customs and Border Protection.

While these are positive steps, GAO has identified areas in which further action is needed to improve specific programs. For example, although DOD took steps to address previously identified weaknesses in updating and maintaining the Militarily Critical Technologies List (MCTL), the list is not being used to inform export control decisions—its original purpose. Further, the list remains outdated; in 2011, DOD ceased updating the MCTL because of funding constraints. DOD needs to ensure that a technical reference—MCTL or an alternative—is available for consistently identifying militarily critical technologies. Actions also are needed in other programs:

  • Enforcement agencies need to improve data sharing with the intelligence community to monitor illicit transshipments of export-controlled items.
  • The Departments of State and Commerce, in consultation with the Departments of Homeland Security and Justice, and other agencies as appropriate, need to improve the time frames for processing license determination requests. This process confirms whether an item is controlled and requires a license, and thereby helps officials determine whether an export control violation has occurred.
  • DOD and the Department of State need to eliminate gaps and inconsistencies in implementing their respective end-use monitoring efforts.

The administration continues to move forward with its export control reform efforts that began in 2010, which have the potential to improve the efficiency and effectiveness of the export control process. As part of the reform efforts, the Department of Homeland Security was tasked with establishing the Export Enforcement Coordination Center, which opened in March 2012, to help improve agency coordination on export control enforcement investigations. Agencies are taking initial steps to address enforcement challenges identified by GAO, such as developing a more robust performance measurement system; however, enforcement agencies have yet to develop standard operating procedures to enhance coordination through the center. The administration also has taken steps to clarify which items will be controlled under the U.S. Munitions List versus the Commerce Control List, in part, to help companies seeking to export defense articles and services and dual-use items to more easily determine whether items are regulated by State or Commerce. This review is taking longer than originally anticipated and concerns exist that the removal of items controlled under the U.S. Munitions List could result in a decreased visibility of exports and an increased need for resources to perform compliance activities.

Multiple agencies, with different authorities, missions, and interests, administer or play a role in the programs that are responsible for identifying and protecting these critical technologies. GAO has expressed concern, however, that the programs do not work collectively as a system. To date, the administration has not taken steps to re-examine the portfolio of programs to address their collective effectiveness. Recent agency actions have been primarily limited to addressing challenges in individual programs and do not provide insight into whether the programs are collectively effective. Also, none of the agencies has taken or been assigned responsibility for addressing the challenges GAO has identified. However, in a recent meeting with senior administration officials across the agencies and the Office of Management and Budget, officials agreed to consider whether to assign a leadership role for this area and if it should be with an existing committee of representatives from each of the agencies. Senior DOD officials noted that in addition to its involvement in export control reform, DOD has initiatives underway to review multiple programs and processes designed to protect critical technologies. Because these initiatives are internal to DOD, other agencies with responsibilities for the various critical technology programs are not involved; however, these initiatives present an opportunity for the agencies to work together to re-examine the portfolio and address GAO’s concerns.

GAO has made a number of recommendations in this area aimed at improving coordination among the programs that are intended to protect technologies critical to U.S. national security and has called for a re-examination of the entire portfolio. GAO’s body of work underscores longstanding problems and shows that challenges persist within and across the programs designed to protect technologies critical to U.S. national security interests. To address these challenges, action is needed at three levels.

  • First, individual agencies need to continue to implement GAO recommendations to address weaknesses in their respective programs—some of which remain unaddressed several years after GAO reported these weaknesses. For example, DOD, the Department of Homeland Security, and the Department of State have yet to address a 2009 GAO recommendation to improve interagency practices to facilitate reliable shipment verification of military items transferred through the Foreign Military Sales program. In addition, State and DOD have not yet made changes to clarify the use of export exemptions in support of defense activities.
  • Second, as the administration continues its export control reform efforts, it should ensure that previously identified weaknesses in the system are addressed, such as the need for better coordination among enforcement agencies. Export control agencies, particularly the Departments of State and Commerce, should assess and report on the potential impact, including the benefits and risks of proposed export control list reforms, on the resource needs of their compliance activities.
  • Finally, GAO has previously reported that the executive branch and Congress should consider re-evaluating the wider portfolio of critical technology-related programs. Ongoing export control reform efforts and other internal DOD reform initiatives present an opportunity to assess prospects for achieving full harmonization across separate but related programs designed to protect critical technologies. Key to demonstrating continued progress will be assigning leadership either to an agency or coordinating body to (1) assess the underlying causes of problems in individual programs and the resulting effect on the broader portfolio, (2) develop and implement effective solutions, and (3) monitor the effectiveness of corrective actions taken.
Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.

Protecting Defense Technologies:

DOD Assessment Needed to Determine Requirement for Critical Technologies List
GAO-13-157:
Published: Jan 23, 2013. Publicly Released: Jan 23, 2013.

Nonproliferation:

Agencies Could Improve Information Sharing and End-Use Monitoring on Unmanned Aerial Vehicle Exports
GAO-12-536:
Published: Jul 30, 2012. Publicly Released: Sep 12, 2012.

Export Controls:

U.S. Agencies Need to Assess Control List Reform's Impact on Compliance Activities
GAO-12-613:
Published: Apr 23, 2012. Publicly Released: Apr 23, 2012.

Export Controls:

Proposed Reforms Create Opportunities to Address Enforcement Challenges
GAO-12-246:
Published: Mar 27, 2012. Publicly Released: Mar 27, 2012.

Persian Gulf:

  • portrait of Belva M. Martin
    • Belva M. Martin
    • Director, Acquisition and Sourcing Management
    • martinb@gao.gov
    • (202) 512-4841