Export Control Regulation Could Be Reduced Without Affecting National Security

ID-82-14: Published: May 26, 1982. Publicly Released: May 26, 1982.

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GAO was requested to examine how well the export control system is carrying out the Export Administration Act's national security goal of controlling exports of militarily significant technology and products to the Soviet Union and other Eastern bloc nations.

The government carefully examines less than 1 out of every 17 export applications it processes. The need to continue licensing requirements for high-technology products, as well as design and production technology related to both high- and low-technology products, to Communist destinations is clear. However, GAO found that there is little justification for continuing to license the vast majority of low-technology products exported to Communist countries, non-Communist countries, and Coordinating Committee countries. The Department of Commerce is required by law to develop a recommendation for each export application before consulting with other departments or agencies. In high-technology cases, Commerce cannot make a credible recommendation, because it lacks the information necessary to assess military risk. Although it would be both impossible and cost-prohibitive to prevent all illegal exports, the government recognizes that it needs to provide a more credible deterrent. Some constraints faced by the United States in controlling exports include: (1) practical limits to cargo inspections; (2) lengthy criminal investigations and a large backlog of incomplete investigations; (3) difficulty in obtaining criminal convictions; and (4) no monitoring of conditional licenses to ensure that conditions are being fulfilled.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Both Houses of Congress considered this recommendation but rejected it to maintain political status quo.

    Matter: Congress should amend the Export Administration Act to have the Department of Defense (DOD) make the initial recommendation on export applications that must be forwarded to DOD and have Commerce limit its review of these applications to those that DOD recommends denying or approving with conditions.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: This recommendation was overtaken by events; a new Memorandum of Understanding between Commerce and Customs now defines the sharing of enforcement responsibilities.

    Recommendation: The Secretary of Commerce should consider use of Customs Service attaches overseas in enforcement investigations.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: This recommendation was dismissed beyond requiring data on a few commodity categories.

    Recommendation: The Secretary of Commerce should require exporters to provide performance specifications and backup information as part of their export licensing application packages.

    Agency Affected: Department of Commerce

  3. Status: Closed - Not Implemented

    Comments: Both Houses of Congress considered this recommendation but rejected it for another GAO recommendation.

    Recommendation: The Secretaries of Commerce and Defense should review the Commodity Control List to identify those few low-technology products that DOD wants to carefully examine before export to Communist countries and then eliminate the remaining low-technology products from licensing requirements.

    Agency Affected: Department of Commerce

  4. Status: Closed - Not Implemented

    Comments: Both Houses of Congress considered this recommendation but rejected it for another GAO recommendation.

    Recommendation: The Secretaries of Commerce and Defense should review the Commodity Control List to identify those few low-technology products that DOD wants to carefully examine before export to Communist countries and then eliminate the remaining low-technology products from licensing requirements.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: P.L. 99-64, July 12, 1985, incorporated, in part, the changes recommended and eliminated certain licensing requirements to close U.S. allies.

    Recommendation: The Secretaries of Commerce and Defense should reexamine the need for licensing of high-technology products to Coordinating Committee countries and other allies by exploring various alternatives that would satisfy control objectives and reduce or eliminate the burden of licensing.

    Agency Affected: Department of Commerce

  6. Status: Closed - Implemented

    Comments: P.L. 99-64, July 12, 1985, incorporated, in part, the changes recommended and eliminated certain licensing requirements to close U.S. allies.

    Recommendation: The Secretaries of Commerce and Defense should reexamine the need for licensing of high-technology products to Coordinating Committee countries and other allies by exploring various alternatives that would satisfy control objectives and reduce or eliminate the burden of licensing.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: Events have muted this recommendation.

    Recommendation: The Secretary of Commerce should direct Commerce reviewing officials to include a full discussion of: (1) how any citation of past precedent relates to the case under review; (2) foreign companies capable of providing a similar product, how that product compares to the proposed export, and the willingness of the foreign manufacturer to sell if the United States were to deny an export license; and (3) intelligence information on the end user obtained from the intelligence agencies in support of Commerce's licensing recommendation.

    Agency Affected: Department of Commerce

  8. Status: Closed - Not Implemented

    Comments: Both Houses of Congress considered and rejected this recommendation in favor of another GAO recommendation.

    Recommendation: The Secretaries of Commerce and Defense should eliminate licensing requirements to non-Communist countries for low-technology products falling below the Communist country threshold level.

    Agency Affected: Department of Commerce

  9. Status: Closed - Not Implemented

    Comments: Both Houses of Congress considered and rejected this recommendation in favor of another GAO recommendation.

    Recommendation: The Secretaries of Commerce and Defense should eliminate licensing requirements to non-Communist countries for low-technology products falling below the Communist country threshold level.

    Agency Affected: Department of Defense

  10. Status: Closed - Not Implemented

    Comments: Ongoing events muted the effect of this recommendation.

    Recommendation: The Secretary of Commerce should revise the current embedded technology guidelines in consultation with the Secretary of Defense to incorporate specific DOD concerns.

    Agency Affected: Department of Commerce

  11. Status: Closed - Not Implemented

    Comments: Events have muted the value of this recommendation.

    Recommendation: The Secretary of Commerce should establish a system for identifying high-technology licenses with conditions and then make tests to ensure that licensing conditions are being satisfied.

    Agency Affected: Department of Commerce

 

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