Nuclear Nonproliferation:

Export Licensing Procedures for Dual-Use Items Need to Be Strengthened

NSIAD-94-119: Published: Apr 26, 1994. Publicly Released: May 18, 1994.

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Pursuant to a congressional request, GAO reviewed U.S. export licensing procedures for dual-use nuclear items, focusing on the: (1) nature and extent of U.S. nuclear-related dual-use exports to countries of proliferation concern; (2) policies and procedures for reviewing export license applications; and (3) methods used to deter and detect the diversion of exports to foreign nuclear proliferation programs.

GAO found that: (1) between 1985 and 1992, the Department of Commerce approved a significant number of nuclear-related dual-use export licenses to countries of nuclear proliferation concern; (2) although the majority of the approved licenses involve nuclear referral list (NRL) items, items with critical nuclear explosive or nonnuclear applications are rarely approved; (3) although license requests for NRL items are expected to continue to decline, license requests from countries on the Special Country List are not declining as rapidly; (4) U.S. licensing decisions are based on minimizing proliferation risk without impeding legitimate exports; (5) the United States approved 87 percent of the license requests from eight countries on the Special Country List; (6) although most licensing decisions for the eight countries were consistent with U.S. export policy, 1,500 licenses were approved to end users suspected of being involved in nuclear proliferation activities; (7) the interagency licensing review process includes weaknesses that prevent some nuclear-related licenses from receiving adequate review; (8) Commerce does not always refer dual-use license applications to the Subgroup on Nuclear Export Coordination (SNEC) as required and the Department of Energy has approved many licenses without subjecting them to adequate interagency review; and (9) the United States needs to improve its criteria for selecting pre-license checks (PLC) and post-shipment verifications (PSV), methods used to perform dual-use inspections, and verification of government-to-government assurances against nuclear end uses.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce and Energy should provide periodic reports to SNEC on those nuclear-related dual-use licenses approved without interagency review.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: Commerce has changed its procedures to require that all dual-use nuclear licenses be forwarded to the Department of Energy for review. In addition, forthcoming regulations are intended to ensure that all agencies will have the ability to review any such license applications. This should, when implemented, provide access by all SNEC agencies to license information as envisioned by GAO's recommendation.

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce, Energy, State, and Defense and the Director, Arms Control and Disarmament Agency, should use licensing information contained in the periodic reports to SNEC to establish mutually acceptable guidelines for selection of licenses for interagency review.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: According to a State Department representative, SNEC does not plan to establish guidelines for selection of licenses for interagency review, primarily because forthcoming regulations will ensure that dual-use nuclear license applications will be provided to all SNEC agencies, which already have the authority to place applications on the SNEC agenda. These regulations, if issued, should satisfy the underlying intent of GAO's recommendation.

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce, Energy, State, and Defense and the Director, Arms Control and Disarmament Agency, should use licensing information contained in the periodic reports to SNEC to establish mutually acceptable guidelines for selection of licenses for interagency review.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: According to a State Department representative, SNEC does not plan to establish guidelines for selection of licenses for interagency review, primarily because forthcoming regulations will ensure that dual-use nuclear license applications will be provided to all SNEC agencies, which already have the authority to place applications on the SNEC agenda. These regulations, if issued, should satisfy the underlying intent of GAO's recommendation.

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce, Energy, State, and Defense and the Director, Arms Control and Disarmament Agency, should use licensing information contained in the periodic reports to SNEC to establish mutually acceptable guidelines for selection of licenses for interagency review.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: According to a State Department representative, SNEC does not plan to establish guidelines for selection of licenses for interagency review, primarily because forthcoming regulations will ensure that dual-use nuclear license applications will be provided to all SNEC agencies, which already have the authority to place applications on the SNEC agenda. These regulations, if issued, should satisfy the underlying intent of GAO's recommendation.

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce, Energy, State, and Defense and the Director, Arms Control and Disarmament Agency, should use licensing information contained in the periodic reports to SNEC to establish mutually acceptable guidelines for selection of licenses for interagency review.

    Agency Affected: Department of Commerce

    Status: Closed - Not Implemented

    Comments: According to a State Department representative, SNEC does not plan to establish guidelines for selection of licenses for interagency review, primarily because forthcoming regulations will ensure that dual-use nuclear license applications will be provided to all SNEC agencies, which already have the authority to place applications on the SNEC agenda. These regulations, if issued, should satisfy the underlying intent of GAO's recommendation.

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce, Energy, State, and Defense and the Director, Arms Control and Disarmament Agency, should use licensing information contained in the periodic reports to SNEC to establish mutually acceptable guidelines for selection of licenses for interagency review.

    Agency Affected: Department of Energy

    Status: Closed - Not Implemented

    Comments: According to a State Department representative, SNEC does not plan to establish guidelines for selection of licenses for interagency review, primarily because forthcoming regulations will ensure that dual-use nuclear license applications will be provided to all SNEC agencies, which already have the authority to place applications on the SNEC agenda. These regulations, if issued, should satisfy the underlying intent of GAO's recommendation.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should focus selection of PLC and PSV by developing lists that: (1) prioritize the most technically sensitive nuclear-related dual use items; and (2) identify end users whose proliferation credentials are already established.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: DOE has provided Commerce a list of items that should receive priority for PLCs and PSVs. This list is being forwarded to those employees screening licenses to assist in selection of candidates for the checks. Updates to the end-user watch list will be made as appropriate.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should focus selection of PLC and PSV by developing lists that: (1) prioritize the most technically sensitive nuclear-related dual use items; and (2) identify end users whose proliferation credentials are already established.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: DOE has provided Commerce a list of items that should receive priority for PLC and PSV. This list is being forwarded to those employees screening licenses to assist in selection of candidates for the checks. Updates to the end-user watch list will be made as appropriate.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should develop specific guidance for U.S. embassy officials on how to conduct inspections for nuclear-related dual use items and require nuclear nonproliferation training for those conducting PLC and PSV.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: Commerce is developing an update to its check guidance to include specific guidance on conducting nuclear-related PLC and PSV, and Commerce officials are training embassy staff on proliferation controls.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should develop specific guidance for U.S. embassy officials on how to conduct inspections for nuclear-related dual use items and require nuclear nonproliferation training for those conducting PLC and PSV.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: Commerce is developing an update to its check guidance to include specific guidance on conducting nuclear-related PLC and PSV, and Commerce officials are training embassy staff on proliferation controls.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should direct that requests for PLC and PSV explain why the inspection is being requested and highlight special licensing conditions.

    Agency Affected: United States Arms Control and Disarmament Agency

    Status: Closed - Implemented

    Comments: Commerce has provided instructions to all pertinent units to include the reason for a PLC/PSV request in the cable to the post. Instructions have also been issued directing that any PSV requests include all licensing conditions.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should direct that requests for PLC and PSV explain why the inspection is being requested and highlight special licensing conditions.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: Commerce has provided instructions to all pertinent units to include the reason for a PLC/PSV request in the cable to the post. Instructions have also been issued directing that any PSV requests include all licensing conditions.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should eliminate U.S. reliance on foreign service nationals to perform nuclear-related dual-use PLC and PSV.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: Commerce issued instructions in April 1995 stipulating that foreign service nationals are not to conduct checks on proliferation-controlled items when their country is the focus of these controls.

    Recommendation: To enhance the effectiveness of PLC and PSV for nuclear-related dual-use exports, the Secretary of Commerce, in consultation with the Secretary of Energy, should eliminate U.S. reliance on foreign service nationals to perform nuclear-related dual-use PLC and PSV.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: Commerce issued instructions in April 1995 stipulating that foreign service nationals are not to conduct checks on proliferation-controlled items when their country is the focus of these controls.

    Recommendation: To ensure that the most sensitive licenses are referred to SNEC, the Secretaries of Commerce and Energy should provide periodic reports to SNEC on those nuclear-related dual-use licenses approved without interagency review.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: Commerce has changed its procedures to require that all dual-use nuclear licenses be forwarded to the Department of Energy for review. In addition, forthcoming regulations are intended to ensure that all agencies will have the ability to review any such license applications. This should, when implemented, provide access by all SNEC agencies to license information as envisioned by GAO's recommendation.

    Recommendation: The Secretary of Energy should reach an agreement with the Secretary of Commerce on guidelines for referral of licenses involving end users on the Nuclear Proliferation Watch List.

    Agency Affected: Department of Energy

    Status: Closed - Implemented

    Comments: The Departments of Commerce and Energy reached agreement in June 1994 on guidelines for referral of dual-use nuclear-related items.

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