Pursuant to a legislative requirement, GAO reviewed the end uses of dual-use exports financed by the Export-Import Bank (Eximbank), focusing on: (1) the nature and extent of the Eximbank's financing of dual-use exports; (2) the actions the Eximbank has taken to help ensure that the dual-use exports it finances are nonlethal and will be primarily used for civilian purposes; and (3) whether the actions provide a sound basis for determining that the dual-use exports it finances are nonlethal and will be primarily used for civilian purposes.

GAO noted that: (1) the Eximbank's support for dual-use exports has increased during the last 3 fiscal years (FY) but has remained well under the annual 10-percent cap established by law; (2) as of June 1997, the Eximbank had made commitments totalling $226.1 million in loans and loan guarantees to support 10 dual-use exports to four countries; (3) however, only one of the dual-use exports--involving aircraft parts and services to Indonesia--has actually been delivered overseas; (4) according to the Eximbank, 1 of the 10 exports will be used by a civil aviation authority; the other nine exports will be used by military organizations for primarily civilian purposes; (5) the Eximbank has established a process to help ensure that it can determine whether the dual-use exports it supports are nonlethal and primarily used for civilian purposes as required by law; (6) for example, this process calls for Eximbank to: (a) review and approve applications for financing dual-use exports; (b) monitor the actual end use of these exports overseas; (c) obtain the views of other federal entities, such as the Departments of State, Treasury, and Commerce, for the purpose of approving the financing of dual-use exports and monitoring their end use; and (d) take appropriate corrective actions if the Eximbank discovers that the dual-use exports have been misused; (7) the Eximbank is using electronic data bases to assist in tracking information on dual-use exports for monitoring purposes; (8) GAO's review indicated that the Eximbank process aimed at financing and monitoring dual-use exports, as currently implemented, should provide a sound basis for determining whether these exports are nonlethal and primarily used for civilian purposes; (9) in the spring of 1997, for the one dual-use export that has taken place, Eximbank officials, assisted by other U.S. government officials, were able to verify that it was being primarily used for civilian purposes; and (10) the State Department, in response to GAO's request, obtained information from its pertinent missions overseas confirming that the other nine dual-use exports financed by the Eximbank were nonlethal and intended for primarily civilian use.