Export Controls:

Changes in Controls Applied to the Export of High Performance Computers

T-NSIAD-98-250: Published: Sep 16, 1998. Publicly Released: Sep 16, 1998.

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GAO discussed export controls on high performance computers (HPC), focusing on: (1) the basis for the executive branch's revision of HPC export controls; and (2) changes in licensing activities and export enforcement requirements resulting from the revision.

GAO noted that: (1) one focus of its work was to assess whether the empirical evidence presented in the Stanford University study--a key element in the decision to revise HPC export controls--supports its conclusions; (2) GAO's analysis showed that it had two significant limitations: (a) the study lacked empirical evidence or analysis to support its conclusion that HPCs were uncontrollable based on worldwide availability and insufficient resources to control them; and (b) the study did not assess the capabilities of countries of concern to use HPCs for military and other national security applications; (3) the study's principal author said that U.S. government data were insufficient to make such an assessment, and the study recommended that better data be gathered so that such an analysis could be done in the future; (4) except for nuclear weapons, the executive branch has not identified how and at what performance levels specific countries of concern may use HPCs for national defense applications--an important factor in assessing risks of HPC sales; (5) the 1996 revision to HPC export controls had three key consequences: (a) the revisions decreased the number of license applications from 459 in fiscal year (FY) 1995 to 125 in 1997 and of approved export license applications for HPCs from 395 in FY 1995 to 42 in 1997; (b) the revision shifted some of the government's end use screening responsibilities from the government to the computer industry; and (c) the regulation required HPC manufacturers to keep records of the end users of all their HPC exports over 2,000 millions of theoretical operations per second (MTOPS); (6) responsibility for postshipment verification (PSV) checks remained with the government, but information on these exports reported to the government has been incomplete; (7) PSVs for computers generally have been of reduced value because of how this process is implemented; (8) GAO found that subsidiaries of U.S. computer manufacturers dominate the overseas HPC market and they must comply with U.S. controls; (9) Russia, China, and India have developed HPCs, but their capabilities are believed to be limited; and (10) GAO's analysis suggests that HPCs over 2,000 MTOPS are not readily available to tier 3 countries from foreign sources without restriction.

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