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entitled 'Ex-Im Bank: The U.S. Export-Import Bank's Financing of Dual-
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United States Government Accountability Office: 

Washington, DC 20548: 

September 27, 2007: 

Congressional Committees: 

Subject: Ex-Im Bank: The U.S. Export-Import Bank's Financing of Dual- 
Use Exports: 

Since October 1994, the U.S. Export-Import Bank (Ex-Im) has had 
statutory authority[Footnote 1] to provide loans, guarantees, and 
insurance to help finance U.S. exports of dual-use (military and 
civilian) defense articles and services, provided that it determines 
these items are nonlethal and meant primarily for civilian 
use.[Footnote 2] These dual-use exports include such items as vehicles 
that are used by the military for civilian or humanitarian purposes. 
The legislation also requires us to report annually on the end uses of 
the dual-use exports financed by Ex-Im during the second preceding 
fiscal year--which, for the purposes of this letter, corresponds to 
2005. Since we last issued a letter in 2001 reporting on Ex-Im financed 
dual-use exports, the enclosure to this letter provides detailed 
information regarding the dual-use exports financed during fiscal years 
2002 through 2004.[Footnote 3] 

Ex-Im Did Not Finance Dual-Use Exports in 2005: 

In fiscal year 2005, Ex-Im did not finance any dual-use export 
projects. According to Ex-Im officials, dual-use items were last 
financed in 2002, and Ex-Im has not considered any requests for dual- 
use financing since then. The officials attributed the program's 
decline to a shift in Ex-Im's portfolio from transactions with 
governments to private sector transactions. 

Agency Comments: 

We provided a copy of the draft version of this letter to Ex-Im's 
Engineering and Environment Division, which is responsible for 
monitoring end user compliance with dual-use requirements. The agency 
had no comments. 

Scope and Methodology: 

To determine the extent of financing and end uses of the dual-use 
exports financed from fiscal years 2002 to the present, we reviewed Ex- 
Im documents and interviewed Ex-Im officials who monitor end user 
compliance with dual-use requirements, including the Vice President of 
the Engineering and Environment Division. 

We conducted our work from July 2007 through September 2007 in 
accordance with generally accepted government auditing standards. 

We are sending copies of this report to interested congressional 
committees. We will also send copies to the President and Chairman of 
Ex-Im, the Secretary of Defense, and the Secretary of State. We will 
also make copies available to others upon request. In addition, this 
report will be available at no charge on the GAO Web site at 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-4347 or The key contributors to 
this report were Anthony Moran, Assistant Director; Leah DeWolf; Karen 
Deans; and Ernie Jackson. 

Signed by: 

Loren Yager: 
Director, International Affairs and Trade: 


List of Recipients: 

The Honorable Christopher J. Dodd: 
The Honorable Richard C. Shelby: 
Ranking Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate: 

The Honorable Robert C. Byrd: 
The Honorable Thad Cochran: 
Ranking Member: 
Committee on Appropriations: 
United States Senate: 

The Honorable Barney Frank: 
The Honorable Spencer Bachus: 
Ranking Member: 
Committee on Financial Services: 
House of Representatives: 

The Honorable David R. Obey: 
The Honorable Jerry Lewis: 
Ranking Member: 
Committee on Appropriations: 
House of Representatives: 

Dual-Use Exports Financed by Ex-Im for Fiscal Years 2002-2004: 

In fiscal year 2002, Ex-Im financed four dual-use export projects for a 
total of $24.6 million and processed an additional project that expired 
before it was financed.[Footnote 4] Ex-Im officials provided us with 
documentation for each of the 2002 projects showing that they monitored 
them to ensure their end uses were for civilian and humanitarian 
purposes. In fiscal years 2003 and 2004, Ex-Im did not finance any dual-
use projects. (See table 1.) 

Table 1: Dual-Use Exports Financed by U.S. Export-Import Bank, Fiscal 
Years 2002-2004: 

Dollars in millions. 

Fiscal year: 2002; 
Recipient country: Venezuela; 
Project: Refurbish aircraft used in support of civilian activities, 
such as assistance in the case of a natural disaster; 
End user: Venezuelan Air Force; 
Export value: $0[A]; 
Amount financed: $0. 

Fiscal year: 2002; 
Recipient country: Venezuela; 
Project: Aircraft repair parts and equipment for aircraft used for 
civilian and humanitarian missions; 
End user: Venezuelan Air Force; 
Export value: 8.5; 
Amount financed: 7.2. 

Fiscal year: 2002; 
Recipient country: Venezuela; 
Project: Engine and propeller repair services for aircraft used for 
civilian and humanitarian missions; 
End user: Venezuelan Air Force; 
Export value: 6; 
Amount financed: 5.1. 

Fiscal year: 2002; 
Recipient country: Venezuela; 
Project: Construction equipment (such as road construction maintenance 
equipment) to be used in support of road construction projects; 
End user: Venezuelan Armed Forces; 
Export value: 3.3; 
Amount financed: 2.8. 

Fiscal year: 2002; 
Recipient country: Dominican Republic; 
Project: Vehicles, helicopters, and training to assist the Dominican 
Republic in implementing a humanitarian relief program to provide civil 
services and assistance for natural disasters; 
End user: Secretary of State of the Armed Forces; 
Export value: 10.4; 
Amount financed: 9.5. 

Total for 2002; 
Export value: $28.2; 
Amount financed: $24.6. 

2003: Ex-Im did not finance any dual-use projects; 
Export value: 0; 
Amount financed: 0. 

2004: Ex-Im did not finance any dual-use projects; 
Export value: 0; 
Amount financed: 0. 

Total 2002-2004; 
Export value: 28.2; 
Export value: 24.6. 

Source: GAO presentation of Ex-Im data. 

[A] As noted above, this project expired before it was financed. 

[End of table] 


[1] The Export-Import Bank Reauthorization Act of 2006 (P.L. 109-438, 
December 20, 2006) extended through September 1, 2011, provisions in 
1994 legislation (P.L. 103-428, October 31, 1994) authorizing Ex-Im to 
finance certain dual-use exports. Under this legislation, Ex-Im can use 
up to 10 percent of its total annual loan, guarantee, and insurance 
authority to support the sale of these dual-use exports. 

[2] According to Ex-Im officials, a dual-use export is eligible for 
financing if convincing evidence exists that the export is nonlethal in 
nature, the export will be used mainly for civilian activities, and the 
buyer or end user provides certification to that effect. 

[3] GAO, Export-Import Bank: The U.S. Export-Import Bank's Financing of 
Dual-Use Exports, GAO-01-1110R (Washington, D.C.), August 31, 2001. 

[4] In fiscal year 2002, Ex-Im's 10 percent cap on dual-use financing 
was $1.04 billion.

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