Analysis of Data for Exports Regulated by the Department of Commerce

GAO-07-197R: Published: Nov 13, 2006. Publicly Released: Nov 17, 2006.

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Ann Marie Calvaresi Barr
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Office of Public Affairs
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In light of the September 2001 terror attacks, we were asked to examine the Department of Commerce's Bureau of Industry and Security's (BIS) dual-use export control system. We reported our findings in a June 26, 2006, report, saying that BIS has not systematically evaluated the overall effectiveness and efficiency of the dual-use export control system. Specifically, we reported that BIS has not conducted comprehensive analyses of available data about items that have actually been exported from the United States. We made several recommendations in that report, including that Commerce should use the available data to evaluate the system's effectiveness. Because we had difficulty obtaining data on actual exports from Commerce, we were unable to provide specific details about these data in time for our June 2006 report. We have since obtained the data and are now transmitting to Congress our analysis of the data for 2004 and 2005.

The data we obtained provide an overall picture of the dollar value of commodities subject to Commerce regulations and of the countries receiving these exports. Most items do not require government review and approval in the form of a license prior to export. We found that less than 1 percent of exports subject to Commerce regulations were licensed in 2005. The dollar value of unlicensed exports from the United States in 2005 was about $624 billion, while the value of licensed exports was about $1.2 billion. BIS regulates the export of dual-use items that have both commercial and military applications, as well as purely commercial items. These items are either specifically identified on a control list or fall into a catch-all category referred to as EAR99. We analyzed the data according to recipient country, type of commodity, and dollar value. Items identified on the control list, whether licensed or unlicensed, were generally exported to Asian countries, such as China, Taiwan, and Singapore, and to European countries, such as France and the United Kingdom. Aircraft, computers, equipment to manufacture semiconductors, telecommunications equipment, and chemicals were some of the top commodities in terms of highest dollar value for exports identified on the control list. Turning to EAR99 items, Mexico was the largest recipient of unlicensed exports in terms of dollar value, while Cuba and Syria--embargoed countries--were the top two recipients of licensed exports. Some of the top commodities in terms of dollar value for unlicensed EAR99 exports were industrial machinery, chemicals, computers, and semiconductors, while agricultural commodities dominated licensed EAR99 exports. The insight we gained from analyzing these data further supports our prior recommendation to Commerce that it use available data to evaluate the effectiveness of its export control system. The data could aid in determining the economic impact of current regulations and in evaluating whether exporters are complying with regulations. BIS officials told us they periodically use portions of the data for enforcement activities but currently do not use the data to evaluate the system's effectiveness.

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