Export-Import Bank:

Dual-Use Export Monitoring Guidance Revised and Implemented

GAO-15-611: Published: Jun 25, 2015. Publicly Released: Jun 25, 2015.

Additional Materials:


Kimberly Gianopoulos
(202) 512-8612


Office of Public Affairs
(202) 512-4800

What GAO Found

The Export-Import Bank of the United States (Ex-Im) addressed weaknesses in monitoring the end use of exported “dual-use” items by revising and implementing its guidance for monitoring these items, as GAO recommended in August 2014. Dual-use items are defense articles and services that Ex-Im has determined are nonlethal and primarily meant for civilian use. Specifically, Ex-Im revised its 1997 memorandum on the implementation of its dual-use policy for military applications and disseminated it to relevant staff on March 11, 2015. The updated memorandum clarified the responsibilities of Ex-Im staff for monitoring end use, and GAO found that bank staff have now taken the following steps:

  • notified buyers of end-use documentation coming due; staff will alert buyers and the bank's Office of General Counsel if there are any overdue documents so that the bank can respond as appropriate;
  • documented their dual-use monitoring activities and decisions , including any decisions that modify reporting requirements in the financing agreements, such as the requirements related to progress and technical operating reports; and
  • made determinations , in what is to be an annual process, as to whether the information received was adequate to demonstrate that the transaction complied or failed to comply with the bank's dual-use policy.

As a result, Ex-Im has received in a timely manner all documents required since GAO's last report, issued in August 2014.

Documentation Received by Ex-Im for Fiscal Year 2012 Dual-Use Exports as of June 15, 2015

Documentation Received by Ex-Im for Fiscal Year 2012 Dual-Use Exports as of June 15, 2015

Ex-Im did not finance any new exports under its dual-use authority in fiscal year 2014, according to Ex-Im authorizations data and Ex-Im officials.

Why GAO Did This Study

Since 1994, Ex-Im has had the authority to facilitate the financing of dual-use exports, which include construction equipment used by foreign militaries to build roads. After a 9-year hiatus, Ex-Im financed three dual-use exports in fiscal year 2012, accounting for $1.03 billion, or just under 3 percent of Ex-Im's $35.8 billion financing for that year. The Consolidated and Further Continuing Appropriations Act, 2015, extends a provision for GAO to report annually on the end uses of dual-use exports financed by Ex-Im during the second preceding fiscal year.

In August 2014, GAO reported that monitoring-related documents from borrowers required by the financing agreements were missing or late and that Ex-Im's dual-use monitoring policy did not specify what actions Ex-Im officials should take if the bank did not receive the required documents. GAO recommended that Ex-Im establish steps staff should take in cases where borrowers do not submit required end- use documentation within the time frames specified in their financing agreements and ensure that these efforts are well documented. Ex-Im agreed with GAO's recommendation and revised its guidance.

This report (1) examines how Ex-Im addressed weaknesses in monitoring the end uses of the dual-use exports it finances and (2) identifies what dual-use exports, if any, Ex-Im reported it financed in fiscal year 2014. GAO reviewed Ex-Im documents and interviewed Ex-Im officials.

For more information, contact Kimberly Gianopoulos at (202) 512-8612 or GianopoulosK@gao.gov.

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