Status of End-Use Monitoring of Dual-Use Exports as of August 2019
GAO-19-656R: Published: Aug 12, 2019. Publicly Released: Aug 12, 2019.
The mission of the Export-Import Bank of the United States is to support U.S. jobs by facilitating the export of U.S. goods and services. It does this through loans, loan guarantees, and insurance.
The bank’s charter generally prohibits supporting sales of defense items. However, it may facilitate export of nonlethal “dual-use” items that have commercial and military application—construction equipment for a foreign military, for example.
We monitored fiscal year 2017 dual-use projects and looked for new projects in 2018. We found 3 projects in 2017 that were monitored as required or completed. We found no new projects in 2018.
[Text revised to clarify dual-use items.]
What GAO Found
As of August 2019, the Export-Import Bank of the United States (EXIM) monitored the end use of its dual-use export transactions that it continued to finance in fiscal year 2017, as summarized below.
- Two satellites for the government of Mexico. A fixed service satellite was launched in December 2012 and became operational in February 2013, and a mobile service satellite was launched in October 2015 and became operational in December 2015. For 2019, EXIM received all documents from the government of Mexico on time and subsequently determined that Mexico was in compliance with the bank’s dual-use policy.
- Construction equipment for the government of Cameroon. The government of Cameroon made its final payment under the credit agreement on July 28, 2018, ending the bank’s end-use monitoring responsibilities for this transaction, according to EXIM. An EXIM official confirmed that no additional reports or certifications were required in 2019.
- Satellite for French company Eutelsat. Eutelsat made its final payment on June 29, 2017, ending the bank’s end-use monitoring responsibilities for this transaction.
EXIM did not finance any new exports under its dual-use authority in fiscal year 2018, according to EXIM authorizations data and EXIM officials.
Why GAO Did This Study
EXIM’s mission is to support the export of U.S. goods and services overseas through loans, loan guarantees, and insurance, thereby supporting U.S. jobs. Since 1994, EXIM has had authority to facilitate the financing of U.S. exports of defense articles and services, provided that it determines these items are nonlethal and primarily meant for civilian end use. Included in the same act was a provision for GAO to report annually on the end uses of dual-use exports financed by EXIM during the second preceding fiscal year.
This report (1) examines the status of EXIM’s monitoring of dual-use exports that it continued to finance in fiscal year 2017, as of August 2019; and (2) identifies any new dual-use exports that EXIM financed in fiscal year 2018.
What GAO Recommends
GAO is not making any recommendations in this report.
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