Export Controls:

Statutory Reporting Requirements for Computers Not Fully Addressed

NSIAD-00-45: Published: Nov 5, 1999. Publicly Released: Nov 18, 1999.

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Harold J. Johnson, Jr
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Pursuant to a congressional request, GAO reviewed the executive branch's report on high performance computer export controls, focusing on: (1) whether the July 1999 report to Congress satisfied the requirements of the Fiscal Year 1998 National Defense Authorization Act; (2) whether the report was factually supported; and (3) how many high performance computers at the current control levels have been approved for export to certain sensitive countries.

GAO noted that: (1) the President's July 1999 report to Congress did not fully satisfy the reporting requirements of section 1211 of the Fiscal Year 1998 Defense Authorization Act; (2) the report did address two of the three requirements--to determine the availability of high performance computers in foreign countries and the potential for use of the newly decontrolled computers for significant military use; (3) it did not, however, assess the impact of such military use on the national security interests of the United States; (4) instead, the report discussed the economic importance of a strong U.S. computer industry to U.S. national security; (5) a 1998 Department of Defense- and Commerce-sponsored study and data from the U.S. computer industry generally provided evidence to support the report's statements that the capabilities of high performance computers and their related components are increasing; (6) however, the President's report implied that there is a greater level of foreign supply of high performance computers than is supported by evidence in the Commerce- and Defense-sponsored study; (7) the study found that U.S. companies and their international business partners overwhelmingly dominate the international market for most high performance computers; (8) further, GAO was unable to assess the justification for the new export control levels because the President's report did not define key terms or explain how they were applied; (9) from November 1997 through August 1999, the United States approved for export 4,092 high performance computers, as defined under the current export control levels, to certain sensitive countries such as China and Russia; (10) China, by far the largest importer of high performance computers, received 1,924 of these approvals; (11) 141 of the computers going to certain sensitive countries, or 3.4 percent of the total, required a license; and (12) the requirement for a license is an indication that the end-use or -user might be connected to the military or a proliferation related end-use or -user.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: While the Department of Commerce provided a statement of actions taken in response to this recommendation on February 16, 2000, the Department failed to provide both of the definitions asked for in the recommendation. Further, the definition for "controllability" provided by the Department lacked the specificity called for in the recommendation that would clearly explain how these terms are applied in setting the proposed control levels. The actions are inadequate to comply with the recommendation and are therefore not fully responsive. As stated in their letter, the Department considers action on this recommendation closed. The recommendation is therefore closed.

    Recommendation: To clarify the basis for future changes to the export control levels for high performance computers, the Secretary of Commerce should develop specific criteria defining both "widely available" and "controllability."

    Agency Affected: Department of Commerce


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