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Military Offsets: Regulations Needed to Implement Prohibition on Incentive Payments

NSIAD-97-189 Published: Aug 12, 1997. Publicly Released: Aug 12, 1997.
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Highlights

Pursuant to a congressional request, GAO reviewed the Department of State's implementation of the Feingold Amendment, a statutory prohibition governing incentive payments on offset programs, focusing on the: (1) status of State's efforts to issue implementing regulations; and (2) need for such regulations.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of State Because the Under Secretary of State for Arms Control and International Security Affairs has not issued needed regulations for implementing the Feingold Amendment, the Secretary of State should establish a specific time frame for the Under Secretary to develop the regulations to implement the Amendment. At a minimum, these regulations should: (1) clarify the term "incentive payments;" (2) define the terms "owned" and "controlled" as used to define a U.S. person; and (3) spell out how State intends to enforce the amendment and impose and administer penalties for violations.
Closed – Not Implemented
The Department of State believes that the Feingold Amendment is being implemented in an appropriate manner under existing State and Department of Defense procedures and, therefore, does not agree that implementing regulations are needed. Though State reported that it cleared its position with knowledgeable offices within the Department of Defense, a Director within the Office of the Under Secretary of Defense for Acquisition and Technology agreed with GAO that regulations were needed and that State ought to develop them.

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Topics

International Affairs
Department of Defense contractorsExport regulationForeign military salesForeign military sales agreementsForeign military sales policiesInternational trade regulationInternational trade restrictionDefense contractorsExport controlsExports