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Highlights

Defense (DOD) activities, U.S. defense companies may export defense items. The Department of State (State) controls such exports through its International Traffic in Arms Regulations (ITAR), which provides for some exemptions from export licensing requirements. For a limited number of these exemptions, DOD may confirm--or certify--that the export activity qualifies for the use of an ITAR exemption. As part of an initiative, DOD is to make more effective use of ITAR exemptions, but little is known about the extent to which this is done. This report (1) describes DOD's approach for certifying exporters' exemption use in support of defense activities, (2) summarizes the use of selected DOD-certified exemptions, and (3) examines State and DOD's oversight of exemption use. GAO's findings are based on its review of export control law, regulation, and DOD guidelines; interviews with State, DOD, and defense industry officials; and a GAO-developed database of DOD certification letters.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To ensure a common understanding of the use of ITAR exemptions available for DOD's activities, the Secretary of State should direct the Deputy Assistant Secretary for the Directorate of Defense Trade Controls and the Secretary of Defense should direct the Director of the Defense Technology Security Administration to establish a work group to define and resolve disagreements on exemption use and guidelines and to document decisions reached. If the work group cannot reach agreement before the existing DOD exemption guidelines expire, then it should elevate the matter for resolution within its appropriate chain of command. If needed, the Secretary of State should direct the Deputy Assistant Secretary for the Directorate of Defense Trade Controls to revise the ITAR to incorporate any necessary changes. Once agreement is reached, the Secretary of Defense, with concurrence from the Secretary of State, should direct that the guidelines be revised and made applicable to all DOD components.
Closed - Not Implemented
As of June 2012, DOD advised us that they cannot make changes to address this recommendation until State revises the relevant ITAR sections. However, State does not plan to do so until after it finishes revising the control list under ongoing export control reforms, and at that time, it will determine whether changes to the ITAR exemptions are still needed. Given that this may take several more years, we are closing this recommendation.
Department of Defense The Secretary of Defense should direct the Director of the Defense Technology Security Administration to ensure that the revised exemption certification guidelines provide the appropriate mechanisms for overseeing the exemption certification process, such as the collection of data from all DOD components on exemptions they certified.
Closed - Not Implemented
As of June 2012, DOD advised us that they cannot make changes to address this recommendation until State revises the relevant ITAR sections. However, State does not plan to do so until after it finishes revising the control list under ongoing export control reforms, and at that time, it will determine whether changes to the ITAR exemptions are still needed. Given that this may take several more years, we are closing this recommendation.
Department of State To ensure a common understanding of the use of ITAR exemptions available for DOD's activities, the Secretary of State should direct the Deputy Assistant Secretary for the Directorate of Defense Trade Controls and the Secretary of Defense should direct the Director of the Defense Technology Security Administration to establish a work group to define and resolve disagreements on exemption use and guidelines and to document decisions reached. If the work group cannot reach agreement before the existing DOD exemption guidelines expire, then it should elevate the matter for resolution within its appropriate chain of command. If needed, the Secretary of State should direct the Deputy Assistant Secretary for the Directorate of Defense Trade Controls to revise the ITAR to incorporate any necessary changes. Once agreement is reached, the Secretary of Defense, with concurrence from the Secretary of State, should direct that the guidelines be revised and made applicable to all DOD components.
Closed - Not Implemented
As of June 2012, State has indicated that it does not plan to make any changes to the ITAR to address exemption until after it finishes revising the control list under ongoing export control reforms, in part because such changes may not be needed. Given that this may take several more years, we are closing this recommendation.

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