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Defense Exports: Reporting on Exported Articles and Services Needs to Be Improved

GAO-10-952 Published: Sep 21, 2010. Publicly Released: Sep 21, 2010.
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The U.S. government exports billions of dollars of defense articles and services annually to foreign entities, generally through direct commercial sales (DCS) from U.S. companies under licenses issued by the State Department (State) or through the Department of Defense (DOD) Foreign Military Sales (FMS) program. GAO has previously reported on weaknesses in the export control system. As requested, GAO (1) identified the magnitude and nature of defense articles and services exported and (2) assessed information currently reported on defense exports and any gaps and limitations in defense export data. To conduct this work, GAO analyzed export data from DOD for FMS and the Department of Commerce's U.S. Census Bureau (Census) for DCS for 2005 through 2009; reviewed relevant laws and regulations; assessed State and DOD reports on defense exports; reviewed agency data systems documentation; and interviewed officials from State, DOD, Homeland Security, and Census.


Matter for Congressional Consideration

Matter Status Comments
In order to obtain a more complete picture of defense exports, Congress may wish to consider whether it needs specific data on exported defense services similar to what it currently receives on defense articles and, if so, request that State provide such data as appropriate.
Closed – Implemented
The information from GAO's report was used to draft provisions introduced in the Security Assistance Act of 2012 and the Foreign Relations Authorization Act for Fiscal Year 2013, that proposed amending the reporting requirement based GAO's recommendations to State. However, these provisions were not enacted. Thus, Congress considered whether it needed specific data as we recommended, but the because amendments were not enacted, State has not been required to provide additional information.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of State To improve transparency and consistency of reporting on defense exports required by the Foreign Assistance Act, the Secretary of State should direct the Directorate of Defense Trade Controls to coordinate with the Departments of Defense and Commerce to identify and obtain relevant defense export information under existing agency data systems and provide a consolidated report to Congress on DCS and FMS that (1) specifies articles exported using a common category system; (2) separates U.S. government end users from foreign entities; (3) separates permanent and temporary exports; (4) incorporates all defense exports, including U.S. government-funded programs; and (5) is made public through the Internet.
Closed – Not Implemented
Although State has made several changes to the way information is presented in their 655 Reports, none of the changes are responsive to our recommendations, and because State has not responded to our inquiries, we are closing the recommendation as not implemented.

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Data collectionData integrityExportingForeign military salesForeign military sales policiesForeign trade agreementsForeign trade policiesInternational relationsInternational tradeInternational trade regulationMilitary aircraftMilitary materielMilitary systems analysisReporting requirements