The Export-Import Bank helps finance U.S. companies' exports. According to its policy, the Bank generally cannot finance defense goods and services unless they are nonlethal and primarily used for civilian rather than military purposes (i.e., dual use). The Bank monitors these dual-use exports to ensure that they are used mostly for civilian purposes, and we report annually on the Bank's monitoring.
As in past years, the Bank determined that the dual-use exports it continued to finance complied with its policy. It did not finance any new dual-use exports in fiscal year 2017.
Photo of Export-Import Bank headquarters
What GAO Found
The Export-Import Bank (EXIM) monitored the end use of two dual-use export transactions--with the government of Mexico, and the government of Cameroon--that it continued to finance in fiscal year 2016. As of August 2018, EXIM received all documents from the government of Mexico on time and made a timely determination that Mexico was in compliance with the bank's dual-use policy, but did not clearly document this determination until 3 months later, on July 26, 2018. The bank received the government of Cameroon's annual end-use certification several days late and made a timely dual-use compliance determination for the Cameroon construction equipment. Regarding a third transaction that the bank continued to finance in 2016, Eutelsat paid off its loan in June 2017, almost 4 and a half years early, which, according to EXIM officials, ended the bank's end-use monitoring of the transaction.
EXIM did not finance any new exports under its dual-use authority in fiscal year 2017, according to EXIM authorizations data and EXIM officials. According to EXIM officials, dual-use transactions require a quorum of board members for approval, and EXIM's board has not had a quorum since late 2015, precluding the bank from financing such projects.
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 2016, as of August 2018; and (2) identifies any new dual-use exports that EXIM financed in fiscal year 2017.
GAO is not making any recommendations in this report.