Export Controls: License Screening and Compliance Procedures Need Strengthening
NSIAD-94-178
Published: Jun 14, 1994. Publicly Released: Jun 15, 1994.
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Highlights
Pursuant to a congressional request, GAO reviewed export control activities at the Departments of State and Commerce, focusing on: (1) whether these agencies effectively use automated systems to screen license applications; (2) how well these agencies cooperate with each other and the U.S. Customs Service; (3) whether State is monitoring reexports and technology transfers by companies involved in munitions manufacturing or distribution agreements; and (4) how State ensures that munitions licenses are issued only to U.S. persons or foreign governments as the law requires.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of State | The Secretary of State should direct the Office of Defense Trade Controls to formally assign watchlist data-entry responsibilities among staff and establish procedures and guidance to ensure data entries are complete and up-to-date. |
DTC has formally assigned responsibility for monitoring the watchlist and receipt of information from other agencies to a Compliance Division employee. It has also established procedures and guidance on data entries into the watchlist.
|
| Department of State | The Secretary of State should direct the Office of Defense Trade Controls to share the relevant portion of State's watchlist with Commerce on a regular basis and incorporate the relevant portion of Commerce's watchlist into State's watchlist. |
State and Commerce have begun sharing their watchlist information.
|
| Department of State | The Secretary of State should direct the Office of Defense Trade Controls to redesign State's screening system to: (1) create an automated license tracking system that will document compliance division review for licenses involving watchlist parties; (2) automatically inform the licensing division if any party on a license is on the watchlist; and (3) prevent a license from being issued until compliance staff have completed their review. |
State has made changes to its automated screening system in accordance with the recommendation. However, State wants to evaluate the impact of these changes after a trial period. If it is found that the changes result in significant delays in license processing, State would search for alternative means to accomplish the intent of the recommendation.
|
| Department of State | The Secretary of State should direct the Office of Defense Trade Controls to assign oversight and monitoring responsibilities for the manufacturing and distribution agreements among the staff and ensure that the files on these agreements are updated. |
According to the Deputy Director of DTC, DTC has been updating its agreements files for over a year and is continuing to do so.
|
| Department of State | The Secretary of State should direct the Office of Defense Trade Controls to either require documentary proof instead of a certification of U.S. person status the first time an applicant applies for a license, or randomly verify with documentation the applicants' certifications of U.S. person status. |
While the recommendation is valid, DTC deems the recommended procedures to be too burdensome. Therefore, it will continue to rely on applicants' self-certification to fulfill the U.S. person status requirement.
|
| Department of Commerce | The Secretary of Commerce should direct the Bureau of Export Administration to formally assign watchlist data-entry responsibilities among the staff and establish procedures and guidance to ensure data entries are complete and up-to-date. |
BXA has formally assigned responsibility for entering the DOJ list of names to its watchlist in October 1993. It has also updated its data entry procedures to ensure accuracy and currency.
|
| Department of Commerce | The Secretary of Commerce should direct the Bureau of Export Administration to share the relevant portion of Commerce's watchlist with State on a regular basis and incorporate the relevant portion of State's watchlist into Commerce's watchlist. |
State and Commerce have begun sharing their watchlist information.
|
| Department of Commerce | The Secretary of Commerce should direct the Bureau of Export Administration to establish and implement adequate procedures to ensure that multiple identification numbers are not assigned to the same party and eliminate existing multiple identification numbers from the system. |
BXA has initiated actions to enable supervisors to quickly identify difficulties in adding new identification numbers, provide selected individuals with the ability to delete multiple identification numbers that were created in error, and alert employees who add names to the watchlist of the possibility of more than one identification number in the system for a particular entity.
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| Department of Commerce | The Secretary of Commerce should direct the Bureau of Export Administration, when pre-licensing checks are conducted because of information from intelligence sources but result in no derogatory information, to routinely consult with the intelligence sources to: (1) assess the merits of the intelligence information; and (2) determine whether the information could be sanitized to permit its use in denying a license application. |
BXA has begun to inform the intelligence community whenever a pre-license or post-shipment check does not corroborate the intelligence information on a party. If Commerce deems the intelligence information sufficient to deny a license application, it would also consult with the appropriate intelligence agency and request for a sanitized version of the original information.
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