Gao 07 265 Export Controls

GAO-07-265 Export Controls: Challenges Exist in Enforcement of an Inherently Complex System

The U.S. Gov't. controls the export of defense-related items to minimize the security risk such exports may pose. The U.S. export control system is primarily divided between two regulatory regimes, one managed by the State Dept. for defense items & another managed by the Commerce Dept. for dual-use items that have both mil. & commercial applications. Determining which dep't. has jurisdiction over an item & how that item is controlled is fundamental to the U.S. export control system. This report assesses how gov't. departments assist co's. in determining the proper controls for defense-related items, specifically: (1) how Commerce implements the commodity classification process; & (2) how State implements the commodity jurisdiction process.

In controlling the transfer of weapons and related technologies overseas, the U.S. gov¿t. must limit the possibility of sensitive items falling into the wrong hands while allowing legitimate trade to occur. The export control system (ECS) is intended to balance multiple U.S. interests. The ECS is managed by the State Dept., which regulates arms exports, and the Commerce Dept., which regulates dual-use exports that have military and civilian applications. Arms exports require licenses, while dual-use exports do not require licenses. This testimony focuses on export licensing inefficiencies, poor interagency coordination, and limits in State¿s and Commerce's ability to provide a sound basis for changes to the system. Illustrations.