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GAO Reports on U.S. Arms Export Discrepancies
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October 2002

By Wade Boese

U.S. processes for controlling arms exports have failed to properly review and account for weapons and technology transfers, according to two reports the General Accounting Office (GAO) released September 20.

One report by the GAO, a nonpartisan government agency tasked with carrying out studies for Congress, faulted the Commerce Department for not seeking advice from the State Department frequently enough and for wrongly deciding that it, and not the State Department, should approve certain proposed exports.

In the U.S. export system, the State Department approves commercial exports of weapons and other purely military items, while the Commerce Department oversees exports of dual-use goods that have both military and civilian applications. Companies conducting defense-related trade are responsible for determining which channel to use.

Between fiscal years 1998 and 2001, companies requested more than 12,400 export classifications from Commerce, meaning they asked for a determination as to what regulations applied to the proposed export. Of those requests, Commerce only referred 40 to the State and Defense Departments for their input on what controls should apply. GAO felt that at least another 253 should have been referred based on criteria set out by Commerce, and it noted that State and Defense Department officials believe that Commerce should be referring “most, if not all,” such requests to them. Commerce disputed this contention.

GAO also reported “several instances” in which Commerce misclassified proposed exports as being under its jurisdiction when they should have been licensed through State. Because Commerce generally has a more lax review process than the State Department, GAO warned that items misclassified could be exported without the proper U.S. government scrutiny.

In another report, GAO concluded that the Defense Department does not have a modern and accurate system for tracking emergency or specially authorized U.S. arms exports.

By law, the president can order the Pentagon to supply arms abroad without going through the normal export process. Since fiscal year 1963, the president has authorized “drawdowns” exceeding $3.3 billion to more than 55 countries and organizations for peacekeeping activities, combating drugs, and military and nonmilitary emergencies worldwide.

In reviewing data for fiscal years 1993-2001, GAO found that the president authorized $1.8 billion in drawdowns, and the U.S. military services collectively reported $724 million in actual transfers. But the Pentagon’s Defense Security Cooperation Agency (DSCA), which is charged with tracking drawdowns, only had data showing $300 million in exports.

GAO attributed DSCA’s poor accounting to its use of an antiquated information system designed in the 1960s and irregular reporting by the services. DSCA agreed with GAO’s recommendation for it to improve its data collection and pursue more regular updates from the armed services.