GAO Issues Report Critical of State and Commerce's Export Control Functions

The U.S. Government Accountability Office (GAO) issued a report entitled, "Export Controls: State and Commerce Have Not Taken Basic Steps to Better Ensure U.S. Interests Are Protected" on April 24, 2008. A summary can be found here and highlights here.

In the report, the GAO found export licensing inefficiencies, poor interagency cooperation, and limits in the Departments of State's and Commerce's ability to provide a sound basis for changes to the system. In November 2007, the GAO reported that procedural and automation weaknesses, along with workforce challenges, created inefficiencies in State's arms export licensing process. The GAO noted that in less than 4 years, median processing times for license applications nearly doubled (from 14 days in 2003 to 26 days in 2006), with State's backlog of open cases peaking at 10,000.

Specifically, the GAO found procedural weaknesses in that the State Department lacked screening procedures to promptly identify those cases needing interagency review. The GAO also found that State also lacked procedures to expedite certain cases such as exports to the UK and Australia and those to support Operations Iraqi Freedom and Enduring Freedom, as required by law. The GAO also found electronic processing problems with State's D-Trade system and that State has faced challenges in establishing and retaining a sufficient workforce with the experience and skills needed to efficiently and effectively process arms export applications.

In response to these findings, State has informed the GAO that it (1) has implemented procedures to more quickly determine whether referrals to other agencies are needed and instituted senior level reviews of cases that are over 60 days old, (2) is planning future D-Trade upgrades that are expected to facilitate case reviews by licensing officers and allow managers to better oversee the processes, and (3) has restructured its licensing divisions to ensure a more equitable distribution in the workload and skill level of licensing officers based on the GAO's analysis. 

From 1998 through 2005, the GAO found that Commerce's overall median processing times have remained stable at around 40 days and are consistent with time frames established by a 1995 executive order. However, the GAO found that Commerce lacks efficiency-related measures and analyses that would allow it to identify opportunities for improvement. For example, Commerce only measures its performance in terms of how long it takes to refer an application to another agency for review but does not have efficiency-related measures for other steps in its review process, such as how quickly a license should be issued once other agencies provide their input, or for the entire process.

The GAO also found vulnerabilities in the export control system due to poor interagency coordination. The GAO noted issues relating to jurisdiction determinations between State and Commerce and license exemption determinations between State and Defense. In addition, the GAO found that State and Commerce do not receive information on criminal export control prosecution outcomes on a timely basis.

Finally, the GAO found that the absence of systematic assessments by State and Commerce limits their ability to identify problems and make improvements to the system.

The GAO concluded its report by stating that, "While the implementation of our recommendations is an important first step for improving the efficiency and effectiveness of the export control system, a sustained commitment on the part of the departments to engage in a continuous process of evaluation, analysis, and coordination is needed."