On February 9, 2009, the Directorate of Defense Trade Controls (DDTC) posted to its website its End Use Monitoring Report for 2007. The report begins:
This report describes actions taken by the Department of State during the past fiscal year to implement the "Blue Lantern" end-use monitoring program. The Blue Lantern program, operated in accordance with section 40A of the Arms Export Control Act, as Amended (AECA), monitors the end-use of commercially exported defense articles, defense services, and related technical data subject to licensing or other authorizations under section 38 of the AECA
The report goes on to state:
The Blue Lantern program is managed within PM/DDTC by the Office of Defense Trade Controls Compliance's (DTCC) Research and Analysis Division (RAD). Blue Lantern end-use monitoring entails pre-license, post license or post-shipment checks undertaken to verify the legitimacy of a transaction and to provide "reasonable assurance that -
i) the recipient is complying with the requirements imposed by the United States Government with respect to use, transfers, and security of defense articles and defense services; and
ii) such articles and services are being used for the purposes for which they are provided."
Additionally, the report states:
Last fiscal year, PM/DDTC completed action on approximately 81,000 license applications and other export requests. Blue Lantern checks are not conducted randomly, but are rather the result of a careful selection process to identify transactions that appear most at risk for diversion or misuse. License applications and other requests undergo review by licensing officers and compliance specialists, who check case details against established criteria for determining potential risks: unfamiliar foreign parties, unusual routing, overseas destinations with a history of illicit activity or weak export/customs controls, commodities not known to be in the inventory of the host country's armed forces and other indicators of concern. The information derived from Blue Lantern checks helps PM/DDTC licensing officers and compliance specialists assess risks associated with the export of certain defense articles and services to various countries and regions, and provides significant insight into the reliability of companies and individuals involved in defense procurement overseas.
Finally, it was interesting to note that the DDTC found various reasons for unfavorable determinations, with the two largest categories being: (1) the failure of applicants to properly identify foreign parties on the license application, and (2) a party violated terms of the license or agreement. The DDTC noted that the failure to identify all parties to a license application creates the increased likelihood of diversion to unauthorized end-users and end-use.