Export Controls

In the wake of allegations that a major U.S. satellite manufacturer gave China sensitive technologies with possible applications to its missile programs, GAO testified on the system that governs the licensing of exports with possible military uses. GAO found that regardless of which of the two agencies responsible for licensing communication satellites grants an export license, it is a matter of managing risks. However, by design, the Commerce Department places great weight on economic and commercial outcomes, while the State Department emphasizes foreign policy implications, lessening--but not eliminating--the threat to U.S. national security interests.

GAO noted that: (1) the U.S. export control system--comprised of both the Commerce and State systems--is about managing risk; (2) exports to some countries involve less risk than to other countries and exports of some items involve less risk than others; (3) the planning of a satellite launch with technical discussions and exchanges of information taking place over several months, involves risk no matter which agency is the licensing authority; (4) recently, events have focused on the appropriateness of Commerce jurisdiction over communication satellites; (5) by design, Commerce's system gives greater weight to economic and commercial concerns, implicitly accepting greater security risks; and (6) State's system gives primacy to national security and foreign policy concerns, lessening--but not eliminating--the risk of damage to U.S. national security interests.