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 concern on the appropriateness of Commerce jurisdiction over communication satellites; (5) this is a difficult judgment; (6) by design, Commerce's system gives greater weight to economic and commercial concerns, implicitly accepting greater security risks; (7) by design, 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; (8) the addition of new controls over satellites transferred to Commerce's jurisdiction in 1996 addressed some of the key areas where the Commerce procedures are less stringent than those of State; (9) there remain, however, differences in how the export of satellites is controlled under these new procedures; (10) Congress notification requirements no longer apply; (11) sanctions do not always apply to items under Commerce's jurisdiction; (12) the Department of Defense's power to influence the decisionmaking process has diminished since the transfer; (13) technical information may not be as clearly controlled under the Commerce system; and (14) the additional controls applied to the militarily sensitive commercial communications satellites transferred to Commerce's control in 1996 were not applied to the satellites transferred in 1993.