Export Controls

Since 1992, the Departments of Commerce and State have largely shared licensing responsibility for the export of commercial communications satellites. Congress has been concerned about reports that U.S. satellite companies provided China with sensitive technology useful for improving China's ballistic missiles. The Departments of Commerce and State included conditions meant to protect sensitive technology on 43 licensed commercial communications satellite campaigns by China, Russia, and Ukraine between 1989 and 1999. Licenses for 35 launch campaigns included five conditions, while licenses for eight launch campaigns issued by Commerce between 1994 and 1997 omitted three of these five conditions. Documents at the Departments of Defense (DOD) and State show that monitoring problems, unauthorized transfers of technology, and other violations of export controls regulations may have occurred in 14 launch campaigns in China, Russia, and Ukraine, including some of the campaigns where license safeguard conditions were omitted. These documents also show that sensitive technology was transferred in at least three cases and that two of these transfers raised national security concerns. Recent legislation that returned licensing authority for all commercial communications satellite exports from Commerce to State and led DOD to establish a monitoring organization should reduce confusion in the controls over these exports caused by the shared jurisdiction. However, some confusion may persist because license applications received before the transfer of jurisdiction in March 1999 will still be processed by Commerce, and approved licenses will be valid for up to two years. Consequently, there will still be a need for the agencies to coordinate their policies and monitoring of foreign launches. Despite this need, State, DOD, and Commerce have yet to agree on or establish clear procedures for each agency to follow in implementing the safeguards outlined in government-to-government agreements to safeguard technology.

GAO noted that: (1) the Departments of Commerce and State used licensing conditions to support U.S. policy outlined in government-to-government agreements with each country meant to help ensure that technology is safeguarded; (2) Commerce and State included conditions meant to protect sensitive technology on 43 licensed commercial communications satellite launch campaigns by China, Russia, and Ukraine between 1989 and February 1999; (3) licenses for 35 launch campaigns included 5 conditions, while licenses for 8 launch campaigns issued by Commerce between 1994 and 1997 omitted 3 of these 5 conditions; (4) for these eight launch campaigns, Commerce did not require: (a) the Department of Defense (DOD) monitors; (b) preparation of technology control plans; or (c) strict compliance with the government's safeguards agreements; (5) at the time Commerce approved these export licenses, it did not consider these three license conditions necessary; (6) although DOD and State were involved in the interagency review of these export licenses, neither agency objected to the omission of these license conditions; (7) since 1997, Commerce and State have included all five conditions in every licensed launch campaign; (8) DOD and State documents show that monitoring problems, unauthorized transfers of technology and other violations of export control regulations possibly occurred in 14 launch campaigns in China, Russia, and Ukraine, including some of the campaigns where license safeguard conditions were omitted; (9) these documents also show that sensitive technology was transferred in at least three cases and that two of these transfers raised national security concerns; (10) many of the problems identified in the 14 launch campaigns arose because of confusion created by the shared licensing jurisidiction and a lack of clarity concerning the roles and responsibilities of each agency in licensing and monitoring these exports; (11) the October 1998 legislation that returned licensing authority for all commercial communications satellite exports from Commerce to State and led DOD to establish a monitoring organization should reduce confusion in the controls over these exports caused by the shared jurisdiction; (12) however, some confusion may remain because license applications received before the March 15, 1999, transfer of jurisdiction will still be processed by Commerce, and approved licenses will be valid for up to 2 years; and (13) consequently, there will still be a need for the agencies to coordinate their policies and monitoring activities of foreign launches.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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