Persian Gulf
U.S. Agencies Need to Improve Licensing Data and to Document Reviews of Arms Transfers for U.S. Foreign Policy and National Security Goals Gao ID: GAO-10-918 September 20, 2010The United States uses arms transfers through government-to-government Foreign Military Sales (FMS) and direct commercial sales (DCS) to support its foreign policy and national security goals. The Departments of Defense (DOD) and State (State) have authorized arms worth billions of dollars to six Persian Gulf countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The United States established the Gulf Security Dialogue (GSD) to discuss security issues with these countries. GAO was asked to determine (1) the dollar value and nature of U.S. arms transfers authorized for the Gulf countries' governments, (2) the extent to which U.S. agencies documented how arms transfers to Gulf countries advanced U.S. foreign policy and national security goals, and (3) the role of the GSD. To conduct this work, GAO analyzed U.S. government regional plans, arms transfer data from fiscal years 2005 to 2009, case-specific documentation for fiscal years 2008 and 2009, and program guidance; and interviewed officials in Bahrain, Saudi Arabia, and the UAE.
GAO cannot determine the total value of authorized arms transfers to the governments of Gulf countries in part because State's DCS database also includes arms transfers authorized for U.S. military units stationed in those countries. GAO's review of State's database determined that at least $6 billion of the $21 billion of authorized transfers between fiscal years 2005 and 2009 were for U.S. military units in Gulf countries. In addition, some license values were counted twice. State's database system does not have the capability to separate authorizations by end-user or separate multiple authorizations that cover the same equipment. Consistent with statutory requirements, State included this data in reporting all license authorizations to Congress. In contrast, GAO could determine that the DOD-administered FMS program authorized about $22 billion in arms transfers to the six Gulf countries. Authorized transfers included air and missile defense systems, with the UAE and Saudi Arabia accounting for over 88 percent of total FMS authorizations. State and DOD did not consistently document how arms transfers to Gulf countries advanced U.S. foreign policy and national security goals for GAO selected cases. State assesses arms transfer requests against criteria in the Conventional Arms Transfer policy, including interoperability with the host nation and the impact on the U.S. defense industrial base. Additionally, DOD assesses FMS requests for significant military equipment against criteria in DOD policy, such as the impact on the recipient's force structure and the ability to monitor sensitive technology. GAO's analysis of 28 arms transfer authorizations--15 DCS and 13 FMS--found that State did not document how it applied its criteria to arms transfers, while DOD could not provide documentation on its review of release of technology for 7 of 13 FMS authorizations. Due to a lack of complete documentation, we cannot verify if U.S. agencies consistently reviewed authorizations. When established in 2006, GSD was intended to enable multilateral cooperation on six security-related topics between the United States and six Gulf countries, but it instead operates as a bilateral forum between the United States and five Gulf countries due to the preference of these countries. Saudi Arabia does not participate in GSD, but discusses security concerns at other forums. According to U.S. officials, GSD's agenda has evolved to focus on regional security and other concerns specific to the country participants. GAO recommends that (1) State take steps to improve the clarity and usefulness of DCS license data, and (2) State and DOD document their reviews of arms transfer requests. State and DOD agreed with the recommendations, but State noted that it would need additional resources to improve DCS reporting.
RecommendationsOur 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.
Director: Joseph A. Christoff Team: Government Accountability Office: International Affairs and Trade Phone: (202) 512-8979GAO-10-918, Persian Gulf: U.S. Agencies Need to Improve Licensing Data and to Document Reviews of Arms Transfers for U.S. Foreign Policy and National Security Goals
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
September 2010:
Persian Gulf:
U.S. Agencies Need to Improve Licensing Data and to Document Reviews
of Arms Transfers for U.S. Foreign Policy and National Security Goals:
GAO-10-918:
GAO Highlights:
Highlights of GAO-10-918, a report to congressional requesters.
Why GAO Did This Study:
The United States uses arms transfers through government-to-government
Foreign Military Sales (FMS) and direct commercial sales (DCS) to
support its foreign policy and national security goals. The
Departments of Defense (DOD) and State (State) have authorized arms
worth billions of dollars to six Persian Gulf countries: Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE).
The United States established the Gulf Security Dialogue (GSD) to
discuss security issues with these countries. GAO was asked to
determine (1) the dollar value and nature of U.S. arms transfers
authorized for the Gulf countries‘ governments, (2) the extent to
which U.S. agencies documented how arms transfers to Gulf countries
advanced U.S. foreign policy and national security goals, and (3) the
role of the GSD.
To conduct this work, GAO analyzed U.S. government regional plans,
arms transfer data from fiscal years 2005 to 2009, case-specific
documentation for fiscal years 2008 and 2009, and program guidance;
and interviewed officials in Bahrain, Saudi Arabia, and the UAE.
What GAO Found:
GAO cannot determine the total value of authorized arms transfers to
the governments of Gulf countries in part because State‘s DCS database
also includes arms transfers authorized for U.S. military units
stationed in those countries. GAO‘s review of State‘s database
determined that at least $6 billion of the $21 billion of authorized
transfers between fiscal years 2005 and 2009 were for U.S. military
units in Gulf countries. In addition, some license values were counted
twice. State‘s database system does not have the capability to
separate authorizations by end-user or separate multiple
authorizations that cover the same equipment. Consistent with
statutory requirements, State included this data in reporting all
license authorizations to Congress. In contrast, GAO could determine
that the DOD-administered FMS program authorized about $22 billion in
arms transfers to the six Gulf countries. Authorized transfers
included air and missile defense systems, with the UAE and Saudi
Arabia accounting for over 88 percent of total FMS authorizations.
Figure: Examples of Arms Transfers Authorized to Persian Gulf
Countries (Fiscal Years 2005 to 2009):
[Refer to PDF for image: 3 photographs]
Javelin missile:
Patriot missile defense system:
F-16 aircraft:
Source: DOD.
[End of figure]
State and DOD did not consistently document how arms transfers to Gulf
countries advanced U.S. foreign policy and national security goals for
GAO selected cases. State assesses arms transfer requests against
criteria in the Conventional Arms Transfer policy, including
interoperability with the host nation and the impact on the U.S.
defense industrial base. Additionally, DOD assesses FMS requests for
significant military equipment against criteria in DOD policy, such as
the impact on the recipient‘s force structure and the ability to
monitor sensitive technology. GAO‘s analysis of 28 arms transfer
authorizations”15 DCS and 13 FMS”found that State did not document how
it applied its criteria to arms transfers, while DOD could not provide
documentation on its review of release of technology for 7 of 13 FMS
authorizations. Due to a lack of complete documentation, we cannot
verify if U.S. agencies consistently reviewed authorizations.
When established in 2006, GSD was intended to enable multilateral
cooperation on six security-related topics between the United States
and six Gulf countries, but it instead operates as a bilateral forum
between the United States and five Gulf countries due to the
preference of these countries. Saudi Arabia does not participate in
GSD, but discusses security concerns at other forums. According to
U.S. officials, GSD‘s agenda has evolved to focus on regional security
and other concerns specific to the country participants.
What GAO Recommends:
GAO recommends that (1) State take steps to improve the clarity and
usefulness of DCS license data, and (2) State and DOD document their
reviews of arms transfer requests. State and DOD agreed with the
recommendations, but State noted that it would need additional
resources to improve DCS reporting.
View [hyperlink, http://www.gao.gov/products/GAO-10-918] or key
components. For more information, contact Joseph A. Christoff at (202)
512-8979 or christoffj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Value of U.S. Arms Transfer Authorizations to Gulf Countries Cannot be
Determined Due to Limitations in Capability of State's DCS Database
System:
U.S. Agencies Did Not Consistently Document How Arms Transfers
Advanced U.S. Foreign Policy and National Security Goals for Selected
Cases:
Though Intended to Enable Multilateral Cooperation, GSD Operates as a
Bilateral Mechanism to Discuss Security Issues Between the United
States and Each of the Five Gulf Countries:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Highest Value FMS Authorizations for Gulf Countries:
Appendix III: Select High Value DCS Authorizations for Gulf Countries:
Appendix IV: U.S. Organizations Involved in Review of DCS Requests for
Gulf Countries:
Appendix V: U.S. Organizations Involved in Review of FMS Requests for
Gulf Countries:
Appendix VI: Comments from the Department of State:
Appendix VII: Comments from the Department of Defense:
Appendix VIII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Key Information on FMS and DCS:
Table 2: Conventional Arms Transfer Policy Criteria:
Table 3: Country Team Assessment Criteria:
Table 4: Highest Value FMS Authorizations for Gulf Countries, Fiscal
Years 2005 to 2009:
Table 5: High Value DCS Authorizations for Gulf Countries, Fiscal
Years 2005 to 2009:
Figures:
Figure 1: Map of Gulf Cooperation Council Countries:
Figure 2: Total FMS Authorizations for Gulf Countries (Fiscal Years
2005 to 2009):
Figure 3: Examples of Arms Authorized for Sale to Gulf Countries
between Fiscal Years 2005 and 2009:
Figure 4: FMS and DCS Review Process for Arms Transfer Requests That
Result in Authorization:
Figure 5: U.S. Organizations Involved in the Review of DCS Requests
for Gulf Countries:
Figure 6: U.S. Organizations Involved in the Review of FMS Requests
for Gulf Countries:
Abbreviations:
AECA: Arms Export Control Act:
CAT: Conventional Arms Transfer:
DCS: direct commercial sales:
DDTC: Directorate of Defense Trade Controls:
DOD: Department of Defense:
DTSA: Defense Technology Security Administration:
FMS: Foreign Military Sales:
GSD: Gulf Security Dialogue:
LOA: Letter of Offer and Agreement:
State: Department of State:
UAE: United Arab Emirates:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 20, 2010:
The Honorable Ileana Ros-Lehtinen:
Ranking Member:
Committee on Foreign Affairs:
House of Representatives:
The Honorable Dan Burton:
Ranking Member:
Subcommittee on the Middle East and South Asia:
Committee on Foreign Affairs:
House of Representatives:
The Honorable Mike Pence:
House of Representatives:
The Persian Gulf remains a volatile region for the United States as it
continues to withdraw U.S. forces from Iraq and confronts Iran's
attempts to develop nuclear weapons. In the Gulf region and elsewhere,
the United States uses two key arms transfer[Footnote 1] programs to
support foreign policy and national security goals: (1) Foreign
Military Sales (FMS) that the Department of Defense (DOD) implements
[Footnote 2] and (2) direct commercial sales (DCS) that the Department
of State (State) implements.[Footnote 3] Between fiscal years 2005 and
2009, State and DOD authorized arms transfers worth billions of
dollars to Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United
Arab Emirates (UAE). In May 2006, the Bush administration created the
Gulf Security Dialogue (GSD) as a mechanism for the United States to
discuss regional security issues with these six countries.
In response to congressional requesters, we reviewed (1) the dollar
value and nature of U.S. arms transfers authorized to the governments
of Gulf countries, (2) the extent to which U.S. agencies documented
how arms transfers to Gulf countries advanced U.S. foreign policy and
national security goals, and (3) the role of the GSD.
To address these objectives, we reviewed and analyzed U.S. government
regional plans and strategies, arms transfer data, case-specific
documentation, program regulations and guidance, and reports on arms
transfers to Gulf countries. We obtained agency data on arms transfers
authorized between fiscal years 2005 and 2009 for the six Gulf
countries. For FMS, DOD provided data from its Defense Security
Management Systems and 1200 system databases that included dollar
values and item descriptions. For DCS, State provided data from its
license database system[Footnote 4] that included dollar values, types
of licenses, destination countries, and descriptions of items or end-
users. From this data, we selected a judgmental sample of 28 cases (13
FMS and 15 DCS) from fiscal years 2008 and 2009, based on a mix of
criteria, including high dollar values overall and per country;
sensitivity of equipment, such as if the authorization approvals were
conditional; and destination country. We selected 15 cases for the UAE
and Saudi Arabia, which had a larger share of authorizations, compared
to 13 cases for the remaining Gulf countries, which had a lower share
of authorizations. For these case studies, we requested documents that
would show the agencies' review and decisions. We interviewed agency
officials from State and DOD, as well as subject matter experts, in
Washington, D.C. We met with officials from the Departments of Army,
Navy, and Air Force; the Office of the Secretary of Defense; the Joint
Chiefs of Staff; and the U.S. Central Command. Additionally, we
interviewed U.S. embassy officials and host country officials in three
Gulf countries (Bahrain, Saudi Arabia, and the UAE). At each embassy,
we met with the Ambassador, State officials representing political and
economic offices, and DOD officials who manage the FMS program. We
also interviewed U.S. embassy officials from the countries we did not
visit (Kuwait, Oman, and Qatar).
We conducted this performance audit from August 2009 to September 2010
in accordance with generally accepted government auditing standards.
These standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives. Appendix I
provides a more detailed description of our scope and methodology.
Results in Brief:
We cannot determine the total value of authorized arms transfers to
the governments of Gulf countries in part because State's DCS database
also includes arms transfer authorizations to U.S. military units
stationed in those countries.[Footnote 5] Our review of State's
database determined that at least $6 billion of the $21 billion in
arms transfer authorizations between fiscal years 2005 and 2009 were
for U.S. military units in the Gulf countries, such as an
authorization of radar equipment for $1.4 billion to the U.S. Navy in
Bahrain. We could not determine the exact value of authorizations to
U.S. government entities because State's database system does not have
the capability to separate authorization data by end-user. Moreover,
the remaining $15 billion of the $21 billion includes both the value
of authorizations for the overall arms agreement and the value of
authorizations for equipment included in the agreement, because State
is required to report the aggregate dollar value and quantity of all
such authorizations. For example, in 2008, State authorized a $47
million arms agreement with Bahrain and a subsequent $43 million
license for aircraft parts. Because the $43 million license was part
of the $47 million agreement, the value of this equipment is included
twice. Consistent with its statutory requirements, State reported all
arms transfer authorizations in its annual reports to Congress;
however, State noted for the first time in its 2008 report that the
data included authorizations for U.S. government entities. Moreover,
State did not provide the magnitude of such authorizations. Since
State's database system does not have the capability to separate
authorizations for arms transfers to U.S. government entities as well
as multiple authorizations that cover the same equipment, we could not
determine the total value of arms transfers authorized for the
governments of Gulf countries under the DCS program. In contrast, we
could determine that the FMS program, administered by DOD, authorized
about $22 billion in arms transfers to the six Gulf countries between
fiscal years 2005 and 2009. Authorized transfers included advanced air
and missile defense systems, with the UAE and Saudi Arabia accounting
for more than 88 percent of total FMS authorizations. Overall, these
six countries primarily used their own funds to purchase U.S. arms and
services including the Patriot missile defense system for UAE,
training for the Saudi Arabian National Guard, Patriot missile defense
system upgrades for Kuwait, transport aircraft for Qatar, antitank
missiles for Oman, and aircraft parts for Bahrain.
State and DOD did not consistently document how arms transfers to Gulf
countries advanced U.S. foreign policy and national security goals for
cases we selected. According to federal internal controls standards,
all significant events need to be clearly documented. Our analysis of
15 DCS and 13 FMS authorizations showed that State and DOD did not
document their reviews for many of these cases. Specifically, for the
15 DCS authorizations, State did not document how it applied criteria
such as interoperability with the host nation and the impact on the
U.S. defense industrial base, as stated in the Conventional Arms
Transfer policy. Eight of 13 FMS authorizations required the U.S.
embassy's assessment of criteria such as the impact of the sale on
recipient's force structure and plans for monitoring sensitive
technology.[Footnote 6] DOD documented how it applied these criteria
for 6 of 8 FMS authorizations. These 6 assessments addressed the
majority of the criteria stated in DOD policy guidance. Further, State
did not document its review of regional security for 2 of 15 DCS
authorizations, while DOD could not document its review of the impact
of releasing requested technology for 7 of 13 FMS authorizations. As a
result of incomplete documentation, we cannot verify if State and DOD
consistently considered U.S. foreign policy and national security
goals in authorizing these arms transfers. While documentation was
incomplete, U.S. officials stated that arms transfers to Gulf
countries are an effective tool to advance U.S. foreign policy and
national security goals. For example, U.S. officials noted that Gulf
countries support the United States by providing basing rights for the
U.S. military in the region and supporting operations in Afghanistan.
At the time of its establishment in 2006, GSD was intended to enable
multilateral cooperation on six security-related topics between the
United States and six Gulf countries, instead it operates as a
bilateral discussion mechanism between the United States and five Gulf
countries; Saudi Arabia does not participate. GSD discussions, co-led
by State and DOD, initially focused on six topics: (1) enhancing
defense capabilities and interoperability, (2) addressing regional
security issues, (3) countering weapons proliferation, (4) countering
terrorism and enhancing internal security, (5) protecting critical
infrastructure, and (6) stabilizing Iraq. However, U.S. officials
stated that GSD's agenda has evolved to focus on regional security
concerns and other areas of interest to the participants.
Additionally, GSD has not succeeded in enabling multilateral
cooperation among Gulf countries because these countries prefer
bilateral discussions with the United States on security concerns,
according to U.S. officials. Moreover, while five Gulf countries have
had bilateral GSD meetings with the United States, U.S. officials
stated that Saudi Arabia chose not to participate in the GSD, but it
addresses security concerns through other bilateral mechanisms, such
as meetings between U.S. and Saudi defense officials.
In this report we are making recommendations to the Secretaries of
State and Defense. Specifically, to ensure that State reports more
clear and useful information on DCS arms transfers authorized to the
governments of Gulf countries, we recommend that the Secretary of
State (1) provide more details related to data in reports on arms
transfer authorizations to Congress, and (2) modify the DCS database
system so that it has the capability to identify and separate licenses
issued for arms transfers to U.S. government entities and overlapping
values of related licenses. We are also recommending that the
Secretaries of State and Defense document reviews of arms transfer
requests, including assessments against Conventional Arms Transfer
policy criteria, for foreign policy and national security
considerations to provide reasonable assurance that such reviews are
conducted.
We provided DOD and State with a draft of this report for their review
and comment. DOD concurred with our recommendation and noted that it
will identify better processes to ensure that key assessments are
documented against national security goals. In comments on a draft of
this report, State generally agreed with our recommendations, but
noted that implementation of these recommendations may require
additional resources. Specifically, in response to our first
recommendation, State said that it recognizes the importance of
reporting reliable data on defense exports to Congress and public.
State noted that it is not currently possible to identify the U.S.
government end-users in the database without a manual search, but that
the department will continue to make such identifications with
existing resources. State also noted that devising additional
reporting formats would require the commitment or allocation of
significant additional resources. We agree that State should identify
U.S. government end-users in its reports to Congress. In considering
modifications to its case management system, State should also ensure
that the system has the capability to identify overlapping dollar
values of authorizations. State concurred with our third
recommendation and noted that it is already taking steps, such as
improving documentation of FMS and DCS case review for human rights
concerns. However, State disagreed with our conclusion that the
partial absence of documentation of agencies' reviews raises concerns
that U.S. priorities are not consistently considered before such sales
are authorized. It stated that the documentation that we reported as
"missing" for two DCS cases can be found in previously authorized
licenses. However, these authorizations were notified to Congress and,
pursuant to State's guidance, required a review. Federal internal
control standards require that in addition to clearly documenting
transactions and all significant events, agencies should ensure that
documentation be readily available for examination. State did not
provide us documentation that its Office of Regional Security and Arms
Transfers reviewed the two DCS cases.
Background:
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE border the
Persian Gulf and, with the exception of Bahrain and Oman, have large
oil or gas reserves. Although some of these predominantly Sunni
[Footnote 7] Arab countries have a history of territorial disputes,
they have made attempts to increase cooperation. For example, in 1981
these countries founded the Gulf Cooperation Council as a means to
resolve internal political and economic issues and coordinate on
security concerns. Figure 1 shows Persian Gulf countries that we
included in our review.
Figure 1: Map of Gulf Cooperation Council Countries:
[Refer to PDF for image: map]
The map depicts the following countries:
Bahrain;
Kuwait;
Saudi Arabia;
Oman;
Qatar;
United Arab Emirates (UAE).
Source: Map Resources (map).
[End of figure]
The United States has longstanding security relationships with some
Gulf countries, such as Saudi Arabia and Bahrain, and developed closer
security relations with Kuwait and the UAE following the 1991 Persian
Gulf War. Throughout the 1990s, the United States tried to contain
potential conventional military threats from Iraq and Iran through its
military posture and attempts to promote Gulf Cooperation Council
security coordination. The security environment in the region has
changed with the emergence of transnational terrorist and
proliferation networks, the removal of Saddam Hussein's government in
Iraq, and the relative strengthening of Iran's military. According to
U.S. regional and country-specific plans, key U.S. goals in the region
include: (1) preventing Iran's development of nuclear weapons
capability, (2) gaining support for operations in Iraq and
Afghanistan, (3) protecting critical infrastructure, (4) enhancing
internal security, and (5) improving maritime security.
Several U.S. laws authorize the transfer of arms from the U.S.
government or U.S. companies to foreign countries, or in certain cases
foreign entities, and establish requirements to review requests for
such transfers and report on them to Congress. The Arms Export Control
Act of 1976 (AECA), as amended, provides the President the authority
to control the transfer of arms.[Footnote 8] The AECA authorizes the
Foreign Military Financing program, which provides U.S. funds for
foreign governments to purchase defense articles and services through
FMS or DCS programs. In addition, the Foreign Assistance Act, as
amended, provides authority for the transfer of excess defense
articles to foreign governments.[Footnote 9] Section 1206 of the
National Defense Authorization Act, as amended, authorizes DOD to use
its funds to train and equip partner nations' military.[Footnote 10]
Foreign governments may purchase arms or receive U.S. security
assistance through these programs. Furthermore, pursuant to a 2008
amendment to the AECA, State must assess arms transfer requests from
Middle East countries, including the six in this review, for the
sales' potential impact on Israel's military capability, also known as
Israel's qualitative military edge.[Footnote 11]
The United States sells arms to foreign governments or international
organizations through FMS and authorizes the sale of arms for foreign
governments or entities through DCS. While State has overall approval
authority for both FMS and DCS, DOD's Defense Security Cooperation
Agency administers the FMS program. An FMS authorization is a
negotiated agreement between the U.S. government and a foreign
government for the purchase of arms, which results in a contract
termed Letter of Offer and Acceptance (LOA). Under the AECA, it is the
sense of Congress that FMS requests should only be approved when
consistent with U.S. foreign policy interests. Further, these sales
must strengthen U.S. security. DOD policies to implement AECA
requirements for FMS are in the Security Assistance Management Manual.
State's Directorate of Defense Trade Controls (DDTC) administers the
DCS license process. Under DCS, a private U.S. corporation and a
foreign buyer negotiate the sale of arms and State issues an export
license for the sale. The license may or may not result in a contract
between the U.S. corporation and the foreign buyer. Under the AECA the
DCS process is to be conducted in furtherance of the security and
foreign policy of the United States. State implements AECA
requirements for DCS through the International Traffic in Arms
Regulations. Table 1 compares key aspects of FMS and DCS.
Table 1: Key Information on FMS and DCS:
FMS:
Administrating agency: DOD--Defense Security Cooperation Agency;
Description: Government-to-government sales program that produces a
negotiated agreement between the U.S. government and a foreign
government for arms transfer;
Authorized request: Authorized requests result in an agreement that
serves as a contract between the U.S. government and foreign
government, called a Letter of Offer and Acceptance;
Payment mechanism: The foreign government may pay the United States
for defense articles and services or may receive security assistance
from the United States, such as Foreign Military Financing and excess
defense articles.
DCS:
Administrating agency: State--Directorate of Defense Trade Controls
(DDTC);
Description: Licensing process for sales negotiated between a U.S.
corporation and a foreign entity for arms on the U.S. Munitions List
that require an export license;
Authorized request: The commercial exporter is required to obtain a
license from DDTC before it can export defense articles and services.
Once DDTC approves the request, it issues a license, which may or may
not result in a contract;
Payment mechanism: Generally the buyer pays the exporter for arms. In
some instances, the United States may provide security assistance to
foreign governments.
Source: GAO summary based on State and DOD information.
[End of table]
Value of U.S. Arms Transfer Authorizations to Gulf Countries Cannot be
Determined Due to Limitations in Capability of State's DCS Database
System:
We cannot determine the overall value of U.S. arms transfer
authorizations to Gulf countries because of limitations in capability
of State's DCS database system, but we determined that authorized arms
transfers to these countries between fiscal years 2005 and 2009
included aircraft, helicopters, and missiles. In contrast, for FMS we
determined that the United States authorized about $22 billion in
government-to-government arms transfers to Gulf countries between
fiscal years 2005 and 2009. Gulf countries primarily use their own
funds to purchase arms through DCS and FMS.
State's Database System Does Not Have the Capability to Provide the
Value of U.S. Arms Transfer Authorizations to the Governments of Gulf
Countries:
Section 655 of the Foreign Assistance Act, as amended, requires the
President to report each year on the aggregate dollar value and
quantity of defense articles, services, and other transfers authorized
by the United States to each foreign country and to international
organizations.[Footnote 12] According to State officials, the DCS
licensing database is designed to capture information on all licenses
irrespective of the end-user and is used to generate information on
authorizations by country for State's annual reports. According to
State's database, State authorized $21 billion in arms transfers to
the six Gulf countries between fiscal years 2005 and 2009. However, we
found that total authorizations included at least $6 billion in arms
transfers authorized for U.S. government entities, such as the U.S.
military operating in these countries.[Footnote 13] For example, the
database included $1.4 billion in radar equipment for the U.S. Navy in
Bahrain. While State's database specifies the destination for each
license, it does not have the capability to generate reports on arms
transfers based on end-users such as the host government or U.S.
government entities operating in the host country. Consistent with its
statutory requirements, State reported all arms transfer
authorizations in its annual reports to Congress; however, State
acknowledged for the fist time in fiscal year 2008 report that these
data included authorizations to U.S. government entities in other
countries. Moreover, State did not provide the magnitude of such
authorizations. For the 2009 report, State officials said that they
would manually review licenses to distinguish between sales to host
governments and U.S. government entities. However, since the DCS
database system does not have the capability to report information by
end-user, State may not be able to accurately estimate the value of
licenses to U.S. government entities. Further, State noted that
because of the size of the database, which includes more than 84,000
licenses, they cannot guarantee that every authorization to a U.S.
government end-user can be manually identified.
State proposes to clarify regulations that specify when exports to
U.S. government entities need a license. According to the
International Traffic in Arms Regulations, a license is not required
for permanent export of defense articles and services for end-use by a
U.S. government agency in a foreign country if the following
conditions are met: (1) the export is pursuant to a contract with a
U.S. government agency, (2) the end-user in the foreign country is a
U.S. government agency or facility and the defense article or
technical data will not be transferred to any foreign person, and (3)
an appropriate export license or U.S. government bill of lading cannot
be obtained in a timely manner due to the urgency of the U.S.
government's requirement. According to State officials, U.S. companies
selling arms to a U.S. government agency may still apply for a license
to ensure that they do not encounter any legal or regulatory issues
when transferring arms.
Further, the remaining $15 billion in DCS authorizations includes both
the value of the overall arms agreement and the value of equipment
included in the agreement. For example, in 2008, State authorized a
$47 million arms agreement for Bahrain and a subsequent $43 million
license for aircraft parts. According to State officials, both these
values were included in State's 2008 report on arms transfer
authorizations to Congress because State is required to report all
authorizations by country.[Footnote 14] Similarly, in 2009 State
authorized a $614 million arms agreement, which included two C-17
transport aircraft and related services, for Qatar's Ministry of
Defense. In the same year, State also authorized a separate license to
export C-17 aircraft for $460 million to Qatar. Aggregating the total
value of these two distinct licenses would repeat the $460 million
value of the second license. State officials noted that the values of
licenses may be repeated because State's database is designed to
capture information on all DCS licenses authorizing arms transfers to
each foreign country. Further, State officials noted that they are
required to report all authorizations in their annual report, pursuant
to Section 655. However, State did not clarify in its annual reports
on arms transfer authorizations to Congress that values of licenses
may be repeated in reporting different types of licenses.
In Contrast to State, DOD Data Show that the U.S. Government
Authorized about $22 Billion in FMS Arms Transfers to Six Gulf
Countries Over 5 Years:
In contrast to our examination of State's DCS data, we could determine
that the DOD-administered FMS program authorized about $22 billion in
arms transfers to six Gulf countries between fiscal years 2005 and
2009. Although FMS authorizations to these countries generally
increased since 2005, they increased significantly in 2009, partly due
to a $6.5 billion authorization for the UAE to purchase the Patriot
missile defense system. See figure 2 for FMS authorizations to Gulf
countries from fiscal years 2005 to 2009.
Figure 2: Total FMS Authorizations for Gulf Countries (Fiscal Years
2005 to 2009):
[Refer to PDF for image: stacked vertical bar graph]
Fiscal year: 2005;
UAE: 40;
Saudi Arabia: 717;
Other gulf countries[A]: 261;
Total: 1,018.
Fiscal year: 2006;
UAE: 972;
Saudi Arabia: 1,153;
Other gulf countries[A]: 821;
Total: 2,946.
Fiscal year: 2007;
UAE: 1,596;
Saudi Arabia: 1,560;
Other gulf countries[A]: 356;
Total: 3,512.
Fiscal year: 2008;
UAE: 478;
Saudi Arabia: 2,100;
Other gulf countries[A]: 676;
Total:
Fiscal year: 2009;
UAE: 7,887;
Saudi Arabia: 2,762;
Other gulf countries[A]: 535;
Total: 11,184.
Source: GAO analysis of DOD data.
[A] Other countries are Bahrain, Kuwait, Oman, and Qatar.
[End of figure]
Various factors may have contributed to Gulf countries' preference to
obtain arms through FMS. First, the United States allows the sale of
certain highly sensitive equipment--such as Javelin missiles and the
Patriot missile defense system--through the FMS program only. The U.S.
government authorized these FMS-only arms transfers for several Gulf
countries. Second, some Gulf countries preferred the FMS program
because of accountability mechanisms that reduce the risk of
corruption in host governments, according to U.S. officials. Third,
many Gulf countries do not have sophisticated procurement
capabilities, so they prefer the established system within the FMS
program to negotiate with the defense industry on their behalf,
according to U.S. officials.
Combined UAE and Saudi Arabia arms transfer authorizations represent
more than 88 percent of the total value of arms transfer
authorizations for the six Gulf countries. Between 2005 and 2009, the
UAE had about $11 billion in authorized arms transfers; Saudi Arabia
was next with about $8 billion.
In general, Gulf countries use their own funds to purchase arms
through DCS and FMS. Oman and Bahrain, however, received $179 million
from the United States to assist in their acquisition of arms between
fiscal years 2005 and 2009. Oman received about $59 million from the
Foreign Military Financing program, while Bahrain received about $120
million from the Foreign Military Financing program, Section 1206
funds, and the excess defense articles grant program.
U.S. Agencies Authorized Sales of Aircraft and Missiles, among Other
Items, to Gulf Countries:
The U.S. government authorized arms transfers of equipment--including
aircraft, helicopters, missiles, and military vehicles--to Gulf
countries through both FMS and DCS between fiscal years 2005 and 2009.
However, the U.S. government authorized more sensitive equipment, such
as missiles, through FMS.
The highest dollar value arms transfers authorized through the FMS
program included missiles, helicopters, tanks and munitions, and
training and support services. For example, to strengthen air defense
systems of Gulf countries, the United States authorized the sale of
the Patriot missile defense system and associated upgrades for the UAE
and Kuwait, respectively; and Black Hawk and Apache helicopters for
the UAE and Saudi Arabia.[Footnote 15] Additionally, DOD authorized
the sale of light armored vehicles and tanks, as well as training and
support services, to Saudi Arabian security forces including the Saudi
Arabian National Guard that, among other things, protect critical
infrastructure including oil installations. See appendix II for FMS
authorizations representing highest dollar value arms transfers
authorized for the six Gulf countries between fiscal years 2005 and
2009.
The high dollar value arms transfers authorized via DCS included
aircraft, helicopters, and spare parts and maintenance for existing
arms.[Footnote 16] For example, the United States authorized the sale
of:
* Chinook helicopters, F-16 Block 60 aircraft related equipment, and
maintenance for C130 and L100 aircraft for the UAE;[Footnote 17]
* S-92 helicopters, F-15 aircraft spare parts, and maintenance of
light armored vehicles for Saudi Arabia;[Footnote 18] and:
* C-17 transport aircraft and spare parts for Qatar.
See appendix III for DCS licenses representing high dollar value arms
transfers authorized for the six Gulf countries between fiscal years
2005 and 2009. Figure 3 provides photos and descriptions of some of
these arms authorized for sale via FMS and DCS to Gulf countries.
Figure 3: Examples of Arms Authorized for Sale to Gulf Countries
between Fiscal Years 2005 and 2009:
[Refer to PDF for image: 6 photographs and associated data]
Patriot missile defense system: An advanced surface-to-air guided
missile air defense system. This system includes radars, missiles,
launchers, vehicles, and other related equipment. It has four major
operational functions: communications, command and control, radar
surveillance, and missile guidance.
Equipment authorized via FMS.
Authorized for sale to: UAE, Kuwait, and Saudi Arabia.
Source: DOD (photographer: Frank Trevino).
Javelin missiles: A portable antitank weapon that is highly lethal
against conventional and reactive armor. It is hardened against
countermeasures and does not require extensive training for effective
employment.
Equipment authorized via FMS.
Authorized for sale to: UAE and Oman.
Source: DOD (photographer: Roddney Jackson).
F-16 aircraft: A compact, multirole fighter with air-to-air combat and
air-to-surface attack capabilities.
F-16 spare parts and technical data authorized via DCS; munitions and
other support authorized via FMS.
Authorized for sale to: UAE, Bahrain, and Oman.
Source: DOD).
Hellfire missiles: This air-to-ground missile is the primary antitank
armament of the Army‘s Apache, Kiowa Warrior, and special operations
helicopters; the Marine Corps‘ Super Cobra helicopter; and the Navy‘s
Sea Hawk helicopter. The Hellfire uses semi-active laser terminal
guidance.
Equipment authorized via FMS; parts authorized via DCS.
Authorized for sale to: UAE and Saudi Arabia.
Source: DOD (photographer: Sinoe Orbe).
C-17 transport aircraft: A multi-engine, turbofan, wide-body aircraft
capable of rapid strategic delivery of troops and all types of cargo
to main operating bases or directly to forward bases in the deployment
area. It can perform tactical airlift and airdrop missions and can
also transport ambulatory patients during aeromedical evacuations when
required.
Equipment authorized via DCS; support and parts authorized via DCS and
FMS.
Authorized for sale to: Qatar.
Source: DOD.
Light armored vehicles: An 8x8 wheeled light armored, all-terrain, all-
weather vehicle with day and night capability. It is fully amphibious
with a maximum of three minutes preparation.
Equipment authorized via FMS; maintenance and repair services
authorized via DCS and FMS.
Authorized for sale to: Saudi Arabia.
Source: DOD (photographer: K. T. Burch).
Overall Source: GAO and DOD.
[End of figure]
U.S. Agencies Did Not Consistently Document How Arms Transfers
Advanced U.S. Foreign Policy and National Security Goals for Selected
Cases:
State and DOD did not consistently document how arms transfers to the
six Gulf countries advanced U.S. foreign policy and national security
goals for 28 cases that we selected. State assesses arms transfer
requests against criteria stated in the Conventional Arms Transfer
(CAT) policy.[Footnote 19] Additionally, DOD assesses FMS arms
transfer requests for significant military equipment against criteria
stated in DOD policy guidance.[Footnote 20] Our analysis of 15 DCS and
13 FMS authorizations found that State did not document how it applied
criteria to review arms transfers, while DOD documented how it applied
criteria for 6 of 8 authorizations. Further, State did not document
its review of regional security for 2 of 15 DCS authorizations and DOD
did not document its reviews of the impact of releasing sensitive
technology for 7 of 13 FMS authorizations. While documentation was
incomplete, U.S. officials explained that arms transfers to Gulf
countries are an effective tool to advance U.S. foreign policy and
national security goals.
State and DOD Officials Stated that They Consider Foreign Policy and
National Security Goals During the Arms Transfer Review Process:
State and DOD share responsibilities in reviewing arms transfers
requested through DCS and FMS. Figure 4 illustrates the FMS and DCS
review process for arms transfer requests.
Figure 4: FMS and DCS Review Process for Arms Transfer Requests That
Result in Authorization:
[Refer to PDF for image: illustration]
Foreign Military Sales:
Arms Transfer Mechanism: Letter of request;
U.S. Embassy: Country team assessment[A] (conditional process);
Defense Department: Technical review; Release of technology[B]
(conditional process);
State Department: Foreign Policy and National Security review;
Congress: Congressional notification[C] (conditional process);
Result: Letter of Offer and Acceptance (LOA).
Direct Commercial Sales:
Arms Transfer Mechanism: License application;
U.S. Embassy: no action;
Defense Department: Release of technology[B] (conditional process);
Foreign Policy and National Security review;
Congress: Congressional notification[C] (conditional process);
Result: License approval or License approved with conditions.
Sources: GAO analysis of U.S. agency information; Corel (clip art).
Note: FMS and DCS arms transfer requests that State or DOD do not
approve may result in denial or be returned without action.
[A] Until April 2010, DOD policy required country team assessments for
defense articles considered to be significant military equipment,
which are arms that warrant special export controls because of their
capacity for substantial military utility or capability.
[B] DOD components and interagency committees are involved in
decisions regarding release of certain technologies and what, if any,
restrictions are placed on the use of technology authorized for
foreign entities.
[C] Pursuant to the AECA, FMS and DCS requests require congressional
notifications if defense articles and services (1) exceed $50 million
or (2) are for major defense equipment worth at least $14 million.
Additionally, congressional notifications are also required for FMS
requests for design and construction services worth at least $200
million and for DCS requests to export firearms in the amount of $1
million or more.
[End of figure]
State Reviews Focus on Foreign Policy Goals:
According to State officials, different offices within State may
review arms transfer requests for their potential impact on regional
security, human rights, and other concerns. For example, State's
Office of Regional Security and Arms Transfers and Bureau of Near
Eastern Affairs review requests for the impact of arms transfers on
regional security, including an assessment of Israel's qualitative
military edge.[Footnote 21] State's Bureau of Democracy, Human Rights,
and Labor may review requests for human rights concerns and its Bureau
of International Security and Nonproliferation may review arms
transfer requests for proliferation concerns. For DCS requests,
State's Directorate for Defense Trade Controls may ask State offices
to review the request for foreign policy concerns. Similarly, for FMS,
State's Office of Regional Security and Arms Transfers receives all
requests and may refer these to other State offices for their review.
Figure 5 identifies U.S. organizations involved in the review of DCS
requests.
Figure 5: U.S. Organizations Involved in the Review of DCS Requests
for Gulf Countries:
[Refer to PDF for image: interactive illustration]
National Security and Foreign Policy Review:
(Administrating agency: State‘s Directorate of Defense Trade Controls):
Release of technology:
* Defense Technology Security Administration:
* Military departments:
– Department of the Air Force;
– Department of the Army;
– Department of the Navy;
* Office of the Secretary of Defense;
* Joint Chiefs of Staff;
* National Security Agency;
* Defense Intelligence Agency;
* Defense Security Cooperation Agency;
* Defense Advanced Research Projects Agency.
Regional impact:
* Bureau of Political-Military Affairs, Office of Regional Security
and Arms Transfers;
* Bureau of Near Eastern Affairs.
Human rights:
* Bureau of Democracy, Human Rights, and Labor.
Proliferation:
* Bureau of International Security and Nonproliferation;
* Missile Technology Export Control Committee.
Other agencies:
* Department of Energy;
* National Aeronautics and Space Administration.
Interactivity instructions for more information:
Roll your mouse over the blue text for online version; see appendix IV
for print version.
Source: GAO analysis based on State and DOD information.
[End of figure]
DOD Reviews Focus on National Security Goals:
For DCS, State may refer license applications to the Defense
Technology Security Administration (DTSA) to determine if the United
States should release the requested technology to the requesting
foreign government. Specifically, DTSA assesses the sale's impact on
preserving critical U.S. military technological advantages, among
other things. Not all DCS licenses are referred to DTSA for their
review; for example, State's Directorate for Defense Trade Controls
may not refer license requests to DTSA for spare parts or equipment
previously authorized for the requesting government. DTSA may
recommend approval of the license, the addition of specific
limitations on the requested technology, return without action for
additional information, or denial of the license. To assist in
formulating DOD's position, DTSA may also refer a DCS license
application to other DOD components, such as the military departments,
or other U.S. agencies for further reviews.
For FMS, prior to April 2010, DOD's Security Assistance Management
Manual required U.S. embassy personnel to conduct an initial
assessment of requests for significant military equipment. These
country team assessments provide a justification for the arms transfer
request and an overall recommendation on whether the U.S. government
should authorize the sale. This recommendation is based on foreign
policy and national security considerations. In April 2010, DOD
changed its policy to require this assessment only for major defense
equipment.[Footnote 22]
As part of DOD's review for national security considerations, multiple
DOD entities may conduct technical reviews of arms transfer requests
and determine if DOD allows the requested technology's release to the
foreign country. The U.S. agency or military department that
implements an FMS authorization has authority to determine if the U.S.
government may release the requested technology in accordance with the
U.S National Disclosure Policy guidelines.[Footnote 23] Specialized
DOD and interagency committees may need to conduct additional reviews
for sensitive technologies. For example, all night vision device
requests are referred to DTSA for approval, according to agency
officials. Similarly, equipment involving stealth technology is
referred to the Low-Observable/Counter-Low-Observable Executive
Committee. The Committee on National Security Systems reviews requests
that include sensitive communications technology. If the requested
technology exceeds the military department's approval authority, the
department will elevate the request to the interagency National
Disclosure Policy Committee, which can approve exceptions to the
National Disclosure Policy. In addition to reviews to determine if the
equipment should be released, military departments also conduct
technical reviews of requested equipment to ensure safeguards, such as
anti-tamper measures, are included for the protection of critical
information. As the administrating entity for FMS, DOD's Defense
Security Cooperation Agency ensures that all appropriate reviews are
conducted before offering the agreement to the foreign country. Figure
6 identifies the U.S. organizations involved in the FMS request review
process.
Figure 6: U.S. Organizations Involved in the Review of FMS Requests
for Gulf Countries:
[Refer to PDF for image: interactive illustration]
Technical reviews:
Security Assistance Organizations:
* Implementing agencies:
- Department of the Air Force;
- Department of the Army;
- Department of the Navy;
- Other organizations.
Release of technology:
* Military department‘s review:
- Navy‘s Technology Transfer Security Assistance Review Board;
- Army‘s Technology Transfer Security Assistance Review Panel;
- Air Force‘s Topline;
* Special committees:
- National Disclosure Policy Committee;
- Low-Observable/Counter-Low-Observable Executive Committee;
- Tri-Service Committee;
- Committee on National Security Systems.
National security policy and strategy:
* U.S. Central Command;
* Joint Chiefs of Staff;
* Office of the Secretary of Defense.
Regional impact:
* U.S. Embassy county team, including:
- Ambassador;
- Political and Political-Military Counselors;
- Security Cooperation Organizations;
* Bureau of Political-Military Affairs, Office of Regional Security
and Arms Transfers;
* Bureau of Near Eastern Affairs.
Human rights:
* U.S. Embassy;
* Bureau of Democracy, Human Rights, and Labor.
Proliferation:
* Bureau of International Security and Nonproliferation;
* Implementing agencies.
Interactivity instructions for more information:
Roll your mouse over the blue text for online version; see appendix V
for print version.
Source: GAO analysis based on State and DOD information.
[End of figure]
U.S. Agencies Could Provide Limited Documentation for their Review of
Arms Transfer Requests:
State and DOD could provide limited documentation for their review of
arms transfer requests for cases we selected. GAO's Standards for
Internal Control in the Federal Government require that agencies
should clearly document transactions and all significant events, and
the documentation should be readily available for examination.
Therefore, we requested that State and DOD provide us documentation on
how they assessed 28 arms transfer authorizations against agency-
specific criteria. We selected 15 DCS and 13 FMS arms transfer
authorizations for the 2008-2009 time period based on a mix of
criteria such as high dollar values overall and per country,
sensitivity of equipment such as if the authorization approvals were
conditional, and destination country. [Footnote 24] The 15 DCS
authorizations totaled more than $3 billion in value.[Footnote 25] The
13 FMS authorizations we selected represented about 40 percent of
dollar value of total authorizations. For these cases, we requested
documentation of State and DOD's reviews, including U.S. embassy
assessments, DOD offices' technical review to determine the
sensitivity and release of technology, and State offices' review for
foreign policy and national security goals, such as regional security.
Additionally, for authorizations that required informing Congress, we
requested that State and DOD provide these notifications.
State Does Not Document Its Review of Arms Transfer Requests Against
Policy Criteria, But DOD Generally Does:
According to State officials, they assess all arms transfer requests
against 12 criteria specified in the CAT policy; these criteria
include maintaining regional stability, supporting U.S. interests
through increased interoperability, protecting human rights,
protecting sensitive technology, and the impact on U.S. defense
industrial base. However, State officials noted that they do not
document these assessments. Table 2 identifies the CAT policy criteria.
Table 2: Conventional Arms Transfer Policy Criteria:
1. Consistency with U.S. regional stability interests, especially when
considering transfers involving power projection capability or
introduction of a system which may foster increased tension or
contribute to an arms race.
2. The degree to which the transfer supports U.S. strategic and
foreign policy interests through increased access and influence,
allied burden sharing, and interoperability.
3. The human rights, terrorism and proliferation record of the
recipient and the potential for misuse of the export in question.
4. Consistency with international agreements and arms control
initiatives.
5. Appropriateness of the transfer in responding to legitimate U.S.
and recipient security needs.
6. The impact of the proposed transfer on U.S. capabilities and
technological advantage, particularly in protecting sensitive software
and hardware design, development, manufacturing, and integration
knowledge.
7. The degree of protection afforded sensitive technology and
potential for unauthorized third-party transfer, as well as in-country
diversion to unauthorized uses.
8. The ability of the recipient effectively to field, support, and
appropriately employ the requested system in accordance with its
intended end-use.
9. The risk of revealing system vulnerabilities and adversely
impacting U.S. operational capabilities in the event of compromise.
10. The impact of U.S. industry and the defense industrial base
whether the sale is approved or not.
11. The availability of comparable systems from foreign suppliers.
12. The risk of adverse economic, political or social impact within
the recipient nation and the degree to which security needs can be
addressed by other means.
Source: State.
[End of table]
For 13 FMS arms transfer authorizations we selected, agency officials
provided U.S. embassies' country team assessments for 6 out of 8
requests that required such an assessment. Four of 6 country team
assessments addressed all applicable criteria, while the remaining 2
assessments each addressed a majority of, but not all, criteria stated
in DOD's policy guidance--such as the sale's potential impact on
recipient's force structure and the ability to monitor sensitive
technology. DOD policy guidance, as stated in the Security Assistance
Management Manual, required U.S. embassies to conduct assessments for
all requests for significant military equipment. However, DOD
officials stated that they conduct and document these assessments only
for arms that constitute a new introduction or significant upgrade of
equipment to a country, or require a congressional notification. Table
3 identifies the criteria addressed in country team assessments.
Table 3: Country Team Assessment Criteria:
1. Reason the purchaser desires the articles or services.
2. How the articles or services would affect the recipient's force
structure.
3. How the articles or services would contribute to both the U.S. and
the recipient's defense or security goals.
4. Justification for the type and quantity of articles or services
requested.
5. Combatant Commander's concurrence to the introduction of a new
warfighting capability to the nation or region. Combatant Commander's
assessment can be provided separately.
6. Anticipated reactions of neighboring nations.
7. Assessment of the nation's ability to account for, safeguard,
operate, maintain, and support the articles.
8. Training required either in-country or in the United States and
anticipated reactions resulting from the presence of U.S. trainers in-
country.
9. Possible impact of any in-country U.S. presence that might be
required as a result of providing the article.
10. Source of financing and the economic impact of the proposed
acquisition.
11. Human rights considerations relevant to the proposed acquisition.
12. A plan for end-use monitoring for sensitive and advanced
warfighting technology and the Security Cooperation Organization's
plan for compliance verification.
13. Recommendation whether the U.S. government should approve transfer
of the article and justification.
14. If the request is for Night Vision Devices, additional information
must be provided such as (a) the justification for the type and
quantity of Night Vision Devices requested, and (b) the operational
plan for use and specific end-users.
Source: DOD Security Assistance Management Manual 5105.38.
[End of table]
DOD Provided Documentation of Its Reviews for All DCS Authorizations,
but Few FMS Authorizations:
For DCS arms transfer authorizations we selected, DOD's DTSA provided
documentation of its national security review decisions for all
authorizations. Specifically, DTSA provided documentation of its
review for all 14 cases that needed a national security review.
[Footnote 26] Although DTSA approved all 14 authorizations, it imposed
restrictions for 8.
For FMS arms transfer authorizations we selected, DOD could not
provide documentation of its national security reviews for 7 out of 13
authorizations. For example, for 3 authorizations, the Department of
the Navy--the implementing agency--did not provide us documentation of
their approval to release the requested technology. However, for 6
authorizations, the Departments of the Air Force and the Army provided
documentation of DOD offices' reviews for the requested technology,
such as approvals to provide the requested arms and waivers to
authorize the sale of night vision devices. According to DOD
officials, although the Defense Security Cooperation Agency is the
administrating authority for FMS cases and provided the final review
to ensure all required reviews were conducted for the cases we
selected, DOD guidance requires that each DOD component maintain the
official documentation of its review. As such, according to DOD
officials, FMS documentation is scattered among multiple offices and
not easily retrievable.
State Does Not Document Its Review of All FMS Authorizations and Did
Not Document its Review of DCS Authorizations in Two Instances:
According to State officials, although DOD provides State all FMS arms
transfer requests for approval, State documents its review only for
requests that require congressional notification. The AECA requires
U.S. agencies to notify Congress of proposed FMS arms transfers that
are more than $14 million for major defense equipment, more than $50
million in defense articles and services, and more than $200 million
in defense-related design and construction. For FMS requests, State
officials noted that they develop a foreign policy and national
security justification that is part of the notification to Congress.
Six of 13 FMS authorizations we selected that required congressional
notification included a justification based on the sale's impact on
regional security, U.S. and host country security goals, and the host
country's capability to utilize arms.
Of 15 DCS arms transfer authorizations we selected, State officials
noted that they conducted the necessary reviews but could not provide
documentation of regional security review for 2 authorizations that
required such review pursuant to State's internal guidance. According
to State officials, State's Office of Regional Security and Arms
Transfers[Footnote 27] and the Bureau of Near Eastern Affairs review
arms transfer requests for Gulf countries for impact on regional
security, including an assessment of Israel's qualitative military
edge, and the Bureau of Democracy, Human Rights, and Labor reviews
arms transfer requests for human rights concerns. However, according
to State's internal guidance, these reviews are not required if an
applicant requests a license for spare parts or equipment that is part
of a previously authorized arms agreement. State officials also noted
that reviews are not required for arms similar to what the recipient
has already received. Since the majority of cases we selected related
to previously authorized arms agreements or for spare parts, these
authorizations did not require additional reviews for foreign policy
and national security, pursuant to State's guidance. However, for two
cases we selected that required a foreign policy review, State could
not provide documentation that Office of Regional Security and Arms
Transfers reviewed these cases for regional security considerations.
These authorizations--$613 million for technical data and defense
services to support aircraft to Qatar and $133 million of technical
data and services to Saudi Arabia--were notified to Congress as their
values met reporting threshold.
U.S. Officials Stated that Arms Transfers to Gulf Countries Advance
U.S. Foreign Policy and National Security Goals:
According to agency officials, arms transfers are a key component of
the U.S. security relationship with Gulf countries and help to advance
U.S. foreign policy and national security goals. Gulf countries
support the United States by providing basing rights for the U.S.
military in the region, allowing the U.S. military to use their
airspace, participating in operations in Afghanistan, and supporting
other U.S. initiatives and priorities, such as countering terrorism
and bolstering regional allies.
For example, some Gulf countries provide important basing rights for
the U.S. military, including transit for military supplies and
personnel bound for Iraq and Afghanistan. Bahrain hosts the U.S.
Navy's Central Command (the Fifth Fleet) and Qatar hosts the U.S.
Central Command forward operating headquarters. Gulf countries also
allow the U.S. military to utilize their air space.
Two Gulf countries have led an international maritime security task
force and provided logistical support for operations in Afghanistan,
according to the U.S. ambassadors in both countries. One country has
provided troops for operations in Afghanistan. According to U.S.
officials, Gulf countries also contribute to U.S. regional priorities
such as support for regional neighbors including Iraq and Yemen,
countering terrorism and piracy, and protecting critical
infrastructure. U.S. officials noted that two Gulf countries supported
U.S. goals in Iraq by re-establishing diplomatic relations with Iraq.
Further, U.S. officials noted that as large purchasers of U.S. arms,
Gulf countries support the U.S. defense industrial base. In general,
FMS sales help lower unit costs by consolidating purchases for FMS
customers with those of DOD. For example, according to U.S. officials,
the UAE's purchase of the Terminal High Altitude Area Defense system
is expected to reduce production costs for the U.S. military.[Footnote
28]
Though Intended to Enable Multilateral Cooperation, GSD Operates as a
Bilateral Mechanism to Discuss Security Issues Between the United
States and Each of the Five Gulf Countries:
At the time of its establishment in 2006, GSD was intended to
encourage multilateral cooperation on six security-related topics
between the United States and six Gulf countries. However, GSD
operates as a bilateral discussion mechanism between the United States
and five Gulf countries; Saudi Arabia does not participate.
GSD Operates as a Bilateral Discussion Mechanism between the United
States and Each of the Five Gulf Countries:
In 2006, the U.S. government established the GSD to enable
multilateral cooperation on security issues between the United States
and the six Gulf countries. According to U.S. officials, the GSD was
not intended to be a program with associated funding. Co-led by State
and DOD, GSD discussions were to address six specific U.S. priorities:
(1) enhancing defense capabilities and interoperability, (2)
addressing regional security issues, (3) countering weapons
proliferation, (4) countering terrorism and enhancing internal
security, (5) protecting critical infrastructure, and (6) stabilizing
Iraq. However, Gulf countries prefer to discuss security concerns in a
bilateral forum, according to U.S. officials. As a result, the GSD has
not succeeded in enabling multilateral cooperation among Gulf
countries, but operates as a bilateral mechanism to discuss security
issues between the United States and each of the five Gulf countries.
U.S. officials stated that Saudi Arabia does not participate in GSD
meetings but it addresses security concerns through existing bilateral
mechanisms, such as military-to-military discussions. According to
U.S. officials, the GSD complements other bilateral security
discussions with Gulf countries, which include DOD-led Joint Military
Committee meetings.
While GSD Agenda Has Evolved, the Meetings Have Not Been as Frequent
as Originally Intended:
U.S. officials in several Gulf countries stated that GSD meetings have
facilitated strategic discussions on security concerns among senior
U.S. and Gulf country officials from civilian and military agencies.
Additionally, U.S. officials in Washington, D.C. and several Gulf
countries noted that the agenda of more recent GSD meetings has
changed to focus on evolving regional security concerns and other
areas of interest to the participating country.
Although GSD meetings were to occur on a 6-month basis in rotating
capitals, these meetings have occurred every 18-24 months and, in some
instances, the United States has not hosted meetings, according to
U.S. officials. For example, U.S. officials in one Gulf country noted
that while the host country hosted several GSD meetings, the United
States has not hosted any. Additionally, U.S. officials in another
Gulf country noted that the United States has not held GSD meetings as
frequently as promised.
Conclusions:
While DOD provided data on arms transfer authorizations to six Gulf
countries through the FMS program since 2005, State could not provide
data on authorizations through direct commercial sales to the
governments of Gulf countries. Further, while State noted for the
first time in its 2008 report to Congress that the DCS authorization
data by country included the value of authorizations to U.S.
government entities in foreign countries, State did not provide the
magnitude of these authorizations. Therefore, Congress may not have a
clear understanding of DCS authorizations intended for foreign
governments. Additionally, as arms transfer authorizations increase to
this part of the world, the U.S. government needs to ensure that it
reviews requests for arms transfers, especially for significant
military equipment, for their foreign policy and national security
implications. The partial absence of documentation of agencies'
reviews, however, raises concerns that U.S. priorities are not
consistently considered before such sales are authorized.
Recommendations for Executive Action:
In order to address the data and documentation deficiencies noted in
our report, we are making the following three recommendations.
To ensure that State reports more clear and useful information on DCS
arms transfers authorized to the governments of Gulf countries, we
recommend that the Secretary of State:
1. Provide more details related to data in reports on arms transfer
authorizations to Congress. For example, for greater clarity, State
should specify where authorization data for a country include licenses
for U.S. government entities in that country as well as the value of
those licenses.
2. Modify the DCS database system, also called the case management
system, so that it has the capability to identify and separate
licenses issued to U.S. government entities and overlapping values of
related licenses.
3. To ensure that arms transfers are consistent with U.S. foreign
policy and national security goals, we recommend that the Secretaries
of State and Defense require documentation of key reviews and written
assessments against policy criteria, especially for sales of
significant military equipment.
Agency Comments and Our Evaluation:
We provided DOD and State with a draft of this report for their review
and comment. DOD and State provided written comments, which we have
reprinted in appendixes VI and VII, respectively. In its written
comments, DOD concurred with our recommendation and noted that it will
identify better processes to ensure that key assessments are
documented against national security goals.
In its written comments, State generally agreed with our
recommendations, but noted that implementation of these
recommendations may require additional resources. Specifically, in
response to our first recommendation, State said that it recognizes
the importance of maintaining and reporting reliable data on defense
exports to Congress and the public. State noted that, while it is not
currently possible to identify U.S. government end-users in the
database without a manual search, the department will continue to make
such identifications with existing resources. State also noted that
devising additional reporting formats would require the commitment or
allocation of significant additional resources. Accordingly, State
will encourage Congress to furnish criteria as decisions are made on
Export Control Reform. We agree that State should identify U.S.
government end-users in its reports to Congress. In considering
modifications to its case management system, State should also ensure
that the system has the capability to identify overlapping dollar
values of authorizations. Since State believes that these
modifications would require additional resources, we will monitor
agency fiscal year 2012 budget requests for this purpose.
State concurred with our third recommendation, stating that
documentation of its reviews of foreign policy and national security
justifications for all arms transfer authorizations could be improved.
State noted that its Political-Military Affairs Bureau and the Bureau
of Democracy, Human Rights, and Labor are already developing a better
means of documenting FMS and DCS case reviews for human rights
concerns. However, State disagreed with our conclusion that the
partial absence of documentation of agencies' reviews raises concerns
that U.S. priorities are not consistently considered before such sales
are authorized. It stated that the documentation we reported as
"missing" in certain Technical Assistance Agreements (TAA) amendments
was present in the base TAAs associated with those amendments. We
agree that State should take additional steps to improve documentation
of FMS and DCS case reviews. GAO's Standards for Internal Control in
the Federal Government requires that agencies clearly document
transactions and all significant events. The agencies could not
provide documentation of reviews for all the FMS and DCS cases we
selected. State notes that the missing documentation for two DCS cases
can be found in previously authorized licenses. These agreements were
notified to Congress and, pursuant to State's guidance, required a
review. Federal internal control standards also require that
documentation of decisions should be readily available for
examination. State did not provide us documentation that the Office of
Regional Security and Arms Transfers reviewed these cases.
DOD and State also provided technical comments, which we incorporated
in this report as appropriate.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. We are sending copies of the report to the
Secretaries of Defense and State and other interested parties. In
addition, the report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov].
If you or your staff have questions about this report, please contact
me at (202) 512-8979 or at christoffj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix VIII.
Signed by:
Joseph A. Christoff:
Director, International Affairs and Trade:
[End of section]
Appendix I: Scope and Methodology:
To determine the value and nature of arms transfers the U.S.
government authorized for the governments of six Gulf countries
(Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab
Emirates) through direct commercial sales (DCS) and the Foreign
Military Sales (FMS) program between fiscal years 2005 through 2009,
we interviewed officials and requested data from the Departments of
State (State) and Defense (DOD). We found FMS data to be sufficiently
reliable; however, we found that DCS data on dollar value of licenses
authorized to the governments of Gulf countries was not retrievable
and, as a consequence, we could not accurately report the magnitude of
DCS arms transfer authorizations.
We interviewed officials from State and DOD responsible for reviewing
and approving DCS and FMS arms transfer requests. At DOD we spoke to
officials from the Defense Security Cooperation Agency, Defense
Technology Security Administration, Defense Intelligence Agency, U.S.
Central Command, the Office of the Secretary of Defense, and the Joint
Chiefs of Staff. At State we spoke to officials from the Directorate
of Defense Trade Controls and the Office of Regional Security and Arms
Transfers--both these offices are under the Bureau of Political-
Military Affairs. We interviewed U.S. embassy officials in Bahrain,
Saudi Arabia, and the United Arab Emirates (UAE) and by telephone for
Kuwait, Oman, and Qatar. We also interviewed host country officials in
Bahrain and the UAE.
We obtained State's DCS license database, which contained 11,058
licenses of which 6,638 licenses were approved or approved with
conditions for the six Gulf countries between fiscal years 2005 and
2009. Among other things, this database included the dollar value,
description, and date of all approved licenses. We analyzed State's
DCS database to determine the value and type of equipment approved for
sale to Gulf countries. We assessed the reliability of DCS data by
comparing the total value of DCS licenses authorized by fiscal year to
State's annual 655 reports. We found that while the DCS data closely
matched the data reported in the 655 reports for fiscal years 2006
through 2008, the data were significantly different for fiscal year
2005. According to a State official, this difference may be because
the 655 report presents license information at a specific point in
time, while the information in the database may change if a license is
amended, revoked or suspended. Additionally we reviewed licenses for
end-user information and tried to determine cases where licenses were
related to each other and, thus, may have overlapping values. The
details of our data reliability assessment are noted below. Because of
limitations in the capability of State's database system, we could not
determine the total dollar value of DCS licenses for the governments
of Gulf countries between fiscal year 2005 and fiscal year 2009.
To identify the licenses where the U.S. government was the end-user,
we performed two searches on the database. First, we searched the
"description" field in the database for keywords--such as U.S.
military and Operation Iraqi Freedom--that were typically used for
U.S. government entities. Based on the keyword search, we separated
the licenses for defense articles and services where the U.S.
government was listed as the end-user. Second, to ensure that the
keyword search correctly identified licenses to U.S. government
entities in Gulf countries, we manually searched the top 100 highest
value licenses and removed any licenses where a Gulf country was the
end-user. We then summed the top 100 highest value licenses to U.S.
government entities in Gulf countries to determine the extent to which
the database includes these licenses. While we were able to determine
that at least $6 billion was authorized for U.S. government entities,
because the "description" fields did not always contain information
indicating the end-user, we cannot determine the exact value of
authorizations to U.S. government entities.
To identify instances where the license values overlapped, we searched
the description field in the database for keywords such as "in
furtherance" to identify licenses that were issued "in furtherance" of
an initial agreement. Based on the keyword search, we identified
license values that may be counted more than once over one year or
multi-year period. We then submitted examples from the keyword search
to State officials to confirm whether this listing of a license in
furtherance of an initial agreement represented a risk of being
counted twice.
For FMS, DOD provided 1,123 actions that included new Letters of Offer
and Acceptance (LOA), as well as amendments or modifications to
existing LOAs, for the six Gulf countries between fiscal years 2005
and 2009. This data was extracted from DOD's Defense Security
Assistance Management System and 1200 system databases and included
information such as dollar value, item description, the implementing
agency, and date of approval for each action. We determined the data
provided by DOD for FMS to the six Gulf countries between fiscal years
2005 and 2009 were both complete and sufficiently reliable for our
use. We verified that the correct databases were used to generate the
FMS data and cross-referenced numerous datasets provided by DOD.
To identify the nature of equipment authorized to Gulf countries
between fiscal years 2005 and 2009 we did the following:
* For FMS, we identified cases that represented highest value
authorizations for Gulf countries. For illustrative purposes, we
identified the top 10 highest value authorizations for the UAE and
Saudi Arabia, since authorizations to these countries is significantly
higher than to other Gulf countries. We identified the top five
highest value authorizations for the remaining four Gulf countries.
* For DCS, some highest value licenses did not have a description. As
a result, we only included information where both the value and the
description for the DCS license were available. For illustrative
purposes, we selected the top 10 high value authorizations for UAE and
Saudi Arabia, and top five high value authorizations for the remaining
four Gulf countries.
To assess agencies' review of arms transfer requests for foreign
policy and national security considerations, we reviewed agency
guidelines, policies, and other documents, and interviewed agency
officials from State and DOD. To obtain information on the role of key
implementing agencies in reviewing arms transfer requests, we obtained
documents and interviewed officials from:
* Department of the Army's U.S. Army Security Assistance Command, the
Deputy Assistant Secretary of the Army for Defense Exports and
Cooperation, and the Office of the Program Manager--Saudi Arabian
National Guard;
* Department of the Navy's International Programs Office; and:
* Department of the Air Force's Secretary of the Air Force/
International Affairs.
We selected a judgmental sample of FMS and DCS approved requests to
determine the nature and extent of the review process and verify
agency officials' statements that they reviewed FMS and DCS cases for
national security and foreign policy considerations. We selected
requests approved in 2008 and 2009 only, as agency officials stated
relatively recent cases would be more easily retrievable for
examination. Because we selected a judgmental sample, we cannot
generalize our findings to all FMS and DCS authorizations for this
time period. We selected cases based on a mix of criteria such as high
dollar values overall and per country, sensitivity of equipment, and
destination country. We selected 15 cases for the UAE and Saudi
Arabia, which had a larger share of authorizations, compared to 13
cases for the remaining Gulf countries, which had a lower share of
authorizations.
For FMS, we selected a judgmental sample of 13 cases based on the DOD-
provided LOA data. These cases represented about 40 percent of the
total dollar value of FMS authorization for 2008-2009 time period. We
used the following criteria to select our sample: (1) fiscal year, (2)
requesting country, (3) high dollar values overall and per country,
(4) sensitivity of arms requested such as night vision devices, and
(5) agency implementing the case. We selected six cases for the UAE
and Saudi Arabia, which had a larger share of authorizations, compared
to seven cases for the remaining Gulf countries, which had a lower
share of authorizations. Although we chose at least one case for each
of the six countries, we selected 8 of the 13 LOAs from agreements
offered to Saudi Arabia, the UAE, and Kuwait, as they accounted for
about 96 percent of the total value of agreements. Finally, we chose
at least one case in which the Army, Navy, or Air Force served as the
implementing agency.
For DCS, we selected a judgmental sample of 20 approved licenses from
State's DCS database to determine the nature and extent of the DCS
review process and verify agency officials' statements that they
reviewed DCS cases for national security and foreign policy
considerations. We subsequently found that five licenses were for U.S.
government entities, which do not require foreign policy and national
security review. We therefore removed these cases from our sample and
were left with 15 DCS licenses. These licenses had a value of more
than $3 billion. We used the following criteria to select our sample:
(1) fiscal year; (2) destination country; (3) sensitivity of the
defense article or service requested, such as if the authorization
approvals were conditional; and (4) high dollar value licenses overall
and per country. We selected nine cases for the UAE and Saudi Arabia,
which had a larger share of authorizations, compared to six cases for
the remaining Gulf countries, which had a lower share of
authorizations.
We requested DOD and State provide documentation related to important
decisions or milestones for our judgmental sample of 13 FMS and 15 DCS
approved requests to verify their consideration of foreign policy and
national security during the review process. The documents we
requested included: (1) decisions related to the release of the
requested technology including any conditions placed upon the sale of
defense articles and services; (2) evidence of referrals to internal
components, committees, or other agencies for specific reviews; (3)
country team assessments, if needed; (4) congressional notifications,
if needed; (5) approved agreement or license; and (6) other
documentation illustrating the review and approval process such as
internal memos, correspondence, tracking sheets, or checklists.
To understand the purpose of the Gulf Security Dialogue (GSD), we
interviewed officials from State and DOD headquarters. Additionally,
we interviewed U.S. officials in Bahrain, Saudi Arabia, and the UAE;
and conducted phone interviews with U.S. officials in Kuwait, Oman,
and Qatar. We also reviewed State department reporting cables
describing the agenda and nature of the GSD meetings.
We conducted this performance audit from August 2009 to September 2010
in accordance with generally accepted government auditing standards.
These standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Highest Value FMS Authorizations for Gulf Countries:
The table below represents the highest value agreements in descending
order, by country, signed between the United States and the country
between fiscal years 2005 and 2009. The totals include new agreements,
as well as amendments and modifications to agreements that may have
occurred over several years between fiscal years 2005 and 2009.
Table 4: Highest Value FMS Authorizations for Gulf Countries, Fiscal
Years 2005 to 2009:
UAE:
Defense article or service: Patriot missile defense system;
Total value: $6.516 billion;
Fiscal year: 2009.
Defense article or service: UH-60M Black Hawk helicopters;
Total value: $1.554 billion;
Fiscal year: 2007-2009.
Defense article or service: AH-64A Apache helicopters;
Total value: $743 million;
Fiscal year: 2006, 2008-2009.
Defense article or service: F-16 aircraft munitions;
Total value: $700 million;
Fiscal year: 2008-2009.
Defense article or service: High Mobility Artillery Rocket System;
Total value: $595 million;
Fiscal year: 2007.
Defense article or service: Hellfire missiles;
Total value: $149 million;
Fiscal year: 2009.
Defense article or service: Javelin launchers and missiles;
Total value: $118 million;
Fiscal year: 2006, 2009.
Defense article or service: F-16 Block 60 training;
Total value: $113 million;
Fiscal year: 2005, 2007-2009.
Defense article or service: Evolved Sea Sparrow missiles;
Total value: $108 million;
Fiscal year: 2006, 2009.
Defense article or service: AH-64A Apache helicopters;
Total value: $72 million;
Fiscal year: 2005-2006, 2008-2009.
Saudi Arabia:
Defense article or service: F110 engines and buildings for aircraft;
Total value: $866 million;
Fiscal year: 2007-2008.
Defense article or service: F-15 sustainment and support;
Total value: $801 million;
Fiscal year: 2005-2009.
Defense article or service: Saudi Arabian National Guard-Training and
local procurement of services;
Total value: $495 million;
Fiscal year: 2009.
Defense article or service: Saudi Arabian National Guard-Construction;
Total value: $450 million;
Fiscal year: 2009.
Defense article or service: Light Armored Vehicles;
Total value: $403 million;
Fiscal year: 2008.
Defense article or service: UH60L Black Hawk helicopters;
Total value: $343 million;
Fiscal year: 2006, 2008.
Defense article or service: Apache helicopters;
Total value: $339 million;
Fiscal year: 2007-2008.
Defense article or service: M1A2 and M1A2S tanks;
Total value: $316 million;
Fiscal year: 2006-2009.
Defense article or service: Saudi Arabian National Guard-Services and
support;
Total value: $285 million;
Fiscal year: 2009.
Defense article or service: F-15 aircraft engine repair;
Total value: $263 million;
Fiscal year: 2005-2006 2008-2009.
Kuwait:
Defense article or service: Patriot Advanced Capability III upgrade;
Total value: $256 million;
Fiscal year: 2008.
Defense article or service: Fast interceptor boats and support;
Total value: $167 million;
Fiscal year: 2006, 2008.
Defense article or service: F/A-18 C/D follow-on material;
Total value: $158 million;
Fiscal year: 2006, 2009.
Defense article or service: Patriot missile support follow-on services;
Total value: $109 million;
Fiscal year: 2006, 2008.
Defense article or service: Tube-launched optically-tracked, wire-
guided (TOW) 2A and 2B missiles;
Total value: $103 million;
Fiscal year: 2005, 2008.
Bahrain:
Defense article or service: UH-60M Black Hawk helicopters;
Total value: $208 million;
Fiscal year: 2007, 2009.
Defense article or service: Follow-on support for F-16 C/D aircrafts;
Total value: $51 million;
Fiscal year: 2005-2009.
Defense article or service: Multiple Launch Rocket System Fire Control
upgrade;
Total value: $33 million;
Fiscal year: 2008-2009.
Defense article or service: Hawk missile system support;
Total value: $22 million;
Fiscal year: 2005-2009.
Defense article or service: Air Defense System Integrator;
Total value: $17 million;
Fiscal year: 2007-2008.
Qatar:
Defense article or service: Support for C-17 Globemaster A/C;
Total value: $168 million;
Fiscal year: 2009.
Defense article or service: Training;
Total value: $13 million;
Fiscal year: 2007.
Defense article or service: Training;
Total value: $13 million;
Fiscal year: 2008.
Defense article or service: F-117 engines for C-17;
Total value: $11 million;
Fiscal year: 2009.
Defense article or service: Communication Security custodians;
Total value: $4 million;
Fiscal year: 2008-2009.
Oman:
Defense article or service: F-16 sustainment case;
Total value: $38 million;
Fiscal year: 2009.
Defense article or service: Approach radar system;
Total value: $27 million;
Fiscal year: 2005-2008.
Defense article or service: Radio equipment;
Total value: $20 million;
Fiscal year: 2007.
Defense article or service: Javelin missiles and launchers;
Total value: $15 million;
Fiscal year: 2005.
Defense article or service: Javelin weapon system;
Total value: $11 million;
Fiscal year: 2008.
Source: DOD.
[A] Total value refers to the total dollar amount of all agreements
signed between 2005 and 2009 (including amendments, modifications, and
new LOAs).
[B] Fiscal year refers to the year in which the basic agreement,
modifications, or amendments were offered by the U.S. government to
the foreign government. A range of years indicates that at least one
agreement, modification or amendment was offered in each of the years
within the range.
[End of table]
[End of section]
Appendix III: Select High Value DCS Authorizations for Gulf Countries:
The table below represents a selection of the high value licenses,
where a description was available, by country, for all new licenses
authorized between fiscal years 2005 and 2009. Information for high
value DCS licenses is based on cases where State's database included a
description of the defense article or service authorized via a
license. If the value of the license was among the highest values, but
did not include a description, we were unable to use it to describe
the nature of equipment authorized. We did not include licenses where
the U.S. government was listed as the end-user.
Table 5: High Value DCS Authorizations for Gulf Countries, Fiscal
Years 2005 to 2009:
UAE:
Defense articles or services: Equipment related to the F-16 Block 60
aircraft;
Value: $1,011;
Fiscal year: 2009.
Defense articles or services: D3 satellite;
Value: $180;
Fiscal year: 2006.
Defense articles or services: Modification and upgrade of aircraft;
Value: $178;
Fiscal year: 2009.
Defense articles or services: CH-47F Chinook helicopters;
Value: $159;
Fiscal year: 2009.
Defense articles or services: Support equipment for vehicles;
Value: $54;
Fiscal year: 2009.
Defense articles or services: F-16 Block 60 defense articles;
Value: $50;
Fiscal year: 2005.
Defense articles or services: Spare parts for repair and maintenance
of C130 and L100 aircraft;
Value: $40;
Fiscal year: 2005.
Defense articles or services: F-16 Block 60 defense articles;
Value: $35;
Fiscal year: 2009.
Defense articles or services: Marketing license for vessels;
Value: $32;
Fiscal year: 2008.
Defense articles or services: Repair and maintenance of C130 and L100
aircraft;
Value: $25;
Fiscal year: 2007.
Saudi Arabia:
Defense articles or services: S-92 helicopters;
Value: $512;
Fiscal year: 2008.
Defense articles or services: Overhaul and repair for F100-W-220/220E
and 229 engines;
Value: $315;
Fiscal year: 2008.
Defense articles or services: Hardware for the Eurofighter aircraft;
Value: $34;
Fiscal year: 2009.
Defense articles or services: Spare parts and components for the F15S
aircraft;
Value: $34;
Fiscal year: 2009.
Defense articles or services: Repair and maintenance of Light Armored
Vehicles;
Value: $34;
Fiscal year: 2009.
Defense articles or services: Marketing license for vessels;
Value: $32;
Fiscal year: 2008.
Defense articles or services: Hardware for HAWK air defense system;
Value: $30;
Fiscal year: 2008.
Defense articles or services: Munitions and training bombs;
Value: $27;
Fiscal year: 2007.
Defense articles or services: Military radio and communications
equipment;
Value: $26;
Fiscal year: 2009.
Defense articles or services: Spare parts for F15S aircraft;
Value: $26;
Fiscal year: 2009.
Kuwait:
Defense articles or services: Marketing license for vessels;
Value: $32;
Fiscal year: 2008.
Defense articles or services: Helicopters;
Value: $14;
Fiscal year: 2008.
Defense articles or services: Vehicles;
Value: $14;
Fiscal year: 2009.
Defense articles or services: Repair of F/A 18 aircraft;
Value: $13;
Fiscal year: 2008.
Defense articles or services: Repair of Patriot missile defense system;
Value: $13;
Fiscal year: 2009.
Bahrain:
Defense articles or services: Model 412EP helicopters with NVG
lighting;
Value: $48;
Fiscal year: 2009.
Defense articles or services: F-16 spare parts;
Value: $43;
Fiscal year: 2008.
Defense articles or services: Marketing license for vessels;
Value: $32;
Fiscal year: 2008.
Defense articles or services: S-70 helicopter repair;
Value: $4;
Fiscal year: 2006.
Defense articles or services: Spare parts for AH-1 and 212 helicopters;
Value: $4;
Fiscal year: 2007.
Qatar:
Defense articles or services: C-17 Globemaster III transport aircraft;
Value: $460;
Fiscal year: 2009.
Defense articles or services: C-17 spare parts and support equipment;
Value: $70;
Fiscal year: 2009.
Defense articles or services: C-17 spare parts;
Value: $18;
Fiscal year: 2009.
Defense articles or services: Equipment to be installed on Sea King
aircraft for security and surveillance, and search and rescue;
Value: $5;
Fiscal year: 2006.
Defense articles or services: Maintenance and repair of Sea King
Commando helicopters;
Value: $3;
Fiscal year: 2009.
Oman:
Defense articles or services: Marketing license for vessels;
Value: $32;
Fiscal year: 2008.
Defense articles or services: Spare engines;
Value: $17;
Fiscal year: 2005.
Defense articles or services: Radar;
Value: $7;
Fiscal year: 2007.
Defense articles or services: Security and surveillance;
Value: $3;
Fiscal year: 2005.
Defense articles or services: Maintenance for Super Lynx 300
helicopters;
Value: $3;
Fiscal year: 2005.
Source: State.
Note: The information in this table represents values from individual
DCS licenses. Thus, some defense articles or services may be repeated
because they appeared on more than one license.
[End of table]
[End of section]
Appendix IV: U.S. Organizations Involved in Review of DCS Requests for
Gulf Countries:
National Security and Foreign Policy Review:
(Administrating agency: State's Directorate of Defense Trade Controls):
Release of technology:
Defense Technology Security Administration:
* Military departments:
- Department of the Air Force:
- Department of the Army:
- Department of the Navy:
* Office of the Secretary of Defense:
* Joint Chiefs of Staff:
* National Security Agency:
* Defense Intelligence Agency:
* Defense Security Cooperation Agency:
* Defense Advanced Research Projects Agency:
Regional impact:
* Bureau of Political-Military Affairs, Office of Regional Security
and Arms Transfers:
* Bureau of Near Eastern Affairs:
Human rights:
* Bureau of Democracy, Human Rights, and Labor:
Proliferation:
* Bureau of International Security and Nonproliferation:
* Missile Technology Export Control Committee:
- Department of State (Committee Chair):
- Defense Technology Security Administration:
- Department of Commerce:
- Department of Homeland Security:
- Department of Energy:
- National Aeronautics and Space Administration:
- Representatives from the Intelligence Community:
Other agencies:
* Department of Energy:
* National Aeronautics and Space Administration:
[End of section]
Appendix V: U.S. Organizations Involved in Review of FMS Requests for
Gulf Countries:
National Security and Foreign Policy Review:
(Administrating agency: DOD's Defense Security Cooperation Agency):
Technical reviews:
Security Assistance Organizations:
* Bahrain--Office of Military Cooperation:
* Kuwait--Office of Military Cooperation:
* Oman--Office of Military Cooperation:
* Qatar--United States Liaison Office:
* Saudi Arabia:
- Office of the Program Manager-Facilities Security Forces:
- United States Military and Training Mission:
- Office of the Program Manager-Saudi Arabian National Guard:
* United Arab Emirates-United States Liaison Office:
Implementing agencies:
* Department of the Air Force:
* Department of the Army:
* Department of the Navy:
* Other organizations:
- Defense Contract Management Agency:
- Defense Information Systems Agency:
- Defense Logistics Agency:
- Defense Security Cooperation Agency:
- Defense Threat Reduction Agency:
- National Geospatial Intelligence Agency:
- National Security Agency:
Release of technology:
* Military department's review:
- Navy's Technology Transfer Security Assistance Review Board:
- Army's Technology Transfer Security Assistance Review Panel:
- Air Force's Topline:
Special committees:
* National Disclosure Policy Committee:
- Secretary of State:
- Secretary of Defense:
- Secretary of the Army:
- Secretary of the Navy:
- Secretary of the Air Force:
- Chairman of the Joint Chiefs of Staff:
- Special Members (who vote on issues that only pertain to them)
include: the Secretary of Energy; the Director of National
intelligence; the Director of Central Intelligence the Under Secretary
of Defense for Policy; the Under Secretary of Defense for Acquisition,
Technology, and Logistics; the Under Secretary of Defense for
Intelligence; the Assistant Secretary of Defense for Networks and
Information Integration/DOD Chief Information Officer; the Assistant
to the Secretary of Defense (Nuclear, Chemical and Biological Defense
Programs); the Director of Defense Intelligence Agency; the Director
of Missile Defense Agency; the Director of National Geospatial-
Intelligence Agency; and the Director of National Security Agency:
* Low-Observable/Counter-Low-Observable Executive Committee:
- Under Secretary of Defense for Acquisition, Technology, and
Logistics (Committee Chair):
- Vice Chairman, Joint Chiefs of Staff:
- Army, Service Acquisition Executive:
- Navy, Service Acquisition Executive:
- Air Force, Service Acquisition Executive:
- Under Secretary of Defense for Policy:
- Under Secretary for Defense for Intelligence:
- Principal Deputy Under Secretary of Defense for Acquisition,
Technology, and Logistics:
- Director of Defense Research and Engineering:
- Director of Strategic and Tactical Systems:
- Director of Operational Test and Evaluation:
- Missile Defense Agency representative:
- Defense Advanced Research Projects Agency representative:
* Tri-Service Committee:
- Director of the Office of Special Programs, Office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics
(Committee Chair):
- Air Force representative:
- Navy representative:
- Army representative:
- Director of Special Programs Staff:
- Joint Staff representative:
- Defense Technology Security Agency representative:
* Committee on National Security Systems:
- Director National Security Agency-National Manager:
- Secretary of State:
- Secretary of Treasury:
- Secretary of Defense:
- Attorney General:
- Secretary of Commerce:
- Secretary of Transportation:
- Secretary of Energy:
- Director of the Office of Management and Budget:
- National Security Advisor:
- Director of Central Intelligence:
- Defense Intelligence Agency:
- Federal Bureau of Investigation:
- Federal Emergency Management Agency:
- General Services Administration:
- Army, Navy, Air Force, and Marine Corps representatives:
National security policy and strategy:
* U.S. Central Command:
* Joint Chiefs of Staff:
* Office of the Secretary of Defense:
Regional impact:
* U.S. Embassy country team, including:
- Ambassador:
- Political, and Political-Military Counselors:
- Security Cooperation Organizations:
* Bureau of Political-Military Affairs, Office of Regional Security
and Arms Transfers:
* Bureau of Near Eastern Affairs:
Human rights:
* U.S. Embassy:
* Bureau of Democracy, Human Rights, and Labor:
Proliferation:
* Bureau of International Security and Nonproliferation:
* Implementing agencies:
[End of section]
Appendix VI: Comments from the Department of State:
United States Department of State
Chief Financial Officer:
Washington, D.C. 20520:
September 8, 2010:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "Persian
Gulf: U.S. Agencies Need to Improve Licensing Data and Document
Reviews of Arms Transfers for U.S. Foreign Policy and National
Security Goals," GAO Job Code 320705.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
John A. Schwenk, Team Leader for the Middle East and Africa, Office of
Regional and Arms Transfers, Bureau of Political-Military Affairs at
(202) 647-2558.
Sincerely,
Signed by:
James L. Millette:
cc: GAO ” Joseph Christoff:
PM ” Andrew J. Shapiro:
State/OIG ” Tracy Burnett:
[End of letter]
Department of State Comments on GAO Draft Report:
Persian Gulf: U.S. Agencies Need to Improve Licensing Data and
Document Reviews of Arms Transfers for U.S. Foreign Policy and
National Security Goals (GAO-10-918, GAO Code 320705):
Thank you for the opportunity to comment on your draft report
entitled, "Persian Gulf: U.S. Agencies Need to Improve Licensing Data
and Document Reviews of Arms Transfers for U.S. Foreign Policy and
National Security Goals."
The Department of State (State) believes some of GAO's main
conclusions throughout the report are based on inaccurate
interpretations of existing requirements and reporting but agrees that
documentation of key decisions pertaining to both Direct Commercial
Sales (DCS) and Foreign Military Sales (FMS) processes could be
improved.
State would like to clarify that all authorizations for the export of
defense articles and defense services, whether DCS or FMS, are subject
to a rigorous analytical process to ensure consistency with U.S.
Government foreign policy and national security goals.
Recommendation 1: Provide more details related to authorizations data
in reports on arms transfer authorizations to Congress. For example,
for greater clarity, State should specify where authorization data for
a country include licenses, as well as their value, to U.S. government
entities in that country.
Recommendation 2: Modify the DCS case management system so that it has
the capability to generate information such as authorizations to
foreign country governments by identifying and separating licenses
issued for arms transfers to U.S. government entities in foreign
countries and overlapping values of related licenses.
State recognizes the importance of maintaining and reporting to the
Congress and public reliable data on United States defense exports
through direct commercial sales or the Foreign Military Sales program.
The draft report identifies gaps and inconsistencies in reports of
this nature by the Executive Branch, some of which result from the
differing reporting requirements of the Foreign Assistance Act of 1961
(FAA). State agrees that the information that GAO requests to have
extracted from the DCS case management system would be useful to users
and looks forward to working with Congress to determine the efficacy
of changing the requirements to the FAA to provide such information.
State faithfully reports to Congress all data requested by it
pertaining to exported articles and services. The Department has
undertaken efforts to improve its reporting on transfers to U.S.
Government entities under FAA Section 655.
The DCS case management system is designed to capture all
authorizations, and extracting data for the 655 Report is just one of
its purposes. While it is not currently possible to identify USG end-
users in the database without a manual search, the Department will
continue to make such identifications with existing resources.
Devising additional reporting formats would require the commitment or
allocation of significant additional resources.
Providing consolidated and useful defense export data to Congress and
the public is consistent with the goals of Export Control Reform and
the Executive Branch task force evaluating proposals and
recommendations associated with it. As decisions are made on Export
Control Reform, the Department of State will encourage the Congress to
furnish criteria and resources to develop appropriate information
technology platforms and reporting criteria of benefit to both the
Congress and the public.
Recommendation 3: To ensure that arms transfers are consistent with
U.S. foreign policy and national security goals, we recommend that the
Secretaries of State and Defense require documentation of key reviews
and written assessments against policy criteria, especially sales of
significant military equipment.
The Department documents its foreign policy and national security
justifications for all arms transfer authorizations, whether they
require congressional notification or not. For cases requiring
Congressional notification, State develops a formal foreign policy and
national security justification package, pursuant to the notification
requirements in the Arms Export Control Act (AECA). For requests
falling below Congressional notification thresholds, State conducts a
foreign policy and national security analysis that is captured either
in formal documentation or through correspondence with the relevant
reviewing agencies or offices. As the Department's lead for arms
transfers, the Bureau of Political Military Affairs (PM) is working to
ensure FMS and DCS cases are cleared with the Department's key bureaus
and other relevant agencies for their potential impact on regional
security, human rights and other concerns. For example, PM and the
Bureau of Democracy, Human Rights and Labor (DRL) are already
developing a better means of documenting FMS and DCS case reviews for
human rights concerns.
The Department agrees that documentation of these reviews could be
improved, though we do not concur with GAO's comment that "[t]he
partial absence of documentation of agencies' reviews, however, raises
concerns that U.S. priorities are not consistently considered before
such sales are authorized." The documentation GAO states is "missing"
in certain Technical Assistance Agreements (TAA) amendments was
present in the base TAAs associated with those amendments, though the
Department could link the amendments to the existing authorization
more explicitly.
[End of section]
Appendix VII: Comments from the Department of Defense:
Office Of The Assistant Secretary Of Defense:
International Security Affairs
Washington, D.C. 20301-2400:
Mr. Joseph A. Christoff:
Director, International Affairs and Trade:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548:
Dear Mr. Christoff:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) draft report, GA0-10-918, "Persian Gulf:
U.S. Agencies Need to Improve Licensing Data and Document Reviews of
Arms Transfers for U.S. Foreign Policy and National Security Goals,"
dated August 10, 2010 (GAO Code 320705).
Recommendation: To ensure that arms transfers are consistent with U.S
foreign policy and national security goals, the GAO recommends that
the Secretaries of State and Defense document key reviews and written
assessments against policy criteria, especially for sales of
significant military equipment.
DoD Response: Concur. The Department continuously strives to identify
better processes to ensure all key assessments are documented against
national security goals. DoD appreciates GAO's feedback and assistance
with our efforts at continuous process improvement.
Sincerely,
Signed by:
James M. Holmes:
Brig Gen, USAF:
Principal Director, Middle East Policy:
[End of section]
Appendix VIII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Joseph A. Christoff, (202) 512-8979 or christoffj@gao.gov:
Staff Acknowledgments:
In addition to the person named above, Jeff Phillips (Assistant
Director), Ashley Alley, Martin De Alteriis, Jenna Beveridge, Mitchell
Karpman, Mary Moutsos, Aku Pappoe, Mona Sehgal, Bradley Terry, and
Jason Trentacoste made key contributions to this report. Karen Deans,
Etana Finkler, John Neumann, Madhav Panwar, and Michael Simon also
provided technical assistance.
[End of section]
Footnotes:
[1] For the purposes of this report, arms transfers include defense
articles and services authorized for sale through direct commercial
sales, as well as defense articles and services that the U.S.
government sells to foreign governments and international
organizations through the Foreign Military Sales program.
[2] Although DOD implements FMS, the Secretary of State is responsible
for the continuous supervision and general direction of sales and
exports under the Arms Export Control Act.
[3] FMS is negotiated between the U.S. government and a foreign
government, while DCS is negotiated between a U.S. supplier and a
foreign buyer.
[4] For the purposes of this report, we refer to State's DCS case
management system as the DCS database system.
[5] We assessed the value of arms transfers authorized for the
governments of each of these countries. We did not assess defense
equipment and services subsequently contracted for or delivered to the
countries. GAO will report on FMS and DCS deliveries in a subsequent
report.
[6] Prior to April 2010, DOD policy required U.S. embassies to conduct
assessments for defense articles considered to be significant military
equipment, which are arms on the U.S. Munitions List that warrant
special export controls because of their capacity for substantial
military utility or capability. 22 U.S.C. 2794(9) and Security
Assistance Management Manual C5.T1. Current DOD policy requires these
assessments only for major defense equipment, which is significant
military equipment with a non-recurring research and development cost
of more than $50 million or total production cost of more than $200
million. 22 U.S.C. 2794(6).
[7] Bahrain is the only Arab Gulf country where the majority of the
population is identified with Shia Islam. Oman is predominantly Ibadi.
[8] AECA, as amended, 22 U.S.C. §§ 2751 et seq.
[9] 22 U.S.C. § 2321j.
[10] National Defense Authorization Act of 2006, as amended, Pub. L.
No. 109-163, § 1206. 119 Stat. 3136, 3456-58 (2006).
[11] 22 U.S.C. § 2776(h).
[12] 22 U.S.C. § 2415.
[13] To determine the minimum value of licenses to U.S. government
entities, we summed the top 100 highest value licenses to U.S.
government entities in Gulf countries where we could clearly verify
that the U.S. government was listed as the end-user. Since the
description field did not always contain information clearly
indicating the end-user, we cannot determine the exact value of
authorizations for U.S. government entities.
[14] State's 2009 report on arms transfers authorization was due on
February 1, 2010.
[15] Black Hawk helicopters are tactical transport helicopters,
capable of transporting an 11-person infantry squad. Apache
helicopters are designed to navigate and conduct precision attacks in
day, night, and adverse weather conditions.
[16] Information for high value DCS licenses is based on cases where
the State's database included a description of the defense article or
service authorized via a license. If the value of the license was
among the highest values, but did not include a description, we were
unable to use it to describe the nature of equipment authorized.
[17] The Chinook is a twin-engine helicopter designed for transporting
cargo, troops, and weapons.
[18] The S-92 is a four-blade twin-engine medium-lift helicopter for
civil and military use. The F-15 aircraft is a supersonic fighter
aircraft used for air-to-air combat.
[19] According to Presidential Decision Directive 34, all arms
transfer decisions should take into account 12 criteria in the CAT
policy.
[20] DOD 5105.38-M, "Security Assistance Management Manual" (October
3, 2003). This manual provides guidance for the administration and
implementation of security assistance and related activities in
compliance with the Foreign Assistance Act, the AECA, and related
statutes and directives.
[21] The AECA, as amended in 2008, defines qualitative military edge
as the ability to counter and defeat any credible conventional
military threat from any individual state or possible coalition of
states or from nonstate actors, while sustaining minimal damages and
casualties, through the use of superior military means, possessed in
sufficient quantity, including weapons, command, control,
communication, intelligence, surveillance, and reconnaissance
capabilities that in their technical characteristics are superior in
capability to those of such other individual or possible coalition of
states or nonstate actors. 22 U.S.C. § 2776(h)(2).
[22] See April 5, 2010, Security Assistance Management Manual e-change
161 to DSCA Policy 10-23 for this change in requirements.
[23] National Disclosure Policy governs the disclosure of classified
military information, including classified weapons. This policy was
established by National Security Decision Memorandum 119, Disclosure
of Classified Military Information to Foreign Governments and
International Organizations, July 20, 1971, as approved by the
President. It was amended by a White House memorandum dated June 6,
1978.
[24] We originally selected 33 cases, but 5 DCS authorizations were
for U.S. government entities in Gulf countries and, therefore, did not
require foreign policy and national security reviews.
[25] Since we could not determine the total value of DCS
authorizations to Gulf countries, we cannot determine what percent of
the total value our selected cases represent.
[26] According to DTSA officials, State is not required to notify DTSA
of DCS arms transfer authorizations related to broader DCS agreements
that DTSA has previously reviewed and approved. One of the 15 DCS
authorizations was for an arms transfer that DTSA had previously
approved.
[27] State's Office of Regional Security and Arms Transfers manages
U.S. political-military relations with other countries and acts as a
link between various State offices and DOD.
[28] Terminal High Altitude Area Defense weapon system consists of
missiles, mobile launchers, ground based radars, a tactical operations
center, and support equipment. It intercepts ballistic missiles
warheads at high altitudes, therefore, reducing the probability that
debris and chemical or biological agents will reach the ground in
damaging amounts. According to DOD officials, the sale of this weapon
for the UAE has not been finalized.
[End of section]
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