Export Controls:

Challenges Exist in Enforcement of an Inherently Complex System

GAO-07-265: Published: Dec 20, 2006. Publicly Released: Dec 20, 2006.

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Each year, billions of dollars in dual-use items--items that have both commercial and military applications--as well as defense items are exported from the United States. To protect U.S. interests, the U.S. government controls the export of these items. A key function in the U.S. export control system is enforcement, which aims to prevent or deter the illegal export of controlled items. This report describes the roles, responsibilities, and authorities of export control enforcement agencies, identifies the challenges these agencies face, and determines if information on enforcement outcomes is provided to the export control agencies. GAO's findings are based on an examination of statutes, interagency agreements, and procedures; interviews with enforcement officials at selected field locations and headquarters; and an assessment of enforcement information.

The enforcement of export control laws and regulations is inherently complex, involving multiple agencies with varying roles, responsibilities, and authorities. The agencies within the Departments of Commerce, Homeland Security, Justice, and State that are responsible for export control enforcement conduct a variety of activities, including inspecting items to be exported, investigating potential export control violations, and pursuing and imposing appropriate penalties and fines against violators. These agencies' enforcement authorities are granted through a complex set of laws and regulations, which give concurrent jurisdiction to multiple agencies to conduct investigations. Enforcement agencies face several challenges in enforcing export control laws and regulations. For example, agencies have had difficulty coordinating investigations and agreeing on how to proceed on cases. Coordination and cooperation often hinge on the relationships individual investigators across agencies have developed. Other challenges include obtaining timely and complete information to determine whether violations have occurred and enforcement actions should be pursued, and the difficulty in balancing multiple priorities and leveraging finite human resources. Each enforcement agency has a database to capture information on its enforcement activities. However, outcomes of criminal cases are not systematically shared with State and Commerce, the principal export control agencies. State and Commerce may deny license applications or export privileges of indicted or convicted export violators. Without information on the outcomes of criminal cases, export control agencies cannot gain a complete picture of an individual or a company seeking export licenses or discover trends in illegal export activities. This report is a publicly releasable version of a law enforcement sensitive report we issued on November 15, 2006. Therefore, some examples that involved law enforcement techniques or methods and that support our findings have been removed from this version.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to establish a task force to evaluate options to improve coordination and cooperation among export enforcement investigative agencies, such as creating new or updating existing operating agreements between and among these agencies, identifying and replicating best practices for routinely collaborating on or leading investigations, and establishing a mechanism for clarifying roles and responsibilities for individual export control cases involving foreign counterintelligence.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: According to information submitted by Commerce in June 2008, to enhance coordination as directed by the GAO, the Justice Department recently appointed the Department's first National Export Control Coordinator. In this position, the Coordinator will be responsible for the development of comprehensive training materials for prosecutors nationwide and coordinating with the various U.S. law enforcement, licensing and intelligence agencies that play a role in export enforcement. It is expected that this appointment will result in improved coordination and cooperation among the organizations. Since the appointment, DOJ's Counterproliferation Task Forces have been set up in a number of locations, and BIS/OEE has participated in many of these task forces.

    Recommendation: To ensure that State and Commerce have complete information on enforcement actions, the Attorney General should direct the Director of the Executive Office for U.S. Attorneys, in consultation with the Assistant Attorney General in charge of the National Security Division, to establish formal procedures for conveying criminal export enforcement results to State's Directorate of Defense Trade Controls and Commerce's Bureau of Industry and Security.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: Beginning in April 2007, the Department of Justice's Executive Office for U.S. Attorneys, in consultation with Justice's National Security Division, implemented this recommendation by providing a quarterly report to the Departments of State and Commerce on criminal enforcement actions.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to establish a task force to evaluate options to improve coordination and cooperation among export enforcement investigative agencies, such as creating new or updating existing operating agreements between and among these agencies, identifying and replicating best practices for routinely collaborating on or leading investigations, and establishing a mechanism for clarifying roles and responsibilities for individual export control cases involving foreign counterintelligence.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Immigration and Customs Enforcement

    Status: Closed - Implemented

    Comments: Over the past 18 months, the Department of Homeland Security's Bureau of Immigration and Customs Enforcement has taken steps to address coordination, de-confliction and information with its counter-proliferation partners in the law enforcement and intelligence communities. DHS/ICE has made internal and external changes to address the GAO concerns, including: 1) the creation of the National Export Enforcement Coordination Network--which serves as the hub for 15 Export Enforcement Coordination Groups based in 10 domestic ICE filed offices within the U.S. and five foreign ICE attache offices in high-risk transshipment countries throughout the world, 2) sharing of information and training with the intelligence and law enforcement communities, and 3) participation in the Department of Justice-led National Counter Proliferation Initiative.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to establish a task force to evaluate options to improve coordination and cooperation among export enforcement investigative agencies, such as creating new or updating existing operating agreements between and among these agencies, identifying and replicating best practices for routinely collaborating on or leading investigations, and establishing a mechanism for clarifying roles and responsibilities for individual export control cases involving foreign counterintelligence.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: In June 2008, the Department of Justice, Federal Bureau of Investigation, reported that in 2007, a task force was created with representatives from FBI, Department of Homeland Security's Office of Immigration and Customs Enforcement, and the Department of Commerce's Office of Export Enforcement. According to the FBI, this task force is achieving results in the direction of those outlined in this report's recommendation. According to FBI, the details of the task force actions and results are classified.

    Recommendation: The Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, the Secretary of Commerce should direct the Under Secretary for Industry and Security, and the Secretary of State should direct the Deputy Assistant Secretary for Defense Trade Controls to coordinate with licensing officers, inspectors, investigators, and prosecutors to determine what additional training or guidance is needed on license determinations, including the type of information needed to make license determinations.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Immigration and Customs Enforcement

    Status: Closed - Implemented

    Comments: On December 20, 2006, the Department of Homeland Security's Immigration and Customs Enforcement issued a memorandum to all of its special agents providing guidance for requesting license determinations from the Department of State. In addition, ICE has provided training on license determinations to hundreds of its special agents. On October 11, 2007, ICE, Department of Justice, and other partners announced the launching of a National Counter-Proliferation Initiative focusing on the national security threat posed by the illegal export of sensitive military and dual-use technologies. The initiative includes training prosecutors to handle the increased workload.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to report the status of task force actions to Congress.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: This recommendation was fulfilled by the Department of Justice in its role as the lead of the export enforcement task force.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to establish a task force to evaluate options to improve coordination and cooperation among export enforcement investigative agencies, such as creating new or updating existing operating agreements between and among these agencies, identifying and replicating best practices for routinely collaborating on or leading investigations, and establishing a mechanism for clarifying roles and responsibilities for individual export control cases involving foreign counterintelligence.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Immigration and Customs Enforcement

    Status: Closed - Implemented

    Comments: Over the past 18 months, the Department of Homeland Security's Bureau of Immigration and Customs Enforcement has taken steps to address coordination, de-confliction and information with its counter-proliferation partners in the law enforcement and intelligence communities. DHS/ICE has made internal and external changes to address the GAO concerns, including: 1) the creation of the National Export Enforcement Coordination Network--which serves as the hub for 15 Export Enforcement Coordination Groups based in 10 domestic ICE filed offices within the U.S. and five foreign ICE attache offices in high-risk transshipment countries throughout the world, 2) sharing of information and training with the intelligence and law enforcement communities, and 3) participation in the Department of Justice-led National Counter Proliferation Initiative.

    Recommendation: To ensure discipline and improve information needed for license determinations, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement and the Secretary of Commerce should direct the Under Secretary for Industry and Security to establish goals for processing license determinations.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Immigration and Customs Enforcement

    Status: Closed - Implemented

    Comments: During fiscal year 2007, the Department of Homeland Security's Immigration and Customs Enforcement held three Strategic Investigations Training Seminars, and approximately 125 agents and analysts attended. This course includes instruction from personnel assigned to licensing agencies. The ICE Office of Investigations has provided written guidance to field offices relating to obtaining and processing license determinations--including how to obtain second-level reviews from the Department of State--to include identifying all required information necessary to making the most complete licensing determination possible. ICE Office of Investigations has also provided training through conferences detailing the licensing process and required information. ICE emphasizes the need to the most accurate and complete specifications available from field offices in order to obtain licensing determinations during all training events and related conferences.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to report the status of task force actions to Congress.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: According to the Department of Justice, the export enforcement task force briefed Congress on the results of their efforts in late 2007. Details of this briefing are classified.

    Recommendation: The Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, the Secretary of Commerce should direct the Under Secretary for Industry and Security, and the Secretary of State should direct the Deputy Assistant Secretary for Defense Trade Controls to coordinate with licensing officers, inspectors, investigators, and prosecutors to determine what additional training or guidance is needed on license determinations, including the type of information needed to make license determinations.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: According to Commerce officials, all Office of Export Enforcement (OEE) officials attended training in May 2007. During this training session, representatives from BIS's Export Administration provided guidance to the OEE Special Agents on the steps necessary to securing accurate licensing determinations. While OEE planned to conduct this training on an annual basis, the current budget shortfall has not allowed for Special Agent training during FY 2008. As soon as appropriate funding is available, the Special Agent training will be scheduled.

    Recommendation: The Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, the Secretary of Commerce should direct the Under Secretary for Industry and Security, and the Secretary of State should direct the Deputy Assistant Secretary for Defense Trade Controls to coordinate with licensing officers, inspectors, investigators, and prosecutors to determine what additional training or guidance is needed on license determinations, including the type of information needed to make license determinations.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: According to Commerce officials, all Office of Export Enforcement (OEE) officials attended training in May 2007. During this training session, representatives from BIS's Export Administration provided guidance to the OEE Special Agents on the steps necessary to securing accurate licensing determinations. While OEE planned to conduct this training on an annual basis, the current budget shortfall has not allowed for Special Agent training during FY 2008. As soon as appropriate funding is available, the Special Agent training will be scheduled.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to report the status of task force actions to Congress.

    Agency Affected: Department of Commerce

    Status: Closed - Implemented

    Comments: This recommendation was fulfilled by the Department of Justice in its role as the lead of the export enforcement task force.

    Recommendation: To enhance coordination in the current system, the Secretary of Commerce should direct the Under Secretary for Industry and Security, the Secretary of Homeland Security should direct the Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement, and the Attorney General should direct the Director of the FBI in conjunction with the Assistant Attorney General in charge of the National Security Division to report the status of task force actions to Congress.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security: Bureau of Immigration and Customs Enforcement

    Status: Closed - Implemented

    Comments: Since its inception, the National Export Enforcement Coordination Network has distributed 89 Homeland Security Intelligence Reports with information derived from multiple sources, 68 Homeland Intelligence Reports to intelligence community members and has conducted numerous outreach presentations to various groups, including Congressional staff members from respective House and Senate Committees on Government Oversight and Homeland Security. In addition, the Department of Justice, the lead for this export enforcement task force, reported the results of its efforts to Congress in late 2007.

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