Export Controls: Proposed Reforms Create Opportunities to Address Enforcement Challenges
Highlights
What GAO Found
Agencies use a risk-based approach, including workload and threat assessment data, to allocate resources, but most do not fully track those used for export control enforcement activities. As their missions are broader than export controls, agencies can use staff resources for other activities based on need, making tracking resources used solely for export control enforcement difficult. Only Commerce’s Office of Export Enforcement allocates its resources exclusively to export control enforcement as that is its primary mission. Other agencies, such as State and the Treasury, have relatively few export control enforcement staff to track. While several agencies acknowledge the need to better track export enforcement resources and have taken steps to do so, they do not know the full extent of their use of these resources and do not use this information in resource allocation decisions. In some cities, agencies are informally leveraging export enforcement resources through voluntarily created local task forces that bring together enforcement resources to work collectively on export control cases.
Enforcement agencies face several challenges in investigating illicit transshipments, both domestically and overseas, which potentially reduce the effectiveness of enforcement activities and limit the identification and investigation of illicit transshipments. These include:
License Determination Delays. License determinations—which confirm whether an item is controlled and requires a license, and thereby help confirm whether an export control violation has occurred—are often not timely, potentially hindering investigations and prosecutions.
Limited Secure Communications and Cleared Staff. Investigators have limited access to secure communications and staff with high-level security clearances in several domestic field offices, limiting investigators’ ability to share timely and important information.
Lack of Trend Data on Illicit Transshipments. While there is a good exchange of intelligence between enforcement agencies and the intelligence community—to seize shipments and take other actions against export control violators—officials noted that no formal process or means existed for these groups to collectively quantify and identify statistical trends and patterns relating to information on illicit transshipments.
Lack of Effectiveness Measures Unique to the Complexity of Export Controls. Investigative agencies lack measures of effectiveness that fully reflect the complexity and qualitative benefits of export control cases.
Some of these challenges may be addressed by ongoing export control reform initiatives, but reform presents both opportunities and challenges. Revising the control list could simplify the license determination process, but could also result in the need for increased enforcement activity overseas to validate the recipient of the items as fewer items may require U.S. government approval in advance of shipment. As most staff located overseas have other agency and mission-related priorities, their availability may be limited. The newly created national Export Enforcement Coordination Center is intended to help agencies coordinate their export control enforcement efforts as well as share intelligence and law enforcement information related to these efforts. However, it is unclear whether the center will address all of the challenges GAO found, as detailed plans for its operations are under development.
Why GAO Did This Study
The U.S. government controls the export of sensitive defense and dual-use items (having both military and commercial use). The five agencies primarily responsible for export control enforcement—the Departments of Commerce, Homeland Security (DHS), Justice, State and the Treasury—conduct inspections and investigations, and can levy punitive actions against violators. A challenging aspect of export control enforcement is the detection of illicit transshipments—the transfer of items from place of origin through an intermediary country to an unauthorized destination, such as Iran. In 2010, the President announced reforms to the U.S. export control system to address weaknesses found by GAO and others. GAO was asked to address how the export control enforcement agencies allocate resources, as well as the challenges they face and the potential impact of export control reform on enforcement activities. GAO reviewed documents and met with enforcement agency officials as well as with U.S. and foreign government and company officials in Hong Kong, Singapore, and the United Arab Emirates, which have a high volume of trade and have been identified as potential hubs for illicit transshipments.
Recommendations
GAO recommends that Commerce, DHS, Justice, and State take steps individually and with other agencies through the national Export Enforcement Coordination Center to better manage export control enforcement resources and improve the license determination process. Agencies agreed with GAOs recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Homeland Security | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretary of Homeland Security and the Attorney General, as they implement efforts to track resources expended on export control enforcement activities, should use such data to make resource allocation decisions. |
DHS/ICE Mission Action Plan to respond to GAO recommendations identified actions taken in 2012 to track resources expended on export control enforcement activities and use such data to make resource allocation decisions. Specifically, ICE now does this through its HSI (Homeland Security Investigations) TRAK(Transparency/Results/Accountability/Knowledge Sharing), its yearly operational Risk Assessment Process, and regular measurement of enforcement statistics and hours expended on export controls.
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| Department of Justice | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretary of Homeland Security and the Attorney General, as they implement efforts to track resources expended on export control enforcement activities, should use such data to make resource allocation decisions. |
DOJ has provided documentation indicating that resources expended on export controls enforcement activities is tracked and this data is used to make resource allocation decisions.
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| Department of Commerce | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretaries of Commerce and Homeland Security as they develop and implement qualitative measures of effectiveness, should ensure that these assess progress towards their overall goal of preventing or deterring illegal exports. |
Commerce's Bureau of Industry and Security (BIS) has implemented program initiatives relating to qualitative measures of effectiveness for export controls. BIS provided examples of Presidential budget submissions and other documents demonstrating performance metrics as parts of the budget formulation process.
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| Department of Homeland Security | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretaries of Commerce and Homeland Security as they develop and implement qualitative measures of effectiveness, should ensure that these assess progress towards their overall goal of preventing or deterring illegal exports. |
As of Dec. 2014, DHS/ICE has moved to a performance measurement system that will track systemic vulnerabilities, both nationally and within its respective field offices, to prioritize efforts. ICE will use the same system to examine the impact effectiveness and outcomes of counter-proliferation investigations. In March 2014, CBP implemented the reengineered Automated Export System (rAES), allowing for more detailed descriptions of export activities into a database to inform trend analysis and subsequent export enforcement efforts. DHS Export Enforcement Coordination Center (E2C2) leadership and CBP explained in Sept. 2014, that while CBP is using rAES for tracking, ICE is using the Border Enforcement Enhanced Program (BEEP) to track investigations. It is in the pilot phase within ICE/HSI and officials hope to bring it on board for all of E2C2 partners in the future. ICE tracks metrics and resources through investigative case hours.
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| Department of Homeland Security | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretary of Homeland Security, in consultation with the departmental representatives of the Export Enforcement Coordination Center, including Commerce, Justice, State, and the Treasury should (1) leverage export control enforcement resources across agencies by building on existing agency efforts to track resources expended, as well as existing agency coordination at the local level; (2) establish procedures to facilitate data sharing between the enforcement agencies and intelligence community to measure illicit transshipment activity; and (3) develop qualitative and quantitative measures of effectiveness for the entire enforcement community to baseline and trend this data. |
As of November 2019, DHS/ICE and the Intelligence Community have not taken all of the steps necessary to fully implement this recommendation. Given the age of this recommendation and DHS' acknowledgement that no further action will be taken, GAO is closing it as not implemented. The details about what has been completed and what had remained to fully implement this recommendation is as follows. Part 1 - Implemented: To help track resources expended and coordination of enforcement resources, the Export Enforcement Coordination Center (E2C2) has ratified and implemented the investigative deconfliction protocol. Part 2 - Not Implemented: To establish procedures to facilitate data sharing between the enforcement agencies and intelligence community to measure illicit transshipment activity, the E2C2 has taken action and implemented standard operating procedures to facilitate deconfliction and data sharing. However, the Intel Cell and its standard operating procedures are incomplete as of August 2019. The E2C2 Intel Cell White Paper is complete, but the Cell is not staffed or operational. This Cell is to serve as the primary interagency conduit for defining, establishing, and implementing protocols and facilitating information sharing between the IC and export enforcement community. The white paper outlines the E2C2 Intel Cell's mission, general roles and functions, recommended tasks and structure to facilitate enhanced coordination and intelligence sharing. When established, the Cell will develop standard operating procedures but this has not yet occurred. Part 3 - Not implemented: To develop qualitative and quantitative measure of effectiveness for enforcement, DHS has efforts ongoing to formalize an intelligence analytical unit, and after it implements the Intel standard operating procedure, the E2C2 Intel Cell should have sufficient data to establish baseline and trend data analysis. However, DHS has not completed the Intel standard operating procedure.
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| Department of Commerce | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretaries of Commerce and State, in consultation with the Secretary of Homeland Security, the Attorney General, and other agencies as appropriate, should establish agreed upon timeliness goals for responding to license determination requests considering agency resources, the level of determination, the complexity of the request, and other associated factors. |
BIS began implementation of the license determination module of the Commerce USXPORTS Export Support System (CUESS) in April 2014. The implementation of CUESS allowed external enforcement agencies to submit license determinations electronically through a web interface, which would then allow for Export Administration to process the requests. This new process eliminated the manual tracking of license determinations that previously had been conducted by Export Enforcement and Export Administration. Since CUESS has been used for license determinations, the average processing time for requests submitted by the Department of Homeland Security has averaged around 13-15 days. This figure is significantly below BIS's internal requirement to complete license determinations within 35 days and below the informal target of 20 days for detained shipments. We believe that the implementation of CUESS addresses GAO's recommendation on license determinations. BIS will continue to monitor the implementation of CUESS and license determinations processing times.
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| Department of State | To better inform management and resource allocation decisions, effectively manage limited export control enforcement resources, and improve the license determination process, the Secretaries of Commerce and State, in consultation with the Secretary of Homeland Security, the Attorney General, and other agencies as appropriate, should establish agreed upon timeliness goals for responding to license determination requests considering agency resources, the level of determination, the complexity of the request, and other associated factors. |
State has continued consultations with the Departments of Justice and Homeland Security regarding processes for the federal law enforcement community to request and receive criminal case support from the Department of State's Directorate of Defense Trade Controls. In lieu of an MOU, interagency consensus was memorialized in guidance provided by the National Security Division of the Justice Department to field prosecutors and investigators earlier this year. The agencies have been operating under the new procedures for several months, evidencing greater efficiency and satisfaction with the results.
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