DEPARTMENT OF HOMELAND SECURITY

Office of Inspector General 

Review of Controls Over the Export of 

Chemical and Biological 

Commodities 

(Redacted)
 

Notice: The Department of Homeland Security, Office of Inspector General, has redacted this 

report for public release. The redactions are identified as (b)(2), comparable to 5 U.S.C. § 

552(b)(2). A review under the Freedom of Information Act will be conducted upon request. 

OIG-05-21 June 2005 

Office of Audits 
 

 

Office oOffice of Inspector Gener f Inspector General 

U.S. Department of Homeland Se tment of Homeland Security 

Washington, DC Washington, DC 20528 

Preface Preface

The Departm The Department of Homnt of Homeland Seculand Security (DHS) Office of Inspector rity (DHS) Office of Inspector General (OIG) w General (OIG) was established by s established by 

the Homeland Security Act of 2002 (Public Law land Security Act of 2002 (Public Law 107-296) by am296) by amendment to the Inspector General t to the Inspector General

Act of 1978. This is one of a series of audit, inspection, investigative, and ection, investigative, and special reports prepared special reports prepared

by the OIG as part of its DHS oversight respons by the OIG as part of its DHS oversight responsibility to promote economy, effectiveness and ibility to promote economy, effectiveness and 

efficiency within the dep efficiency within the department. 

This report represents a public sum This report represents a public summary of our lim ry of our limited official use report assessing Custom assessing Customs and 

Border Protection Border Protection’s controls over the export of e export of chemical and biological comm ical and biological commodities.odities. Our findings Our findings 

were based on selected tests, interviews with em terviews with employees and offi ployees and officials of relevant agencies and cials of relevant agencies and 

institutions, direct observations, and institutions, direct observations, and a review of applicable docum a review of applicable documents. 

The recommendation contained in this report has been developed to report has been developed to the best knowledge available to the best knowledge available to 

the OIG, and has been discussed in draft with appropriate mopriate management officialent officials. It is our hope that s. It is our hope that 

this report will resu this report will result in more elt in more effective, efficient, ffective, efficient, and economi and economical operations. We express our e express our 

appreciation to all of those who contributed to the preparation of this report. ed to the preparation of this report. 

Richard L. S Richard L. Skinner 

Acting Inspector General Acting Inspector General 
 

 

 

Introduction 

In response to the National Defense Authorization Act that requires the review of the controls over 

the export of militarily sensitive technologies to countries and entities of concern, we assessed the 

Bureau of Customs and Border Protection’s (CBP) enforcement practices at U.S. ports of exit. This 

review is part of a series of interagency OIG reviews on the transfer of militarily sensitive 

technologies1

. In concert with the interagency audit objective to assess whether the current export 

licensing process can help deter the proliferation of chemical and biological commodities, we 

evaluated the department’s enforcement practices to determine whether they are in place and 

working effectively to prevent the illegal export of chemical and biological commodities. Following 

is an abbreviated, public version of our report. 

Background 

The United States (U.S.) controls the export of dual-use2 commodities and munitions3 under the 

authority of several laws, primarily the Export Administration Act of 1979 and the Arms Export 

Control Act of 1976. CBP is responsible for enforcing licensable export controls for both the 

Department of Commerce (Commerce) and the Department of State (State) through authority 

provided in the Export Administration Regulations (EAR)4

 and the International Traffic in Arms 

Regulations (ITAR).5

 Certain chemical and biological commodities are subject to the licensing 

requirements contained in the EAR for dual-use, which Commerce issues, or the ITAR for 

munitions, which are issued by State. ITAR defines a chemical agent as a substance having military 

application, which by its ordinary and direct chemical action produces a powerful physiological 

effect. ITAR further defines a biological agent or biologically derived substances as those capable 

of producing casualties in humans or livestock, degrading equipment, or damaging crops, and which 

have been modified for the specific purpose of increasing such effects. 

The Arms Export Control Act 6 authorizes the President to control the import and export of defense 

articles and defense services. This authority has been delegated to the Secretary of State, and is 

administered by State’s Directorate of Defense Trade Controls, which approves and issues licenses 

for the export of munitions. To legally ship commodities represented on the State Department’s 

United States Munitions List (a list of munitions and associated commodities requiring a license), an 

exporter must be issued an export license administered by the Directorate of Defense Trade 

Controls. To legally export dual-use items subject to the EAR, an exporter must obtain a license 

1

 Section 1402 of the National Defense Authorization Act (NDAA) for Fiscal Year 2000, Public Law 106-65 requires 

annual interagency reviews of the transfer of militarily sensitive technologies to countries and entities of concern by the 

OIGs at the Departments of Commerce, Defense, Energy and State, and in consultation with the Director of the Central 

Intelligence Agency and the Director of the Federal Bureau of Investigation.

2

 Dual-use commodities are goods and technology items that have both military and civilian application. 

3

 Munitions are defense articles or technical data. 

4

 Title 15 Code of Federal Regulations (CFR), Part 758.7 

5

 Title 22 CFR Part 127.4 

6

 Title 22 United States Code Section 2778 

Controls Over the Export of Chemical and Biological Commodities 

Page 1 
from Commerce’s Bureau of Industry and Security, which enters all license information 

electronically into Commerce’s Export Control Automated Support System. 

As the enforcement arm at U.S. ports for both State and Commerce, CBP is responsible for ensuring 

that licensable exports, via their Outbound program, in this case chemical and biological 

commodities, are processed in accordance with applicable laws and regulations. CBP uses the 

Bureau of Immigration and Customs Enforcement’s Exodus Command Center (ECC) as a liaison 

with State and Commerce to answer questions that may arise as to whether a shipment is licensable, 

and CBP officers are directed to send any such questions to the ECC for resolution. 

CBP Enforcement Practices 

CBP does not consistently enforce federal export licensing laws and regulations at all U.S. ports of 

exit. CBP’s ability to effectively and efficiently control exports licensed by State and Commerce is 

limited by inadequate information and staff resources. 

CBP does not consistently document the location of State Licenses in its Automated Export System. 

Exporters physically lodge State licenses with CBP at the port where shipments are expected 

primarily to occur; however, exports may be made through any authorized U.S. port of exit. Such 

license information is necessary to determine whether an individual shipment is being made in 

compliance with the associated license conditions. When a port receives notification of an export to 

be shipped against a license lodged at another port, enforcement personnel must locate the port of 

lodging and verify the authenticity of the export information to the original license. However, CBP 

is not required to document the location of State licenses in the Automated Export System, which 

makes it difficult for enforcement personnel at the port of shipping to readily obtain license 

information. As a result, CBP’s ability to enforce State licensed exports in a timely and efficient 

manner is reduced. 

Also, CBP needs to improve its enforcement of license requirements for shipments that have been 

processed against Commerce licenses. 

We recommended that the Commissioner of CBP evaluate the Outbound program, including 

information requirements, staffing needs, and consistency of enforcement practices, and make 

adjustments necessary to ensure that all of CBP’s enforcement responsibilities are accomplished. 

Controls Over the Export of Chemical and Biological Commodities 

Page 2 
Appendix 1 

Major Contributors to this Report 

Alexander Best Jr., Director, Border and Transportation Security 

Ethel Taylor-Young, Audit Manager 

Joseph L. Hardy Jr., Auditor-In-Charge 

Gary Alvino, Management Analyst 

Marshall Toutsi, Senior Auditor 

Nadine F. Ramjohn, Senior Auditor 

Controls Over the Export of Chemical and Biological Commodities 

Page 3 
Appendix 2 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

General Counsel 

Executive Secretariat 

Assistant Secretary, Public Affairs 

Under Secretary, Border and Transportation Security 

Commissioner, Bureau of Customs and Border Protection 

Assistant Secretary, Bureau of Immigration and Customs Enforcement 

Director, Bureau of Citizenship and Immigration Services 

DHS GAO/OIG Liaison 

DHS OIG Liaison, ICE 

DHS OIG Liaison, CIS 

DHS Public Affairs 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees as Appropriate 

Controls Over the Export of Chemical and Biological Commodities 

Page 4 
Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General 

(OIG) at (202) 254-4100, fax your request to (202) 254-4285, or visit the OIG 

web site at www.dhs.gov. 

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind 

of criminal or noncriminal misconduct relative to department programs or 

operations, call the OIG Hotline at 1-800-323-8603; write to Department of 

Homeland Security, Washington, DC 20528, Attn: Office of Inspector 

General, Investigations Division – Hotline. The OIG seeks to protect the 

identity of each writer and caller.