Audit of Export Controls for Activities 

Related to China 

 

Unclassified Summary

Notice: The DHS OIG has modified this report for public release. The modifications 

were made pursuant to the Freedom of Information Act, 5 U.S.C. § 552. 

 

DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

Office of Audits 

 OIG-06-28 March 2006 
Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was established by 

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

Act of 1978. This is one of a series of audit, inspection, and special reports prepared as part of our 

oversight responsibility to promote economy, efficiency, and effectiveness within the department. 

This report represents a public summary of our limited official use report assessing the effectiveness 

of the U.S. government’s export control policies and practices with respect to preventing the transfer 

of sensitive U.S. technologies and technical information to the Peoples’ Republic of China. It is 

based on interviews with officials of relevant agencies and institutions, direct observations, and a 

review of applicable documents. 

This report discusses the status of recommendations from prior reports but does not make new 

recommendations. Therefore, no formal response to this report is necessary. It is our hope that this 

report will result in more effective, efficient, and economical operations. We express our 

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

 

Richard L. Skinner 

Inspector General 
OIG 

Audit 

Report 

Department of Homeland Security 

Office of Inspector General 

Export Controls for Activities Related to the PRC

Page 1

 

Unclassified Summary

 

This report presents the results of our review of export control activities 

related to China1

. It is the sixth in the series of seven interagency audits 

required2

 by Congress on transfers of militarily sensitive technology and 

technical information to countries and entities of concern. 

The objective of the interagency3

 audit was to determine the effectiveness of 

the United States (U.S.) government’s export control policies and practices 

with respect to preventing the transfer of sensitive technologies and technical 

information to China. Specifically, we attempted to answer these questions: 

o For arrests made in connection with violations of export 

requirements to China, were the commodities properly screened 

prior to release? 

o Has DHS taken actions or established documented plans to 

implement the recommendations of the prior audit reports? 

We reviewed Immigration and Customs Enforcement (ICE) arrests for the 

illegal exportation of militarily sensitive commodities to China in FY 2004 

and 2005; CBP export screening procedures in effect during October and 

November 2005; and recommendations from our prior audit reports open at 

September 2005. Additionally, we reviewed the policies and procedures 

applicable to the exportation of militarily sensitive commodities, and 

interviewed responsible agency officials. Further, we obtained documentation 

to support the implementation or correction of prior open DHS bureau audit 

recommendations. We visited Customs and Border Protection (CBP), ICE, 

and United States Citizenship and Immigration Service (USCIS) headquarters 

in Washington, D.C. Also, we visited CBP port offices in Boston, 

Massachusetts; Houston, Texas; Atlanta, and Savannah, Georgia, as well as 

the ICE Special Agent-In-Charge office in Boston, Massachusetts. This audit 

 

1

 The use of the term “China” in this report refers to the Peoples’ Republic of China and Hong Kong. 2

 The National Defense Authorization Act for Fiscal Year (FY) 2000, Public Law 106-65, section 1402, October 5, 1999, 

contains the requirement. 

3

 The OIGs for the Department of Commerce, Department of State, Department of Defense, Central Intelligence Agency, 

and the Department of Homeland Security are participating in the audit this year. 
Export Controls for Activities Related to the PRC 

Page 2

was conducted from September to November 2005 according to generally 

accepted government auditing standards. 

The relationship between export related arrests and the export screening 

process is limited, and did not allow us to draw conclusions about the 

effectiveness of CBP’s screening process. Because we did not have sufficient 

data to determine whether CBP properly screened commodities prior to 

release based on arrests made, we reviewed CBP export control procedures at 

four ports and the ICE arrest cases. This review did not disclose any 

conditions that had not been reported in prior audits. 

Of our seven prior open audit recommendations, DHS bureaus took actions to 

close two recommendations and established documented plans to implement 

four more. The remaining prior audit recommendation addressed to ICE is 

unresolved. 

Summary of Prior Audit Recommendations 

OIG Report 

Number 

Finding # - 

Recommendation # 

DHS 

Bureau 

Status 

OIG-03-069 F2-R4 ICE PCA Target Date – May 2006 

OIG-03-069 F3-R3 ICE Closed 

OIG-04-023 F1-R1 ICE Unresolved 

OIG-04-023 F1-R2 USCIS PCA Target Date – December 2006 

OIG-04-023 F1-R3 USCIS PCA Target Date – October 2006 

OIG-05-021 F1-R1 CBP PCA Target Date – September 2006 

OIG-05-021 F2-R2 CBP Closed 

 
Appendix F 

Report Distribution 

 

 

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. 

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 DHS Office of Inspector General/MAIL 

STOP 2600, Attention: Office of Investigations - Hotline, 245 Murray Drive, SW, 

Building 410, Washington, DC 20528, fax the complaint to (202) 254-4292; or email 

DHSOIGHOTLINE@dhs.gov. The OIG seeks to protect the identity of each writer 

and caller.