United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Acquisition and Technology,

Committee on Armed Services, U.S.

Senate

May 1995 EXPORT CONTROLS

Concerns Over

Stealth-Related

Exports

GAO/NSIAD-95-140

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-260666 

May 10, 1995

The Honorable Robert C. Smith

Chairman, Subcommittee on Acquisition

 and Technology

Committee on Armed Services

United States Senate

Dear Mr. Chairman:

As you requested, we are reporting on the results of our review examining

export controls over low-observable, radar signature reduction technology

(hereafter referred to as “stealth technology”).1

 Our review focused on

(1) determining how control over stealth technology and related

commodities is split between the State-managed U.S. Munitions List (USML)

and the Commerce Control List (CCL), (2) identifying the impact of shared

jurisdiction over stealth-related items, and (3) assessing whether current

referral procedures allow the Department of Defense (DOD) to review all

stealth-related exports.

Background Stealth-related commodities and technology are sensitive for many

reasons. When incorporated into advanced weapon systems, stealth

technology greatly improves the effectiveness of forces. The United States

is the world leader in stealth technology, and this lead has given U.S.

forces a clear battlefield advantage as was demonstrated in Operation

Desert Storm. Stealth-related commodities are sensitive from an export

control perspective because some of the materials and processes involved

have civil applications that make it difficult to control the commodities’

dissemination and retain U.S. leadership in stealth technology.

Stealth designs incorporate materials, shapes, and structures in a

functional system that can meet mission requirements. Stealth techniques

fall into two general groups. First, a material may deflect an incoming

radar signal into neutral space thereby preventing the source radar from

picking up the radar reflection and “seeing” the object. Second, a material

may simply absorb an incoming radar signal, not allowing the signal to

reflect back to its source. In addition to materials, measurement gear used

to test radar-absorbing properties and technologies and software related

1

Our review did not address counter low-observable technologies or other aspects of low-observable

designs, such as technologies for reducing infrared, acoustic, electromagnetic, and visual signatures.

Page 1 GAO/NSIAD-95-140 Export Controls
B-260666 

to manufacturing and application techniques are also considered sensitive

from an export control perspective.

DOD’s policy on the commercial export of stealth technology recognizes its

military significance and sensitivity while acknowledging that some items

with stealth properties have been developed for commercial purposes, are

widely available, and are not militarily significant. DOD’s policy states that

commercial marketing of unclassified, non-DOD funded stealth technology

may be permitted on a case-by-case basis after review by appropriate

offices and agencies and approval of the required export license.

The U.S. export control system is divided into two regimes, one for

munitions items under the Arms Export Control Act (AECA) and one for

dual-use items (items with both civil and military uses) under the Export

Administration Act (EAA). The Department of State controls munitions

items through its Office of Defense Trade Controls and establishes the

USML, with input from DOD. The Department of Commerce, through its

Bureau of Export Administration, controls dual-use commodities (e.g.,

machine tools) and establishes the CCL. In general, export controls under

the EAA are less restrictive than the controls under the AECA.

Exporters must determine whether the item they wish to export is on the

CCL or the USML and then apply to the appropriate agency for an export

license. When there is confusion over which agency controls a commodity,

an exporter may ask State to make a commodity jurisdiction

determination.2

 State, in consultation with the exporter, DOD, Commerce,

and other agencies, reviews the characteristics of the commodity and

determines whether the item is controlled under the USML or the CCL. Since

1992, the majority of all commodity jurisdiction determinations ruled that

the commodity belonged on the CCL and not the USML.

Results in Brief Materials used for stealth have civil and military applications and are

controlled on the CCL and the USML. However, the unclear lines of

jurisdiction over stealth-related items may lead to the inappropriate export

of militarily sensitive stealth materials and technology.

Exporters may unknowingly or knowingly seek and obtain export licenses

from Commerce for militarily sensitive items controlled on the USML. The

less restrictive export controls under the EAA provide an incentive for

2

Under the implementing regulations of the AECA, the commodity jurisdiction procedure is the only

process for determining whether an article is controlled on the USML.

Page 2 GAO/NSIAD-95-140 Export Controls
B-260666 

exporters to go to Commerce rather than State. Moreover, Commerce has

limited authority to prevent such exports. Licenses to export

stealth-related commodities and technology controlled on the CCL can only

be denied under limited circumstances and when the exports are going to

certain destinations.

Under current referral practices, the majority of applications for the

export categories related to stealth are not sent to DOD or State for review.

Without such referrals, DOD, State, and Commerce cannot ensure that

export licenses for militarily significant stealth technology are properly

reviewed and controlled.

Stealth-Related

Commodities Are

Controlled by State

and Commerce

On the USML, stealth-related commodities are primarily controlled in two

general categories. Stealth-related items are controlled under several other

categories when the technology is incorporated as part of a system or end

item. For example, fighter aircraft that incorporate stealth features are

controlled under the category for aircraft. In general, the USML relies on

functional descriptions of the items being controlled. Table 1 shows that

the USML controls stealth-related exports as parts of several control

categories.

Table 1: Portions of USML Categories

That Are Applicable to Stealth-Related

Commodities

USML

category Portion related to stealth

XIII (e) Concealment and deception gear, including paints

XIII (j) Signature measurement gear, signature materials and treatments, and

signature control design methodology

Various Stealth items incorporated as parts of various weapon systems

The CCL, as shown in table 2, controls stealth-related exports under seven

export commodity control numbers. In general, the CCL uses more detailed

language (often with technical performance criteria) than the USML to

describe what is controlled. Because some export control classification

numbers cover a broad array of items, some of the exports classified

under these numbers are not related to stealth.

Page 3 GAO/NSIAD-95-140 Export Controls
B-260666 

Table 2: Portions of CCL Entries

Applicable to Stealth-Related

Commodities

ECCNa Portion related to stealth

1C21 Materials and coatings for reduced observables, i.e., stealth technology, for

applications usable in missile systems and subsystems

1D23 Software specially designed for the development, production, or use of

items controlled by 1C21 and 1C01

1E23 Technology for the development, production, or use of items controlled by

1C21

1C01 Materials specially designed for use as absorbers of electromagnetic

waves or intrinsically conductive polymers

1E01 Technology for the development or production of equipment or materials

controlled by 1C01

1E02 Technology for the installation, maintenance, or repair of materials

controlled by 1C01

6B08 Pulse radar cross-section measurement systems and specially designed

components

aExport control classification number.

State and DOD officials acknowledge that the descriptions in the CCL and

the USML covering stealth-related items and technology do not clearly

define which stealth-related exports are controlled by which agency. State

and DOD officials also agree that the lines of jurisdiction should be

clarified.3 DOD officials noted that they are only concerned about militarily

significant items or items in the grey area that are potentially militarily

significant.

A Commerce official noted that overlapping jurisdiction is confusing for

exporters and said commodities that fall in the grey area between

Commerce and State should be placed on the USML. The Commerce official

said that putting grey area cases on the USML would help exporters avoid

the (1) confusion of determining where to go for a license and

(2) possibility of having their exports seized by a Customs agent who

believes the items belong on the USML. The Commerce official cautioned,

however, that in moving items to the USML, consideration should be given

to whether comparable items are readily available from other countries.

State noted in its comments to this report that, under the AECA, foreign

availability is not a factor in determining whether an item warrants the

national security and foreign policy controls of the USML.

Commerce noted in its comments that it does not agree that there is

overlapping or unclear jurisdiction over stealth-related commodities and

3

DOD technical experts noted that clarifying what belongs on the USML might involve classified

information concerning which performance levels are militarily significant.

Page 4 GAO/NSIAD-95-140 Export Controls
B-260666 

technology between the CCL and the USML. We disagree. As noted in the

report, officials from both DOD and State told us that the lines of

jurisdiction are unclear and should be clarified. Further, as discussed

below, this unclear jurisdiction has led to problems in Commerce’s

licensing of sensitive stealth-related commodities.

Unclear Jurisdiction

May Lead to

Inappropriate Exports

of Militarily Sensitive

Stealth-Related

Commodities

Unclear jurisdiction over stealth-related commodities increases the

likelihood that militarily sensitive stealth technology will be exported

under the less restrictive Commerce export control system. In 1994,

Commerce approved two export applications for a radar-absorbing

coating determined later to belong on the USML. Although DOD and State

have not verified the exact capabilities and military sensitivity of this

product, these export licenses illustrate the problems with unclear

jurisdiction and authority over stealth-related exports.

Commerce Approved

Applications for Militarily

Sensitive Stealth Material

Commerce approved two applications in 1994 to export a

high-performance, radar-absorbing coating. The details of one of the

applications was reported in a major trade publication. As reported, the

export application described the high-performance claims for the product

and indicated that 200 gallons of the material would be used for a cruise

missile project headed by a German company. Commerce also granted a

license to export the same commodity to another country for use on a

commercial satellite. Commerce approved both of these applications in

fewer than 10 days and, in accordance with referral procedures, did not

refer these applications to either DOD or State.

The article reporting Commerce’s approval of this material for export

noted that the radar frequencies this stealth coating seeks to defend

against include those employed by the Patriot antimissile system. In

response to that report and subsequent concerns raised by DOD, State

performed a commodity jurisdiction review to determine whether the

stealth coatings actually belonged under the USML. At this time, the

coatings had not yet been shipped overseas. On the basis of State’s review

that included consultation with both DOD and Commerce, State ruled that

the radar-absorbing coating was under the jurisdiction of the USML.

After State’s ruling, Commerce suspended the export licenses it had

approved and the exporter submitted new export applications to State.

After State and DOD were unable to obtain adequate information on the

Page 5 GAO/NSIAD-95-140 Export Controls
B-260666 

exact performance characteristics of the product from the exporter, State

decided not to approve the export applications.

Commerce’s Export

Control Regulations Are

Less Restrictive Than

State’s Munitions Control

Regulations

Commerce’s export control authority under the EAA is more limited than

State’s authority under the AECA. In fact, a high-ranking Commerce official

said Commerce probably could not have denied the two applications to

export the radar-absorbing coatings.

The EAA regulates dual-use exports under national security controls and

foreign policy controls.4

 As shown in table 3, the seven stealth-related

commodities on the CCL are controlled for national security and missile

technology reasons (considered a foreign policy control).

Table 3: Reason for Control of

Stealth-Related Commodities on CCL ECCNa Description Basis for control on CCL

1C21 Other materials for reduced

observables

Missile technology concern

1D23 Software for 1C21 and 1C01 Missile technology concern

1E23 Technology for 1C21 Missile technology concern

1C01 Materials designed as absorbers Missile technology concern and

national security concern

1E01 Technology for 1C01 Missile technology concern and

national security concern

1E02 Repair items for 1C01 National security concern

6B08 Pulse radar measurement equipment National security concern

aExport control classification number.

National security controls are designed to prevent exports from reaching

the former East bloc and Communist nations. Exports that are controlled

on the CCL for national security reasons and that are going to

noncontrolled countries can only be denied by Commerce if there is

evidence the exports will be diverted to a controlled country.

Foreign policy controls under the EAA are designed to control exports for

specific reasons (e.g., missile technology concerns) and if the exports are

going to specific countries (e.g., countries considered to be missile

proliferators). In essence, these controls are targeted to specific items, end

uses, and/or countries. Consequently, items controlled for missile

technology reasons (e.g., most stealth-related commodities), as a practical

4

In addition, the EAA regulates exports of commodities that are considered to be in short supply in the

United States.

Page 6 GAO/NSIAD-95-140 Export Controls
B-260666 

matter, are not restricted if they are destined for other end uses (e.g., ship

applications and aircraft) or for a country not considered to be a missile

proliferation threat (e.g., any member of the Missile Technology Control

Regime).5

In contrast, under the AECA, commodities on the USML are controlled to all

destinations, and authority to regulate exports is not limited by end use or

country.6

 The AECA grants State broad authority to deny export

applications based on a determination that the license is against national

interests.

Referral Practices

Prevent DOD From

Seeing Most

Stealth-Related

Exports

Commerce referral procedures for the seven stealth-related categories do

not require most applications to be sent to either DOD or State for review.

Commerce referral procedures depend on the reason the export is

controlled and the ultimate destination.

DOD Does Not Review

Most Stealth-Related

Exports

As shown in table 4, between fiscal years 1991 and 1994, most applications

under the seven export control classification numbers related to stealth

were not referred to either DOD or State. During this time, only 15 of 166

applications processed by Commerce were sent to either DOD or State for

review. Table 4 also shows, because some export control classification

numbers cover a broad array of items, some of the export applications

classified under these numbers are not related to stealth. Table 5 lists

examples of applications that were referred by Commerce, and table 6 lists

applications that were not referred.

5

The Missile Technology Control Regime is an international arrangement. Under this arrangement, the

United States, Canada, France, Germany, Italy, Japan, Spain, the United Kingdom, and 17 other

countries, adopted export control policies designed to limit the proliferation of missiles capable of

delivering weapons of mass destruction (i.e., nuclear, chemical, and biological weapons).

6

Under the USML, some items going to Canada are not controlled.

Page 7 GAO/NSIAD-95-140 Export Controls
B-260666 

Table 4: Applications and Referrals for

ECCNs Related to Stealth

ECCNa Category description

Applications

FY91-FY94

Referred to

DOD or State

1C21 Materials for reduced observables (i.e.,

stealth technology), including structural

materials and coatings

28 3

1D23 Software specially designed for the

development, production, or use of items

controlled by 1C21, 1C01. and other

categories

0 0

1E23 Technology for development, production,

or use of items controlled by 1C21 and

nine other categories

24 5

1C01 Materials designed as absorbers of

electromagnetic waves or intrinsically

conductive polymers

12 0

1E01 Technology for the development or

production of equipment or materials

controlled by 1C01 and 18 other categories

95 6

1E02 Technology for the installation,

maintenance, or repair of items controlled

by 1C01 and other categories

5 1

6B08 Pulse radar cross-section measurement

systems and specially designed

components

2 0

Total 166 15

Note: Because export categories are broad, an undetermined number of the 166 applications

classified under these seven categories do not have direct relevance to stealth technology.

aExport control classification number.

Table 5: Selected Applications

Referred by Commerce ECCNa Commodity End use Region

1C21 Material and coatings for

reduced observables (i.e.,

stealth technology)

Golf club heads East Asia

1C21 Material and coatings for

reduced observables (i.e.,

stealth technology)

Computer housings, leisure

goods

East Asia

1E01 Technology for the production

or development of materials

designed for use as absorbers

Manufacturing data on

composite structures for civil

aircraft

East Asia

aExport control classification number.

Page 8 GAO/NSIAD-95-140 Export Controls
B-260666 

Table 6: Selected Applications Not

Referred by Commerce ECCNa Commodity End use Region

1C21 Material and coatings for

reduced observables (i.e.,

stealth technology)

Reduction of radar cross-section

on ship applications

Middle

East

1C21 Material and coatings for

reduced observables (i.e.,

stealth technology)

Cruise missile Western

Europe

1C21 Material and coatings for

reduced observables (i.e.,

stealth technology)

Radome on military aircraft Western

Europe

6B08 Pulse radar cross-section

measurement systems

Test military aircraft Middle

East

aExport control classification number.

Referral Procedures

Depend on Reason for

Control

In general, commodities controlled on the CCL for national security reasons

are referred to DOD only if they are going to a controlled country.7

 These

referral procedures are based, in part, on agreements between Commerce

and DOD. National security controls are designed to prevent exports from

going to controlled countries. Consequently, exports of commodities that

are controlled for national security reasons and that are going to other

destinations are generally not restricted, and Commerce does not refer

such applications to DOD.

Exports of commodities controlled for missile technology reasons are

referred by Commerce only if they meet two key tests. First, the

description of the export must fit the definition of missile technology

items as described in the Annex to the Missile Technology Control

Regime. Some commodities that fall under export commodity control

numbers controlled for missile technology may not fit the detailed

description of missile technology found in the Annex. Second, the export

must be going to a country considered to be of concern for missile

technology proliferation reasons.8

Export applications that Commerce refers based on missile technology

concerns are sent to the Missile Technology Export Control group (MTEC).

The MTEC is chaired by State with representatives from DOD, Commerce,

7

In addition, Commerce refers to DOD applications involving certain exports going to a special list of

countries (mainly countries that support terrorism).

8

Under the terms of the Enhanced Proliferation Controls Initiative, items not on the Missile

Technology Control Regime Annex may be referred if Commerce believes the items are destined for a

missile project of concern.

Page 9 GAO/NSIAD-95-140 Export Controls
B-260666 

the U.S. intelligence agencies, and others at the invitation of the Chair and

the concurrence of the group. DOD, by being a member of MTEC, has access

to missile technology applications that Commerce refers to the group.9

In a recent report, we noted concerns about Commerce’s referral practices

for missile-related exports.10 Only a fraction of the export applications

under export control classification numbers controlled for missile

technology reasons going to China were sent by Commerce to other

agencies for review. According to the current Chair of the MTEC,

Commerce does not refer all relevant missile technology applications to

the MTEC for review. Commerce officials stated that they refer all relevant

cases and noted that the MTEC Chair may be unfamiliar with Commerce

referral procedures. State noted in its comments that it would be

preferable for the MTEC to review all export licenses for Annex items.

Recommendations In light of the more stringent controls under the AECA and the sensitivity of

stealth technology, we recommend that

• the Secretary of State, with the concurrence of the Secretary of Defense

and in consultation with the Secretary of Commerce, clarify the licensing

jurisdiction between the USML and the CCL for all stealth-related

commodities and technologies with a view toward ensuring adequate

controls under the AECA for all sensitive stealth-related items and

• the Secretary of Commerce revise current licensing referral procedures on

all stealth-related items that remain on the CCL to ensure that Commerce

refers all export applications for stealth-related commodities and

technology to DOD and State for review, unless the Secretaries of Defense

and State determine their review of these items is not necessary.

Agency Comments We obtained written comments from the Departments of State and

Commerce (see apps. I and II). State generally agreed with the analyses

and recommendations in the report. State indicated that our first

recommendation should be revised to properly reflect State’s leading role

in determining which items are subject to the AECA (i.e., belong on the

USML). State also noted that our second recommendation should be

amended to include State in determining whether some stealth-related

9

In contrast to Commerce’s referral procedures, State’s Office of Defense Trade Controls refers to the

MTEC, through the Defense Technology Security Administration, potential missile-related applications

regardless of their destination.

10Export Controls: Some Controls Over Missile-Related Technology Exports to China Are Weak

(GAO/NSIAD-95-82, Apr. 17, 1995).

Page 10 GAO/NSIAD-95-140 Export Controls
B-260666 

export licenses need to be referred to State for review for foreign policy

reasons. We clarified both recommendations to address State’s concerns.

Commerce disagreed with our first recommendation stating that the lines

of jurisdiction over exports of stealth-related commodities are already

clear. As demonstrated in the report, we believe the lines of jurisdiction

are unclear. In addition, State, in its comments to this report, concurs with

our recommendation to clarify which stealth-related items should be

controlled under the USML and the CCL. Commerce also disagreed with our

second recommendation indicating that the executive branch has drafted

an executive order that would give the relevant agencies authority to

review all dual-use license applications. If implemented, this draft

executive order may help improve the review of sensitive exports by DOD

and State. However, this draft executive order, by itself does not address

the need to clarify jurisdiction between the CCL and the USML in light of the

military significance and sensitivity of stealth-related technology and the

more stringent controls under the AECA.

DOD officials provided oral comments on a draft of this report. We made

changes to the report as appropriate to address the technical issues they

raised.

Scope and

Methodology

To determine how control over stealth technology is split between the CCL

and the USML, we reviewed the two lists and interviewed officials from

State’s Office of Defense Trade Controls, Commerce’s Bureau of Export

Administration, DOD’s Defense Technology Security Administration, and

the Institute for Defense Analyses.

To identify the impact of shared jurisdiction over stealth-related items, we

• reviewed the export controls established in the AECA and the EAA;

• obtained Commerce export licensing records on computer tape and

focused our analysis on licenses processed after the CCL was restructured

in 1991;11

• examined Commerce export license application records that had export

classification numbers related to stealth technology; and

• discussed the impacts of shared jurisdiction over stealth with defense and

technical experts in DOD’s Special Programs Office, the Institute for

11We assessed the reliability of this computer data in the following reviews and found it to be generally

adequate: Export Controls: License Screening and Compliance Procedures Need Strengthening

(GAO/NSIAD-94-178, June 14, 1994) and Nuclear Nonproliferation: Export Licensing Procedures for

Dual-Use Items Need to Be Strengthened (GAO/NSIAD-94-119, Apr. 26, 1994).

Page 11 GAO/NSIAD-95-140 Export Controls
B-260666 

Defense Analyses, the Defense Technology Security Administration, and

officials from the MTEC group, State’s Office of Defense Trade Controls,

and the Bureau of Export Administration.

To assess whether current referral procedures allow DOD to review all

stealth-related exports, we examined the referral histories for the

stealth-related exports we identified.

We conducted our review from June 1994 through April 1995. Our review

was performed in accordance with generally accepted government

auditing standards.

As agreed with your office, unless you publicly announce the contents of

this report earlier, we plan no further distribution of this report until 15

days after its issue date. At that time, we will send copies to other

congressional committees and the Secretaries of Defense, State, and

Commerce. We will also make copies available to other interested parties

upon request.

Please contact me at (202) 512-4587 if you or your staff have any questions

concerning this report. Major contributors to this report were Davi M.

D’Agostino, Jai Eun Lee, and David C. Trimble.

Sincerely yours,

David E. Cooper

Director, Acquisition Policy, Technology,

 and Competitiveness Issues

Page 12 GAO/NSIAD-95-140 Export Controls
Page 13 GAO/NSIAD-95-140 Export Controls
Appendix I 

Comments From the Department of State

Page 14 GAO/NSIAD-95-140 Export Controls
Appendix I 

Comments From the Department of State

Now on p. 4.

See comment 1.

Now on p. 7.

See comment 2.

Now on p. 10.

See comment 3.

Now on p. 9.

See comment 4.

Page 15 GAO/NSIAD-95-140 Export Controls
Appendix I 

Comments From the Department of State

Now on p. 10.

Page 16 GAO/NSIAD-95-140 Export Controls
Appendix I 

Comments From the Department of State

The following are GAO’s comments on the Department of State’s letter

dated May 1, 1995.

GAO Comments 1. We agree that foreign availability is not relevant in determining whether

an item should be controlled on the U.S. Munitions List (USML). Our

statement in the draft report concerning foreign availability considerations

has been deleted.

2. The report was changed to more accurately describe the Missile

Technology Control Regime.

3. We made changes to the report to reflect State’s view that Commerce

should not “pre-screen” export licenses and that the Missile Technology

Export Control group (MTEC) should review all export licenses for Missile

Technology Control Regime Annex items.

4. We added a footnote to the report to mention Enhanced Proliferation

Controls Initiative referrals.

Page 17 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

Page 18 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

See comment 1.

Now on pp. 3-5.

See comment 2.

Page 19 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

See comment 3.

Now on p. 3.

See comment 2.

Now on p. 4.

See comment 4.

See comment 5.

Page 20 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

Now on p. 4.

See comment 6.

See comment 7.

Now on p. 5.

Now on pp. 8-9.

See comment 8.

Page 21 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

See comment 9.

See comment 10.

Now on pp. 6-7.

See comment 11.

Now on p. 10.

See comment 12.

Now on p. 9.

See comment 13.

Page 22 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

Now on p. 10.

See comment 2.

Now on p. 10.

Page 23 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

The following are GAO’s comments on the Department of Commerce’s

letter dated May 2, 1995.

GAO Comments 1. We agree that the two systems are different. However, as discussed in

the report, Commerce’s system is less restrictive than State’s system. This

difference, as Commerce notes, is due to Commerce being responsible for

regulating dual-use commodities and State regulating more sensitive

military commodities.

2. The rationalization exercise was initiated in 1990 by President Bush to

move dual-use items on the USML to the Commerce Control List (CCL), not

to examine both control lists for problems of unclear or overlapping

jurisdiction. Though some stealth-related commodities were examined

during the course of this exercise in 1991, problems of overlapping

jurisdiction remain. In addition, as noted in our report, the Department of

Defense (DOD) and State officials agree that jurisdiction over

stealth-related technology and commodities is ill defined and should be

clarified.

3. We do not have responsibility for determining where the lines of

jurisdiction between the control lists should be drawn. As we stated in our

recommendation, this is the role of the Department of State in

consultation with DOD and the Department of Commerce.

4. We made changes to the report to more accurately reflect Commerce’s

position.

5. We do not suggest that new International Traffic in Arms Regulations

controls over dual-use items be implemented.

6. Our draft report acknowledged the role of DOD in establishing referral

procedures. We made changes to the final report to further clarify DOD’s

role. Moreover, in comments on our draft report, State indicated that it

would be preferable for Commerce to refer to State all export licenses for

Missile Technology Control Regime Annex items regardless of destination.

7. We clarified our use of the term “stealth” in the final report to explain

that our review focused primarily on radar cross-section reduction.

Consequently, any possible overlap in export controls for other aspects of

stealth technology (e.g., technologies and materials related to reducing

Page 24 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

infrared, acoustic, electromagnetic and visual signatures, and counter

low-observables technologies) was not addressed in our report.

8. We made changes to the report to comply with the confidentiality

concerns raised by Commerce.

9. Our draft report acknowledges that because some export control

classification numbers cover a broad array of items, some of the exports

classified under these numbers are not related to stealth. We made

changes to the final report to make this point more clearly. We would have

preferred to review these applications with technical experts from DOD to

determine which applications involved stealth technology. However, in

our review examining missile related exports to China, we were prevented

from sharing license information with DOD for the purposes of assessing

the technology in a sample of Commerce export licenses.1

 Due to

Commerce’s lengthy administrative requirements for requesting

permission to share license information with DOD, we were unable to

perform this detailed analysis in the timeframes of our assignment.

10. Commerce states that it has sufficient authority to deny validated

license applications for products the U.S. government does not want to

export. It points to regional stability controls reached with interagency

consensus as examples of its use of such authority. While Commerce

could take a more expansive view of its statutory charter, in practice, it

has been more restrained. For example, Commerce officials told us they

could not have prevented the export of radar-absorbing coatings to

Germany for use on a cruise missile.

11. We made changes to the report to clarify our point that items

controlled for missile technology reasons are, as a practical matter, not

restricted if they are destined for other uses or for a country not

considered a missile proliferation threat.

12. The report does not state that Commerce violated its referral

procedures for exports going to China that are controlled for

missile-technology reasons. Our point is that current referral practices

preclude State and DOD from seeing most Commerce license applications

for export commodity classification numbers controlled for missile

technology reasons.

1

Export Controls: Some Controls Over Missile-Related Technology Exports to China Are Weak

(GAO/NSIAD-95-82, Apr. 17, 1995).

Page 25 GAO/NSIAD-95-140 Export Controls
Appendix II 

Comments From the Department of

Commerce

13. The examples in the table are valid. The license that was returned

without action was held by Commerce for 44 days before it was returned.

This provided Commerce ample time to refer the case to DOD for review.

The other application involved equipment used to make radar

cross-section measurements—an important capability in assessing efforts

to reduce the radar signature of an aircraft or missile.

(705055) Page 26 GAO/NSIAD-95-140 Export Controls
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