Report to the Subcommittee on

Readiness and Management Support,

Committee on Armed Services, U.S.

Senate

United States General Accounting Office

GAO

October 2001 EXPORT CONTROLS

Clarification of

Jurisdiction for

Missile Technology

Items Needed

GAO-02-120
Page i GAO-02-120 Export Controls

Letter 1

Results in Brief 2

Background 3

Export Control Jurisdiction Unclear for Certain Missile Technology

Control Regime Items 5

Disagreement Over Definitions and Lack of Effective Consultation

Have Contributed to Unclear Jurisdiction for Regime Items 7

Unclear Jurisdiction for Regime Items May Have Consequences for

U.S. National Interests and Exporters 9

Conclusions 12

Recommendations for Executive Action 12

Agency Comments and Our Evaluation 13

Scope and Methodology 13

Appendix I Missile Technology Control Regime Items Subject to

Unclear Jurisdiction 16

Appendix II Comments From the Department of Commerce 23

Appendix III Comments From the Department of State 32

Tables

Table 1: Examples of Regime Items on Both the Commerce Control

List and the State Department’s U.S. Munitions List 6

Table 2: Control of Regime Items by Both the Departments of

Commerce and State 16

Contents
Page 1 GAO-02-120 Export Controls

October 9, 2001

The Honorable Daniel K. Akaka

Chairman

The Honorable James M. Inhofe

Ranking Minority Member

Subcommittee on Readiness and

 Management Support

Committee on Armed Services

United States Senate

The U.S. government has long been concerned about the growing threat to

U.S. interests from the proliferation of missiles, their components, and

related technologies. These missiles can deliver chemical, biological, and

nuclear weapons of mass destruction. In an effort to address these

concerns, the United States has committed to work with other countries

through the Missile Technology Control Regime to control the export of

missile-related items. With the passage of the National Defense

Authorization Act for Fiscal Year 1991, the Congress amended existing

export control statutes to strengthen missile-related export controls,

consistent with the U.S. government’s commitments to the Regime.1

Under the amended statutes, the Departments of Commerce and State

share primary responsibility for controlling exports of Regime items. The

Commerce Department is required to control Regime items that are dualuse (those having both military and civilian uses) on its export control

list—the Commerce Control List. All other Regime items are to be

controlled by the State Department on its export control list—the U.S.

Munitions List.

Given the current interest in missile technology proliferation and export

controls, you asked us to determine whether the Departments of

Commerce and State have clearly established which Department has

jurisdiction over Missile Technology Control Regime items. Specifically,

we identified the two Departments’ division of jurisdiction over Regime

items, the factors that contribute to unclear jurisdiction for these items,

and the potential effects of unclear jurisdiction over these items.

 1

 P.L. 101-510, Nov. 5, 1990.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-120 Export Controls

The Departments of Commerce and State have not clearly established

which Department has jurisdiction for almost 25 percent of the items the

United States agreed to control as part of its Missile Technology Control

Regime commitments.2

 In some cases, the descriptions of the Regime

items on the Commerce Control List and the U.S. Munitions List are the

same. In other cases, one Department claims jurisdiction over items that

do not explicitly appear on its export control list but do appear on the

other Department’s list.

Two factors contribute to unclear jurisdiction for Regime items. First, the

Departments of Commerce and State disagree on how to determine which

Regime items are Commerce Department-controlled and which are State

Department-controlled. Commerce Department officials said a Regime

item appearing on both export control lists should be State Departmentcontrolled only if it meets the criteria of being specifically designed or

modified for a military application. The State Department disagreed with

this position by stating that an item is State Department-controlled if it

appears on the U.S. Munitions List and that exporters should not use any

other criteria to determine jurisdiction. Second, consultations between the

Departments of Commerce and State regarding their respective control

lists have not been effective in ensuring that Regime items are subject to

the jurisdiction of only one Department. The State Department office

responsible for maintaining the U.S. Munitions List has not participated in

these consultations. Furthermore, the State Department has not updated

the Regime section of its export control list for several years, which has

limited opportunities for consultations.

Unclear jurisdiction may result in the same Regime item being subject to

different export control restrictions and processes at the Departments of

Commerce and State, which could affect U.S. national interests and

companies’ ability to export. For example, by law, the State Department

generally cannot allow missile technology and other items it controls to be

exported to China, while this same restriction does not apply to the

Commerce Department. Therefore, a company generally cannot export a

Regime item to China under the State Department’s export control system

but may be able to do so through the Commerce Department’s system

after meeting certain requirements. Because of differences between the

 2

 We previously reported on unclear lines of jurisdiction for stealth-related commodities

and technologies, which are Regime items. See Export Controls: Concerns Over StealthRelated Exports (GAO/NSIAD-95-140, May 10, 1995).

Results in Brief
Page 3 GAO-02-120 Export Controls

two Departments’ export control systems, it is critical that exporters

properly determine which Department has jurisdiction over Regime items.

However, some of the exporters we spoke with did not fully understand

the export control system or certain terms in the regulations thereby

making it sometimes difficult to determine where to apply for a license to

export Regime items.

To ensure that proposed exports of Regime items are subject to the

appropriate review process as determined by the U.S. government, we are

recommending that the Departments of Commerce and State resolve their

jurisdictional lines of control for Regime items and revise their regulations

accordingly. In commenting on a draft of this report, the Commerce

Department stated that, although it believes jurisdiction for Regime items

is generally clear, it supports reviewing the export control lists to provide

additional clarity for exporters. In its comments, the State Department

agreed to update its regulations and work with the Commerce Department

to eliminate areas of overlap in jurisdiction for Regime items.

The United States along with six allies established the Missile Technology

Control Regime (MTCR) in 1987.3

 The Regime is a voluntary agreement

among member countries to limit the proliferation of missiles capable of

delivering nuclear, biological, and chemical weapons and their associated

equipment and technology. The Regime consists of common export policy

guidelines and a list of controlled items that include complete missile

systems (rocket and unmanned air vehicle systems) and missile-related

components and technologies that may have civilian applications. The list,

known as the Equipment, Software, and Technology Annex (hereafter,

referred to as the Regime Annex), is periodically updated to reflect

technological advances. Member countries agree to control exports of

Regime items in accordance with their respective national laws.4

The United States fulfills its MTCR commitments primarily through the

export control systems of the Departments of Commerce and State. These

two systems were founded on different premises. The Commerce

 3

 The other founding members of the Regime are Canada, France, Germany, Italy, Japan,

and the United Kingdom. Since 1987, 26 additional countries have become members of the

Regime, bringing the total number of member countries to 33.

4

 Throughout this report, the phrase “Regime item” refers to the equipment, facilities,

components, materials, software, and technologies listed in the Regime Annex.

Background
Page 4 GAO-02-120 Export Controls

Department, through its Bureau of Export Administration, controls

exports of most dual-use items and technologies under the authority of the

Export Administration Act of 1979.5

 As such, the Commerce Department

is charged with weighing U.S. economic and trade interests along with

national security and foreign policy interests. Dual-use items subject to the

Commerce Department’s export controls are identified in the Commerce

Control List of the Export Administration Regulations.6

 In contrast, the

State Department, through its Office of Defense Trade Controls, controls

exports of defense articles and services under the authority of the Arms

Export Control Act.7

 The State Department’s export control system is

designed primarily to further national security and foreign policy interests.

The items controlled by the State Department can be found in the

International Traffic in Arms Regulations, specifically within the U.S.

Munitions List, which the State Department develops with the

concurrence of the Department of Defense.8

 The Departments of State

and Defense are reviewing and revising different portions of the U.S.

Munitions List on an annual basis, as part of the Defense Trade Security

Initiative, to ensure that coverage of items on the list is appropriate.9

Exporters are responsible for determining whether an item they seek to

export is on the Commerce Control List and, therefore, subject to the

Commerce Department’s jurisdiction, or on the U.S. Munitions List and

subject to the State Department’s jurisdiction.

With the passage of the National Defense Authorization Act for Fiscal

Year 1991, the Congress amended both the Export Administration Act and

the Arms Export Control Act to include restrictions on the export of

Regime items. Under the amended Export Administration Act, the

Secretary of Commerce, in consultation with the Secretaries of State and

Defense and other officials, is required to establish and maintain as part of

the Commerce Control List, a list of all dual-use goods and technologies

that appear on the Regime Annex. Under the amended Arms Export

Control Act, the Secretary of State, in consultation with the Secretary of

Defense and others, is to establish and maintain as part of the U.S.

 5

 50 U.S.C. App. secs. 2401 et seq.

6

 15 C.F.R. secs. 730-774.

7

 22 U.S.C. secs. 2751 et seq.

8

 22 C.F.R. secs. 120-130.

9

 See Defense Trade: Analysis of Support for Recent Initiatives (GAO/NSIAD-00-191,

Aug. 31, 2000).
Page 5 GAO-02-120 Export Controls

Munitions List, a list of Regime items that are not controlled under the

Export Administration Act. Thus, under these statutes, individual Regime

items are to be listed on either the Commerce Control List or the U.S.

Munitions List—but not both lists. The Commerce Control List identifies a

variety of controlled dual-use items, some of which are designated as

being controlled for missile technology reasons, and includes Regime

items. In contrast, the U.S. Munitions List contains a separate section that

identifies Regime items subject to the State Department’s jurisdiction.10

Forty-seven of 196 Regime items appear subject to the export control

jurisdictions of both the Commerce Department and the State

Department.11 For these 47 items, either (1) the description of the item is

the same on both the Commerce Control List and the U.S. Munitions List

or (2) one Department claims jurisdiction over an item even though the

item does not explicitly appear on its export control list but does appear

on the other Department’s list. Appendix I contains descriptions of the 47

Regime items and identifies where they are covered on the Commerce and

State control lists.

Table 1 provides examples of Regime items that appear on both export

control lists with either identical descriptions or overlapping performance

parameters.

 10 22 C.F.R. sec. 121.16.

11 The MTCR Annex consists of 20 groupings of items, which are divided into subitems. For

the purpose of this report, we counted 196 subitems as separate Regime items.

Export Control

Jurisdiction Unclear

for Certain Missile

Technology Control

Regime Items
Page 6 GAO-02-120 Export Controls

Table 1: Examples of Regime Items on Both the Commerce Control List and the

State Department’s U.S. Munitions List

Commerce Control List U.S. Munitions List

Bulk machinable silicon-carbide reinforced

unfired ceramic, usable for nose tips.

Bulk machinable silicon-carbide reinforced

unfired ceramic usable for nose tips.

Gyro-astro compasses and other devices,

other than those controlled by 7A004,a

which derive position or orientation by

means of automatically tracking celestial

bodies or satellites and specially designed

components therefor.

Instrumentation, navigation, and direction

finding equipment and systems, and

associated production and test equipment

as follows; and specially designed

components and software therefor:

Gyro-astro compasses and other devices

which derive position or orientation by

means of automatically tracking celestial

bodies or satellites.

Software that processes post-flight,

recorded data, obtained from the systems

controlled by 6A108.b,b

 enabling

determination of vehicle position throughout

its flight path.

Precision tracking systems:

Software which processes post-flight,

recorded data, enabling determination of

vehicle position throughout its flight path.

a

 Export Control Classification Number 7A004 covers “gyro-astro compasses, and other devices

which derive position or orientation by means of automatically tracking celestial bodies or satellites,

with an azimuth accuracy of equal to or less (better) than 5 seconds of arc.”

b

 Export Control Classification Number 6A108.b controls precision tracking systems, usable for

missiles.

Neither the Commerce Control List nor the U.S. Munitions List provides

criteria to differentiate when these items are subject to the Commerce

Department’s jurisdiction and when they are subject to the State

Department’s jurisdiction. The Commerce Control List sometimes

provides a cross-reference to the U.S. Munitions List when the State

Department controls certain items meeting particular parameters.12

However, Commerce Department officials said that the Commerce Control

List does not always include such references because the regulations

would become too voluminous. The State Department’s control list

generally does not indicate that an item may be subject to the Commerce

Department’s control since the U.S. Munitions List is supposed to identify

only those items subject to the State Department’s jurisdiction.

 12 According to Part 738.2(d) of the Commerce Department’s export control regulations, the

Commerce Control List includes cross-references if another U.S. government department

has export licensing authority over items related to those controlled by the Commerce

Department.
Page 7 GAO-02-120 Export Controls

In other cases, the State Department claims jurisdiction over software and

technologies related to missile production equipment and facilities,

although these items do not explicitly appear on the U.S. Munitions List.

These items, however, appear on the Commerce Control List.

Two factors have contributed to unclear jurisdiction for Regime items.

First, officials at the Departments of Commerce and State have expressed

different understandings of how to define which Regime items are

Commerce Department-controlled and which are State Departmentcontrolled. Second, consultations between the Departments of Commerce

and State on Regime-related changes to their regulations have not ensured

that items are clearly subject to the jurisdiction of one Department or the

other. The State Department office responsible for maintaining the U.S.

Munitions List has not formally participated in reviews of proposed

changes to the Commerce Control List. Furthermore, the State

Department has not updated the MTCR section of the U.S. Munitions List

since the mid-1990s, precluding the opportunity to consult with the

Commerce Department.

Commerce Department officials said that jurisdiction for Regime items is

clear as long as an exporter follows the State Department’s regulation on

designating and determining defense articles and services. Referring to the

State Department’s regulations, Commerce Department officials said that

if a Regime item appears on both Departments’ control lists, it should be

subject to the State Department’s jurisdiction if it

“Is specifically designed, developed, configured, adapted, or modified for a military

application, and

(i) Does not have predominant civil applications, and

(ii) Does not have performance equivalent (defined by form, fit and function) to those of an

article or service used for civil applications; ....”

13

Conversely, according to Commerce Department officials, if the item does

not meet these criteria—even if it appears in the MTCR section of the U.S.

Munitions List—it should be subject to the Commerce Department’s

export controls. However, a senior State Department official disagreed

with the Commerce Department officials’ interpretation of the State

Department’s regulations. The official explained that the criteria cited by

 13 22 C.F.R. sec. 120.3.

Disagreement Over

Definitions and Lack

of Effective

Consultation Have

Contributed to

Unclear Jurisdiction

for Regime Items
Page 8 GAO-02-120 Export Controls

Commerce Department officials is used by the State Department, in

consultation with the Defense Department, to determine which items will

appear on the U.S. Munitions List and should not be used by exporters and

others to determine whether an item is subject to the State Department’s

export controls. Instead, exporters are to consult the U.S. Munitions List

to determine which Regime items are under the State Department’s

jurisdiction.

Consultations between the Departments of Commerce and State have

been limited. According to the Commerce Department, it coordinates its

regulations and proposed changes for the control of Regime items with the

Departments of State, Defense, and Energy and, therefore, these

Departments should be aware of which Regime items appear on the

Commerce Control List. However, officials from the State Department’s

Office of Defense Trade Controls, which maintains the U.S. Munitions List,

said they are not formally consulted to ensure that Regime items do not

appear on both export control lists. Within the State Department, the

Bureau of Nonproliferation formally reviews and comments on the

Commerce Department’s regulations for the control of Regime items. A

senior Bureau official said that the review is to ensure that Regime items

are controlled, without concern for which Department has jurisdiction.

Further, the State Department has not consulted with the Commerce

Department in recent years regarding the Regime items covered by its

export control list. According to a senior official with the Office of

Defense Trade Controls, the Commerce Department was provided an

opportunity to review the section of the U.S. Munitions List that identifies

the Regime items subject to the State Department’s controls before the

section was added to the International Traffic in Arms Regulations in 1994.

However, this section of the State Department’s regulations has not been

updated or revised since then to incorporate the periodic changes made to

the Regime Annex. State Department officials maintain that the U.S.

Munitions List does not have to be regularly revised to ensure that new

items added to the Regime Annex are controlled, as those items are

already controlled under the U.S. Munitions List’s broad categories.

However, as a result of this lack of revision, the Commerce Department

has not been provided another opportunity to review and comment on the

Regime items covered by the U.S. Munitions List to ensure that items do

not appear on both export control lists.
Page 9 GAO-02-120 Export Controls

The appearance of an item on both the Commerce Control List and the

U.S. Munitions List and disagreements between the Departments over

which one has jurisdiction may result in the same Regime item being

subject to different restrictions and reviews, which may affect U.S.

national interests and companies’ ability to export Regime items. While the

Commerce Department’s export control system seeks to balance U.S.

national security and foreign policy interests with economic interests, the

State Department’s export control system was designed to primarily

further national security and foreign policy interests. The differences in

the underlying premises of the two Department’s export control systems

are reflected in their restrictions on where Regime items can be exported

and processes to review export licensing applications.

A key difference between the Departments’ export control systems is that

some sanctions and embargoes only apply to items on the U.S. Munitions

List and not to those on the Commerce Control List. For example, under

U.S. law, licenses cannot be issued for the export of most missile

technology and other items on the U.S. Munitions List to China.14 As a

result, the State Department generally denies license applications

involving the export of items on the U.S. Munitions List to China. This

same restriction does not apply to items on the Commerce Control List.

Missile technology items on the Commerce Control List may be licensed

for export to China provided that certain legal requirements are met.15

Additionally, the State Department generally denies license applications

involving exports of U.S. Munitions List items to Indonesia and Yugoslavia.

The Commerce Department does not have a comparable policy for exports

of Regime items to these countries. Because of these policy differences,

the State Department could deny a license to an exporter seeking to

export a Regime item to one of these countries, whereas the Commerce

 14 P.L. 101-246, Feb. 16, 1990. The statute permits licensing of some systems and

components specifically designed for inclusion in civil products unless the President

determines that the intended recipient is the military or security forces of China. Also,

under the statute, licensing of U.S. Munitions List items for export to China is prohibited

unless the President reports to Congress that (1) China has achieved certain political and

human rights reforms or (2) it is in the U.S. national interest.

15 Section 1512 of P.L. 105-261, Oct. 17, 1998, as amended, generally permits the export of

missile equipment or technology to China only after the President certifies that the export

is not detrimental to the U.S. space launch industry and the missile equipment or

technology will not measurably improve China's missile or space launch capabilities. This

restriction applies to the export of all missile equipment or technology on the Regime

Annex, except inertial reference units and components in manned civilian aircraft.

Unclear Jurisdiction

for Regime Items May

Have Consequences

for U.S. National

Interests and

Exporters
Page 10 GAO-02-120 Export Controls

Department could approve a license to export the same item to these

countries.

Other sanctions apply to both export control lists, but the Departments

have enforced these sanctions differently. For example, under the MTCR

sanction provisions of the Export Administration Act and the Arms Export

Control Act, the President generally is to impose sanctions on U.S. and

foreign parties who improperly transferred Regime items.16 For the

improper transfer of Regime-controlled components, equipment, material,

and technology, the Departments of Commerce and State are to deny

export licenses to the involved parties for all Regime items subject to their

respective controls for a 2-year period.17 In applying MTCR sanctions, the

Commerce Department has allowed Regime items to be exported to

sanctioned parties if these items were incorporated into larger items not

subject to these sanctions. The State Department, however, has prohibited

the export to sanctioned parties of non-Regime items on the U.S.

Munitions List if they contain Regime items. As a result, exporters have

been subject to different levels of scrutiny and restrictions at the

Departments of Commerce and State.

Finally, the Commerce Department’s regulations do not require licenses

for the export of Regime items on the Commerce Control List to Canada,

while the Department of State’s regulations require licenses for the export

of Regime items on the U.S. Munitions List to all countries.18 The exporter

consulting the Commerce Control List could export an item to Canada

without a license, while the exporter consulting the U.S. Munitions List

would have to go through the Department of State’s license application

process. The U.S. government may or may not have an opportunity to

review and approve a Regime item exported to Canada, depending on

whether the exporter consults the Commerce Control List or the U.S.

Munitions List.

 16 The law allows the President to waive these sanctions under certain conditions. The

United States has imposed these sanctions in the past on several countries including China,

Egypt, India, Pakistan, and Russia.

17 For the improper transfer of Regime-controlled complete rocket systems and unmanned

air vehicle systems and their complete subsystems, the sanction provisions call for the

Departments of Commerce and State to deny export licenses to the involved parties for all

items on the Commerce Control List and U.S. Munitions List for at least two years.

18 See Export Controls: Regulatory Change Needed to Comply with Missile Technology

Licensing Requirements (GAO-01-530, May 31, 2001).
Page 11 GAO-02-120 Export Controls

Because of differences in the export control systems of the Departments

of Commerce and State, it is critical that exporters properly determine

whether their items are controlled on the Commerce Control List or the

U.S. Munitions List. However, some of the companies we spoke with did

not understand U.S. export controls as applied to missile technology

items. For example, an official from one company stated the company’s

product is not exported for use in missiles and, therefore, did not

understand why this product is controlled for missile technology reasons,

even though it is on the Regime Annex. At another company, an official

said that the State Department controls all Regime items and did not

realize that the Commerce Department controls dual-use Regime items.

Export licensing officials with another company said that companies

acquired by their company had incorrectly determined that certain Regime

items were Commerce Department-controlled when the items were State

Department-controlled.19 An export licensing official from another

company stated that when there is uncertainty as to which Department

has jurisdiction over a particular Regime item, the company submits the

license application to the Commerce Department with the expectation that

the Commerce Department would send the license application to the State

Department if the item were State Department-controlled. Officials from

other companies said they relied on past experience, familiarity with a

particular Department, and their own interpretations of the regulations

when deciding where to submit an export license application.

Some of the companies expressed uncertainty of the meaning of certain

terms in the regulations, which sometimes made it difficult to determine

whether to submit their license applications to the Commerce Department

or the State Department. For example, officials from several companies

indicated that they did not understand what the regulations mean when

referring to items as specifically designed or modified for a military

application. These officials noted that the Departments of Commerce and

State do not provide either a regulatory definition or sufficient guidance

for what constitutes being specifically designed or modified. As a result,

an official with one company said there is room for interpretation on the

part of exporters. Officials from these companies stated that if they make

any modifications to an item for use by the military, they submit the

 19 According to the company officials, the acquired companies voluntarily disclosed to the

State Department that they had incorrectly exported certain Regime items through the

Commerce Department rather than the State Department.
Page 12 GAO-02-120 Export Controls

license application to the State Department to ensure that they do not

violate the State Department’s regulations and governing statute.

The U.S. government has committed internationally to controlling Regime

items because of its concerns about the threat missile proliferation poses

to U.S. interests. The lack of clarity over which Department has

jurisdiction over some Regime items may lead an exporter to seek a

Commerce Department license for a militarily sensitive item controlled on

the U.S. Munitions List or a State Department license for a dual-use item

controlled on the Commerce Control List. The Commerce Department and

State Department would review these license applications according to

different criteria and restrictions and possibly reach different

determinations on whether the item may be exported. Because there is

unclear jurisdiction for critical Regime items, exporters are left to decide

which Department should review their exports and, by default, the policy

interests that are to be considered and acted upon.

To ensure that proposed exports of Missile Technology Control Regime

items are subject to the appropriate review process, we recommend that

• the Secretaries of Commerce and State direct the offices responsible for

the Commerce Control List and the U.S. Munitions List, in consultation

with others as appropriate, to jointly review the Regime Annex, determine

the appropriate jurisdiction for items on the Annex, and revise their

respective export control lists accordingly;

• the Secretary of Commerce ensure that, when a Regime item generally

controlled by the Commerce Department becomes subject to the State

Department’s control if it meets certain parameters, the Commerce

Control List specify those parameters and provide a cross-reference to the

U.S. Munitions List; and

• the Secretary of State update the section of the U.S. Munitions List that

identifies the Regime items subject to the State Department’s jurisdiction

to ensure that it is consistent with the current version of the Regime

Annex and provide a cross-reference to the Commerce Control List for

those Regime items that would be subject to the Commerce Department’s

control when certain parameters are met.

The annual review of the U.S. Munitions List, which is being conducted as

part of the Defense Trade Security Initiative, may provide a vehicle to

implement these recommendations.

Conclusions

Recommendations for

Executive Action
Page 13 GAO-02-120 Export Controls

In written comments on a draft of this report, the Commerce Department

concurred with our recommendation to review the Commerce Control List

and the U.S. Munitions List to provide additional clarity to exporters.

However, the Commerce Department commented that jurisdiction for

Regime items is generally clear and the current export control system is

not a risk to U.S. nonproliferation interests. The Commerce Department

stated that it refers its export license applications for Regime items to the

State Department and other agencies for their review.20 According to the

Commerce Department, the State Department has an opportunity to

indicate that an item cannot be licensed under the Commerce Department

because it is State Department-controlled. However, making a jurisdiction

determination during the license review process delays the exporter from

obtaining an approved license from the appropriate Department. By

clarifying the regulations, the Departments would minimize such

occurrences that can impact the workloads of both the exporters and the

U.S. government. The Commerce Department’s comments are reprinted in

appendix II, along with our evaluation of them.

In written comments on a draft of this report, the State Department

concurred with our recommendation to update the section of the U.S.

Munitions List that identifies the Regime items subject to the State

Department’s jurisdiction. The State Department said that, as part of this

update, it will work with the Commerce Department in an effort to

eliminate unclear jurisdiction for Regime items. According to the State

Department, the process of updating this section has already begun and

should be completed before the end of 2001. The State Department also

provided technical comments to clarify which Regime items are subject to

its jurisdiction and we revised the report to reflect those comments. The

State Department’s comments are reprinted in appendix III, along with our

evaluation of them.

To determine the division of jurisdiction over Regime items between the

Departments of Commerce and State, we compared the Regime

Equipment, Software, and Technology Annex of October 2000 with the

January 2001 Commerce Control List and the April 2000 U.S. Munitions

List (and subsequent updates made to each list). We then confirmed with

officials from the Department of State’s Office of Defense Trade Controls

 20 Executive Order 12981 grants authority for the Departments of State, Defense, and

Energy to review any license applications submitted to the Commerce Department.

Agency Comments

and Our Evaluation

Scope and

Methodology
Page 14 GAO-02-120 Export Controls

and the Department of Commerce’s Bureau of Export Administration the

Regime items that they claim as subject to their respective export controls.

To identify the factors that contribute to unclear jurisdiction for Regime

items, we interviewed officials with the Department of Defense’s Defense

Threat Reduction Agency, the Department of State’s Bureau of

Nonproliferation and Office of Defense Trade Controls, and the

Department of Commerce’s Bureau of Export Administration. We also

reviewed Commerce Department and State Department policies and

practices for revising the export control lists.

To identify the potential effects of unclear jurisdiction, we conducted

structured interviews with 24 companies that export Regime items to

discuss how they determine which Department controls their exports of

Regime items and how they are affected by differences in the export

control systems. These companies were selected on the basis of the

number of license applications for the export of Regime items they had

submitted to either the Commerce Department or the State Department

from fiscal year 1997 through fiscal year 2000. We also interviewed

officials with the Department of Defense’s Defense Threat Reduction

Agency, the Department of State’s Bureau of Nonproliferation and Office

of Defense Trade Controls, and the Department of Commerce’s Bureau of

Export Administration. Additionally, we reviewed our prior reports and

reports from the Inspectors General of the Departments of Defense and

Commerce.

We conducted our review from January through July 2001 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

30 days after its issuance. At that time, we will send copies to the

Chairmen and Ranking Minority Members of the Senate Committee on

Banking, Housing, and Urban Affairs; Senate Committee on Foreign

Relations; House Committee on International Relations; House Committee

on Armed Services; the Secretaries of Commerce, Defense, and State; the

Director, Office of Management and Budget; and the Assistant to the

President for National Security Affairs. We will also make the report

available to others upon request.

If you or your staff have questions concerning this report, please contact

me at (202) 512-4841. Others making key contributions to this report were
Page 15 GAO-02-120 Export Controls

Thomas J. Denomme, Anne-Marie Lasowski, Johana R. Ayers, Richard K.

Geiger, and John Van Schaik.

Katherine V. Schinasi

Director

Acquisition and Sourcing Management
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 16 GAO-02-120 Export Controls

Forty-seven of the 196 items listed in the Missile Technology Control

Regime (MTCR) Equipment, Software, and Technology Annex appear

subject to the export control jurisdictions of both the Departments of

Commerce and State. These 47 Regime items are described in table 2,

along with an identification of where they are controlled on the Commerce

Control List and the State Department’s U.S. Munitions List.

In some cases, Regime items are described on both export control lists

with either identical or overlapping performance parameters. For these

items, we have identified the category and Export Control Classification

Number where they appear on the Commerce Control List and the

category where they appear on the U.S. Munitions List. The remaining

items, which are software and technologies related to Regime production

facilities and equipment, have been claimed by Department of State

officials as subject to the State Department’s jurisdiction, although the

items do not explicitly appear on the U.S. Munitions List but do appear on

the Commerce Control List. For these items, we have indicated on the

table where State Department officials claim these items are controlled on

the U.S. Munitions List and where they appear on the Commerce Control

List.

Table 2: Control of Regime Items by Both the Departments of Commerce and State

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

1. Software specially designed or modified

for the use of missileb

 production facilities

Propulsion Systems, Space Vehicles, and

Related Equipment (9D101)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV) and Aircraft and

Associated Equipment (Category VIII)

2. Technology for the development,

production, or use of missile production

facilities and specially designed or

modified software for the use of those

facilities

Propulsion Systems, Space Vehicles, and

Related Equipment (9E001, 9E002, and

9E102)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV) and Aircraft and

Associated Equipment (Category VIII)

3. Software specially designed or modified

for the use of missile subsystem c

production facilities

Propulsion Systems, Space Vehicles, and

Related Equipment (9D101)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV)

4. Software specially designed or modified

for the use of thrust vector control

systemsd

Propulsion Systems, Space Vehicles, and

Related Equipment (9D102)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV)

Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 17 GAO-02-120 Export Controls

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

5. Technology for the development,

production, or use of missile subsystem

production equipment and facilities,

software for the use of those facilities,

and software for thrust vector control

subsystems

Propulsion Systems, Space Vehicles, and

Related Equipment (9E001, 9E002, and

9E102)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV)

6. Liquid and slurry propellant (including

oxidizers) control systems, and specially

designed components, usable in missiles,

designed or modified to operate in

vibration environments of more than

10 g RMS between 20 Hz and 2 kHz

Propulsion Systems, Space Vehicles, and

Related Equipment (9A106)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV)

7. Software specially designed or modified

for the use of production facilities for

propulsion equipment, assemblies,

components, and materials usable in

missiles

Propulsion Systems, Space Vehicles, and

Related Equipment (9D002 and 9D101)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV) and Aircraft and

Associated Equipment (Category VIII)

8. Software specially designed or modified

for the use of lightweight turbojet and

turbofan engines and of liquid and slurry

propellant control systems and specially

designed components

Propulsion Systems, Space Vehicles, and

Related Equipment (9D102)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV) and

Aircraft and Associated Equipment

(Category VIII)

9. Technology for the development,

production, or use of liquid and slurry

propellant control systems, production

equipment and facilities for the

manufacture of propulsion components,

and software for the use of those

facilities, lightweight turbojet and turbofan

engines, liquid and slurry propellant

control systems

Propulsion Systems, Space Vehicles, and

Related Equipment (9E001, 9E002,

9E101, and 9E102)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV) and Aircraft and

Associated Equipment (Category VIII)

10. Nitrogen dioxide/dinitrogen tetroxidee Materials, Chemicals, Microorganisms,

and Toxins (1C111)

Explosives, Propellants, Incendiary

Agents, and Their Constituents

(Category V)

11. Triethylene glycol dinitratef Materials, Chemicals, Microorganisms,

and Toxins (1C111)

Explosives, Propellants, Incendiary

Agents, and Their Constituents

(Category V)

12. 2-Nitrodiphenylamineg Materials, Chemicals, Microorganisms,

and Toxins (1C111)

Explosives, Propellants, Incendiary

Agents, and Their Constituents

(Category V)

13. Technology for the development,

production, or use of nitrogen dioxide/

dinitrogen tetroxide, triethylene glycol

dinitrate, and 2-Nitrodiphenylamine

Materials, Chemicals, Microorganisms,

and Toxins (1E001 and 1E101)

Explosives, Propellants, Incendiary

Agents, and Their Constituents

(Category V)

14. Software specially designed or modified

for the use of propellant test and

production equipment for the production

and handling of propellants and

chemicals

Materials, Chemicals, Microorganisms,

and Toxins (1D102)

State officials claim this item is

categorized as Explosives, Propellants,

Incendiary Agents, and Their

Constituents (Category V)
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 18 GAO-02-120 Export Controls

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

15. Technology for the development,

production, or use of propellant test and

production equipment

Materials, Chemicals, Microorganisms,

and Toxins (1E001 and 1E101)

State officials claim this item is

categorized as Explosives, Propellants,

Incendiary Agents, and Their

Constituents (Category V)

16. Resin impregnated fiber prepregs and

metal coated fiber preforms for composite

structures, laminates, and manufactures

thereof, specially designed for use in

missiles and their complete subsystems,

made either with organic matrix or metal

matrix utilizing fibrous or filamentary

reinforcements having a specific tensile

strength greater than 7.62 x 104 m and a

specific modulus greater than

3.18 x 106

 m

Propulsion Systems, Space Vehicles, and

Related Equipment (9A110)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV) and

Auxiliary Military Equipment

(Category XIII)

17. Fine grain recrystallized bulk graphites

(with a bulk density of at least 1.72 g/cm3

measured at 15° C) having a particle size

of 100 x 10-6 m or less, usable for rocket

nozzles and reentry vehicle nose tips

usable in missiles

Materials, Chemicals, Microorganisms,

and Toxins (1C107)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV) and

Auxiliary Military Equipment

(Category XIII)

18. Pyrolytic or fibrous reinforced graphites

usable for rocket nozzles and reentry

vehicle nose tips usable in missiles

Materials, Chemicals, Microorganisms,

and Toxins (1C107)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV) and

Auxiliary Military Equipment

(Category XIII)

19. Ceramic composite materials (dielectric

constant less than 6 at frequencies from

100 Hz to 10 GHz) for use in radomes

usable in missiles

Materials, Chemicals, Microorganisms,

and Toxins (1C107)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV)

20. Bulk machinable silicon-carbide

reinforced unfired ceramic usable for

nose tips usable in missiles

Materials, Chemicals, Microorganisms,

and Toxins (1C107)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV)

21. Technology for the development,

production, or use of resin impregnated

fiber prepregs, metal coated fiber

preforms, fine grain recrystallized bulk

graphites, pyrolytic or fibrous reinforced

graphites, ceramic composite materials,

and bulk machinable silicon-carbide

reinforced unfired ceramic

Materials, Chemicals, Microorganisms,

and Toxins (1E001 and 1E101) and

Propulsion Systems, Space Vehicles, and

Related Equipment (9E101 and 9E102)

Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV) and

Auxiliary Military Equipment

(Category XIII)

22. Gyro-astro compasses and other devices

which derive position or orientation by

means of automatically tracking celestial

bodies or satellites, and specially

designed components

Navigation and Avionics (7A104) Spacecraft Systems and Associated

Equipment (Category XV)
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 19 GAO-02-120 Export Controls

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

23. Accelerometers with a threshold of 0.05 g

or less, or a linearity error within 0.25% of

full scale output, or both, which are

designed for use in inertial navigation

systems or in guidance systems of all

types and specially designed

componentsh

Navigation and Avionics (7A101) Aircraft and Associated Equipment

(Category VIII) and Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII)

24. All types of gyros usable in missiles, with

a rated drift rate stability of less than 0.5

degrees per hour in a 1 g environment

and specially designed componentsi

Navigation and Avionics (7A102) Aircraft and Associated Equipment

(Category VIII) and Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII)

25. Continuous output accelerometers or

gyros of any type, specified to function at

acceleration levels greater than 100 g,

and specially designed components

Navigation and Avionics (7A001 and

7A002)

Fire Control, Range Finder, Optical and

Guidance and Control Equipment

(Category XII)

26. Software specially designed or modified

for the use of gyro-astro compasses,

accelerometers, gyros, and production,

test, calibration, and alignment equipment

deigned or modified to be used with

equipment for instrumentation,

navigation, and direction finding

Navigation and Avionics (7D101) Aircraft and Associated Equipment

(Category VIII); Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII); and

Spacecraft Systems and Associated

Equipment (Category XV)

27. Integration software specially designed

for inertial or other equipment using

accelerometers or gyros and systems

incorporating such equipment

Navigation and Avionics (7D102) Aircraft and Associated Equipment

(Category VIII) and Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII)

28. Technology for the development,

production, or use of gyro-astro

compasses, accelerometers, gyros,

related production and test equipment,

and related software

Navigation and Avionics (7E001, 7E002,

and 7E101)

Aircraft and Associated Equipment

(Category VIII); Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII); and

Spacecraft Systems and Associated

Equipment (Category XV)

29. Test, calibration, and alignment

equipment specially designed for

hydraulic, mechanical, electro-optical, or

electromechanical flight control systems

and attitude control equipment designed

or modified for missiles

Navigation and Avionics (7B001) State officials claim this item is

categorized as Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII)

30. Software specially designed or modified

for the use of test, calibration, and

alignment equipment for flight and

attitude control systems and equipment

Navigation and Avionics (7D101) State officials claim this item is

categorized as Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII)

31. Technology for the development,

production, or use of test, calibration, and

alignment equipment for flight and

attitude control systems and equipment

and related software

Navigation and Avionics (7E001, 7E002,

and 7E101)

State officials claim this item is

categorized as Fire Control, Range

Finder, Optical and Guidance and

Control Equipment (Category XII)
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 20 GAO-02-120 Export Controls

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

32. Design technology for protection of

avionics and electrical subsystems

against electromagnetic pulse and

electromagnetic interference hazards

from external sources as follows:

• Design technology for shielding

systems

• Design technology for the

configuration of hardened electrical

circuits and subsystems

• Design technology for determination

of hardening criteria for the above

Navigation and Avionics (7E102) Military Electronics (Category XI)

33. Precision tracking systems, usable for

missiles as follows:

• Tracking systems that use a code

translator installed on the rocket or

unmanned air vehicle in conjunction

with either surface or airborne

reference or navigation satellite

systems to provide real-time

measurements of in-flight position

and velocity

• Range instrumentation radars

including associated optical/infrared

trackers with all of the following

capabilities:

• Angular resolution better than

3 mrad,

• Range of 30 km or greater with a

range resolution better than

10 m RMS, and

• Velocity resolution better than

3 m/s

Sensors and Lasers (6A108) Military Electronics (Category XI)

34. Software that processes post-flight,

recorded data, enabling determination of

vehicle position throughout its flight path,

specially designed or modified for

missiles

Sensors and Lasers (6D103) Launch Vehicles, Guided Missiles,

Ballistic Missiles, Rockets, Torpedoes,

Bombs, and Mines (Category IV)

35. Software specially designed or modified

for the use of precision tracking systems

Sensors and Lasers (6D102) Military Electronics (Category XI)

36. Technology for the development,

production, or use of precision tracking

systems, software which processes postflight recorded data, and software for

precision tracking systems

Sensors and Lasers (6E001, 6E002, and

6E101)

Launch Vehicles, Guided Missiles,

Rockets, Torpedoes, Bombs, and Mines

(Category IV) and Military Electronics

(Category XI)
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 21 GAO-02-120 Export Controls

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

37. Analog computers, digital computers, or

digital differential analyzers designed or

modified for use in missiles having any of

the following characteristics:

• Rated for continuous operation at

temperatures from below –45° C to

above +55° C or

• Designed as ruggedized or radiation

hardened

Computers (4A101) Military Electronics (Category XI)

38. Technology for the development,

production, or use of analog and digital

computers and digital differential

analyzers

Computers (4E001) Military Electronics (Category XI)

39. Devices for reduced observables such as

radar reflectivity, ultraviolet/infrared

signatures and acoustic signatures

(i.e., stealth technology), for applications

usable in missiles and their complete

subsystems

Materials, Chemicals, Microorganisms,

and Toxins (1C101)

Auxiliary Military Equipment

(Category XIII)

40. Systems specially designed for radar

cross section measurement usable for

missiles and their complete subsystemsj

Sensors and Lasers (6B108) Military Electronics (Category XI)

41. Materials for reduced observables such

as radar reflectivity, ultraviolet/infrared

signatures and acoustic signatures

(i.e., stealth technology), for applications

usable for missiles and their complete

subsystems

Materials, Chemicals, Microorganisms,

and Toxins (1C101)

Auxiliary Military Equipment

(Category XIII)

42. Software specially designed for reduced

observables such as radar reflectivity,

ultraviolet/infrared signatures and

acoustic signatures (i.e., stealth

technology), for applications usable for

missiles and their complete subsystems

Materials, Chemicals, Microorganisms,

and Toxins (1D103)

Auxiliary Military Equipment

(Category XIII)

43. Technology for the development,

production, or use of devices, materials,

and software for reduced observables,

and systems for radar cross section

measurement

Materials, Chemicals, Microorganisms,

and Toxins (1E001, 1E002, 1E101, and

1E102) and Sensors and Lasers (6E001,

6E002, and 6E101)

Military Electronics (Category XI) and

Auxiliary Military Equipment

(Category XIII)

44. Detectors specially designed or modified

to protect rocket systems and unmanned

air vehicles against nuclear effects, and

usable for missiles

Sensors and Lasers (6A102) Military Electronics (Category XI)

45. Technology for the development,

production, or use of detectors

Sensors and Lasers (6E001, 6E002, and

6E101)

Military Electronics (Category XI)

46. Software specially designed or modified

for production facilities for complete

subsystems usable in complete rocket

systems and unmanned air vehicles that

are capable of a maximum range equal to

or greater than 300 km with payloads of

less than 500 kg

Propulsion Systems, Space Vehicles, and

Related Equipment (9D001, 9D002, and

9D101)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV)
Appendix I: Missile Technology Control

Regime Items Subject to Unclear Jurisdiction

Page 22 GAO-02-120 Export Controls

Description of MTCR Itema

Commerce Control List Category

(Export Control Classification Number)

U.S. Munitions List Category

(Number)

47. Technology for the development,

production or use of production facilities

and equipment for complete rocket

systems and unmanned air vehicles that

are capable of a maximum range equal to

or greater than 300 km with payloads of

less than 500 kg and software for those

facilities

Propulsion Systems, Space Vehicles, and

Related Equipment (9E001, 9E002, and

9E102)

State officials claim this item is

categorized as Launch Vehicles, Guided

Missiles, Ballistic Missiles, Rockets,

Torpedoes, Bombs, and Mines

(Category IV)

a

The descriptions of the MTCR items are based on the Missile Technology Control Regime

Equipment, Software, and Technology Annex.

b

 For the purpose of this appendix, missiles are defined as complete rocket and unmanned air vehicle

systems capable of delivering at least a 500 kilogram (kg) payload to a range of at least

300 kilometers (km).

c

 Complete subsystems include individual rocket stages, reentry vehicles, rocket engines, and

warhead arming and fusing mechanisms.

d

 Thrust vector control systems change the rocket’s thrust direction to steer a missile. They are also

used on advanced fighters and spacecraft.

e

 Nitrogen dioxide/dinitrogen tetroxide is a liquid oxidizer that burns fuel in rocket motors and engines

and is also used as an agent in agricultural chemicals and plastics.

f

 Triethylene glycol dinitrate is a nitrated plasticizer added to solid rocket propellants to increase their

burn rate and is also used in military and commercial explosives.

g

 2-Nitrodiphenylamine is an additive that reduces the decomposition of rocket fuels and is also widely

used throughout the ammunition industry.

h

 Accelerometers are used to measure the rate of change of speed in a given direction and are used

in missile guidance systems but are also used on civilian and military aircraft and in electronic

equipment and manufacturing.

i

 Gyroscopes, or gyros, sense changes in orientation and are used in missile guidance systems but

are also used on commercial and military ships and aircraft.

j

 Radar cross section measurement systems are needed to determine and reduce the radar signature

of a missile. They can also be adapted to measure antenna performance patterns for commercial

applications, including cell phones and satellite dishes.
Appendix II: Comments From the

Department of Commerce

Page 23 GAO-02-120 Export Controls

Appendix II: Comments From the

Department of Commerce

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.
Appendix II: Comments From the

Department of Commerce

Page 24 GAO-02-120 Export Controls

See comment 1.
Appendix II: Comments From the

Department of Commerce

Page 25 GAO-02-120 Export Controls

See comment 4.

See comment 3.

See comment 2.
Appendix II: Comments From the

Department of Commerce

Page 26 GAO-02-120 Export Controls

See comment 5.
Appendix II: Comments From the

Department of Commerce

Page 27 GAO-02-120 Export Controls

See comment 6.
Appendix II: Comments From the

Department of Commerce

Page 28 GAO-02-120 Export Controls

See comment 7.
Appendix II: Comments From the

Department of Commerce

Page 29 GAO-02-120 Export Controls

See comment 9.

See comment 8.
Appendix II: Comments From the

Department of Commerce

Page 30 GAO-02-120 Export Controls

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

dated September 13, 2001:

1. Text revised for clarification.

2. We believe the text reflects what Commerce Department officials told

us during our review and is not substantively different than the

Commerce Department’s proposed change. We, therefore, do not

believe a revision is needed.

3. We did not revise the report to include a discussion of the license

review process. We believe that jurisdictional determinations should

be made before a company submits an export license application for

review. Clarification of the regulations would help ensure that a

company submits its license application for a Regime item to the

appropriate Department.

4. Text revised.

5. As discussed in the report, the State Department did not agree that

exporters should use the criteria contained in section 120.3 of the State

Department’s regulations to determine whether an item is subject to

the State Department’s export controls. In addition, the Commerce

Department refers to section 120.3 as containing the definition of a

defense article. However, the definition of a defense article appears in

section 120.6 of the State Department’s regulations. According to the

definition in section 120.6, a defense article is any item or technical

data designated on the U.S. Munitions List.

6. We believe the text reflects what Commerce Department officials told

us during our review and is not substantively different than the

Commerce Department’s proposed change. We, therefore, do not

believe a revision is needed.

7. The Commerce Department’s example highlights the difference

between how the Departments of Commerce and State enforce

sanctions. We do not believe additional clarification is needed.

8. As discussed in the report, some of the exporters we spoke with did

not understand the export control system or certain terms in the

regulations, thereby making it sometimes difficult to determine where

to apply for a license to export Regime items. We point out in one

GAO Comments
Appendix II: Comments From the

Department of Commerce

Page 31 GAO-02-120 Export Controls

example that a company submits license applications to the Commerce

Department when uncertain as to which Department has jurisdiction,

but do not discuss how Commerce licensing officers respond in such a

situation.

9. Text revised for clarification.
Appendix III: Comments From the

Department of State

Page 32 GAO-02-120 Export Controls

Appendix III: Comments From the

Department of State

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.
Appendix III: Comments From the

Department of State

Page 33 GAO-02-120 Export Controls

See comment 1.
Appendix III: Comments From the

Department of State

Page 34 GAO-02-120 Export Controls

The following is GAO’s comment on the State Department’s letter dated

September 10, 2001:

1. We believe our draft report reflected information provided to us by

State Department officials during the course of our review. However,

we have revised the report to reflect the State Department’s position as

indicated in its comments.

GAO Comment

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