Report to the Ranking Minority Member, 

Subcommittee on National Security, 

Emerging Threats, and International 

Relations, Committee on Government 

Reform, House of Representatives 

United States General Accounting Office 

GAO 

July 2003 DEFENSE TRADE 

Better Information 

Needed to Support 

Decisions Affecting 

Proposed Weapons 

Transfers 

GAO-03-694 
Before transfers are approved, the U.S. government must first determine if 

classified weapons or technologies are releasable to the requesting country 

according to the National Disclosure Policy (NDP). The process for 

determining releasability is complex. A foreign government’s request is first 

reviewed by the military department that owns the requested weapon or 

technology. In cases where the request exceeds NDP’s approved 

classification level, the military department forwards the request to the 

National Disclosure Policy Committee for its review. For some sensitive 

technologies, such as stealth, the case is also forwarded to a special 

committee for review. The process requires coordination among different 

U.S. government entities—including DOD, the military departments, the 

State Department, and the intelligence community—which have varying 

perspectives. Adding to this complexity, determinations of releasability are 

governed by broad guidance, which allows latitude in interpreting the unique 

circumstances of each proposed transfer. 

In determining the releasability of advanced weapons and technologies, a 

number of factors are considered, including how U.S. technological 

advantage would be affected. To protect U.S. technological advantage, 

safeguards—such as lowering the capability of a transferred weapon and 

withholding sensitive information on how the system operates—are 

considered for proposed transfers. However, the effectiveness of some 

individual safeguards may be limited. For example, one safeguard—the 

ability of the United States to deny spare parts to former allies—may not be 

effective if these countries are able to obtain spare parts through other 

means. While certain individual safeguards may not be as effective as 

desired, DOD officials said they consider various safeguards to ensure 

technological advantage is maintained. 

Information needed to assess releasability is not always complete, up-todate, or available. For example, DOD’s centralized National Disclosure 

Policy System database that was used to make decisions during the last 

4 years only contained information for that time period. DOD has recently 

deployed an upgrade to the system, but has not yet determined its 

effectiveness. Other information, such as Central Intelligence Agency risk 

assessments—which provide counterintelligence information and risks 

involved in releasing advanced weapons to a foreign country—are often 

outdated or nonexistent. Finally, some intelligence information that could 

have a direct bearing on whether an advanced weapon or technology should 

be released is prepared for other purposes and is not provided to decision 

makers involved in releasability determinations. 

The heightened visibility of 

advanced U.S. weapons in military 

conflicts has prompted foreign 

countries to seek to purchase such 

weaponry. In 2001, transfers of 

U.S. weapons and technologies to 

foreign governments totaled over 

$12 billion. The potential loss of 

U.S. technological advantage has 

been raised as an issue in recently 

approved transfers of advanced 

military weapons and 

technologies—such as military 

aircraft that were reported in the 

media to contain superior radar 

and avionics than those in the 

Department of Defense’s (DOD) 

inventory. 

GAO looked at how releasability of 

advanced weapons is determined, 

how U.S. technological advantage 

is considered and protected, and 

what information is needed to 

make informed decisions on the 

potential release of advanced 

weapons. 

GAO is recommending that the 

Secretary of Defense direct the 

National Disclosure Policy 

Committee Executive Secretariat 

to take several actions to improve 

efforts for collecting and updating 

information needed for the review 

process. DOD concurred with 

some of GAO’s recommendations 

but did not concur with others. 

DOD provided additional 

information about recent actions it 

has taken, which lead to the 

modification of some of GAO’s 

recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-03-694.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Katherine V. 

Schinasi at (202) 512-4841 or 

schinasik@gao.gov. 

Highlights of GAO-03-694, a report to the 

Ranking Minority Member, Subcommittee 

on National Security, Emerging Threats, 

and International Relations, Committee on 

Government Reform, House of 

Representatives 

July 2003 

DEFENSE TRADE 

Better Information Needed to Support 

Decisions Affecting Proposed Weapons 

Transfers 
Page i GAO-03-694 Defense Trade 

Letter 1

Results in Brief 2

Background 4

Process to Determine the Releasability of Advanced Weapons and 

Technologies Is Inherently Complex 6

Technological Advantage and Various Safeguards Are Considered 

When Determining Releasability 14

More Complete, Current, or Available Information Would Better 

Support Determinations of Releasability 15

Conclusions 22

Recommendations for Executive Actions 23

Agency Comments and Our Evaluation 23

Appendix I Scope and Methodology 26 

Appendix II National Disclosure Policy Criteria 28 

Appendix III Comments from the Department of Defense 30 

Appendix IV Staff Acknowledgments 36 

Related GAO Products 37 

Table 

Table 1: NDP Criteria and Examples of Information to Consider for 

Each Criterion 28

Figures 

Figure 1: U.S. Military Departments’ Review Processes for 

Determining the Releasability of Proposed Advanced 

Weapons and Technologies Transfers 8

Contents 
Page ii GAO-03-694 Defense Trade 

Figure 2: NDPC Review Process for Considering Exceptions to 

NDP 10

Figure 3: Example of a Special Committee Process: Low 

Observable/Counter Low Observable 12

Figure 4: Dates of CIA Risk Assessments for Countries with 

Exceptions Approved between 1997 and 2002 19

Figure 5: Dates of NDPC Security Surveys for Countries with 

Exceptions Approved between 1997 and 2002 20

Abbreviations 

CIA Central Intelligence Agency

DOD Department of Defense 

LO/CLO Low Observable/Counter Low Observable 

NDP National Disclosure Policy 

NDPC National Disclosure Policy Committee

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Page 1 GAO-03-694 Defense Trade 

July 11, 2003 

The Honorable Dennis Kucinich 

Ranking Minority Member 

Subcommittee on National Security, Emerging 

 Threats, and International Relations 

Committee on Government Reform 

House of Representatives 

Dear Mr. Kucinich: 

The heightened visibility of advanced U.S. weapons1

 in military conflicts 

over the last decade has prompted foreign countries to increasingly seek 

to purchase such weaponry. In 2001, transfers of weapons from the U.S. 

government to foreign governments totaled over $12 billion, or 46 percent 

of the world market share, representing a 15 percent increase in market 

share since 1997. According to the Department of Defense (DOD), such 

transfers can help strengthen defense coalitions and enhance 

interoperability between the United States and its allies, as well as extend 

production lines and lower unit costs for key weapon systems. Before 

transfers are approved,2

 the U.S. government must first determine if 

classified weapons or technologies are releasable to the requesting 

country according to policies and procedures stated in the National 

Disclosure Policy (NDP).3

The potential loss of U.S. technological advantage has been raised as an 

issue in recently approved transfers of advanced military weapons and 

technologies—such as those to the United Arab Emirates and South Korea 

of military aircraft that were reported by the media to contain superior 

radar and avionics than systems in DOD’s inventory. Therefore, you asked 

 1

 For this report, advanced weapons primarily refer to the weapons and related 

technologies that DOD has designated as classified. Some DOD officials acknowledged that 

unclassified items can also contain advanced technology, such as night vision devices. 

However, this report does not focus on unclassified items that are subject to U.S. export 

control restrictions. 

2

 Arms transfers can generally be approved through the U.S. government’s Foreign Military 

Sales Program or the U.S. export control system. 

3

 NDP governs the releasability of classified military information, including classified 

weapons. 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-694 Defense Trade 

us how the U.S. government protects technological advantage when 

considering the transfer of advanced weapons. This report (1) describes 

the process for determining the releasability of advanced weapons and 

technologies, (2) describes how U.S. technological advantage is 

considered and protected through this process, and (3) assesses the types 

of information needed to make informed decisions on the potential release 

of advanced weapons. 

To conduct our work, we reviewed and analyzed policies and procedures 

and the relevant directives and guidance governing the potential release of 

advanced weapons and technologies. To identify safeguards to protect 

U.S. technological advantage, we reviewed and analyzed records for 

selected weapon systems approved for release. We also analyzed data on 

various assessments and information used in the releasability process. We 

spoke with officials in DOD, the military departments, the Joint Chiefs of 

Staff, the Department of State, and the intelligence community to 

understand how the process works, what safeguards are considered to 

protect U.S. technological advantage, and what information is used to 

support the decision-making process. Details on our scope and 

methodology are provided in appendix I. 

The process for determining the releasability of advanced weapons and 

technologies to foreign countries is complex because it involves several 

multilevel reviews and coordination among different U.S. government 

entities with varying perspectives. Each military department has its own 

process for reviewing foreign governments’ requests for transfers. When 

the request exceeds the classification level approved for release in NDP,4

the military department forwards the request for an exception to the 

National Disclosure Policy Committee (NDPC)—which includes members 

from DOD, the military departments, the State Department, and the 

intelligence community—for its review. For some sensitive technologies, 

such as stealth, the request is also forwarded to special committees for 

review. Further, the releasability process is governed by broad guidance, 

which allows latitude in interpreting the unique circumstances 

surrounding each proposed transfer. 

 4

 NDP provides the classification levels for various countries that may receive certain types 

of classified military information. If a foreign country’s request for advanced weapons 

exceeds the classification level specified for the country, an exception to the policy is 

required. In addition, exceptions are required when the requested item is not covered in the 

NDP or does not comply with NDP criteria. 

Results in Brief 
Page 3 GAO-03-694 Defense Trade 

In determining the releasability of advanced weapons and technologies, 

NDPC members consider a number of factors, including how U.S. 

technological advantage would be affected if a weapon or technology were 

released. To protect U.S. technological advantage, committee members 

rely on safeguards, which include general safeguards to help accomplish 

military objectives and specific limitations and conditions that are placed 

on a transfer. Limitations and conditions generally include lowering the 

capability of a transferred weapon, withholding sensitive information on 

how the system operates, or time-phased delivery—that is, timing the 

contractual delivery date of a weapon system to follow the expected 

fielding of a more capable weapon. However, the effectiveness of some of 

these individual safeguards may be limited for various reasons. For 

example, as we have previously reported, projected time frames for 

fielding next generation weapons systems are consistently 

underestimated, resulting in unexpected delays. 5

 Such delays could negate 

the effectiveness of time-phased delivery if the fielding of a more capable 

weapon or technology does not coincide with the advanced weapon’s 

contractual delivery date to the foreign government. Some DOD officials 

told us that while the effectiveness of certain individual safeguards may be 

limited, various safeguards are considered to ensure that technological 

advantage is maintained. 

Finally, release decisions may not be fully informed because information 

needed to assess the releasability of an advanced weapon or technology, 

such as information on a foreign government’s ability to protect the 

weapon or technology, is not always complete, up-to-date, or available. 

For example, DOD’s centralized National Disclosure Policy System 

database, which is intended to improve coordination by capturing 

information on proposed transfers, contained limited historical data and 

search capability needed to facilitate decision making. DOD has developed 

a system upgrade to provide more search capability and more historical 

data. After several delays, DOD had recently deployed the upgraded 

system but its effectiveness will not be known for some time. Other 

information, such as risk assessments and security surveys, that could be 

useful in making releasability decisions is either outdated or, in some 

cases, not prepared. In addition, some intelligence information, such as 

information on illegal transfers of U.S. weapons and technologies, could 

be germane to the decision-making process. This information is used 

 5 Major Management Challenges and Program Risks: Department of Defense, GAO-03-98

(Washington, D.C.: January 2003). 
Page 4 GAO-03-694 Defense Trade 

primarily for nonproliferation purposes and is not provided to decision 

makers involved in the releasability process. 

To ensure that decisions to release advanced weapons and technologies 

are better informed, we are recommending that DOD take several actions 

to collect and update information needed for the review process. In 

commenting on a draft of this report, DOD concurred with several of our 

recommendations but did not agree with others. Specifically, DOD 

concurred with our recommendations to evaluate the upgraded system, 

prioritize risk assessments, and identify additional information for the 

process. However, DOD did not concur with other recommendations 

regarding the upgraded system and a plan for security surveys. DOD 

provided additional information in its comments about recent actions it 

has taken, which led to modification of some of our recommendations. 

The Department of State chose not to provide formal written comments. 

The Arms Export Control Act, as amended,6

 is the primary statute 

governing exports of U.S. defense articles and services, including 

advanced weapons and technologies, to eligible countries through the 

government-to-government Foreign Military Sales program and sales made 

directly by U.S. companies.7

 The act also includes a statement of 

conventional arms transfer policy, which provides that sales of defense 

items be consistent with U.S. national security and foreign policy interests. 

The Conventional Arms Transfer Policy, a Presidential Decision Directive 

last updated in 1995, provides policy for weapons transfers.8

 In addition to 

stipulating that transfer decisions be made on a case-by-case basis, the 

policy has several key goals that must be considered when transferring 

weapons: 

• Ensure U.S. military forces maintain technological advantage over their 

adversaries. 

 6

 22 U.S.C. § 2751 et seq. 

7

 According to DOD Directive 2040.2, International Transfers of Technology, Goods, 

Services, and Munitions, dated January 1984, direct commercial and government sales are 

two methods for transferring weapons and military technology to foreign governments. 

Other methods include licensing and data exchange agreements, codevelopment and 

coproduction agreements, and international meetings and symposia on advanced 

technology. 

8

 The Conventional Arms Transfer Policy is classified; however, details of the policy were 

made publicly available through White House Fact Sheets in February 1995. 

Background 
Page 5 GAO-03-694 Defense Trade 

• Help allies and friends deter or defend against aggression, while promoting 

interoperability with U.S. forces when combined operations are required. 

• Promote stability in regions critical to U.S. interests, while preventing the 

proliferation of weapons of mass destruction and their missile delivery 

systems. 

• Promote peaceful conflict resolution and arms control, human rights, 

democratization, and other U.S. foreign policy objectives. 

• Enhance the ability of the U.S. defense industrial base to meet U.S. 

defense requirements and maintain long-term military technological 

superiority at lower costs. 

While the Conventional Arms Transfer Policy generally covers all arms 

transfers, NDP9

 specifically governs the releasability of classified military 

information, including classified weapons and military technologies.10 NDP 

establishes a framework for policy decisions on proposed transfers to 

foreign recipients and is key in governing the release of an advanced 

weapon or technology. These decisions are made before weapons or 

technologies are approved for transfer. As implemented by DOD Directive, 

this policy specifies that releasability decisions must satisfy five criteria.11

For example, the proposed transfer must be consistent with U.S. military 

and security objectives and be protected by the foreign recipient in 

substantially the same manner as the United States. The DOD Directive 

also requires department officials to enter NDP case data, including 

releasability decisions, into a centralized database to facilitate the 

coordination and review of potential transfers of weapons.12

In November 2002, the White House announced that it had begun a 

comprehensive assessment of the effectiveness of U.S. defense trade 

policies to identify changes needed to ensure that these policies continue 

to support U.S. national security and foreign policy goals. It also aims to 

assess how U.S. technological advantage can be maintained. The 

 9

 NDP was established by National Security Decision Memorandum 119, Disclosure of 

Classified Military Information to Foreign Governments and International Organizations, 

July 20, 1971, as approved by the President. It was amended by a White House 

memorandum dated June 6, 1978. 

10 There are eight categories of classified military information, including military materiel 

and munitions, which covers advanced weapons and technologies; intelligence 

information; and research and development information. 

11 DOD Directive 5230.11, Disclosure of Classified Military Information to Foreign 

Governments and International Organizations, June 16, 1992, enclosure 3. 

12 DOD Directive 5230.11, section 4.7. 
Page 6 GAO-03-694 Defense Trade 

assessment is expected to cover such topics as the Arms Export Control 

Act and the military departments’ technology release policy, as well as a 

determination of the effectiveness of the Defense Trade Security 

Initiatives.13 The assessment is also expected to cover issues related to the 

NDP process. 

The process governing the release of advanced weapons and technologies 

is inherently complex because it involves multiple, multilevel reviews by 

various U.S. government entities and individuals with varying 

perspectives. A country’s request for an advanced system initially is sent to 

the military department that is responsible for—or “owns” the weapon or 

technology, which then coordinates with various functional units to arrive 

at a decision on whether to fulfill the request. Depending on the 

circumstances of the request and the outcome of this initial review, the 

request may be submitted to an interagency committee and other special 

committees for additional review. Further, because the reviewers 

represent different agencies, they bring varying perspectives to the 

process and must reconcile differences to reach a unanimous decision on 

each request. Finally, the guidance governing the process is broad and 

applied on a case-by-case basis, allowing decision makers to use judgment 

and interpretation when considering each foreign country’s request for the 

release of an advanced weapon or technology. 

A foreign government’s request for the transfer of an advanced weapon or 

technology is directed to the military department that is responsible for 

the particular weapon or technology. Each military department has its 

own review process for determining whether the weapon or technology 

should be released (see fig. 1). To develop a position, the military 

department receiving the request coordinates with and obtains input from 

military experts14 in various offices and divisions within those offices. For 

example, we were told that the Air Force coordinates a proposed transfer 

of an Air Force fighter aircraft to a foreign government with subject matter 

experts in functional offices, such as acquisition, plans, operations, and 

weapons systems division. These experts, in turn, may consult with other 

 13 For a discussion of the initiatives see Defense Trade: Analysis of Support for Recent 

Initiatives, GAO/NSIAD-00-191 (Washington, D.C.: Aug. 31, 2000.) 

14 Military experts are officials from various functional units such as acquisition, plans, and 

weapons systems division that provide technical input on proposed transfers. 

Process to Determine 

the Releasability of 

Advanced Weapons 

and Technologies Is 

Inherently Complex 

Multiple Reviews Are 

Conducted 
Page 7 GAO-03-694 Defense Trade 

experts within their divisions. For instance, the weapons systems division 

may coordinate with its electronic warfare staff, its radar staff, or both to 

obtain input. 

Military department reviews can result in one of three outcomes: 

concurrence, concurrence with limitations and conditions, or 

nonconcurrence. If a consensus to approve a request cannot be reached, 

the request is elevated within the military department for a final decision. 

If the requested item (1) is not covered in NDP, (2) exceeds the NDP 

classification level specified for a particular foreign country, or (3) does 

not comply with NDP criteria, the military department may seek an 

exception to NDP from the National Disclosure Policy Committee, an 

interagency review forum.15 Timelines for military departments’ reviews of 

requests can vary. For example, Army officials stated that some cases can 

be handled quickly while others may require a major investment of time 

and resources. 

 15 National Security Decision Memorandum 119 gives implementing responsibility for 

controlling the release of classified military information to the Secretaries of State and 

Defense, consulting as appropriate with other agency heads, including the Director of 

Central Intelligence. 
Page 8 GAO-03-694 Defense Trade 

Figure 1: U.S. Military Departments’ Review Processes for Determining the Releasability of Proposed Advanced Weapons and 

Technologies Transfers 
Page 9 GAO-03-694 Defense Trade 

a

The Navy board cochairs are the Assistant Secretary of the Navy for Research, Development, and 

Acquisition and the Vice Chief of Naval Operations or the Assistant Commandant of the Marine Corps 

(for issues specific to the Marine Corps). 

b

The Deputy Chief of Staff for Intelligence finalizes the position package and serves as the Army’s 

representative on NDPC. 

When NDPC receives a request for an exception, the Executive Secretariat 

distributes the request to committee members and seeks a unanimous vote 

within 10 days (see fig. 2). Each committee member coordinates a position 

with various experts. For example, the Joint Staff sends the request to the 

Combatant Command that has responsibility for the country requesting 

the advanced weapon or technology. The Combatant Command, in turn, 

coordinates the request with various units within the Command, which 

may include the Scientific Advisor, plans and operations division, weapons 

systems division, and intelligence division to provide input on such issues 

as the impact of the transfer on the region. These units may further 

coordinate with other offices within their units. A final coordinated 

Command position is then provided to the Joint Staff NDPC member. 

If any NDPC member votes not to approve a request for an exception, 

there is a negotiation period for no more than 20 days. During this time, 

the member that has requested the exception may propose or accept 

placing different or additional conditions on the request to gain unanimity. 

If agreement cannot be reached, the request is elevated to the Chairman 

for a decision. Members have 10 days to appeal the Chairman’s decision or 

it is accepted. If a committee member appeals the decision, the request is 

elevated to the Deputy Secretary or Secretary of Defense. However, of the 

330 exceptions reviewed over the last 4 years, only 1 had been appealed 

and 2 denied.16 The appeal and denials covered requests for weapons and 

technologies and intelligence information. In addition, 5 requests for 

exceptions related to weapons and technologies were withdrawn before a 

decision was reached.17 According to DOD officials, most exceptions are 

approved with limitations and conditions. 

 16 The majority of these exceptions cover requests for weapons and technologies. The 

remainder includes other categories of classified military information covered by NDP. 

17 According to DOD officials, requests are withdrawn when additional information is 

needed or concerns cannot be addressed during the review process. 
Page 10 GAO-03-694 Defense Trade 

Figure 2: NDPC Review Process for Considering Exceptions to NDP 

In addition to the military departments’ reviews and the NDPC exception 

process, special committee processes are set up to review requests for 

sensitive technologies that may be included in a proposed transfer. For 

example, if a proposed transfer includes a stealth component, the military 

department submits the case to the Director of Special Programs within 

the Office of the Under Secretary of Defense for Acquisition, Technology, 

and Logistics who manages low observable/counter low observable 

(LO/CLO) issues (see fig. 3). Precedent decisions, which are contained in a 

database, are used to determine the releasability of the technology. Based 

on the level of sensitivity of the technology involved, the case may be 

elevated to the Tri-Service Committee18 for further review. Some 

 18 The Tri-Service Committee consists of colonel-level officers that meet weekly to discuss 

any sensitive cases that need to be elevated to the LO/CLO Executive Committee. 
Page 11 GAO-03-694 Defense Trade 

controversial or extraordinarily complex cases may require exceptions to 

precedent LO/CLO policy and further elevation to the LO/CLO Executive 

Committee for final decision. If needed, the Tri-Service Committee can 

charter a “Red Team,” which, according to DOD officials, is composed of 

subject matter experts, including those from industry, academia, and the 

military department laboratories. The Red Team is convened to assess the 

risks associated with the proposed transfer. The Tri-Service Committee 

and the Executive Committee make their decision based on their 

assessment of the information provided by the military department that is 

responsible for the technology and the pros and cons presented by the Red 

Team, if convened. 
Page 12 GAO-03-694 Defense Trade 

Figure 3: Example of a Special Committee Process: Low Observable/Counter Low Observable 

a

Low Observable (LO) cases are referred to the Air Force; Counter Low Observable (CLO) and ship 

LO cases are referred to the Navy; and ground vehicle cases are referred to the Army. 

b

DOD Instruction S-5230.28, Low Observable, and Counter Low Observable Programs, October 2, 

2000, governs the LO/CLO process and determines which cases to elevate. 
Page 13 GAO-03-694 Defense Trade 

The multilayered reviews involved in the process for determining the 

releasability of an advanced weapon or technology can be particularly 

complex because individual entities and decision makers have varying 

perspectives. For example, the combatant commanders’ position may 

concentrate on such issues as the effects the proposed transfer could have 

on coalition warfare, political-military relations in a region, and their plans 

and operations. The State Department, concerned with U.S. foreign policy 

goals, tends to focus on issues such as the proposed transfer’s potential 

effect on the stability of the region of the requesting country. Others may 

deliberate the benefits and risks of the proposed transfer. In addition, we 

were told that resource issues, including turnover of officials involved in 

the releasability process, can affect the reviews. As we previously 

reported, military personnel rotate, on average, every 2 years.19

The guidance governing releasability adds further complexity to the 

review process because it is broad and implemented on a case-by-case 

basis, allowing for judgment and interpretation of the unique 

circumstances surrounding each transfer. Specifically, decisions on the 

release of advanced weapons or technologies must satisfy five broad NDP 

criteria that are subject to interpretation. (See app. II for a discussion of all 

five criteria and examples of information to be considered for each.) For 

example, one criterion decision makers must consider is whether the 

proposed transfer is consistent with U.S. military and security objectives. 

In examining this criterion, decision makers must address multiple factors, 

including how technological advantage would be protected if the weapon 

or technology were sold or transferred. According to NDPC members, the 

broad criteria allow for a certain level of flexibility that is needed in 

determining whether an advanced weapon should be released to a foreign 

country. Some NDPC members further pointed out that this flexibility is 

especially critical in the current foreign policy environment in which many 

different countries are working with the United States in the war on 

terrorism. 

 19 Military Personnel: Longer Time Between Moves Related to Higher Satisfaction and 

Retention, GAO-01-841 (Washington, D.C.: Aug. 3, 2001). 

Varying Perspectives and 

Broad Guidance Governing 

Potential Transfers Add to 

the Complexity of the 

Review Process 
Page 14 GAO-03-694 Defense Trade 

One criterion NDPC must consider when determining the releasability of 

advanced weapons and technologies is that the transfer must be consistent 

with U.S. military and security objectives. In satisfying this criterion, 

military experts involved in the NDP coordination and review process told 

us they consider the effect the transfer could have on U.S. technological 

advantage, along with various safeguards—both case-specific and 

general—to protect this advantage.20 The effectiveness of individual 

safeguards may be limited; however, a variety of safeguards may be 

considered. 

In considering technological advantage, military experts said that they first 

review relevant military department documents and policies to determine 

if the requested weapon or technology exceeds the technology thresholds 

specified for the country making the request. If the requested weapon or 

technology exceeds this threshold, the experts may consult and 

coordinate with military engineers, the contractor that manufactures the 

weapon or technology, the system program office, and other operational 

experts to incorporate appropriate safeguards—typically in the form of 

case-specific limitations and conditions—to protect U.S. technological 

advantage. These include (1) sanitized or export variants, where the 

released weapon or technology has a lower operational capability or less 

advanced technology than what the United States has in its inventory; 

(2) anti-tamper measures, where features are built into the weapon to 

prevent reverse engineering such as code encryption, and protective 

coatings on internal weapon components; (3) time-phased release, where 

the advanced weapon or technology is not released until the United States 

has fielded a better capability; and (4) withheld information and data, 

where the transfer does not include information such as software source 

codes. Military experts said that program offices, in some cases, conduct 

verification tests and the Defense Contract Management Agency works 

with contractors to ensure that limitations and conditions are 

implemented before the weapon is transferred. 

Military department officials told us that in addition to case-specific 

limitations and conditions, they also consider other general safeguards to 

preserve U.S. military superiority. These include (1) superior U.S. tactics 

and training, where military tactics for maneuvers and operations may not 

be shared with other nations; (2) control of system spare parts, where the 

 20 U.S. military superiority is also addressed when NDP officials assess criteria on 

U.S. military and security objectives. 

Technological 

Advantage and 

Various Safeguards 

Are Considered When 

Determining 

Releasability 
Page 15 GAO-03-694 Defense Trade 

United States can stop providing spare parts to former allies; and 

(3) countermeasure awareness, where the United States has the ability to 

develop measures to defeat the released system because of its knowledge 

of how the system functions. 

However, the effectiveness of certain individual safeguards used to protect 

technological advantage may be limited for various reasons. For example, 

a time-phased release may not be effective if the fielding of a more capable 

weapon or technology is delayed and does not coincide with the 

contractual delivery date of the weapon to be released to the foreign 

government. As we reported in January 2003, schedule delays have been 

pervasive in certain major acquisition programs.21 The Air Force’s F/A-22, 

the next generation fighter aircraft, for example, was initially expected to 

be fielded in September 1995. As development proceeded, the estimated 

fielding date was pushed out 8 years to September 2003. According to a 

current estimate, the F/A-22 projected fielding date has slipped another 

2 years to December 2005. In addition, factors outside of U.S. control can 

diminish the effectiveness of certain individual safeguards. For example, 

the United States may stop providing spare parts to former allies, but these 

countries may obtain needed parts through other means, such as 

“cannibalizing” parts from other weapons or obtaining parts from other 

countries at a higher cost through the “grey market.” Some DOD officials 

told us that while certain individual safeguards may not be as effective as 

desired, they consider various safeguards for each proposed transfer to 

ensure technological advantage is maintained. 

In addition to considering technological advantage when making 

releasability decisions, NDPC considers other criteria such as a foreign 

government’s capability to protect U.S. classified military information, 

including weapons or technologies. Information such as Central 

Intelligence Agency (CIA) risk assessments and NDPC security surveys 

can be used to validate a country’s capability to provide such protection. 

DOD’s centralized database contains some of this information, as well as 

historical case data; however, it is not always complete, up-to-date, or easy 

to access. In addition, some information such as end-use monitoring 

reports, which may identify countries that have not protected U.S. military 

information, is not provided to NDPC. 

 21 GAO-03-98. 

More Complete, 

Current, or Available 

Information Would 

Better Support 

Determinations of 

Releasability 
Page 16 GAO-03-694 Defense Trade 

DOD requires that NDP exception cases be recorded in a centralized 

automated system to assist committee members in reviewing, 

coordinating, and reaching decisions on proposals to release classified 

military information.22 This centralized system contains several databases, 

including the National Disclosure Policy System, which tracks and assigns 

exception cases, records releasability decisions, and contains historical 

data on exceptions.23 Historical data are important for identifying weapons 

or technologies that have been released to the requesting country, as well 

as its neighboring countries. However, the National Disclosure Policy 

System that was used to make decisions during the last 4 years contained 

data only for decisions made during that time period. It did not contain 

data on exceptions that were decided in prior years. In addition, it did not 

allow users to conduct full text searches or to search for specific data 

elements, such as exceptions by country, weapon system, or date.24

Because of limited historical data in the National Disclosure Policy 

System, NDPC members told us that they could not always use it to 

analyze precedent cases. To obtain historical data and other information, 

the military departments have relied on their own separate databases 

containing information on their departments’ prior requests for transfers. 

Unlike the military departments, other NDPC members do not have their 

own databases. For example, the State Department has relied on manual 

reviews of paper files and discussions with country experts or other 

officials with knowledge of prior cases—assuming the files still exist and 

the experts and officials still work at the State Department. Because of 

limitations in the National Disclosure Policy System, the NDPC Executive 

Secretariat has also relied on manual file reviews to identify information 

 22 DOD Directive 5230.11, last updated in 1992, requires the use of the Foreign Disclosure 

and Technical Information System, now called the Security Policy Automation Network. 

23 Other databases include the Foreign Visit System, which contains requests by foreign 

governments to visit U.S. government facilities, and the Classified Military Information 

database, which contains decisions made by disclosure officials on classified information 

or material. However, the Classified Military Information database is not kept up-to-date. 

24 Full text search capability will allow users to enter keywords and retrieve documents on 

the system containing those words, thus providing a wider search capability. 

DOD’s Centralized NDP 

Database Was Not 

Complete and the 

Effectiveness of the 

Upgrade Is Unknown 
Page 17 GAO-03-694 Defense Trade 

necessary for preparing its annual NDP report to the National Security 

Council.25

To add more capability to the National Disclosure Policy System, DOD’s 

Policy Automation Directorate developed an upgrade that is expected to 

provide historical data from 1960 to the present and enhance data query 

ability. According to NDPC officials, the upgrade has taken over 3 years to 

develop because of other priorities, technical issues, and limited input 

requested from users on the requirements and improvements for the 

upgraded database. In addition, deployment of the upgraded system was 

delayed several months because the upgrade had been experiencing 

technical problems. For example, NDP exception cases have been 

mislabeled as “current” when they were 2 years old, some cases were 

missing from the system, and certain queries did not always provide 

accurate results. While the upgrade has recently been deployed, the NDPC 

Executive Secretariat stated that it may take about 3 to 4 months to assess 

its effectiveness. 

As part of the NDP process, the DOD Directive requires26 decision makers 

to determine whether foreign recipients of classified military information 

are capable of providing substantially the same degree of security 

protection given to it by the United States.27 In addition to historical 

precedence, decision makers can rely on CIA risk assessments and NDPC 

security surveys to make these determinations.28 The National Disclosure 

Policy System includes information such as security surveys, but it does 

not include CIA risk assessments. CIA risk assessments provide 

counterintelligence risk information, including the assessment of risks 

 25 This annual report discusses the effectiveness of NDP and exceptions granted to the 

policy. For example, it enumerates disclosures of classified military information to foreign 

recipients that were known not to possess the capability to protect classified military 

information in a manner comparable to the United States. 

26 DOD Directive 5230.11. This requirement is also specified in U.S.C. section 2753 (a)(3) 

and the National Security Decision Memorandum 119. 

27 DOD Directive 5230.11 also requires that decision makers determine the foreign 

government’s intent for protecting classified military information. To establish this intent, 

the U.S. government enters into a General Security of Information Agreement or a similar 

security arrangement with the foreign government. 

28DOD Directive 5230.11 also indicates that embassy security assessments can be used to 

make these determinations. However, NDPC officials we spoke with said that these 

assessments have not been used because they are often not prepared. 

CIA Risk Assessments and 

NDPC Security Surveys 

Are Often Outdated 
Page 18 GAO-03-694 Defense Trade 

involved in releasing classified material to a foreign government. NDPC 

security surveys consist of reviews of the foreign government’s security 

laws, regulations, and procedures for protecting classified information. 

These reviews include making certain that recipients (1) have procedures 

to provide clearances to personnel, restrict access to properly cleared 

individuals, and report promptly and fully to the United States any known 

or suspected compromises and (2) agree not to reveal to a third party any 

U.S. classified military information without prior consent of the U.S. 

government. 

Our analysis shows that of the approximately 70 percent of countries 

covered by NDP that had exceptions approved for advanced weapons and 

technologies between 1997 and 2002, most have outdated or no CIA risk 

assessments.29 Specifically, of these, 66 percent were conducted more than 

5 years ago and 12 percent have not been completed (see fig. 4). And while 

22 percent of CIA risk assessments are currently up-to-date, our analysis 

shows that an overwhelming majority of these risk assessments will be out 

of date by the end of 2003. 

 29 Based on discussions with NDPC officials, we define outdated assessments to be those 

that are 5 years or older. 
Page 19 GAO-03-694 Defense Trade 

Figure 4: Dates of CIA Risk Assessments for Countries with Exceptions Approved 

between 1997 and 2002 

According to the NDPC Executive Secretariat, CIA officials have been 

unable to respond to some requests to update risk assessments because of 

resource reductions and other agency priorities. Responding to a CIA 

request, the Secretariat prioritized the top four or five assessments that 

were needed in 1999. However, NDPC would like to have all assessments 

updated every 2 years. 

In addition, while NDPC has set a goal to perform security surveys every 

5 years, some of them are outdated while others were not conducted. 

Specifically, 23 percent of these surveys are 5 years or older and 7 percent 

have not been completed for countries that had exceptions approved for 

advanced weapons and technologies between 1997 and 2002, (see fig. 5). 

And while 70 percent of security surveys are currently up-to-date, our 

analysis shows that over half of these surveys will be out of date by the 

end of 2003. 
Page 20 GAO-03-694 Defense Trade 

Figure 5: Dates of NDPC Security Surveys for Countries with Exceptions Approved 

between 1997 and 2002 

Some NDPC security surveys have not been completed in a timely manner 

because of lack of foreign government cooperation, and other unforeseen 

circumstances, such as country unrest and limited resources. According to 

NDPC officials, the scheduling of NDPC security surveys is a timeconsuming effort performed by one staff member who has other 

responsibilities. In addition, security surveys are performed as a collateral 

duty by the Executive Secretariat. Depending on their availability, 

committee members also volunteer to assist the Executive Secretariat in 

conducting the surveys. 

NDPC officials also noted that in some cases, assessments and surveys 

may not be needed because the system or technology requested is not 

significant and the country makes infrequent requests. For example, a 

country may request one weapon requiring an exception in a 20-year time 

frame, negating the need for expending resources to regularly update or 

conduct a CIA risk assessment or security survey for that country. 

However, NDPC members told us that the CIA risk assessments and the 

NDPC security surveys provide different information that is often 

important for making NDPC decisions. CIA risk assessments are 

particularly important for exception cases because they provide an 
Page 21 GAO-03-694 Defense Trade 

evaluation of a country’s security forces and the risk environment of a 

country that will potentially receive U.S. advanced weapon systems. 

However, because the assessments are outdated, they likely do not reflect 

the current conditions of the countries and therefore cannot be relied on 

for deciding exception cases. Further, the upgraded National Disclosure 

Policy System does not include CIA risk assessments—which NDPC 

members have said would be useful to have in the new upgraded system. 

According to some NDPC members, having outdated or no NDPC security 

surveys may hamper efforts to determine whether a country could protect 

advanced weapons and technologies from compromise. Specifically, 

without these surveys, NDPC members may not be able to identify 

weaknesses in the country’s current systems or areas that need 

improvement. In addition, the NDPC Executive Secretariat said, in some 

cases, when security surveys were not prepared, decisions were made to 

grant exceptions because benefits were deemed to outweigh risks. 

Once weapons have been transferred to other countries, the State 

Department and the intelligence community track information on their use 

and disposition. For example, a State Department-chaired committee 

collects intelligence information on the illegal transfers of weapons to 

third parties and transfers of non-U.S. weapons among foreign countries. 

However, according to some NDPC members, this information is used by 

the State Department primarily for nonproliferation purposes and is not 

provided to NDPC. This information could assist NDPC members in 

determining the releasability of a weapon or technology to a foreign 

country because it indicates how well the country has protected 

previously transferred advanced weapons and technologies. Further, this 

information can provide a more accurate assessment of the types of 

weapons the country receiving the illegal transfers has in its arsenal. 

In addition, information from DOD’s recently initiated end-use monitoring 

program30 could also be useful in making releasability decisions.31 The 

program will include monitoring of sensitive defense articles, services, and 

 30 End-use monitoring refers to the procedures used to verify that foreign governments are 

using and controlling U.S. defense articles and services in accordance with U.S. terms and 

conditions of the transfer. Verification measures range from contacting the appropriate 

foreign government representative for information to physical inspection by U.S. 

personnel. 

31 Foreign Military Sales: Changes Needed to Correct Weaknesses in End-Use Monitoring 

Program, GAO/NSIAD-00-208 (Washington, D.C.: Aug. 24, 2000). 

Some Intelligence and 

Other Information Not 

Currently Provided to NDP 

Decision Makers 
Page 22 GAO-03-694 Defense Trade 

technologies that have special conditions placed on them when 

transferred through the Foreign Military Sales program. However, DOD 

has not yet determined the resources needed to conduct the end-use 

monitoring requirements outlined in the program’s policy. The end-use 

monitoring program manager is expected to provide reports on end-use 

violations to NDPC. Committee officials said that this information would 

be useful because it would indicate how well a country is protecting the 

weapons and technologies that have been transferred through the Foreign 

Military Sales program. 

Finally, the intelligence community sometimes obtains derogatory 

information on countries that may be of interest to NDPC in making 

determinations of releasability. For example, NDPC officials said that in a 

recent instance an intelligence agency discovered that a country 

requesting the release of an advanced weapon system did not have the 

security capabilities to protect U.S. classified military information, but did 

not provide this information to NDPC during the review process. These 

officials stated that while such cases are not typical, this type of 

information would have been useful in evaluating whether the country 

provided the same degree of protection that would be provided by the 

United States—a key criterion governing NDP decisions. 

The U.S. government has invested hundreds of billions of dollars in the 

research and development of advanced weapons and technologies. To 

protect this investment, it is important for decision makers to be fully 

informed of the benefits and risks associated with the release of such 

weaponry. The process for determining the releasability of advanced 

weapons and technologies is necessarily complex because the integrity of 

the process relies on multiple layers of decision makers who consider 

numerous factors in assessing the risks involved if a weapon is 

compromised or ends up in unfriendly hands. To minimize the risks, it is 

critical that the decision makers have ready access to reliable and 

complete information on such factors as the recipient country’s ability to 

protect the advanced weapon or technology. Yet the process does not 

always include a systematic sharing of up-to-date information with NDPC 

members. Given the turnover of military officials involved in the NDPC 

process, it is especially critical that complete and readily accessible data 

from the National Disclosure Policy System database, up-to-date CIA 

assessments and NDPC security surveys, and relevant intelligence 

information from other agencies are available to make fully informed 

decisions. 

Conclusions 
Page 23 GAO-03-694 Defense Trade 

To ensure that NDPC members have complete and accurate information in 

a centralized database that facilitates coordination and decision making on 

the potential release of advanced weapons and technologies, we are 

recommending that the Secretary of Defense direct the NDPC Executive 

Secretariat to 

• evaluate the accuracy and effectiveness of the upgraded National 

Disclosure Policy System, 

• determine with NDPC members the additional capabilities, such as 

inclusion of CIA risk assessments, needed for the upgraded National 

Disclosure Policy System, and 

• work with the DOD Policy Automation Directorate to address user 

comments and technical problems related to the upgraded system as they 

arise. 

 

To ensure that useful and timely information is available for making 

informed release decisions, we are recommending that the Secretary of 

Defense direct the NDPC Executive Secretariat to 

• work with CIA to prioritize risk assessments that need to be updated, 

establish a schedule for performing these assessments, and systematically 

distribute the assessments to NDPC members through the automated 

system or other means; 

• develop a plan to be used as a business case for determining the 

appropriate level of resources required to conduct needed security surveys 

or if a survey cannot be conducted, ensure that an alternative analysis of 

or information on the foreign government’s security capability is made 

available to NDPC members; and 

• identify what additional information, such as end-use monitoring reports, 

would be useful to NDPC members, and establish a mechanism for 

requesting this information from appropriate sources, and systematically 

distribute it to NDPC members. 

In written comments on a draft of this report, DOD agreed with a number 

of our findings and recommendations but did not agree with others. 

Specifically, DOD concurred with our recommendations to evaluate the 

upgraded National Disclosure Policy System, prioritize CIA risk 

assessments that need to be updated or conducted, and identify additional 

information needed to facilitate decision making. DOD did not concur with 

our recommendations to investigate further the capabilities of the 

upgraded National Disclosure Policy System or establish a firm schedule 

for addressing technical problems with the upgrade. DOD also did not 

Recommendations for 

Executive Actions 

Agency Comments 

and Our Evaluation 
Page 24 GAO-03-694 Defense Trade 

concur with our recommendation to develop a plan for NDPC security 

surveys. Further, DOD stated that our depiction of the NDP process 

appears to mislead the reader about the information available to 

committee members when making decisions. 

At the time of our review, DOD had taken 3 years to develop an upgraded 

system primarily because of limited input requested from users, which 

resulted in a major redesign of the system. In addition, deployment of the 

upgrade was delayed a number of times because of technical problems. 

This system was deployed after our review was completed, and we have 

since modified our recommendations to reflect the current situation. In 

commenting on our original recommendations, DOD stated that 

improvements to the upgrade cannot be identified at this time. However, 

in our discussions with NDPC members, they have already identified 

capabilities they would like to have in the upgrade, such as inclusion of 

CIA risk assessments. Additionally, DOD stated that NDPC personnel will 

identify problems with the system and bring them to the attention of the 

software developers. We believe all users of the system, including 

committee members and not just NDPC personnel, should participate in 

the identification of technical problems to ensure that the system is 

meeting user needs. Further, DOD said that developers have quickly fixed 

minor software problems. We, therefore, are no longer recommending that 

a firm schedule be established but rather that technical problems be 

addressed as they arise. 

With regard to our recommendation on a plan for NDPC security surveys, 

DOD stated that it already develops a schedule for completion of such 

surveys. Implementation of the schedule is largely dependent on 

committee members volunteering to conduct the surveys. However, the 

plan we envisioned in our recommendation would include not only a 

schedule but also information such as the reason each security survey is 

needed and the level of resources necessary to schedule and conduct the 

survey. We believe the plan would provide an opportunity to develop a 

business case to determine if dedicated resources are needed to complete 

security surveys on a prioritized basis, instead of largely relying on 

committee volunteers. We have modified our recommendation to clarify 

its intent. 

We disagree that our report misleads the reader about the sufficiency of 

the information available to make decisions. Committee members we 

spoke with stated that information, such as more timely CIA risk 

assessments and security surveys, would allow them to make more 

informed decisions. Our recommendations are intended to enhance the 
Page 25 GAO-03-694 Defense Trade 

information needed for the decision making process. DOD’s letter and our 

detailed evaluation of its comments are reprinted in appendix III. 

The Department of State did not provide formal written comments; 

however, a senior State official said that the report was informative. 

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 of this report to 

the Chairmen and Ranking Minority Members of the House Committees on 

Government Reform, on International Relations, and on Armed Services 

and Senate Committees on Governmental Affairs, on Foreign Relations, 

and on Armed Services. We will also send copies to the Secretaries of 

Defense and State and the Director, Office of Management and Budget. We 

will also make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

Please contact me at (202) 512-4841 or Anne-Marie Lasowski at (202) 

512-4146 if you or your staff have any questions concerning this report. 

Major contributors to this report are listed in appendix IV. 

Sincerely yours, 

Katherine V. Schinasi 

Director, Acquisition and Sourcing Management 
Appendix I: Scope and Methodology 

Page 26 GAO-03-694 Defense Trade 

To ascertain the process for determining the releasability of an advanced 

weapon or technology, we conducted a literature search, reviewed the 

related law and regulations, and analyzed policy, directives, and guidance 

governing the process. We interviewed officials in the Departments of 

Defense and State, the military departments, the Joint Chiefs of Staff, three 

Combatant Commands, and the intelligence community to understand 

how the interagency committee process works for reviewing exceptions to 

the National Disclosure Policy (NDP). We also obtained briefings on 

special committee processes such as the Low Observable/Counter Low 

Observable Executive Committee process. We analyzed military 

department policies and procedures for reviewing requests for the transfer 

of weapons and technologies and discussed the review and coordination 

processes with pertinent military officials. 

To determine if U.S. technological advantage is considered and protected 

in the review process, we reviewed selected weapons transfers records, 

including pertinent initial country requests; military department, Joint 

Staff, and other National Disclosure Policy Committee (NDPC) members’ 

input and positions on the requests; and limitations and conditions 

included in the final committee positions. We analyzed the types of 

limitations and conditions used to protect technological advantage and 

discussed these and their effectiveness with military department experts, 

as well as Joint Staff officials. Through discussions with these officials, we 

also identified other safeguards that committee members consider to 

preserve U.S. military advantage. We reviewed GAO and Department of 

Defense (DOD) reports related to these various safeguards and specific 

limitations and conditions. 

To identify and assess the types of information used in the process, we 

reviewed the NDP and DOD’s and the military departments’ releasability 

regulations. We interviewed officials in the Executive Secretariat for the 

NDPC, the military departments, Joint Staff, and State Department to 

obtain their perspectives on information required for NDP exception 

decisions. We also obtained a briefing and demonstration on DOD’s 

centralized National Disclosure Policy System database and its upgrade 

and discussed the capability of this system with various users. We 

analyzed data on Central Intelligence Agency risk assessments and NDPC 

security surveys performed over the last 25 years. We determined the 

number of assessments and surveys that were performed more than 

5 years ago or were not completed for countries that had received 

exceptions to NDP for potential weapons transfers during 1997 through 

2002. We identified additional information that may be useful to the 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 27 GAO-03-694 Defense Trade 

National Disclosure Policy Committee and discussed this with committee 

members. 

We performed our review from June 2002 through May 2003 in accordance 

with generally accepted government auditing standards. 
Appendix II: National Disclosure Policy 

Criteria 

Page 28 GAO-03-694 Defense Trade 

The National Disclosure Policy Committee (NDPC) considers five criteria 

when determining the releasability of classified military information, 

including weapons and technologies. These criteria are broad and are 

implemented on a case-by-case basis. Table 1 provides the criteria and the 

types of information that decision makers consider when assessing each 

criterion. 

Table 1: NDP Criteria and Examples of Information to Consider for Each Criterion 

NDP criterion Examples 

Proposed transfer must be consistent with 

U.S. foreign policy and national security 

objectives. 

Officials must reference presidential, National Security Council, or other high-level policy 

decisions to justify how this criterion would be met. These officials can consider how: 

• The prospective recipient government cooperates with the United States in pursuit of 

foreign policy and political objectives. 

• A specific U.S. national, diplomatic, or military purpose will be served. 

• The proposed release will be used in support of mutual defense objectives. 

Proposed transfer must be consistent with 

U.S. military and security objectives. 

Officials must explain how the transfer, if compromised, will not constitute an 

unreasonable risk to U.S. military technology and operational capabilities, regardless of 

the intended recipient. If officials determine that risks outweigh gains, alternatives are 

considered to minimize or prevent damage to U.S. technological advantage. They 

consider such issues as: 

• The type of technology involved. 

• The impact of possible compromise. 

• The susceptibility of the item to reverse engineering. 

• The capability of the foreign recipient to reverse engineer the item. 

• The foreign availability of the technology or equipment involved, as well as other 

governments to whom similar equipment or technology has been released. 

Proposed transfer must result in benefits 

to the U.S. equivalent to the value of the 

transfer. 

Officials must consider contributions to U.S. political, military, or economic objectives. 

They consider such contributions as: 

• Standardization and interoperability of equipment or increased defensive capability for 

an ally. 

• Access to bases and ports owned by the recipient nation. 

• Positive impacts on the U.S. industrial and technology bases when the recipient nation 

funds research and development of an advanced weapon or technology that the 

United States can also use. 

• A foreign government’s support or participation in a specified military objective that is 

advantageous to the United States. 

Proposed transfer must depend on the 

foreign recipient providing the items 

substantially the same degree of 

protection as provided by the United 

States. 

Officials must evaluate the proposed recipient government’s intent and capability to 

protect U.S. classified military information. To establish a recipient government’s intent, 

the U.S. government enters into a General Security of Information Agreement or a 

similar security arrangement with the recipient government. To validate the capability of 

the recipient government to provide the necessary degree of protection, DOD relies on 

• embassy security assessments, 

• historical precedence, 

• Central Intelligence Agency risk assessments, and/or 

• NDPC security survey reports. 

In the absence of an NDPC security survey, efforts shall be made to obtain, through 

intelligence channels, a counterintelligence risk assessment or security analysis of the 

foreign government’s security capabilities. 

Appendix II: National Disclosure Policy 

Criteria 
Appendix II: National Disclosure Policy 

Criteria 

Page 29 GAO-03-694 Defense Trade 

NDP criterion Examples 

Proposed transfer must be limited solely 

to information needed to fulfill the purpose 

for which the transfer is made. 

Officials must limit the transfer of the weapon to information for operating and 

maintaining that weapon, as well as for training on the equipment. However, other 

information, such as research and development data and production data, would not be 

provided. 

Source: DOD Directive 5230.11, Office of the Deputy Under Secretary of Defense for Policy Support International Programs Security Handbook, and discussions with NDPC members. 
Appendix III: Comments from the Department 

of Defense 

Page 30 GAO-03-694 Defense Trade 

Appendix III: Comments from the 

Department of Defense 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment 2. 

See comment 1. 
Appendix III: Comments from the Department 

of Defense 

Page 31 GAO-03-694 Defense Trade 
Appendix III: Comments from the Department 

of Defense 

Page 32 GAO-03-694 Defense Trade 

Now on p. 23. 

Now on p. 23. 

Now on p. 23. 

See comment 3. 

Now on p. 23. 

See comment 4. 
Appendix III: Comments from the Department 

of Defense 

Page 33 GAO-03-694 Defense Trade 

See comment 5. 

Now on p. 23. 

Now on p. 23. 
Appendix III: Comments from the Department 

of Defense 

Page 34 GAO-03-694 Defense Trade 

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

(DOD) letter dated June 24, 2003. 

1. We disagree with DOD’s statement that our depiction of the National 

Disclosure Policy (NDP) process appears to mislead the reader about 

the sufficiency of the information available to make decisions. We 

accurately describe the process, but found that the information 

supporting the decisions was not always complete, up-to-date, or easy 

to access. We further acknowledge in the report that each request is 

reviewed on a case-by-case basis. While DOD states that supporting 

information must be furnished to each member of the Committee for 

review, committee members we spoke with stated that information 

such as more timely National Disclosure Policy Committee (NDPC) 

security surveys and Central Intelligence Agency (CIA) risk 

assessments would facilitate the process, thus allowing members to 

make more informed decisions. 

2. The National Disclosure Policy System that was used to make 

decisions during the last 4 years contained data only for decisions 

made during that time period. DOD indicated that this system was a 

follow-on to another database containing historical data. However, 

some committee members and officials told us that this older database 

is not easy to use and contains only summary information. In addition, 

one committee member does not have access to this database. The 

report clearly states that an upgraded system has been developed. 

DOD asserted that glitches and technical problems are to be expected 

for a system in development. We understand that such technical 

problems can occur with an upgrade. However, at the time of our 

review, the system had taken over 3 years to develop, and deployment 

was delayed a number of times because of technical problems and 

limited input requested from users. As DOD has acknowledged, the 

effectiveness of the upgrade is yet to be determined. 

3. We believe that it is too early for DOD to assert that the upgraded 

system has proven to be reliable and efficient, given that it will not 

formally assess the effectiveness of the system until September 2003. 

DOD’s response acknowledges that improvements are expected but 

cannot be identified at this time. However, NDPC members told us 

about capabilities they wanted included in the upgrade, such as 

inclusion of CIA risk assessments. We believe that DOD should be 

proactive in seeking input from users about such additional 

capabilities needed for the upgraded system. We have clarified our 

recommendation to indicate that this information should be obtained 

GAO Comments 
Appendix III: Comments from the Department 

of Defense 

Page 35 GAO-03-694 Defense Trade 

from members after they have had an opportunity to use the system 

and can assess the need for improvements. 

4. DOD acknowledged that as NDPC personnel identify problems with 

the upgraded system, they will bring these problems to the attention of 

the software developers. However, our recommendation was directed 

toward obtaining input from all NDPC members who are users of the 

system, not just NDPC personnel, to ensure that user needs are met. In 

addition, DOD said that developers have quickly fixed minor software 

problems. We, therefore, are no longer recommending that a firm 

schedule be established but rather that technical problems be 

addressed as they arise. 

5. While DOD indicates that it already develops a schedule for 

completion of NDPC security surveys, our recommendation is 

intended to include not only a schedule but also additional 

information. Specifically, we believe that a plan should also identify 

surveys to be conducted and the reasons each survey is needed; 

establish time frames for completing these surveys; and estimate the 

resources needed to schedule and conduct these surveys. Based on 

this information, DOD can develop a business case to determine if 

dedicated resources, instead of committee volunteers, are needed to 

ensure that surveys are completed on a prioritized basis. We have 

modified our recommendation to clarify this point. 

Finally, DOD states that no known alternative analysis currently exists 

that would provide information comparable to that provided through 

the security surveys. However, the department has acknowledged that 

the CIA risk assessments may be used as the basis for decisions when 

a security survey cannot be conducted. This is the type of alternative 

analysis that we are referring to in our recommendation. 
Appendix IV: Staff Acknowledgments 

Page 36 GAO-03-694 Defense Trade 

Anne-Marie Lasowski, Marion Gatling, John Ting, Ella Mann, Shelby S. 

Oakley, Karen Sloan, Marie Ahearn, and Stan Kostyla made key 

contributions to this report. 

Appendix IV: Staff Acknowledgments 

Acknowledgments 
Related GAO Products 

Page 37 GAO-03-694 Defense Trade 

Export Controls: Processes for Determining Proper Control of 

Defense-Related Items Need Improvement. GAO-02-996. Washington, D.C.: 

September 20, 2002. 

Export Controls: Department of Commerce Controls over Transfers of 

Technology to Foreign Nationals Need Improvement. GAO-02-972. 

Washington, D.C.: September 6, 2002. 

Export Controls: More Thorough Analysis Needed to Justify Changes in 

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Defense Trade: Lessons to be Learned From the Country Export 

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Export Controls: Issues to Consider in Authorizing a New Export 

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Export Controls: Reengineering Business Processes Can Improve 

Efficiency of State Department License Reviews. GAO-02-203. 

Washington, D.C.: December 31, 2001. 

Export Controls: Clarification of Jurisdiction for Missile Technology 

Items Needed. GAO-02-120. Washington, D.C.: October 9, 2001. 

Defense Trade: Information on U.S. Weapons Deliveries to the Middle 

East. GAO-01-1078. Washington, D.C.: September 21, 2001. 

Export Controls: State and Commerce Department License Review Times 

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Export Controls: Regulatory Change Needed to Comply with Missile 

Technology Licensing Requirements. GAO-01-530. Washington, D.C.: 

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Defense Trade: Analysis of Support for Recent Initiatives. 

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Foreign Military Sales: Changes Needed to Correct Weaknesses in EndUse Monitoring Program. GAO/NSIAD-00-208. Washington, D.C.: 

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Related GAO Products 
Related GAO Products 

Page 38 GAO-03-694 Defense Trade 

Defense Trade: Status of the Department of Defense’s Initiatives on 

Defense Cooperation. GAO/NSIAD-00-190R. Washington, D.C.: 

July 19, 2000. 

Conventional Arms Transfers: U.S. Efforts to Control the Availability of 

Small Arms and Light Weapons. GAO/NSIAD-00-141. Washington, D.C.: 

July 18, 2000. 

Foreign Military Sales: Efforts to Improve Administration Hampered by 

Insufficient Information. GAO/NSIAD-00-37. Washington, D.C.: 

November 22, 1999. 

Foreign Military Sales: Review Process for Controlled Missile Technology 

Needs Improvement. GAO/NSIAD-99-231. Washington, D.C.: 

September 29, 1999. 

Export Controls: 1998 Legislative Mandate for High Performance 

Computers. GAO/NSIAD-99-208. Washington, D.C.: September 24, 1999. 

Export Controls: Better Interagency Coordination Needed on Satellite 

Exports. GAO/NSIAD-99-182. Washington, D.C.: September 17, 1999. 

Defense Trade: Department of Defense Savings From Export Sales Are 

Difficult to Capture. GAO/NSIAD-99-191. Washington, D.C.: 

September 17, 1999. 

Export Controls: Issues Related to Commercial Communications 

Satellites. T-NSIAD- 98-208. Washington, D.C.: June 10, 1998. 

Export Controls: Change in Export Licensing Jurisdiction for Two 

Sensitive Dual-Use Items. GAO/NSIAD-97-24. Washington, D.C.: 

January 14, 1997. 

Export Controls: Sensitive Machine Tool Exports to China. 

GAO/NSIAD-97-4. Washington, D.C.: November 19, 1996. 

Export Controls: Sale of Telecommunications Equipment to China. 

GAO/NSIAD-97-5. Washington, D.C.: November 13, 1996. 

Export Controls: Some Controls Over Missile-Related Technology Exports

to China Are Weak. GAO/NSIAD-95-82. Washington, D.C.: April 17, 1995. 

(120151) 
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