Persian Gulf: Implementation Gaps Limit the Effectiveness of End-Use Monitoring and Human Rights Vetting for U.S. Military Equipment
Released: 2011-11-17T00:00:00

Letter

Background

Gulf Cooperation Council

Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE are key U.S. allies in the Persian Gulf (see fig. 1). The countries are primarily governed by longstanding ruling families under emirates and monarchies, and, with the exception of Bahrain and Oman, each possesses large oil or gas reserves. Together, these countries constitute the Gulf Cooperation Council, which they established in 1981 as a means to coordinate on security concerns, among other issues. The United States maintains close security ties with the Gulf countries. For example, Saudi Arabia and the UAE are two of the largest purchasers of U.S. arms in the world, the U.S. Navy’s 5th Fleet is headquartered in Bahrain, and U.S. Central Command operates its forward command facilities in Qatar. Moreover, the United States has designated Bahrain and Kuwait as major non- NATO allies.

In the 1990s, the U.S. military presence in the Persian Gulf and efforts to promote greater coordination among the Gulf Cooperation Council states was primarily aimed at containing conventional threats from Iraq and Iran. More recently, U.S. security cooperation has focused on addressing transnational terrorism and proliferation networks and confronting regional security threats, in particular Iran. However, popular uprisings in the Persian Gulf and elsewhere in the Arab world strained U.S. relations with some Gulf Cooperation Council countries in 2011 and have drawn into focus the tension between preserving existing security relationships and promoting human rights. For example, human rights organizations and other observers have noted that the government in Bahrain may have violated human rights in its attempt to quell protests in February 2011 and suppress dissent in their aftermath.

Laws Governing Arms Exports and Sales

The Arms Export Control Act of 1976 (AECA) authorizes the President to control the sale or export of defense articles and services. The U.S. government sells defense articles and services to foreign governments and international organizations through FMS and authorizes the commercial export of defense articles and services to foreign governments and other entities through DCS. State has overall regulatory responsibility for both FMS and DCS, but DOD’s Defense Security Cooperation Agency (DSCA) administers FMS, and the individual military departments implement the sale and delivery process for FMS.Directorate of Defense Trade Controls administers DCS by licensing exports from U.S. companies to foreign entities.

The AECA, as amended, also requires end-use monitoring for the sale or export of defense articles and services, and these responsibilities are delegated to the same agencies that administer the programs. A 1988 amendment to the AECA required the President to develop standards for identifying high-risk commercial exports for regular end-use monitoring. In consultation with other agencies, State developed a list of standards that may signal an illegal export or diversion, and therefore warrant end- use monitoring.

In 1996, Congress amended the AECA to require the President to establish a program for monitoring the end-use of defense articles and defense services sold, leased, or exported under the AECA, including through FMS and DCS. The amendment specified that the program should provide reasonable assurances that the recipient is complying with restrictions imposed by the U.S. government on the use, transfer, and security of the defense articles and defense services. DOD’s DSCA administers the Golden Sentry program to monitor the end-use of defense articles and defense services transferred through FMS, and State’s Directorate of Defense Trade Controls administers the Blue Lantern program to conduct end-use monitoring for defense articles and defense services exported under DCS. U.S. officials located in the Gulf countries conduct the monitoring for each program. DOD officials at Security Cooperation Organizations conduct Golden Sentry end-use monitoring and State officials at U.S. embassies conduct Blue Lantern checks. Policies and procedures for the Golden Sentry and Blue Lantern programs are outlined in DOD’s Security Assistance Management Manual and State’s Blue Lantern Guidebook, respectively.

Restrictions on Security Assistance Based on Human Rights Concerns

A provision in the Foreign Assistance Act, as amended in 2008, commonly referred to as the “Leahy Law,” prohibits the United States from providing any assistance under the act or AECA to any unit of the security forces of a foreign country if there is credible information that such unit has committed gross violations of human rights. This law applies to assistance provided through the International Military Education and Training and Foreign Military Financing programs, among others. From 1997 through 2007, this provision was included as an amendment to State’s annual foreign operations appropriation bills. In 2008, the Foreign Assistance Act was amended to make these restrictions permanent. In addition, DOD’s annual appropriations bill contains a similar “Leahy” provision that applies to DOD-funded training programs. This provision prohibits any funding made available through DOD’s appropriations bill from being used to train a unit of security forces or foreign police forces if State provides to DOD credible evidence of gross human rights violations by such unit. According to DOD policy, this provision applies to Joint Combined Exchange Training and the Combating Terrorism Fellowship Program—two training programs that DOD has funded in the Persian Gulf countries.

The State and DOD Leahy provisions do not apply to training and equipment purchased through FMS or DCS using host country funds. These purchases are subject to a separate human rights provision, which limits security assistance to countries whose governments engage in a consistent pattern of gross violations of human rights. According to State, it reviews all arms sales and exports through FMS and DCS for human rights concerns, among other things. State’s review process is described in greater detail in our previous report on arms sales and arms exports to the Gulf countries.

Implementation Gaps Limit the Effectiveness of U.S. Efforts to Safeguard Military Equipment in the Persian Gulf Countries

DOD Monitors Military Equipment Based on Lists of Sensitive Items, while State Monitors it Case-by- Case Based on Sensitivity and Other Risk Factors

DOD Conducts Two Levels of End-Use Monitoring and Periodic Compliance Visits

Under its Golden Sentry program, DOD conducts two levels of monitoring—enhanced end-use monitoring and routine end-use monitoring—based on a list of specific sensitive defense articles. DOD conducts enhanced end-use monitoring for specifically identified sensitive defense articles, services, and technologies. Letters of Offer and Acceptance authorizing the sale of these items to countries in the Persian Gulf and elsewhere may contain specialized notes or provisos specifying that the purchaser must adhere to certain physical security and accountability requirements. For example, specialized notes for Advanced Medium Range Air-to-Air Missiles require the purchaser to conduct semiannual inventories by serial number and establish procedures to provide a continuous accounting for the items. To verify compliance with these provisos, DOD policy requires that it conduct serial number inventories for items designated as requiring enhanced end-use monitoring following delivery and at regular intervals thereafter. As of July 2011, DOD had designated 16 defense articles that always require enhanced end-use monitoring when sold though FMS. As of August 23, 2011, the Gulf countries have purchased 9 of these 16 defense articles, including NVDs and various missiles (see table 1).

DOD conducts routine end-use monitoring for defense articles and services sold through FMS that do not have any unique conditions associated with their transfer. Routine end-use monitoring is conducted in conjunction with other required security-related duties. For example, U.S. officials might observe how a host country’s military is using U.S. equipment when visiting a military installation on other business. Given the large volume of defense articles transferred through FMS, DSCA officials have instructed DOD personnel to concentrate routine end-use monitoring efforts on a “watch list” of specific categories of items, including battle tanks, artillery systems, fixed wing aircraft, and helicopters. All other defense articles, such as uniforms, radios, and canteens, are still subject to routine end-use monitoring, but receive a lower priority.

In addition to enhanced and routine end-use monitoring, DOD conducts periodic Compliance Assessment Visits to review and evaluate the Security Cooperation Organizations’ and host nations’ overall end-use monitoring compliance programs. A Compliance Assessment Visit evaluates a country’s compliance with specific physical security and accountability agreements, provisos, and other terms of sale. It may include facility visits, records reviews, reviews of local security procedures, and inventories of U.S. origin defense articles. As of October 27, 2011, DOD has conducted a Compliance Assessment Visit in each of the Gulf countries except for Qatar, which has not received any defense articles requiring enhanced end-use monitoring except for Communications Security Equipment (see table 2). In May 2009, we reported that DOD did not have written guidance for selecting countries for compliance visits and recommended that DOD create written guidance that incorporated a risk-based approach.written guidelines for identifying countries to receive compliance visits in its May/June 2011 End-Use Monitoring newsletter, and these guidelines will be included in forthcoming revisions to the Security Assistance Management Manual. These guidelines will be broad enough to take various factors into consideration, including the political and military stability of the region, the history of a country’s compliance with the Golden Sentry program, and the makeup of a country’s inventory of defense articles requiring enhanced end-use monitoring, among other factors.

DOD’s and State’s End-Use Monitoring Varies Significantly for NVDs Purchased by Persian Gulf Countries

U.S. Government Considers NVDs to Be a Sensitive Military Technology Prone to Diversion

The U.S. government considers NVDs to be a sensitive military technology that is vulnerable to diversion. According to DOD, control and security of NVDs continues to be a major national security concern, and its policy is to treat these systems as a valuable, limited, and sensitive national security resource to be husbanded and invested in support of national security objectives. NVDs provide U.S. forces a technological advantage by facilitating the location, recognition, and defeat of opposing forces during periods of low battlefield visibility, a capability also sought by terrorist groups. Night vision technology may be incorporated into man-portable devices, such as binoculars, weapons sights, and thermal imagers, or devices mounted onto other platforms, including helicopters and unmanned aerial systems. Figure 3 shows an example of a third-generation, head- mounted night vision goggle and a thermal imaging device, both of which have been purchased by the Gulf countries.

The U.S. government has authorized the sale of NVDs to Gulf governments through FMS and licensed exports of NVDs to private and governmental entities in these countries through DCS. All requests for the sale or export of NVDs are evaluated on a case-by-case basis and undergo an interagency review, including a national security review by the Defense Technology Security Administration. The decision to release NVD technology to foreign end-users is based on the type of equipment, the end-users’ ability and willingness to safeguard the equipment, and whether the end-use is consistent with enhancing or maintaining U.S. national security (e.g., assisting in antiterrorist or antipiracy operations). NVDs are the only military technology the Gulf countries have purchased through FMS and DCS that require enhanced end-use monitoring (i.e., delivery verification and regular inventories) when purchased through FMS.

DOD Guidance Requires Tracking and Inventorying Man-Portable NVDs Purchased by Gulf Countries through FMS

Until a policy change that took effect on October 1, 2011, DOD guidance, some of which was not documented, required that DOD conduct serial number inventories of man-portable NVDs purchased by the Gulf countries following delivery and at regular intervals thereafter. To facilitate these inventories, DOD tracks man-portable NVDs by serial number in the SCIP. According to data from the SCIP, the Gulf countries had received 10,550 NVDs through FMS, as of August 23, 2011 (see fig. 4). NVDs purchased by Saudi Arabia constituted almost 70 percent of the total number of NVDs in the Persian Gulf countries purchased through FMS.

Before October 1, 2011, DOD guidance required that personnel in the Gulf countries conduct 100 percent serial number inventories for all NVDs following delivery. According to the DSCA Program Manager for the Golden Sentry program, DOD personnel in these countries were then required to conduct inventories of 50 percent of all second-generation NVDs annually (100 percent biannually) and 100 percent of all third- generation NVDs annually. However, the required frequency for these inventories was not documented in formal DOD guidance. Instead, DSCA could specify the required inventory frequency on a country-by-country basis, and this requirement was subsequently reflected in the SCIP, which DOD personnel in the Gulf countries use to plan and carry out their inventories. On September 22, 2011, DOD issued a new policy, effective October 1, 2011, which specified that NVDs sold through FMS to non-NATO countries, including the Persian Gulf countries, would be subject to a serial number inventory within 90 days of delivery, tracked by serial number in the SCIP database, and inventoried annually thereafter. However, the policy provided DSCA with discretion to modify the established criteria based on risk assessments, record of compliance with security and accountability measures, or reported end-use violations. Accordingly, DSCA disseminated implementation guidelines through its End-Use Monitoring newsletter which further refined the criteria for conducting Golden Sentry inventories of man-portable NVDs. These guidelines reflect a risk-based approach that stipulates differing requirements based on the decade in which the items were purchased:

NVDs purchased before December 31, 1990. These NVDs will no longer require regular serial number inventories or tracking through enhanced end-use monitoring. Instead, they will be covered under routine end-use monitoring.

NVDs purchased between January 1, 1991, and December 31, 2000.

DOD personnel will be required to establish a baseline count for these NVDs and conduct at least one serial number inventory, after which regular serial number inventories will no longer be required and the NVDs will be covered under routine end-use monitoring.

NVDs purchased on or after January 1, 2001. The end-use monitoring requirements will not change for these NVDs. They will still require 100 percent annual inventories and tracking in the SCIP by serial number.

State Does Not Systematically Conduct End-Use Checks for or Track All NVDs in the Gulf Countries

We found that State did not conduct end-use checks on all NVD shipments to Gulf countries from fiscal years 2005 through 2010. The Blue Lantern Guidebook, which outlines State’s policies for the program, states that Blue Lantern checks are selected based on perceived risk factors, one of which is sensitive technologies, such as NVDs. According to the State official who was in charge of the Blue Lantern program until August 2011, State attempts to conduct end-use monitoring checks on all shipments of complete NVD systems. He noted that this is not a formal policy requirement, but rather an informal objective to more closely align State’s practices with DOD’s. According to State, complete NVD systems include night vision goggles, monoculars, and image intensifier tubes—the technology that allows one to view images through the goggles or monoculars. We reviewed State’s data on licenses for defense exports to the Gulf countries and identified at least 34 licenses for 8,757 man-portable NVDs that were exported to the Gulf countries from fiscal years 2005 through 2010, all of which included security and accountability provisos. State conducted end-use checks on 9 of these 34 licenses, or about 26 percent of all such licenses. These checks covered 2,242 of the 8,757 NVDs exported to the Gulf countries during this period. In contrast to DOD’s end-use monitoring for NVDs, from fiscal years 2005 through 2010, State did not conduct postshipment checks for any NVDs authorized for export to the Gulf countries more than once.

In addition, State has not conducted any end-use checks on man- portable, thermal imaging systems exported to the Gulf countries, as of September 2011. According to U.S. Army night vision specialists, thermal imaging technology enables warfighters to find and engage targets in complete darkness, a capability that night vision goggles based on image intensification technology do not have. From fiscal years 2005 through 2010, State approved 44 licenses authorizing the export of about 480 thermal imaging systems to the Gulf countries. These included 6 licenses for 140 man-portable thermal imaging systems, which are more prone to diversion. However, State did not conduct any end-use checks on these sensitive items. In contrast, DOD subjects these systems under its Golden Sentry program to enhanced end-use monitoring. According to data from DOD’s end-use monitoring database, Bahrain purchased six thermal imagers through FMS that DOD will track by serial number and monitor regularly.

Furthermore, State does not systematically track or record by serial number NVDs that the Gulf countries have purchased through DCS. According to State, it can determine the number and location of NVDs exported through DCS by analyzing data from its export licensing database and shipping data from the U.S. Census Bureau’s Automated Export System database. If necessary, it can also obtain serial numbers for NVDs purchased through DCS by contacting the U.S. exporter. For example, we identified one instance in which State obtained serial numbers from a U.S. exporter at the request of embassy personnel to enable an inventory of NVDs in Saudi Arabia. However, unlike DOD, State does not systematically compile this information. As a result, State does not have ready access to serial-number specific information on the total number of NVDs in the inventories of the Gulf countries, their location, and their current disposition.

Less Advanced NVDs Purchased through FMS Have Received More Rigorous End-Use Monitoring than Advanced NVDs Purchased through DCS

As a result of DOD’s and State’s different approaches to end-use monitoring, some less advanced, second-generation NVDs purchased by the Gulf countries through FMS have received more rigorous end-use monitoring than more advanced third-generation NVDs purchased through DCS. In some Gulf countries, the NVDs purchased through FMS and DCS are included in the inventory of the same end-user. According to DSCA officials, DOD personnel in Saudi Arabia have been required to track and conduct annual serial number inventories on half of the almost 6,000 second-generation NVDs purchased by Saudi Arabia’s Ministry of Defense and Aviation and the Saudi Arabia National Guard through FMS in the early 1990s. For example, DOD officials conducted their most recent serial number inventory of the more than 4,000 NVDs in the Saudi Arabia National Guard’s inventory in February and March 2011 by visiting 29 locations over a five-week period. Meanwhile, State has approved at least 13 licenses for the sale of more than 11,000 advanced, third- generation NVDs to Saudi Arabia’s Ministry of Defense and Aviation through DCS since 2005. However, because these NVDs were purchased through DCS, they will be subject to less rigorous end-use monitoring than the older, less-advanced NVDs purchased through FMS.

The UAE Has Not Provided a Required NVD Compliance Plan to DOD

DOD and State require entities in the Gulf countries that purchase NVDs through FMS and DCS to meet comparable physical security and accountability requirements. For example, DOD and State both require the purchaser to secure the NVDs against loss, theft, or unauthorized access. Both agencies also require that the purchaser conduct regular inventories of the NVDs and make their records available to U.S. government officials upon request. For NVDs purchased through FMS, DOD also requires that the purchaser provide a written physical security and accountability plan (NVD compliance plan) within 30 days of acceptance of the Letter of Offer and Acceptance outlining how they will comply with these requirements. However, as of August 18, 2011, the UAE military had not provided an NVD compliance plan, despite having purchased more than 300 NVDs through FMS since 2008. According to DSCA, it raised this concern as part of a May 2010 Compliance Assessment Visit in the UAE and again as recently as October 24, 2011. DSCA officials stated that they would notify the UAE that if they do not receive a signed NVD compliance plan by December 31, 2011, DSCA will cease to recommend NVD sales to the UAE through FMS. DOD took similar action towards Saudi Arabia’s Ministry of Defense and Aviation in February 2011 because it had not furnished an NVD compliance plan. In May 2011, the Ministry of Defense and Aviation provided a copy of its compliance plan, and DOD subsequently resumed consideration of NVD sales.

State Conducts Human Rights Vetting for Recipients of U.S.- Funded Training in Gulf Countries, but Does Not Conduct Comparable Vetting for Recipients of Equipment

State Conducts Human Rights Vetting for Individuals and Units Nominated for U.S.- Funded Training in the Gulf Countries

Data from State’s new vetting database indicate that State has conducted human rights vetting for about 770 individuals and 12 units in the Gulf countries that were nominated for U.S.-funded training. U.S. laws prohibit certain types of assistance from being provided to any unit of the security forces of a foreign country if there is credible evidence that such unit has committed gross violations of human rights. In keeping with these laws and State human rights policies, State’s policy is to vet security force units and their commanders for unit training, and individual security force members for individual training. DOD’s policy requires that all DOD- funded training events with foreign individuals and units be referred to State for human rights vetting. State conducts the human rights vetting process on behalf of DOD for DOD-funded programs.

The Gulf countries have received various types of U.S.-funded training that is subject to State’s and DOD’s human rights laws. For example, Bahrain and Oman received about $4.3 million in assistance through the International Military Education and Training program in fiscal years 2009 and 2010 to send officers to U.S. war colleges and to receive English language or other technical training in the United States. The same two countries also received almost $2.5 million in Antiterrorism Assistance to improve aviation security and responses to mass casualty events, among other things. Over the same period, Oman, Saudi Arabia, and UAE received about $2.4 million through the Export Control and Related Border Security program, some of which funded training designed to help customs officials and other enforcement agents identify controlled commodities during inspections. Members of the security forces of the Gulf countries have also participated in DOD-funded Joint Combined Exchange Training exercises with U.S. special operations forces.

As shown in figure 5, State uses a multistep process for conducting human rights vetting. The process begins at the U.S. embassy in the home country of the unit or individual nominated for training when a sponsoring office requests human rights vetting for security force units or individuals that have been proposed for U.S.-funded training. Names are first vetted by selected sections at the embassy by querying databases frequently used by their offices and consulting other relevant sources.

For example, the consular section might search its internal database, which includes information on individuals that have applied for U.S. visas or may be ineligible for U.S. visas, and the Department of Homeland Security might search its enforcement database, which includes information on entities suspected of or involved in violating federal laws. When vetting at post has been completed, the list of candidates for training is transmitted to State headquarters in Washington, D.C., where they undergo a second stage of screening by officials in the Bureau of Near Eastern Affairs and the Bureau of Democracy, Human Rights, and Labor. These officials consult intelligence databases and other classified and unclassified sources. If no derogatory information is found, State notifies the embassy that the candidates have been approved, and training may proceed.

Under State’s policy, the political section is the only section at post required to conduct vetting. Vetting by other sections is optional and varies from post to post. In the Gulf countries, the number of sections that conducted vetting ranged from three in the UAE to seven in Saudi Arabia.

State Does Not Conduct Individual- and Unit-Level Human Rights Vetting for Recipients of U.S.-Funded Equipment in the Persian Gulf

In contrast to its vetting process for recipients of training, State does not conduct individual- or unit-level human rights vetting for recipients of U.S.- funded equipment in Gulf countries. U.S.-funded equipment provided through certain programs is subject to the same human rights provisions that apply to U.S.-funded training programs. State has conducted human rights vetting for hundreds of individuals and units that received U.S.- funded training in the Gulf countries, but has not conducted comparable vetting for the anticipated recipients of more than $188 million in U.S.- funded equipment for Bahrain and Oman. From fiscal years 2005 through 2010, Bahrain and Oman received about $148 million through the U.S.- funded Foreign Military Financing program to purchase military equipment from the United States, including NVDs, missile systems, helicopters, and small arms (see table 7). In addition, Bahrain was authorized to receive equipment valued at about $40 million through the Excess Defense Articles program. According to State officials, recipients of U.S.-funded equipment would only be vetted if the same entities that received the equipment also received U.S.-funded training.

According to State, vetting for the anticipated recipients of equipment currently takes place through memos drafted by State and cleared by the relevant regional bureaus at the time that funding is allocated for the countries that will receive assistance. In these memos, State regional bureaus confirm, in consultation with the respective embassies, that they are not aware of credible evidence of gross human rights violations by any units that might receive assistance under the funding authorization. However, according to State, the exact items to be financed and the exact units or individuals to receive the items are not generally known at the time the funding is obligated, and may not be known until many months or even years later. The official that oversees human rights vetting at State said that the anticipated recipient of equipment listed in the funding allocation memos is typically not a specific unit or individual, but rather a much higher-level entity, such as the Ministry of Interior, in the country slated to receive assistance.

State does not currently have procedures in place to conduct vetting later in the acquisition process when the exact recipient unit or individual is known. However, according to State, it is developing policy guidance and identifying procedures to standardize the collection of timely information on recipient units of equipment in order to conduct equipment vetting through INVEST and improve the effectiveness of its vetting process. The procedures will likely incorporate a two stage process. The first stage of vetting would be initiated when State receives a formal request for equipment. During this stage, the embassy, regional bureau, and the Bureau of Democracy, Human Rights, and Labor would sign off on a memo similar to the current method of vetting for U.S.-funded equipment. The second stage would occur near the end of the acquisition process and before shipment of the equipment when the exact recipient of the equipment is known. During this second stage, the unit scheduled to receive the equipment would be vetted through INVEST, similar to vetting for U.S.-funded training.

Conclusions

DOD and State established the Golden Sentry and Blue Lantern programs, respectively, to provide reasonable assurance that arms sold or licensed for export to foreign governments do not end up in the possession of individuals or groups who pose a threat to the United States or its allies. However, gaps in implementing these programs in the Gulf countries may limit the ability of DOD and State to adequately safeguard defense articles upon their arrival, storage, and eventual use in those countries. For example, both DOD and State view NVDs as a sensitive technology sought by terrorists, but their approaches to monitoring NVDs varies widely. Paradoxically, more modern third- generation NVDs sold to Gulf countries through direct commercial sales receive less rigorous end-use monitoring than older, less advanced NVDs purchased through FMS. Gaps in implementing State’s Blue Lantern monitoring program have resulted in State not physically verifying receipt of some items or confirming some end-users’ compliance with license conditions—even though State has identified the need for a postshipment check—thus reducing confidence in the security of arms exported to these entities. Also, the absence of DOD documentation of its efforts both to verify host country security and accountability procedures for sensitive military equipment and to monitor less sensitive items limits assurance that equipment sold through FMS is being used as intended. Moreover, DOD’s inability to obtain a required compliance plan from the UAE, outlining its security and accountability procedures for more than 300 NVDs purchased since 2008, erodes confidence in the security of arms sold to a country that has been used by illicit actors to transship sensitive equipment. If the UAE does not provide a compliance plan, DOD could consider not recommending further NVD sales through FMS.

State and DOD have developed policies to prevent U.S. assistance from being used to provide training for units or individuals who have committed gross violations of human rights. However, State’s absence of procedures to conduct individual- and unit-level human rights vetting of recipients of U.S.-funded equipment increases the risk that such equipment may ultimately be used by violators of human rights. Given recent unrest in some Gulf countries, this could result in U.S.-funded equipment being misused to quell peaceful demonstrations.

Recommendations for Executive Action

To close gaps in the implementation of end-use monitoring programs in the Gulf countries that may limit the ability of DOD and State to adequately safeguard defense articles upon their arrival, storage, and eventual use in those countries, we recommend that the Secretaries of Defense and State take steps to harmonize their approaches to end-use monitoring for NVDs to ensure that they receive equal levels of protection regardless of how they are obtained by foreign recipients. Such steps might include developing a plan or schedule for how and when each department’s end-use monitoring approaches would be harmonized.

We also recommend that the Secretary of Defense take the following two actions: develop guidance requiring DOD officials to document their efforts to verify host country security and accountability procedures for sensitive equipment and their activities to monitor less sensitive equipment, and obtain from the UAE government an NVD compliance plan, as required under the conditions of sale through FMS, or develop an appropriate response.

We further recommend that the Secretary of State take two actions to issue policies and procedures that: provide guidance to Compliance Specialists regarding when to request embassy personnel to conduct postshipment checks, and when to close checks, and stipulate that when postshipment checks are requested, U.S. embassy personnel should conduct site visits to end-users to physically verify compliance with conditions associated with an export license.

To reduce the risk that U.S.-funded equipment may be used by violators of human rights in the Gulf countries, we recommend that the Secretary of State implement individual- and unit-level human rights vetting for recipients of U.S.-funded equipment.

Agency Comments and Our Evaluation

We provided a draft of this report to DOD and State for their review and comment. Both DOD and State provided written comments, which we have reprinted in appendixes II and III, respectively. DOD and State also provided technical comments, which we incorporated in this report, as appropriate.

DOD and State both agreed with our recommendation to take steps to harmonize their approaches to end-use monitoring for NVDs. DOD stated that it welcomed this recommendation and offered to provide any assistance needed to State to provide consistent monitoring of sensitive technology regardless of the method through which the transfer is made. State said that it intends to increase the number of end-use checks on NVDs that are comparable to those sold through FMS. However, State noted that human resource constraints in Washington, D.C., and at its embassies around the world will pose the greatest challenge to achieving full harmonization. Accordingly, it plans to explore how existing DOD resources in-country may be leveraged to support end-use monitoring for sensitive items exported through DCS.

DOD agreed with our recommendation to develop guidance requiring its personnel to document efforts to verify host country security and accountability procedures for sensitive equipment and activities to monitor less sensitive equipment. DOD noted that forthcoming revisions to the Security Assistance Management Manual will include new requirements that address this recommendation. DOD also agreed with our recommendation that it obtain from the UAE government an NVD compliance plan, as required under the conditions of sale through FMS, or develop an appropriate response. DOD stated that it has continued to work with the UAE to obtain the plan and, on October 24, 2011, met with UAE officials to inform them that NVD exports through FMS may be affected if the UAE Ministry of Defense does not provide an NVD compliance plan by December 31, 2011.

State disagreed with our recommendation to issue policies and procedures stipulating that U.S. embassy personnel conduct site visits to end-users as part of requested postshipment checks. State said that we misinterpreted data from certain cases to reach the conclusions that led to this recommendation and that we based our conclusion on several isolated examples of Blue Lantern checks conducted in the Gulf countries. However, our recommendation is based on our finding that when postshipment checks were requested, State inconsistently used site visits to verify whether defense articles had been received by an end-user and whether items were being used in accordance with the terms of their licenses. We drew this conclusion by analyzing a sample of 13 postshipment checks which State requested for the Gulf countries from fiscal years 2005 through 2010 and determining that U.S. embassy officials conducted site visits to end-users for only 3 of these 13 checks. Embassy officials did conduct site visits to private companies acting as intermediaries in order to confirm that they were reliable recipients of U.S. defense equipment in some cases, but the risk that U.S. equipment could be lost or diverted is not limited to intermediaries. Separately, our report cited specific examples of Blue Lantern checks to highlight State’s inconsistent use of site visits. For example, embassy officials did not conduct site visits to verify receipt and confirm compliance with license conditions in the UAE, even though they were requested to do so in their tasking from State, whereas they did in Saudi Arabia and Qatar. In its comments, State also noted that it accepts host government official assurances that equipment was received and inventory control and accounting systems were working in certain appropriate instances. However, without conducting a site visit, State was not able to verify that items were being used in accordance with the terms of their license, a key objective of the Blue Lantern program. Therefore, we continue to believe that our recommendation on the need for policies and procedures on using site visits remains valid.

State also disagreed with our recommendation to provide guidance to its Compliance Specialists on when to request embassy personnel to conduct postshipment checks and when to close checks. We note that our recommendation is not prescriptive and is designed to allow State flexibility on when to request and close checks, but without losing the opportunity to close them successfully. State commented that the Blue Lantern checks cited in our report gave a misleading impression and led to incorrect conclusions. Our report cited two instances when State could not confirm receipt of NVDs or physically verify compliance with security and accountability conditions for the recipients of these items because it waited several years before requesting a check. In the first instance, embassy officials in Qatar could not verify the location of a shipment of NVDs, in part, because State waited three years after shipment to request a check. State’s comments on this draft did not explain why State waited three years to request this check. In the second instance, State intentionally waited until after the second and last of two NVD shipments to Saudi Arabia to request a check, at which point the items had been issued to different units located throughout the country and were not available for inventory. However, State offered no explanation for why it waited 18 months after final export to request the check. As we noted in the report, State lacks internal guidance that would help inform its decision of when to conduct a postshipment check.

We continue to believe that State Compliance Specialists could benefit from guidance on when to close Blue Lantern cases and, therefore, we have not modified our recommendation. In our report, we also cite 2 examples of postshipment checks among the 13 we reviewed in which State closed Blue Lantern cases as favorable before receiving confirmation from embassy officials that the end-user had received the items. In its written comments, State noted that in both of these cases embassy officials confirmed the bona fides of the transactions. We have added language to the report to reflect State’s comments. While this statement is accurate, it misses our point. In both instances, State also explicitly requested that embassy officials verify receipt of the items by the end-user. Although embassy officials reported back to State that they were not able to verify receipt by the end-user, State closed both cases as favorable instead of leaving these cases open until embassy officials could confirm receipt.

State agreed with our recommendation to implement individual- and unit- level human rights vetting for recipients of U.S.-funded equipment and noted that it is already working on plans to improve human rights vetting procedures with the aim of more effectively screening recipients of equipment. According to State, this new approach will permit equipment vetting to be conducted through INVEST much closer to the time of delivery and should significantly improve effectiveness over the current process, which relies on the information available when funding for equipment is allocated, sometimes years before delivery.

We are sending copies of this report to relevant congressional committees, the Secretaries of Defense and State, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have questions about this report, please contact me at (202) 512-4347 or at yagerl@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IV.

Appendix I: Scope and Methodology

To assess the extent to which the Department of Defense (DOD) and the Department of State (State) safeguard U.S. military technologies sold or exported to Persian Gulf countries through their end-use monitoring programs, we reviewed relevant laws and regulations, interviewed U.S. and host country officials, and analyzed end-use monitoring and licensing data. For DOD’s Golden Sentry end-use monitoring program, we reviewed relevant program guidance in the Security Assistance Management Manual and standard operating procedures used by the Security Cooperation Organizations in the Gulf countries. We also reviewed reports summarizing the findings from DOD’s Compliance Assessment Visits in the Gulf countries. We interviewed and obtained documentation from U.S. officials in the Defense Security Cooperation Agency, Defense Technology Security Administration, and U.S. Central Command (CENTCOM). We also interviewed officials representing military departments that implement Foreign Military Sales (FMS), including the Navy International Programs Office, the Office of the Deputy Assistant Secretary of the Army for Defense Exports and Cooperation, and the Office of the Deputy Under Secretary of the Air Force for International Affairs. We traveled to Riyadh, Saudi Arabia, and Abu Dhabi, United Arab Emirates (UAE), and interviewed U.S. officials in the respective Security Cooperation Organizations responsible for conducting end-use monitoring. We observed U.S. officials conducting end- use monitoring for night vision devices (NVD) and Advanced Medium Range Air-to-Air Missiles in Saudi Arabia and the UAE, respectively. We also interviewed host country officials in these two countries to discuss their end-use monitoring procedures. We conducted phone interviews with U.S. embassy officials responsible for Golden Sentry end-use monitoring in the other four Gulf countries.

To determine the total number of defense articles requiring enhanced end- use monitoring in the Gulf countries and their inventory status, we obtained and analyzed data from DOD’s end-use monitoring database—the Security Cooperation Information Portal (SCIP). Specifically, the Defense Security Cooperation Agency queried the SCIP to provide us with “Ad Hoc” reports for each of the Gulf countries, which included information on the defense articles purchased by each country; the date that these items were last inventoried; and their “disposition status,” that is, the status of their inventories. We cross referenced these data by comparing the total count for each defense article in the “Ad Hoc” report to the “SCIP Quantity” in each country’s Enhanced End-Use Monitoring Reconciliation Report, which includes all the sensitive defense articles that have been purchased by the Gulf countries and entered into the SCIP database, and were able to confirm most quantities. As a result, we determined the SCIP data to be sufficiently reliable for the purposes of this engagement. To determine the total number of sensitive defense articles in the Gulf countries that require enhanced end-use monitoring and the inventory status of these defense articles, we collapsed the 12 “disposition status” categories into 4 new categories—”observed or inventoried;” “not observed or inventoried;” “disposed, demilitarized, or expended in training;” and “inventory loss.” We excluded defense articles that had been purchased by the Gulf countries but had not yet been delivered to these countries. Finally, we calculated the number of defense articles that fell into each of these four categories.

For State’s Blue Lantern program, we reviewed relevant program guidance, including State’s Blue Lantern Guidebook, and cables associated with selected checks. We interviewed officials in State’s Directorate of Defense Trade Controls who administer the Blue Lantern program and review export licenses. We also interviewed U.S. embassy officials in the Gulf countries that conduct Blue Lantern checks. We traveled to Saudi Arabia and the UAE to interview Blue Lantern points of contact and conducted phone interviews with embassy officials in the other four Gulf countries. In Saudi Arabia, we observed a Blue Lantern postshipment check for NVDs. We also interviewed host country officials in Saudi Arabia and the UAE to discuss their end-use monitoring procedures. We obtained information from State on “unfavorable” Blue Lantern checks in the Gulf countries that were referred to enforcement and we reviewed State’s Compliance Office Reports detailing enforcement actions taken as a result of Blue Lantern checks. Finally, we received a briefing from State officials on potential violations of the Arms Export Control Act of 1976 involving the Gulf countries, which have been communicated to Congress through section 3 reports.

To summarize the number and type of Blue Lantern checks conducted in the Gulf countries, we obtained and analyzed data from State on checks conducted in the Gulf countries from fiscal years 2005 through 2010. These data included 23 checks classified as “no action,” in which U.S. embassies were not tasked by State to conduct a check, and 8 checks classified as “no response,” in which State either did not receive a response from post or State deemed the response unsatisfactory. We excluded these 31 checks from our analysis. To determine the reliability of these data, we cross-referenced license numbers between State’s Blue Lantern and licensing databases, and we used State cables to corroborate various fields in the Blue Lantern database. We determined that these data were sufficiently reliable for our purposes. To more closely examine how State carries out Blue Lantern checks, we drew a nongeneralizable sample of 34 Blue Lantern checks—including 25 selected randomly and 9 selected judgmentally—and requested State cables for these checks. First, we selected a random sample of 25 checks out of 77 that State initiated involving the Gulf countries during fiscal years 2009 and 2010. We limited our sample to checks during these years to increase the likelihood that the embassy officials who conducted these checks would still be in their current positions, thereby enabling further discussion about the specific details of the checks. We stratified our sample by the results of the checks. Specifically, we sampled 100 percent of the “unverifiable” cases, 50 percent of the “unfavorable” cases, 25 percent of the “favorable” cases, and 25 percent of the “no action” cases. Our random sample included both prelicense and postshipment checks and included at least one case from each country. We also judgmentally selected an additional six cases for our sample that involved checks on NVDs that were conducted during fiscal years 2005 through 2010. We included checks on NVDs in our sample because they are a sensitive military technology and are the only item sold through both FMS and DCS to the Gulf countries that are on DOD’s list of items requiring enhanced end-use monitoring. In addition, we judgmentally selected three cases from fiscal years 2005 through 2010 that were designated by State as priority level 2, or higher priority, Blue Lantern checks. Priority level 2 checks are based on more substantial indications that a violation of the International Traffic in Arms Regulations may have occurred or will be attempted. We requested both the cables from State to the embassy and the embassy’s response cable to State for each of our sample cases. State was unable to provide us with the cables for 11 of the 34 cases because officials decided not to send a cable requesting the embassy to conduct a Blue Lantern check in those cases. Our final sample included 23 cases—6 prelicense checks and 17 postshipment checks. Of those 17 postshipment checks, 4 involved checks on brokers, and were not associated with verifying the delivery of specific items on a license. The remaining 13 postshipment checks consisted of 8 we selected randomly and 5 we selected judgmentally. We then analyzed and recorded information about each case, including the subject of the check, the commodity checked, the time it took post to conduct the check, license conditions, whether or not site visits were requested and conducted, inventories requested and conducted, and any follow-up that post indicated was necessary.

To assess the extent to which DOD and State provide similar or differing levels of protection for the same military technologies sold or exported to the Gulf countries, we interviewed DOD and State officials in Washington, D.C., and the Gulf countries, as well as host country officials in Saudi Arabia and the UAE. This included the Defense Security Cooperation Agency and State’s Directorate of Defense Trade Controls, who oversee end-use monitoring for NVDs purchased by the Gulf countries through FMS and DCS, respectively, and the Defense Technology Security Administration, which is responsible for setting policy and reviewing requests for the sale or export of NVDs. We received a briefing on, and practiced using various types of image intensification and thermal NVDs at the Army’s Night Vision and Electronic Sensors Directorate in Fort Belvoir, Virginia. Additionally, we observed DOD and State officials conduct a serial number inventory of NVDs in Saudi Arabia as part of a Blue Lantern postshipment check. We reviewed DOD and State end-use monitoring program guidance, DOD polices regarding the transfer and end-use monitoring for NVDs, and NVD security and accountability requirements included in DCS license provisos and FMS Letters of Offer and Acceptance. We obtained and analyzed DOD end-use monitoring data on the number of NVD systems subject to enhanced end-use monitoring in the Gulf countries, and we reviewed Blue Lantern data and cables associated with checks conducted on NVDs in these countries.

In order to identify export licenses for NVDs and determine the extent to which State has conducted Blue Lantern postshipment checks on shipments associated with these licenses, we requested State’s defense exports licensing data for the Gulf countries from fiscal year 2005 through May 2011. We checked the licensing data for duplicate records and cross-referenced selected licenses for NVDs with information from the Blue Lantern database and determined that these data were sufficiently reliable for the purpose of identifying licenses for NVD exports to the Gulf countries. To determine the universe of licenses for exports to the Gulf countries that included NVD technology, we first conducted a key word search on terms associated with NVD technology—including “image intensifiers,” “thermals,” “night vision,” “infrared,” and “Forward Looking Infrared (FLIR)” systems—in pertinent database fields. To ensure that we captured all relevant licenses for NVD technology, we also manually reviewed all licenses for exports to the Gulf countries that included U.S. Munitions List Category XII(c) items—the category that includes NVD technology. Next, we pared down our master list in several ways. First, we limited our list to licenses that were approved from fiscal years 2005 through 2010 to maintain consistency with the Blue Lantern data we received. Second, we limited the licenses to those with security and accountability provisos for permanent export to the Gulf countries by checking the relevant fields in State’s licensing data and then vetting the list of licenses we developed with the Defense Technology Security Administration to ensure that they all had security and accountability provisos. Third, with the exception of image intensifier tubes, we excluded licenses that were exclusively spare parts for NVD systems, rather than full NVD systems. Finally, to make an appropriate comparison with NVDs sold through FMS that are subject to enhanced end-use monitoring, we further limited the DCS licenses to those that may be used as man- portable systems. We identified 45 licenses for nonthermal NVDs and 6 licenses for thermal imaging systems that met all of our criteria. We shared our list of NVD licenses with the Army’s Night Vision and Electronic Sensors Directorate to confirm that the licenses were all NVDs and distinguish those that were man-portable from those that were platform-mounted. We also provided our list to State in order to verify whether shipments had been made on these licenses as of September 9, 2011. State verified that complete shipments had been made on 34 of the 45 licenses for man-portable NVDs authorized for export to the Gulf countries.

To assess the extent to which DOD and State vet recipients of military training and equipment for human rights concerns, we reviewed relevant laws, including the “Leahy Law” in the Foreign Assistance Act and DOD’s 2011 appropriations bill, the most recent version of DOD’s “Leahy” provision. We also reviewed DOD’s and State’s vetting policies and procedures, including State’s Guide to the Vetting Process; State’s International Vetting and Security Tracking (INVEST) User Guide; and standard operating procedures used by the U.S. embassies in Kuwait, Saudi Arabia, and the UAE to conduct vetting. We interviewed officials in State’s Bureaus of Democracy, Human Rights, and Labor, and Near Eastern Affairs that oversee and conduct vetting, respectively, in Washington, D.C., and U.S. embassy officials that conduct human rights vetting in the Gulf countries. To determine the amounts of U.S.-funded training and equipment provided to the Gulf countries that are subject to human rights vetting, we reviewed State’s annual Congressional Budget Justification documents, DOD’s and State’s jointly-developed Foreign Military Training reports, and DOD data on the value of Excess Defense Articles authorized for Bahrain. To determine the number of individuals and units in the Gulf countries that have been vetted through INVEST, we obtained data from State’s INVEST database. These data included information on the type of training provided, the agency sponsoring the training, the funding source, the event date, and the status of vetting, among other things. We cross referenced these data with documentation of vetting we obtained from U.S. embassies in Saudi Arabia and the UAE and determined that these data were sufficiently reliable to describe the number of individuals and units in the Gulf countries for which State had completed human rights vetting. To determine State’s process for vetting recipients of U.S.-funded equipment in the Gulf countries for human rights concerns, we interviewed officials from State’s Bureau of Democracy, Human Rights, and Labor, and received written responses to questions from State’s Bureau of Political-Military Affairs.

We conducted this performance audit from October 2010 to November 2011 in accordance with generally accepted government auditing standards. These standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Comments from the Department of Defense

Appendix III: Comments from the Department of State

GAO Comments

1. We did not recommend that State conduct a 100 percent check on all NVD exports; rather, we recommended that State and DOD take steps to harmonize their approaches to end-use monitoring for NVDs to ensure that these sensitive items receive equal levels of protection regardless of how they are obtained. Nonetheless, in DOD’s comments on this draft it offered to provide any assistance needed to State to ensure that sensitive items are appropriately monitored by both agencies. 2. State asserted that our report does not consider that the number and type of NVDs sold through FMS may vary from those exported through DCS. However, we accounted for this possible difference by limiting our analysis to a comparison of State’s and DOD’s end-use monitoring for man-portable NVDs—the primary focus of DOD’s end-use monitoring for NVDs. Specifically, DOD conducts enhanced end-use monitoring (i.e., delivery verification by serial number and regular follow-up serial number inventories) for man-portable NVDs, whereas it conducts routine end-use monitoring (i.e., observations in conjunction with other duties) for platform-mounted NVDs, such as the larger infrared devices cited by State. Accordingly, we did not recommend that State or DOD conduct a 100 percent check on every NVD sale or export, but rather that they harmonize their approaches to end-use monitoring for NVDs to ensure equal protection for these sensitive items regardless of the method of transfer. 3. State asserted that our conclusion on State’s inconsistent use of site visits is based on isolated Blue Lantern cases that give a misleading impression. However, we drew our conclusion based on an analysis of a sample of 13 postshipment checks that State requested in the Gulf countries from fiscal years 2005 through 2010. We determined that U.S. embassy officials conducted site visits to end-users for only 3 of these 13 checks. Separate from this analysis, we cited examples in our report of instances in which State did and did not conduct site visits to end-users to verify receipt and confirm compliance with license conditions for sensitive defense articles. For example, we noted two instances in which embassy officials in Saudi Arabia and Qatar conducted site visits to end-users to verify receipt and confirm compliance with license conditions. In contrast, we cited another example to illustrate an instance when embassy officials in the UAE did not conduct a site visit, as requested by State. 4. State’s assertion that it did not request a site visit in this instance differs from our documentary evidence. For this postshipment check, State requested that embassy officials verify the serial numbers for a shipment of NVDs and confirm that all of the devices were secure, functional, and being used only for the purpose stated on the license. Moreover, State explicitly asked in its tasking cable that embassy officials conduct a site visit to gather and verify this information. However, as State notes in its comments, embassy officials did not conduct a site visit in this instance. Instead, the embassy received a fax from the UAE Armed Forces 14 months after the check was requested stating that all the items had been fully received. The fax did not comment on whether the NVDs were being used in accordance with the authorized end-use and license provisos. 5. We cited this Blue Lantern check as an example of an instance in which delays in requesting and conducting a check prevented State from conducting a serial number inventory of a shipment of NVDs or verifying that these items were being stored in secure facilities. State said that it did not request a site visit because it was sufficiently satisfied with assurances from the Saudi authorities that the items had been received and were being used according to the provisions of the export license. However, during our fieldwork in Saudi Arabia, we accompanied an embassy official on the Blue Lantern check in which he attempted to conduct a serial number inventory of the 766 NVDs shipped on this license. However, the Saudi authorities informed the embassy official that the devices had been issued to units located throughout the country. As a result, he was unable to independently verify that the NVDs had been received and were being used in accordance with the provisions of their license. State further asserts that it intentionally waited until final export before initiating the postshipment check for these NVDs in order to make optimal use of resources by conducting a single check to cover all of the items exported. However, rather than initiate the check immediately following final export, State waited an additional 18 months to conduct the check (more than three years after the first of two shipments of NVDs). State’s comments on this draft did not explain why State waited 18 months after final export to conduct the check. 6. While State’s written comments noted that, in both of these cases, embassy officials confirmed the bona fides of the transactions, this misses our point. We cited these two cases as examples of Blue Lantern checks that were closed as favorable before receiving confirmation that the end-user had received the items. In both of the cases cited in our report, State explicitly requested in its tasking cables that embassy officials verify receipt of the items by the end- user. Although embassy officials reported back to State that they were not able to verify receipt by the end-user, State closed both cases as favorable instead of leaving these cases open until embassy officials could confirm receipt. 7. We agree that officials from Embassy Abu Dhabi visited the intermediary and confirmed the bona fides of this transaction. However, State explicitly requested in its tasking cable that U.S. officials verify receipt of the thermal imaging camera by the UAE Armed Forces. In this instance, embassy officials were unable to confirm receipt by the UAE Armed Forces because the camera was still being held by the consignee. Rather than leave the Blue Lantern case open until embassy officials could verify receipt, State closed the case as favorable and did not request that Embassy Abu Dhabi conduct any additional follow-up. 8. We agree that officials from Embassy Muscat visited the intermediary and confirmed the bona fides of the transaction. However, State asked in its tasking cable that Embassy Muscat verify that the Royal Court received the firearms. When Embassy Muscat notified State that the firearms had not yet been received by the Royal Court, State closed the case as favorable. It was not until later that State received written confirmation from the Omani intermediary that it had received the firearms and delivered them to the Royal Court. 9. We agree and did not intend to imply that INVEST was implemented only in the Persian Gulf countries. We revised the report to clarify that INVEST was implemented worldwide in 2010 and 2011 to facilitate human rights vetting. 10. We list the six Persian Gulf countries that are included in the scope of this study in the Highlights page and on the first page of the report. We do not believe any additional clarification is necessary. 11. While Bahrain is the only Gulf country included in the scope of this study to have experienced ongoing public demonstrations, Oman and Saudi Arabia have also experienced some degree of political unrest in 2011. We have modified the language in the report to clarify this distinction. 12. We agree and have revised the report to refer more broadly to Bahrain’s security forces, rather than Bahrain’s military.

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

Key contributors to this report were Joseph A. Christoff, Director (ret.); Jeff Phillips, Assistant Director; Drew Lindsey, Analyst-in-Charge; Juan Avila; Rachel Dunsmoor; and Adam Vogt. Martin de Alteriis, Justin Fisher, and Mitchell Karpman provided assistance with design and methodology, statistics, and data analysis, respectively. Ashley Alley provided legal support, Etana Finkler and Jena Sinkfield provided graphics support, and Sarah McGrath provided assistance in editing and report preparation.