The Department of State controls munitions items under the authority provided in the Arms Export Control Act. State promulgates the International Traffic in Arms Regulations (ITAR) and establishes, with the concurrence of the Department of Defense, the U.S. Munitions List. State and Defense can include a dual-use item on this list, as provided by the ITAR, if it “is specifically designed, developed, configured, adapted, or modified for a military application, and has significant military or intelligence applicability such that control under [the ITAR] is necessary.” The Department of Commerce controls dual-use items under a system established under the Export Administration Act. Commerce imposes export controls on the items within its jurisdiction through the Export Administration Regulations and establishes the Commerce Control List in consultation with other agencies and in parallel with U.S. commitments in international control regimes. In arriving at a licensing decision, Commerce provides license applications for the review of other agencies, including Defense, State, the Department of Energy, and the Arms Control and Disarmament Agency. A December 1995 executive order states that Commerce may refer all applications for a validated license to these agencies for review. If an agency disagrees with Commerce’s initial licensing decision, it can appeal the decision to interagency review committees. In March 1993, we reported that jurisdiction over commercial jet engine hot section technology and space-related items, such as communications satellites, was a long-standing issue between State and Commerce. In November 1990, the President ordered the removal of dual-use items from the U.S. Munitions List and State’s licensing controls, unless significant national security interests would be jeopardized. Pursuant to this order, State led an interagency review, including officials from Defense, Commerce, and other agencies, to determine which dual-use items should be removed from the munitions list and transferred to Commerce’s jurisdiction and which warranted retention on the munitions list. This review was conducted between December 1990 and April 1992. As part of this review, an interagency working group identified and established performance parameters for the militarily sensitive characteristics of communications satellites. If a satellite met or exceeded these parameters, the satellite would be controlled by State, otherwise it would be licensed by Commerce. As a result of the interagency review, over two dozen dual-use items were removed from the munitions list and placed under Commerce’s jurisdiction, including approximately half of the commercial communications satellites. Jurisdiction for hot section technology, however, was not resolved as a result of the interagency review. The executive branch’s recent decision to change the export licensing jurisdiction for commercial jet engine hot section technology addresses a long-standing disagreement as to whether State or Commerce should control its export. Until this decision, Commerce had claimed jurisdiction over hot section technology of commercial engines not derived from military technology, while State and Defense had maintained that hot section technology for commercial engines that is derived from military engines is the same technology used in military fighter engines and is of such sensitivity that ITAR control was appropriate. Now, all hot section technology for commercial engines, including certain civil and military engines that share the same hot section technology and are evolving together, will be controlled by Commerce. All commercial communications satellites, including those with militarily sensitive characteristics, will be licensed by Commerce. A jet engine is composed of three sections: the cold section, or the fan and compressor, which is where the air enters the engine; the hot section, comprised of the combustor and portions of the turbine, which are the components exposed to combustion gases; and the warm section, or exhaust nozzle, which is where the exhaust gases leave the engine. The turbine is one of the more critical components of jet engines because it extracts energy from combustion gases and converts it into the engine’s mechanical force. Hot section gas turbine technology that is used to manufacture military engines incorporate advanced design concepts, materials, and manufacturing processes that help keep the turbine cool while the engine operates at extremely hot temperatures. The key to achieving greater engine performance is to increase the temperature of operation within the engine’s hot section. Increased engine effectiveness enhances the performance of the aircraft and leads to improved survivability, lethality, reliability, and sustainability. According to Defense officials, the U.S. military has air superiority over other countries in large part because of the advanced technology used to build hot sections for military engines. U.S. fighter aircraft have the ability to outlast and outperform other foreign-built aircraft, which translates into a significant combat advantage over possible adversaries. Hot section technology required for military aircraft also has applications for engines used on commercial aircraft. Commercial engines require different performance parameters than military engines, but higher operating temperatures provide greater fuel efficiency. According to officials at Commerce, Defense, and State and industry representatives, the core elements of hot section technology are similar for both military and commercial jet engines. Although all agree that it is almost impossible to distinguish between military and commercial hot section technology, they differ in opinion on the applicability of commercial hot section technology to military uses. Defense and State officials informed us that exporting commercial hot section technology gives a foreign manufacturer information allowing it to build either a commercial or military engine if it is willing to make certain trade-offs in manufacturing, such as sacrificing durability to achieve higher performance and temperatures. Commerce officials maintain that if a foreign manufacturer decides to adapt commercial hot section technology to military use, it can make a military engine, but it will not have sufficient experience to allow it to make an engine equal to or exceeding U.S. military capabilities. Engine manufacturers agree that selected hot section technology for commercial engines should be protected for both competitive interest and national security, but they believe that certain technical data transfers to foreign partners facilitate cooperative engine development, production sharing, operational maintenance, and repair. Because of the military importance of hot section technology and the similarity between commercial and military technology, Defense officials are concerned about the diffusion of technology and availability of hot section components that could negatively affect the combat advantage of U.S. aircraft and pose a threat to U.S. national security concerns. To protect national security interests, Defense officials review applications referred by State to determine whether the export would undermine the U.S. lead in hot section technology and, consequently, U.S. air superiority.Defense and State have not approved the export of the most advanced hot section technology for either military or commercial use, although certain exports have been allowed under government-to-government agreements with U.S. allies that restrict transfer beyond the government. In addition to protecting the export of state-of-the-art hot section technology, Defense also makes recommendations on the advisability of exporting selected individual parts that make up the hot section (i.e., the blades, discs, and combustor lines). These parts are exposed to combustion gases and, in state-of-the-art engines, they must have the ability to sustain very high temperatures. According to Defense officials, allowing the export of the most advanced components would allow foreign manufacturers to assemble hot sections that match the capabilities of U.S. engines used in fighter aircraft. State defers to Defense’s recommendations on license applications for these parts. Licensing of these components is not affected by the change in jurisdiction and remains with State. Commercial communications satellites are intended to facilitate civil communication functions through various media, such as voice, data, and video. Commercial satellites often carry Defense data as well. In contrast, military communications satellites are used exclusively to transfer information related to national security and have characteristics that allow the satellites to be used for such purposes as providing real-time battlefield data and relaying intelligence data for specific military needs. Satellites used for either commercial or military communications may contain one or more of nine militarily sensitive characteristics. A description of the characteristics is provided in table 1. Satellites with characteristics exceeding certain parameters are considered militarily sensitive. Jurisdiction over commercial communications satellites that did not have any of these militarily sensitive characteristics changed to Commerce in October 1992 as a result of the interagency review begun in 1990. Those with any of the nine components remained under State’s jurisdiction, as did the individual components themselves and all sensitive technology to design, develop, or manufacture a satellite. The regulations move commercial satellites with one or more of the nine characteristics to Commerce, while the export of individual systems and components not incorporated in a satellite remain under State’s jurisdiction, as does the technology to design, develop, and manufacture the satellite. Certain kick motors that are not embedded in satellites, however, will be subject to Commerce’s jurisdiction when they are to be used for specific satellite launches, provided that a kick motor is neither specifically designed or modified for military use nor capable of being restarted after the satellite is in orbit. In reviewing export license applications, Defense and State officials examine the potential for the export of satellite technologies. The process of planning a satellite launch takes place over several months, and there is concern that technical discussions between U.S. and foreign representatives may go beyond that needed for the launch and lead to the transfer of information on militarily sensitive components. Officials say they are particularly concerned about the technologies to integrate the satellite to the launch vehicle because this technology can also be applied to launch ballistic missiles to improve their performance and reliability. They also expressed concern about the operational capability that specific characteristics, in particular antijam capability, crosslinks, and baseband processing, could give a potential adversary. State has approved the exports of commercial communications satellites and established detailed security guidelines and conditions to address concerns about the disclosure of technologies associated with the launch vehicle and militarily sensitive characteristics for launches from China and sites in the former Soviet Union. These conditions require that safeguards be applied to prevent the disclosure of technology beyond that needed for integration and launch of the satellite, as provided for in safeguard agreements between the United States and these countries.