Stealth-related commodities and technology are sensitive for many reasons. When incorporated into advanced weapon systems, stealth technology greatly improves the effectiveness of forces. The United States is the world leader in stealth technology, and this lead has given U.S. forces a clear battlefield advantage as was demonstrated in Operation Desert Storm. Stealth-related commodities are sensitive from an export control perspective because some of the materials and processes involved have civil applications that make it difficult to control the commodities’ dissemination and retain U.S. leadership in stealth technology. Stealth designs incorporate materials, shapes, and structures in a functional system that can meet mission requirements. Stealth techniques fall into two general groups. First, a material may deflect an incoming radar signal into neutral space thereby preventing the source radar from picking up the radar reflection and “seeing” the object. Second, a material may simply absorb an incoming radar signal, not allowing the signal to reflect back to its source. In addition to materials, measurement gear used to test radar-absorbing properties and technologies and software related to manufacturing and application techniques are also considered sensitive from an export control perspective. DOD’s policy on the commercial export of stealth technology recognizes its military significance and sensitivity while acknowledging that some items with stealth properties have been developed for commercial purposes, are widely available, and are not militarily significant. DOD’s policy states that commercial marketing of unclassified, non-DOD funded stealth technology may be permitted on a case-by-case basis after review by appropriate offices and agencies and approval of the required export license. The U.S. export control system is divided into two regimes, one for munitions items under the Arms Export Control Act (AECA) and one for dual-use items (items with both civil and military uses) under the Export Administration Act (EAA). The Department of State controls munitions items through its Office of Defense Trade Controls and establishes the USML, with input from DOD. The Department of Commerce, through its Bureau of Export Administration, controls dual-use commodities (e.g., machine tools) and establishes the CCL. In general, export controls under the EAA are less restrictive than the controls under the AECA. Exporters must determine whether the item they wish to export is on the CCL or the USML and then apply to the appropriate agency for an export license. When there is confusion over which agency controls a commodity, an exporter may ask State to make a commodity jurisdiction determination. State, in consultation with the exporter, DOD, Commerce, and other agencies, reviews the characteristics of the commodity and determines whether the item is controlled under the USML or the CCL. Since 1992, the majority of all commodity jurisdiction determinations ruled that the commodity belonged on the CCL and not the USML. On the USML, stealth-related commodities are primarily controlled in two general categories. Stealth-related items are controlled under several other categories when the technology is incorporated as part of a system or end item. For example, fighter aircraft that incorporate stealth features are controlled under the category for aircraft. In general, the USML relies on functional descriptions of the items being controlled. Table 1 shows that the USML controls stealth-related exports as parts of several control categories. The CCL, as shown in table 2, controls stealth-related exports under seven export commodity control numbers. In general, the CCL uses more detailed language (often with technical performance criteria) than the USML to describe what is controlled. Because some export control classification numbers cover a broad array of items, some of the exports classified under these numbers are not related to stealth. State and DOD officials acknowledge that the descriptions in the CCL and the USML covering stealth-related items and technology do not clearly define which stealth-related exports are controlled by which agency. State and DOD officials also agree that the lines of jurisdiction should be clarified. DOD officials noted that they are only concerned about militarily significant items or items in the grey area that are potentially militarily significant. A Commerce official noted that overlapping jurisdiction is confusing for exporters and said commodities that fall in the grey area between Commerce and State should be placed on the USML. The Commerce official said that putting grey area cases on the USML would help exporters avoid the (1) confusion of determining where to go for a license and (2) possibility of having their exports seized by a Customs agent who believes the items belong on the USML. The Commerce official cautioned, however, that in moving items to the USML, consideration should be given to whether comparable items are readily available from other countries. State noted in its comments to this report that, under the AECA, foreign availability is not a factor in determining whether an item warrants the national security and foreign policy controls of the USML. Commerce noted in its comments that it does not agree that there is overlapping or unclear jurisdiction over stealth-related commodities and technology between the CCL and the USML. We disagree. As noted in the report, officials from both DOD and State told us that the lines of jurisdiction are unclear and should be clarified. Further, as discussed below, this unclear jurisdiction has led to problems in Commerce’s licensing of sensitive stealth-related commodities. Unclear jurisdiction over stealth-related commodities increases the likelihood that militarily sensitive stealth technology will be exported under the less restrictive Commerce export control system. In 1994, Commerce approved two export applications for a radar-absorbing coating determined later to belong on the USML. Although DOD and State have not verified the exact capabilities and military sensitivity of this product, these export licenses illustrate the problems with unclear jurisdiction and authority over stealth-related exports. Commerce approved two applications in 1994 to export a high-performance, radar-absorbing coating. The details of one of the applications was reported in a major trade publication. As reported, the export application described the high-performance claims for the product and indicated that 200 gallons of the material would be used for a cruise missile project headed by a German company. Commerce also granted a license to export the same commodity to another country for use on a commercial satellite. Commerce approved both of these applications in fewer than 10 days and, in accordance with referral procedures, did not refer these applications to either DOD or State. The article reporting Commerce’s approval of this material for export noted that the radar frequencies this stealth coating seeks to defend against include those employed by the Patriot antimissile system. In response to that report and subsequent concerns raised by DOD, State performed a commodity jurisdiction review to determine whether the stealth coatings actually belonged under the USML. At this time, the coatings had not yet been shipped overseas. On the basis of State’s review that included consultation with both DOD and Commerce, State ruled that the radar-absorbing coating was under the jurisdiction of the USML. After State’s ruling, Commerce suspended the export licenses it had approved and the exporter submitted new export applications to State. After State and DOD were unable to obtain adequate information on the exact performance characteristics of the product from the exporter, State decided not to approve the export applications. Commerce’s export control authority under the EAA is more limited than State’s authority under the AECA. In fact, a high-ranking Commerce official said Commerce probably could not have denied the two applications to export the radar-absorbing coatings. The EAA regulates dual-use exports under national security controls and foreign policy controls. As shown in table 3, the seven stealth-related commodities on the CCL are controlled for national security and missile technology reasons (considered a foreign policy control). National security controls are designed to prevent exports from reaching the former East bloc and Communist nations. Exports that are controlled on the CCL for national security reasons and that are going to noncontrolled countries can only be denied by Commerce if there is evidence the exports will be diverted to a controlled country. Foreign policy controls under the EAA are designed to control exports for specific reasons (e.g., missile technology concerns) and if the exports are going to specific countries (e.g., countries considered to be missile proliferators). In essence, these controls are targeted to specific items, end uses, and/or countries. Consequently, items controlled for missile technology reasons (e.g., most stealth-related commodities), as a practical matter, are not restricted if they are destined for other end uses (e.g., ship applications and aircraft) or for a country not considered to be a missile proliferation threat (e.g., any member of the Missile Technology Control Regime). In contrast, under the AECA, commodities on the USML are controlled to all destinations, and authority to regulate exports is not limited by end use or country. The AECA grants State broad authority to deny export applications based on a determination that the license is against national interests. Commerce referral procedures for the seven stealth-related categories do not require most applications to be sent to either DOD or State for review. Commerce referral procedures depend on the reason the export is controlled and the ultimate destination. As shown in table 4, between fiscal years 1991 and 1994, most applications under the seven export control classification numbers related to stealth were not referred to either DOD or State. During this time, only 15 of 166 applications processed by Commerce were sent to either DOD or State for review. Table 4 also shows, because some export control classification numbers cover a broad array of items, some of the export applications classified under these numbers are not related to stealth. Table 5 lists examples of applications that were referred by Commerce, and table 6 lists applications that were not referred. In general, commodities controlled on the CCL for national security reasons are referred to DOD only if they are going to a controlled country. These referral procedures are based, in part, on agreements between Commerce and DOD. National security controls are designed to prevent exports from going to controlled countries.