Exports Include a Potential for Security Problems

Reporting on exported articles and services needs to be improved. In order to obtain a more complete picture of defense exports, Congress may wish to consider whether it needs specific data on exported defense services similar to what it currently receives on defense articles, according to a new Government Accountability Office (GAO) report. Congress might also want to request that the State Department (State) provide such data as appropriate, the GAO added in the study. Issued September 21, the report, Defense Exports: Reporting on Exported Articles and Services Needs to Be Improved, found that the U.S. government exports billions of dollars of defense articles and services annually to foreign entities, generally through direct commercial sales (DCS) from U.S. companies under licenses issued by State or through the Department of Defense (DOD) Foreign Military Sales (FMS) program. Congress does not have a complete picture of defense exports under current reporting — including which method of export is used more often by individual countries or for certain types of items. State — which has overall responsibility for regulating defense exports — and DOD, report to Congress in response to various requirements, the study found. However, their annual reports on DCS and FMS exports have several information gaps and inconsistencies — in part, because of the differing purposes of the agencies’ data systems and different reporting methodologies.