Defense Trade: Better Information Needed to Support Decisions
Affecting Proposed Weapons Transfers (11-JUL-03, GAO-03-694).
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.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-694
ACCNO: A07498
TITLE: Defense Trade: Better Information Needed to Support
Decisions Affecting Proposed Weapons Transfers
DATE: 07/11/2003
SUBJECT: Information technology
Technology transfer
Weapons industry
Foreign military arms sales
Foreign military sales policies
Defense capabilities
Combat readiness
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-03-694
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
This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.
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. weapons 1
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. S: 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, NDP 9 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
experts 14 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 Committee 18 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 requires 26 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.
28 DOD 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
program 30 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 High
Performance Computer Controls. GAO- 02- 892. Washington, D. C.: August 2,
2002.
Defense Trade: Lessons to be Learned From the Country Export Exemption.
GAO- 02- 63. Washington, D. C.: March 29, 2002. Export Controls: Issues to
Consider in Authorizing a New Export
Administration Act. GAO- 02- 468T. Washington, D. C.: February 28, 2002.
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 Are
Similar. GAO- 01- 528. Washington, D. C.: June 1, 2001.
Export Controls: Regulatory Change Needed to Comply with Missile
Technology Licensing Requirements. GAO- 01- 530. Washington, D. C.: May
31, 2001.
Defense Trade: Analysis of Support for Recent Initiatives.
GAO/ NSIAD- 00- 191. Washington, D. C.: August 31, 2000. Foreign Military
Sales: Changes Needed to Correct Weaknesses in EndUse Monitoring Program.
GAO/ NSIAD- 00- 208. Washington, D. C.: August 24, 2000. 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)
The General Accounting Office, the audit, evaluation and investigative arm
of Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability of
the federal government for the American people. GAO examines the use of
public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO*s commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO*s Web site (www. gao. gov) contains abstracts
and fulltext files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail
this list to you every afternoon, go to www. gao. gov and select
*Subscribe to daily E- mail alert for newly released products* under the
GAO Reports heading.
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to: U. S. General Accounting Office 441 G Street NW, Room LM
Washington, D. C. 20548 To order by Phone: Voice: (202) 512- 6000
TDD: (202) 512- 2537 Fax: (202) 512- 6061
Contact: Web site: www. gao. gov/ fraudnet/ fraudnet. htm E- mail:
fraudnet@ gao. gov Automated answering system: (800) 424- 5454 or (202)
512- 7470 Jeff Nelligan, Managing Director, NelliganJ@ gao. gov (202) 512-
4800
U. S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.
C. 20548 GAO*s Mission Obtaining Copies of
GAO Reports and Testimony
Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs Public Affairs
*** End of document. ***