    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-519
      TITLE:     Nonproliferation: Further Improvements Needed in U.S.
      Efforts to Counter Threats from Man-Portable Air Defense Systems
      Coverage Follow-up Techniques and When It Will Produce Coverage
      Measurement Results
         DATE:   05/13/2004

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    entitled 'Nonproliferation: Further Improvements Needed in U.S. Efforts
    to Counter Threats from Man-Portable Air Defense Systems' which was
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    Report to Congressional Committees:

    May 2004:

    NONPROLIFERATION:

    Further Improvements Needed in U.S. Efforts to Counter Threats from
    Man-Portable Air Defense Systems:

    [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-519]:

    GAO Highlights:

    Highlights of GAO-04-519, a report to congressional committees

    Why GAO Did This Study:

    The proliferation of man-portable air defense systems (MANPADS) has
    been of growing concern to the United States and other governments. The
    United States is pursuing a wide variety of activities internationally
    and domestically to address this threat. GAO was asked to assess
    efforts by (1) the State Department to control global proliferation of
    MANPADS, (2) the Department of Defense (DOD) to monitor end-use of U.S.
    -exported Stingers, and (3) the Department of Homeland Security (DHS)
    to develop technical countermeasures to minimize the threat of a
    MANPADS attack.

    What GAO Found:

    In 2003, the State Department made important progress in its efforts to
    control the global proliferation of MANPADS. Thirty-two foreign
    governments made multilateral commitments to better control MANPADS and
    prevent their acquisition by terrorists. However, the State
    Department�s ability to assess further progress in MANPADS
    nonproliferation is limited because the multilateral forums have no
    mechanisms to monitor members� implementation of commitments. In
    addition, the State Department obtained foreign government commitments
    to destroy or better secure MANPADS.

    DOD is required annually to inventory every Stinger missile system sold
    overseas. However, DOD�s inventory inspection process has flaws. First,
    DOD records on the number and destination of Stingers sold overseas are
    incomplete, unreliable, and largely in hard-copy form. Because DOD has
    not required DOD agencies responsible for end-use monitoring to retain
    these records, it does not know how many Stingers have been sold
    overseas. Second, DOD officials overseas use inconsistent practices
    when inspecting Stinger inventories because DOD lacks procedures for
    conducting these inspections.

    U.S. Stinger Missile System:

    [See PDF for image]

    [End of figure]

    To develop technical countermeasures to minimize the MANPADS threat to
    aircraft, the DHS initiated a 2-year program to adapt military aircraft
    defense systems to commercial aircraft. However, DHS faces significant
    challenges such as establishing system requirements and setting
    reliable cost estimates. The department adopted GAO�s January 2004
    recommendations to implement a knowledge-based approach to this
    development program. For example, DHS plans to use GAO-recommended
    criteria that ensure product knowledge is attained at key points in
    system development.

    What GAO Recommends:

    The Secretary of State should develop a strategy to work within
    multilateral forums to establish mechanisms for assessing foreign
    governments� implementation of their commitments to reduce MANPADS
    proliferation.

    The Secretary of Defense should (1) establish standardized requirements
    for keeping Stinger missile records; (2) create an electronic database
    to consolidate all DOD records for Stinger missile systems sold
    overseas and track the worldwide Stinger inventory; and (3) direct that
    standardized procedures for conducting Stinger inspections be issued.

    State and DOD concurred with our recommendations. DHS provided only
    technical comments.

    www.gao.gov/cgi-bin/getrpt?GAO-04-519.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact Joseph Christoff at (202)
    512-8979 or christoffj@gao.gov.

    [End of section]

    Contents:

    Letter:

    Results in Brief:

    Background:

    MANPADS Pose a Threat to Commercial Aircraft:

    State Department Has Led Efforts to Control MANPADS but Has Limited
    Ability to Assess Extent of Progress:

    Disposition of U.S. Stinger Missiles Sold Overseas Is Unknown:

    U.S. Is Determining Feasibility of Countermeasures to Protect
    Commercial Aircraft:

    Conclusion:

    Recommendations for Executive Action:

    Agency Comments and Our Evaluation:

    Appendixes:

    Appendix I: Scope and Methodology:

    Appendix II: Comments from the Department of Defense:

    GAO Comments:

    Appendix III: Comments from the Department of Homeland Security:

    Appendix IV: Comments from the Department of State:

    Appendix V: GAO Contact and Staff Acknowledgments:

    GAO Contact:

    Staff Acknowledgments:

    Tables:

    Table 1: Countries That Developed or Produced MANPADS Since the 1950s:

    Table 2: Stinger Missiles Exported by United States to Foreign
    Countries, 1982-2004:

    Figures:

    Figure 1: Components of a Man-Portable Air Defense System:

    Figure 2: U.S. Stinger Missile System:

    Figure 3: MANPADS to be Destroyed in Liberia, 2003:

    Figure 4: Comparison of Knowledge-Based Approach to DHS Program Plan:

    Abbreviations:

    AECA: Arms Export Control Act:

    DHS: Department of Homeland Security:

    DOD: Department of Defense:

    DSCA: Defense Security Cooperation Agency:

    DTRA: Defense Threat Reduction Agency:

    LOA: letter of offer and acceptance:

    MANPADS: man-portable air defense systems:

    OSCE: Organization for Security and Cooperation in Europe:

    SAMM: Security Assistance Management Manual:

    SAO: security assistance organization:

    Letter May 13, 2004:

    The Honorable Duncan Hunter:
    Chairman:
    The Honorable Ike Skelton:
    Ranking Minority Member:
    Committee on Armed Services:
    House of Representatives:

    The Honorable John L. Mica:
    Chairman:
    The Honorable Peter A. DeFazio:
    Ranking Minority Member:
    Subcommittee on Aviation:
    Committee on Transportation and Infrastructure:
    House of Representatives:

    As we reported in May 2003,[Footnote 1] the threat of terrorist attacks
    against U.S. personnel, facilities, and interests overseas was great
    because of the number and types of terrorist organizations, the
    lethality of terrorists' tactics, and the ability of terrorists to
    operate worldwide. Among these threats, the proliferation of man-
    portable air defense systems (MANPADS) has been of growing concern to
    the United States and other governments. MANPADS are shoulder-launched
    surface-to-air missile systems designed for military use by ground
    forces to defend against air attacks. However, terrorists have acquired
    and used these MANPADS to attack and bring down both military and
    commercial aircraft in areas of conflict.

    You asked us to assess (1) the nature and extent of the MANPADS threat,
    (2) the State Department's efforts to control the international
    proliferation of MANPADS, (3) the Department of Defense's (DOD) end-use
    monitoring[Footnote 2] of Stinger missiles, and (4) the Department of
    Homeland Security's (DHS) efforts to develop technical countermeasures
    to minimize the threat of a MANPADS attack. We did not review other
    options for addressing the MANPADS threat, such as law enforcement
    efforts, airport security, or emergency flight training.

    To address our objectives, we obtained documents and met with officials
    at the Departments of Defense, State, and Homeland Security, and the
    intelligence agencies. We interviewed foreign government officials and
    met with representatives of the Secretariats of the Wassenaar
    Arrangement[Footnote 3] and of the Organization for Security and
    Cooperation in Europe[Footnote 4] (OSCE) in Vienna. We toured Stinger
    missile storage facilities in Germany and the United Kingdom, observed
    Stinger missile inventory inspections in Turkey, and interviewed U.S.
    DOD security assistance officials in those countries. We also requested
    meetings with officials of the National Security Council to discuss the
    prioritization of terrorist threats, but they refused to meet with us
    or respond to our questions. We performed our work from April 2003 to
    March 2004 in accordance with generally accepted government auditing
    standards. For additional information on our scope and methodology, see
    appendix I.

    Results in Brief:

    MANPADS pose a threat to commercial aircraft for several reasons.
    First, MANPADS are widely available. Since the 1950s, 20 countries have
    developed or produced at least 30 different types of MANPADS, with
    between 500,000 and 750,000 weapons believed to be in the worldwide
    inventory today. The U.S. government estimates that a few thousand
    MANPADS are outside government controls. It estimates that thousands
    more under government controls may be vulnerable to theft and possible
    transfer to terrorist groups because they are not subject to stringent
    national export standards nor do they have adequate physical security
    or inventory controls. Second, the characteristics of MANPADS--their
    lethality, portability, ease of use and concealment, and relatively low
    cost (from less than $1,000 to $100,000 each)--make them attractive to
    terrorists for acquisition and use against commercial aircraft. Third,
    MANPADS have been successfully used to attack and bring down aircraft.
    The State Department estimated in 2003 that more than 40 aircraft have
    been struck by MANPADS since the 1970s, causing at least 24 crashes and
    more than 600 deaths worldwide. To date, only one attack occurred
    outside a conflict area, and none has occurred within the United
    States.

    In 2003, the U.S. government obtained commitments from foreign
    governments in multilateral forums to better control MANPADS and
    prevent their acquisition by terrorists, but the forums lack mechanisms
    to monitor members' implementation. The State Department led the U.S.
    efforts that obtained commitments in 2003 from the member countries of
    the Group of Eight,[Footnote 5] the Asian Pacific Economic Cooperation
    summit, and the Wassenaar Arrangement to strengthen their export
    controls and security of MANPADS. However, multilateral forum members'
    compliance with their commitments is voluntary, and the forums lack
    mechanisms to verify that members implement their political commitments
    or to analyze participants' reported data on arms transfers. The State
    Department has worked with foreign governments to destroy more than
    8,155 excess MANPADS and improve the security of MANPADS stockpiles.
    The State Department has procedures in place to confirm destruction of
    MANPADS through its bilateral programs.

    The disposition of Stinger missiles sold overseas is unknown because
    DOD's Stinger inventory inspection process is flawed. To prevent the
    proliferation of U.S. Stinger missile systems, U.S. law,[Footnote 6]
    sales agreements, and departmental directives have required DOD to
    conduct annual inventory inspections of 100 percent of Stinger missiles
    sold to foreign governments for all but 5 years since it began selling
    the missile systems in 1982. However, DOD has no requirements for DOD
    organizations responsible for end-use monitoring to keep records on the
    number and destinations of these Stingers. As a result, its records are
    neither complete nor reliable. In addition, DOD's Stinger records are
    largely in hard-copy form, and no single office has complete copies of
    these records. We also found discrepancies at DOD offices that maintain
    such records. For example, DOD officials in one country[Footnote 7]
    identified approximately 30 percent more Stinger missiles from their
    2003 inventory inspection than the number on record with the
    responsible DOD office in the United States. Also, DOD officials
    overseas use inconsistent practices to perform Stinger inspections
    because DOD lacks procedures for conducting the inspections. For
    example, DOD officials count Stingers differently. DOD officials in one
    country we visited reported opening the Stinger container cases to
    count the missiles. DOD officials in another country we visited
    reported counting only the Stinger container cases. DOD officials
    planned to issue procedures for conducting inspections to all overseas
    officials with inspection responsibility in December 2003 but, as of
    April 2004, no such guidance had been released.

    During 2003, DHS initiated a 2-year system development and
    demonstration program for a counter-MANPADS system.[Footnote 8] We
    reviewed their efforts and have previously reported[Footnote 9] that
    DHS faces significant challenges in adapting a military counter-MANPADS
    system to commercial aircraft, such as establishing system
    requirements, developing technology and design to sufficient maturity,
    and setting reliable cost estimates. Our work on the best practices of
    product developers in government and industry has found that such
    challenges can be successfully overcome by using a knowledge-based
    approach. We recommended that the Secretary of Homeland Security
    implement a knowledge-based approach in its counter-MANPADS development
    program; the Secretary concurred, and DHS plans to use GAO-recommended
    exit criteria that ensures product knowledge is attained at key points
    in system development.

    We are recommending that the Secretary of State develop a strategy to
    work within the multilateral forums to establish mechanisms to monitor
    and report on (1) countries' implementation of their commitments to
    reduce MANPADS proliferation and (2) the impact such implementation of
    commitments has on the flow of MANPADS to illicit arms markets.
    Establishing such mechanisms would enable the forums to assess the
    impact of these efforts toward reducing MANPADS proliferation.

    In addition, we are recommending that the Secretary of Defense (1)
    establish standardized recordkeeping requirements for maintaining
    Stinger records, (2) establish a centralized electronic database to
    consolidate DOD's Stinger records and to track the worldwide Stinger
    inventory, and (3) issue standardized procedures for conducting Stinger
    inspections.

    State and DOD concurred with the recommendations in this report, while
    DHS did not comment on them. State and DHS provided technical comments
    that we incorporated as appropriate.

    DOD stated that it would amend its security assistance manual to
    specifically identify recordkeeping standards for end-use monitoring.
    It further said that it is developing a database that would consolidate
    the information noted in our recommendation by October 2004. DOD also
    stated that it is developing checklists and procedures that would
    provide guidance to overseas officials conducting Stinger inventory
    inspections.

    Background:

    MANPADS are portable short-range surface-to-air missile systems
    designed for use by one or two soldiers to attack fixed-wing aircraft
    and helicopters during wartime. Basic components include the launch
    tube and missile, gripstock (launcher or firing mechanism), and thermal
    battery. See figure 1 for an illustration of MANPADS components.

    Figure 1: Components of a Man-Portable Air Defense System:

    [See PDF for image]

    [End of figure]

    Due to growing concern in the late 1990s over the worldwide
    proliferation of MANPADS to non-state actors, the United States led an
    effort to promote improved export control policies for MANPADS,
    primarily in the Wassenaar Arrangement. In December 2000, the 33
    Wassenaar Arrangement participating states[Footnote 10] adopted U.S.-
    proposed guidelines for establishing a set of MANPADS export
    controls.[Footnote 11] While multilateral export control regimes are a
    key policy instrument in the overall U.S. strategy to combat the
    proliferation of weapons of mass destruction and conventional weapons,
    they have limitations. The multilateral export control regimes are
    voluntary, nonbinding arrangements among like-minded supplier
    countries. While countries make no legally binding commitments in
    joining them, participating countries undertake a political commitment
    to abide by the goals and principles of the regime. The regimes operate
    on the basis of consensus of all members and decisions on how to
    implement and interpret regime decisions are left to the national
    discretion of each member. None of the regimes identify specific
    countries as targets. Collectively the regimes strive to stop, slow, or
    increase the cost and risk of detection efforts by countries' of
    concern to acquire sensitive technologies and capabilities, including
    MANPADS.

    The United States began selling its current MANPADS, the Stinger
    missile system, to U.S. allies and U.S.-approved nations in 1982.
    Because the Stinger missile system is among the most advanced of all
    MANPADS, the United States has placed enhanced controls and
    requirements on its sale and use. (See fig. 2 for a picture of the U.S.
    Stinger missile system.) Under security assistance procedures, DOD
    provides defense articles, services, and training to foreign
    governments and international organizations that have been approved by
    the State Department and determined by the President as supporting U.S.
    national security and foreign policy objectives, according to DOD. In
    comments on a draft of this report, DOD said that each proposed
    transfer of Stinger missiles is thoroughly vetted by many different
    organizations and offices, thus providing DOD a high level of
    confidence that the missiles under security assistance programs do not
    pose a terrorist threat.

    Figure 2: U.S. Stinger Missile System:

    [See PDF for image]

    [End of figure]

    The Stinger missile system is one of only a few weapons
    systems[Footnote 12] that are subject to "enhanced end-use monitoring"
    by DOD. If a Stinger missile system sale is approved through the
    Foreign Military Sales process, State and DOD sign and extend a letter
    of offer and acceptance (LOA) to the customer nation. The LOA serves as
    a contract agreement between the United States and the customer nation
    and requires the customer nation to allow DOD to conduct annual
    inspections to ensure the Stinger systems are being used and stored as
    required under the terms of the sale. Countries that purchase Stinger
    missile systems from the United States are legally bound to cooperate
    with these inspections or risk damaging future military sales and
    cooperative relations with the United States.[Footnote 13]

    Notwithstanding U.S. controls over its Stinger missile systems, the
    concern over a potential MANPADS attack against commercial aircraft has
    grown in recent years. According to the U.S. government, terrorists are
    aware of the severe economic consequences that a MANPADS attack could
    wreak on the U.S. economy. In November 2002, terrorists used a MANPADS
    to attack, but miss, a commercial airliner in Mombasa, Kenya--the first
    such attack outside an area of conflict. Following this attack,
    according to DOD officials, the National Security Council created an
    interagency task force to pursue several options to reduce the risk of
    MANPADS attack, including the feasibility of transferring counter-
    MANPADS technology from U.S. military aircraft to U.S. commercial
    aircraft. In response to the conference report accompanying the
    Emergency Wartime Supplemental Appropriations Act, 2003,[Footnote 14]
    DHS began to review a variety of technical options for counter-MANPADS
    systems with a goal of selecting a system within 2 years for use on the
    U.S. commercial aircraft fleet. DHS is now working with private
    contractors to develop a counter-MANPADS system.

    MANPADS Pose a Threat to Commercial Aircraft:

    MANPADS pose a threat to commercial aircraft for several reasons.
    First, MANPADS are widely available. The U.S. government estimates that
    thousands of MANPADS worldwide are outside government controls.
    Thousands more under government controls may be vulnerable to theft and
    possible transfer to terrorist groups through illicit arms markets
    because they are not subject to stringent national export standards nor
    do they have adequate physical security. Second, MANPADS
    characteristics make them attractive to terrorists. Finally, MANPADS
    have been successfully used to attack and bring down aircraft.

    MANPADS Are Widely Available Worldwide:

    Since the 1950s, 20 countries have developed or produced at least 30
    different types of MANPADS, with a total production of more than a
    million missiles. The majority of MANPADS are either located within
    military arsenals; have been expended in live-fire exercises, wars,
    insurgencies, or other conflicts; or have been destroyed, according to
    State Department officials. Estimates of the global inventory of
    MANPADS range from 500,000 to 750,000 weapons, with approximately 1
    percent outside the control of national governments, according to
    intelligence sources. In addition, according to the State Department,
    the numbers of MANPADS in the global inventory are difficult to
    estimate because destruction of MANPADS systems is not always
    publicized and the systems' effective lifetimes depend on how they are
    stored and maintained. Table 1 shows the 20 countries that have
    developed or produced MANPADS since the 1950s.

    Table 1: Countries That Developed or Produced MANPADS Since the 1950s:

    Country:

    Bulgaria;
    China;
    Czech Republic;
    Egypt;
    Former Yugoslavia;
    France;
    Germany[A];
    Greece[A];
    Netherlands[A];
    North Korea;
    Pakistan;
    Poland;
    Romania;
    Russia.;
    Sweden;
    Switzerland[A];
    Turkey[A];
    Ukraine;
    United Kingdom;
    United States.

    Source: DOD.

    [A] Under the terms of the European Stinger Project Group, Germany,
    Greece, the Netherlands, and Turkey coproduce Stinger missiles solely
    for the national defense of the party to the agreement and exports to
    third parties are not permitted. Switzerland's coproduction arrangement
    with the United States also had a similar restriction.

    [End of table]

    During the cold war, the United States, the Soviet Union, and their
    allies provided MANPADS to several client states in surrogate cold war
    conflicts. For example, the U.S. government transferred hundreds of
    Stinger missiles in the mid-1980s to Afghan rebels that were fighting
    Soviet forces in Afghanistan. U.S. intelligence officials stated that a
    number of these weapons may have fallen into the hands of terrorist
    groups. The State Department estimates that at least nine nonstate
    groups, including al Qaeda, have obtained some type of
    MANPADS.[Footnote 15]

    Some MANPADS produced during the cold war were surplus to countries'
    defense needs in the 1990s. These MANPADS became widely available on
    the black and gray arms markets where terrorists could acquire them.
    The black arms market consists primarily of weapons that have been
    stolen from government or private holdings, seized by combatant forces,
    supplied by state sponsors to subnational groups, or produced
    illegally. Black market transfers usually involve a small number of
    arms that do not move through official licensing channels and are
    difficult to detect. Gray arms sales can be large and involve sales of
    advanced weapons systems. Such sales generally move through official
    government licensing channels and rely on false documentation or other
    deceptive means to disguise the buyer, supplier, type of weaponry, or
    another component of the transaction. There are known black markets in
    Afghanistan, the Balkans, Iraq, Lebanon, Somalia, Southeast Asia, and
    Yemen, according to the State Department. Gray arms shipments of
    MANPADS to Africa have been delivered mostly to countries that divert
    the weapons to subnational groups.

    The new security challenges in Iraq have added to the global stockpile
    of MANPADS available on the black and gray markets. According to
    intelligence sources, thousands of MANPADS may have been provided to
    Iraqi security forces or were stolen during hostilities in Iraq
    immediately following the collapse of the Saddam Hussein regime in
    2003. Therefore, the number of MANPADS outside national controls may
    have doubled.[Footnote 16]

    The U.S. government is also concerned that thousands of MANPADS under
    the control of some foreign governments may be vulnerable to theft and
    possible transfer to terrorist groups through the black and gray
    markets. Some countries lack stringent national export standards, which
    increases the likelihood that MANPADS will fall into the hands of
    terrorists, according to the State Department. For example, China,
    Egypt, former Yugoslavia, North Korea, and Pakistan have produced
    MANPADS but are not Wassenaar Arrangement members. In 2000, Wassenaar
    Arrangement members adopted the first multilateral guidelines for
    controlling the export of MANPADS[Footnote 17] and strengthened these
    guidelines in 2003.[Footnote 18]

    In addition, the U.S. government is concerned about the physical
    security and inventory controls of MANPADS within certain countries'
    arsenals, where MANPADS are vulnerable to theft and possible transfer
    to terrorist groups. For example, as of September 2003, the U.S.
    government had identified at least 17 countries whose security over
    their MANPADS stockpiles raised concerns. These countries included
    Bosnia and Herzegovina, Liberia, Cambodia, Nicaragua, and
    Serbia.[Footnote 19] Total stockpiles of MANPADS in these 17 countries
    are believed to number in the tens of thousands, according to the State
    Department.

    Characteristics of MANPADS Make Them Attractive to Terrorists:

    MANPADS are attractive to terrorists for acquisition and use against
    commercial aircraft because they are lethal, easy to use, transport,
    and conceal, and they are relatively inexpensive.

    MANPADS are designed to be lethal. Frequently called heat-seeking
    missiles, most MANPADS models employ sensors that search for and home
    in on the target's infrared signature, often the engine. Newer MANPADS
    can recognize specific aircraft characteristics and reject simple
    countermeasures or distractions, according to a defense manufacturer.
    MANPADS are effective up to approximately 15,000 feet in altitude and 3
    miles in range. Thus, while aircraft generally are safe from MANPADS
    when flying at cruising altitude (30,000 feet), they are most
    vulnerable during take off and landing.

    MANPADS systems are relatively easy to use but do require training. An
    individual rests the weapon on his or her shoulder, looks through a
    sight, and pulls a trigger. MANPADS typically have a "fire-and-forget"
    design that does not require the operator to remain in place to help
    guide the missile to its target. MANPADS' small size--about 5 feet long
    and a few inches in diameter and less than 35 pounds--make them easy to
    transport and to conceal. As a result, there have been recorded efforts
    to smuggle them into the United States, including two thwarted
    attempts. In August 2003, the Department of Justice reported that a
    British citizen in New Jersey tried to sell Russian-made MANPADS to
    Federal Bureau of Investigation agents posing as terrorists. Also, on
    November 6, 2002, three men with alleged links to al Qaeda tried to buy
    Stinger MANPADS from U.S. and Hong Kong law enforcement agents in Hong
    Kong, according to a 2003 State Department report.

    The costs of MANPADS, while varying significantly, are relatively
    inexpensive. Some estimates range between $5,000 and $30,000 apiece on
    the black market, while others suggest that they have sold for less
    than $1,000 to as much as $100,000 apiece.

    MANPADS Have Been Used to Attack Commercial Aircraft:

    In 2003, the State Department estimated that more than 40 aircraft had
    been struck by MANPADS since the 1970s, causing at least 24 crashes and
    more than 600 deaths worldwide. According to a November 2003
    Congressional Research Service report, there have been 35 attempted
    MANPADS attacks on commercial aircraft overseas since 1978, 24 of which
    successfully took down the aircraft.[Footnote 20] Of these 35 attacks,
    6 occurred against large, multiengine jet aircraft, according to the
    State Department. Five of these jet aircraft survived with minor
    damage; one attack was catastrophic. According to State Department
    officials, the number of jet aircraft hit is too small for accurate
    statistical analysis, and it is impossible to predict the outcome of a
    MANPADS attack. To date, only one attack occurred outside a conflict
    area--in Mombasa, Kenya, in November 2002--and none has occurred within
    the United States.

    Although there have been no MANPADS attacks within the United States,
    the threat posed by terrorists equipped with MANPADS is of credible
    concern, according to the Deputy Administrator, Transportation Security
    Administration, Department of Homeland Security. He stated that even an
    unsuccessful MANPADS attack on a commercial airliner would have a
    devastating economic and political impact. As of late February 2004,
    there was no credible, specific intelligence about planned MANPADS
    attacks against commercial aircraft in the United States, according to
    DHS officials.

    State Department Has Led Efforts to Control MANPADS but Has Limited
    Ability to Assess Extent of Progress:

    The State Department led the U.S. efforts to achieve agreements with
    foreign governments on a U.S. strategy to prevent terrorist acquisition
    of MANPADS through illicit arms markets. The department's efforts
    resulted in agreements from members of several multilateral forums on
    key elements of its strategy. However, the State Department's ability
    to assess progress toward reducing MANPADS proliferation is limited by
    the multilateral forums' lack of mechanisms to monitor countries'
    implementation of their commitments. The department also obtained--
    through bilateral diplomatic channels--foreign governments'
    commitments to destroy or secure MANPADS. The State Department has
    procedures in place to confirm destruction of MANPADS through its
    bilateral efforts.

    U.S. MANPADS Strategy Moved Forward in Multilateral and Bilateral
    Forums:

    In early 2003, the United States began to implement a strategy to
    reduce the risk of terrorists acquiring MANPADS through illicit arms
    markets. The State Department is leading the U.S. efforts to implement
    the strategy through multilateral forums and bilateral diplomacy. The
    first five points of the strategy focus on export controls and security
    that can be undertaken in multilateral forums; the last element
    addresses the State Department's bilateral approach on MANPADS security
    and destruction. The six points urge foreign governments to:

    * adopt stringent, best-practice export controls on MANPADS;

    * extend export controls to essential components of MANPADS;

    * develop technical launch control features to prevent unauthorized
    use;

    * enact comprehensive laws, regulations, and enforcement mechanisms on
    the production, transfer, and brokering[Footnote 21] of MANPADS;

    * exchange information on uncooperative governments and entities and
    ban transfers to nonstate actors; and:

    * enhance stockpile management of MANPADS, including the destruction of
    stocks in excess of national security needs.

    Multilateral Agreements Strengthened Commitments on Exports and
    Controls:

    In 2003, the State Department began to obtain commitments from members
    of multilateral forums to (1) limit MANPADS to legitimate governments
    and their agents and (2) ensure that they provide MANPADS with strong
    and effective security and controls. In early 2003, the State
    Department presented its proposal to the members of the Group of Eight
    and the Wassenaar Arrangement.

    In June 2003, the Group of Eight members responded to the U.S. proposal
    by adopting an action plan[Footnote 22] that reflected the United
    States' six strategy points. The Group of Eight members committed to
    promote the Wassenaar Arrangement principles on MANPADS to other
    states, share information on their implementation of the adopted action
    plan, and discuss MANPADS issues at their June 2004 summit.

    In December 2003, the Wassenaar Arrangement members adopted an enhanced
    set of principles for MANPADS exports.[Footnote 23] The Wassenaar
    Arrangement's principles reflected the key points in the U.S. strategy.
    Members agreed to assess the adequacy and effectiveness of the
    recipient government's physical security arrangements for the transport
    and storage of MANPADS inventories and ensure that any infringement of
    export control legislation related to MANPADS would be subject to
    adequate penalty provisions or criminal sanctions. The Wassenaar
    Arrangement members agreed to exchange information on countries that
    failed to meet security guidelines and on non-state entities attempting
    to acquire MANPADS, promote MANPADS guidelines to non-Wassenaar
    Arrangement members, and add MANPADS to their annual data reports on
    arms transfers.

    The State Department promoted the six-point U.S. strategy in three
    additional multilateral forums in 2003, as follows:

    * At the October 2003 Asian Pacific Economic Cooperation summit, the
    U.S. government presented the key elements of the strategy that had
    been adopted by the Group of Eight in June. In the final ministerial
    statement, participants committed to stronger domestic controls on the
    production, stockpiles, transfer, and brokering of MANPADS.

    * The participant states of the OSCE also followed the Group of Eight's
    lead and issued two statements on MANPADS in 2003. Both noted the
    potential for OSCE to use its policy document on small arms and light
    weapons[Footnote 24] to prompt additional steps against illicit trade
    in MANPADS. Furthermore, the OSCE Secretariat hosted a workshop in
    January 2004 to share best practices for countering the MANPADS threat;
    the workshop brought together international experts and senior civil
    aviation security and counterterrorism officials from the OSCE states.

    * In 2003, U.S. experts led efforts to revise the United Nations
    Register of Conventional Arms,[Footnote 25]creating a new MANPADS
    subcategory. A State Department official said that the MANPADS data
    reported by participating nations will provide greater transparency
    into the volume of trade in MANPADS and eventually might lead to
    greater accountability for transfers to nations and regions of concern.

    Forums Lack Mechanisms for Assessing Members' Compliance:

    The multilateral forums lack mechanisms and capability to assess data
    on arms transfers and members' compliance with their commitments to
    reduce MANPADS threats. As a result, each participating country may
    make its own assessment and consult with the forums or other member
    countries on a bilateral basis.

    The multilateral forums have no mechanisms to allow them to monitor or
    measure members' implementation of their political commitments. For
    example, the Group of Eight is not a legal entity and has no permanent
    Secretariat. Although the Wassenaar Arrangement has a Secretariat,
    Secretariat officials stated that its infrastructure does not allow for
    the Secretariat to perform analyses of data reported by members. Such
    analyses are left to the individual members to perform and bring before
    the membership for discussion.

    Furthermore, the voluntary and nonbinding nature of consensus-based
    multilateral forums means they have no explicit tools to enforce
    members' compliance with their commitments. These forums rely on
    diplomatic pressure to influence compliance or the occasional
    intelligence information from member states to identify activities that
    might be inconsistent with their commitments. Without multilateral
    enforcement mechanisms, the U.S. government has little assurance that
    commitments by member countries to improve their controls over MANPADS
    will have an impact on members' national policies and practices to
    reduce MANPADS proliferation. According to the State Department, the
    U.S. government must rely on other means for such assurance.

    Bilateral Programs Focused on Destruction and Security of MANPADS:

    To address the strategy's sixth point, the United States provides
    bilateral assistance to foreign governments to (1) identify and destroy
    MANPADS stocks that are excess to their national security needs,
    loosely secured, or obsolete and (2) assess and improve security of
    storage facilities for MANPADS retained for national defense purposes.

    In 2003, State Department officials approached certain countries to
    discuss the disposition of their excess MANPADS stockpiles. In some
    cases, the United States offered technical expertise or funded the
    destruction of MANPADS stockpiles. According to State Department
    officials, by March 2004, the United States had received commitments
    from nine countries--including Bosnia and Herzegovina, Cambodia,
    Liberia, Nicaragua, and Serbia[Footnote 26]--to destroy nearly 10,000
    excess MANPADS stocks; as of May 2004, 8,155 of these MANPADS had been
    destroyed.[Footnote 27] For example, State Department personnel
    discovered some MANPADS in insecure locations in Liberia in 2003; they
    were brought to the attention of U.N. military forces in Liberia, were
    secured, and subsequently destroyed. (Fig. 3 shows the Liberian
    MANPADS.):

    Figure 3: MANPADS to be Destroyed in Liberia, 2003:

    [See PDF for image]:

    [End of figure]:

    The State Department has provided approximately $200,000 to assist in
    the destruction of 8,155 MANPADS. As part of this effort, U.S.
    officials convinced the government of Bosnia and Herzegovina to destroy
    its entire stockpile of nearly 6,000 MANPADS. Actual destruction was
    performed by the international Stabilization Force,[Footnote 28]
    according to the State Department.

    The United States is also providing countries with assessments of the
    security of their MANPADS arsenals. The United States is concerned that
    MANPADS stored in relatively insecure foreign arsenals could be
    vulnerable to theft or illicit transfer to countries of concern or
    nonstate entities. In fiscal year 2003, DOD's Defense Threat Reduction
    Agency (DTRA) conducted arsenal security assessments in six countries:
    Angola, Bosnia and Herzegovina, Cambodia, Ecuador, El Salvador, and
    Nicaragua. DTRA plans to provide assessments to six additional
    countries in fiscal year 2004--one country in Latin America, two in
    Asia, two in Africa, and one in Eastern Europe.[Footnote 29] The
    assessments included reviews of the physical structures and practices
    of security officials, recommendations for infrastructure
    improvements, and orientations for security personnel on U.S. military
    practices for securing arsenals. According to DTRA and State, poorly
    secured arsenals include those that are filled to over capacity, are
    relatively close in proximity to buildings or civilian populations, are
    inadequately maintained, or have poor facility security.

    As an outcome of these security assessments, the United States is
    providing financial assistance to some countries that lack fiscal
    resources for U.S.-recommended infrastructure improvements. For
    example, in fiscal year 2003, the United States provided Serbia-
    Montenegro with $150,000 for computers, software, training, and alarm
    systems to improve MANPADS inventory processes and security; and in
    fiscal year 2004, the United States will provide Cambodia with $233,000
    for U.S.-recommended upgrades. In addition, the State Department
    provided nearly $400,000 for stockpile management and physical security
    upgrades as part of the MANPADS destruction and threat reduction
    effort, according to State. As part of the president's February 2004
    budget proposal to Congress for fiscal year 2005, the State Department
    requested an additional $6 million above its previous annual $3 million
    program budget for small arms and light weapons destruction, in order
    to expand its bilateral efforts to destroy and secure MANPADS.

    Disposition of U.S. Stinger Missiles Sold Overseas Is Unknown:

    To prevent the proliferation of the U.S. Stinger missile system, DOD
    monitors its end use in recipient countries. Although DOD has
    strengthened the requirements for monitoring Stinger missile systems
    after they have been sold to foreign countries, DOD has no requirement
    for DOD organizations responsible for end-use monitoring to keep
    records on the number and destinations of these Stingers. DOD's Stinger
    records are neither complete nor reliable. As a result, DOD cannot
    account for each Stinger sold abroad. In addition, because DOD has no
    procedures for performing Stinger inspections, security assistance
    organization[Footnote 30] (SAO) officials use inconsistent practices in
    conducting Stinger inspections and some are unclear about their
    inspection responsibilities.

    DOD Reinstated Inspection Requirement for Stingers:

    The Arms Export Control Act (AECA) charges the President with
    establishing a program that provides for the end-use verification of
    defense articles that are particularly vulnerable to diversion or other
    misuse or defense articles whose diversion or other misuse could have
    significant consequences.[Footnote 31] In June 2003, DOD issued a
    directive[Footnote 32] requiring SAO officials to conduct annual
    inventory inspections of 100 percent of Stinger missile systems sold
    overseas. This directive reinstated the 100 percent inventory
    requirement[Footnote 33] that had been in place since 1982 when DOD
    began selling Stingers to foreign governments. In 1998, DOD had lowered
    the Stinger inspection requirement to 5 percent, stating that the 100
    percent inventory inspections duplicated the 100 percent inspections
    conducted by recipient governments twice a year. In 2003, DOD said that
    the 5 percent inventory requirement was inadequate and reinstated the
    original requirement to inventory 100 percent of Stinger systems.

    DOD's inventory requirement applies to Stinger systems (1) sold
    overseas, (2) produced by a U.S.-authorized European consortium of four
    nations led by Germany, and (3) produced by Switzerland under a U.S.-
    authorized program. DOD inventory inspections are meant to verify that
    every Stinger system, as identified by serial number, is still under
    the recipient government's possession and control. SAO officials are
    also required to verify the adequacy of physical security at facilities
    storing Stingers. This requirement is stated in the sales agreement--
    the LOA--signed by the recipient country. DOD inspections are also
    meant to complement 100 percent inventory inspections that are
    performed by the recipient country. Recipient country officials are
    required by the LOA to allow review by SAOs to ensure that they are
    performing these inventory inspections.

    Several DOD agencies and offices are responsible for controls over
    Stinger missile systems. The U.S. Army, which owns the Stinger missile
    system, is responsible for the missiles until they are shipped and
    received overseas by the recipient nation. After that, SAOs are
    responsible for monitoring the end-use of Stinger systems by recipient
    nations until these missiles are disposed of or used. The central
    component of Stinger missile end-use monitoring--missile inventory
    inspection--is performed by SAO officials or, in some cases, by defense
    attach�s at the U.S. embassy. DOD also created the Golden Sentry
    program to monitor the end-use of sensitive weapons systems such as
    Stinger, in response to AECA requirements. DOD's Defense Security
    Cooperation Agency (DSCA) manages this program. DSCA's responsibilities
    include: (1) performing overall management of the Golden Sentry
    program, (2) issuing guidance to keep the Golden Sentry program current
    and updating policies and procedures for end-use monitoring, and (3)
    conducting visits to security assistance organizations and host nations
    to assess compliance with enhanced end-use monitoring procedures.

    The Federal Managers' Financial Integrity Act of 1982 requires GAO to
    issue standards for internal control in the federal government.
    According to these standards,[Footnote 34] vulnerable assets such as
    inventories should be periodically counted and compared with control
    records, and exceptions should be examined.

    DOD generates the following two primary types of records for its
    Stinger end-use monitoring:

    * First, the Army generates shipping records, which contain serial
    numbers for all Stingers sold overseas. Shipping records accompany
    Stinger missile shipments and pass to the custody of SAOs upon the
    Stinger shipment's arrival in the recipient country. These records
    serve as a baseline of all Stingers provided to the recipient country
    and as Stinger control records, providing SAOs with the serial numbers
    to be used in Stinger inventory inspections.

    * Second, SAO officials produce annual inventory records. Inventory
    records are those records and materials that document the results of
    inventory inspections performed by SAOs. At the end of the year, each
    SAO is required to submit an end-of-year report on its Stinger missile
    inventory inspections. This type of inventory record--the end-of-year
    report--is used by DSCA to manage the Stinger missile end-use
    monitoring program.

    To apply federal government internal controls standards, DOD would
    maintain reliable shipping records to serve as control records for
    conducting its Stinger inventory inspections. Consequently, DOD would
    establish consistent procedures for comparing these control records
    with Stinger inventories in annual inventory inspections.

    DOD's Lack of Recordkeeping Requirements Resulted in Unreliable Stinger
    Control Records:

    DOD lacks reliable control records because there have been no DOD
    requirements for DOD organizations responsible for end-use monitoring
    to keep Stinger shipping records over the years. Without complete and
    accurate Stinger shipping records, SAO officials have no reliable
    control records against which to compare Stinger inventories.

    DSCA, Army, and SAO officials said that Stinger shipping records are
    missing or incomplete. According to Army and SAO officials, there is no
    DOD requirement for DOD organizations responsible for end-use
    monitoring to maintain Stinger shipping records. However, without
    complete shipping records, DOD cannot reliably determine how many
    Stingers were sold overseas or their serial numbers. Furthermore,
    Stinger shipping records were missing for two main reasons, as follows:

    * First, the Army, DSCA, and SAO officials stated that most shipping
    records are in hard-copy form, and some were lost or misfiled over the
    years.

    * Second, Army and DSCA officials said that there has been great
    pressure in recent years, particularly in the 1990s, to reduce
    paperwork at U.S. missions and offices overseas. Therefore, many older
    Stinger records were likely destroyed during efforts to dispose of
    older paperwork.

    In comments on a draft of this report, DOD said that it has
    recordkeeping requirements for implementing agencies and SAOs regarding
    security assistance management. However, we found that these general
    recordkeeping requirements apply to Foreign Military Sales case
    managers, not to DSCA or SAOs, and to financial management purposes,
    not end-use monitoring.[Footnote 35] Furthermore, Army officials said
    that they were unaware of any requirement to maintain Stinger shipping
    records. DOD said that DSCA would amend the Security Assistance
    Management Manual (SAMM) to specifically identify the recordkeeping
    standards for end-use monitoring activities to ensure that the
    requirements are clear.

    No single DOD office has maintained copies of all the Stinger shipping
    records. The two main offices that maintain such records--the Army and
    the SAOs--have some of the Stinger shipping records. In addition, DSCA
    has a database containing additional data on defense articles,
    including Stingers, authorized and delivered under the Foreign Military
    Sales program. However, we found discrepancies in the numbers of
    Stingers that different DOD offices show were sold to foreign
    governments. For example, one SAO reported in its 2003 inventory
    inspection of all Stinger missiles in its recipient country[Footnote
    36] that it found approximately 30 percent more Stingers than the
    number that the Army stated had been provided to that country. In a
    second example, a different SAO in 2002 reported the total number of
    Stingers received by the recipient country[Footnote 37] over the years
    as 156 missiles fewer than the number that the Army had on record.

    According to data from the U.S. Army, the United States has exported
    7,551 Stinger missiles to 14 countries (plus Taiwan) since 1982 through
    DOD's foreign military sales program (see table 2).[Footnote 38] The
    Army reconstructed its information for us from a combination of its
    remaining original shipping records and limited inventory inspection
    records dating back to 1982. As a result of being constructed from
    incomplete data, some of the numbers in the table likely under-
    represent the number of Stingers sold. We determined that Army data are
    not a reliable single source of information on the numbers and
    destinations of Stingers the United States has exported overseas.
    Because of our concerns about the reliability of the Army data, we
    looked at DSCA data on the number of Stinger systems exported by the
    United States since 1982. According to our analysis of the DSCA data,
    the United States has exported 8,331 Stinger missiles to 16 countries
    (plus Taiwan). This data is from DSCA's 1200 Series database, which
    shows the quantities and dates of Stingers delivered to foreign
    governments. DSCA provided us with this data, which we consolidated in
    this table. We performed data reliability checks on the 1200 Series
    database and determined that it was sufficiently reliable for
    comparison against the information provided by the Army. As table 2
    shows, there are significant discrepancies between Army and DSCA data
    on the number of Stinger missiles the U.S. has exported to foreign
    countries. For example, Army data shows the U.S. has not exported any
    Stinger missiles to Egypt. However, DSCA data indicates the U.S. has
    exported 89 Stingers to Egypt.

    Table 2: Stinger Missiles Exported by United States to Foreign
    Countries, 1982-2004:

    Recipient country: Bahrain;
    Army missiles: 69;
    DSCA missiles: 139.

    Recipient country: Denmark;
    Army missiles: 1140;
    DSCA missiles: 1140.

    Recipient country: Egypt;
    Army missiles: 0;
    DSCA missiles: 89.

    Recipient country: France;
    Army missiles: 82;
    DSCA missiles: 81.

    Recipient country: Germany;
    Army missiles: 9;
    DSCA missiles: 19.

    Recipient country: Greece;
    Army missiles: 408;
    DSCA missiles: 500.

    Recipient country: Israel;
    Army missiles: 318;
    DSCA missiles: 318.

    Recipient country: Italy;
    Army missiles: 611;
    DSCA missiles: 885.

    Recipient country: Japan;
    Army missiles: 871;
    DSCA missiles: 1025.

    Recipient country: Netherlands;
    Army missiles: 637;
    DSCA missiles: 646.

    Recipient country: Pakistan;
    Army missiles: 120;
    DSCA missiles: 120.

    Recipient country: Portugal;
    Army missiles: 33;
    DSCA missiles: 45.

    Recipient country: Saudi Arabia;
    Army missiles: 601;
    DSCA missiles: 596.

    Recipient country: Switzerland;
    Army missiles: 0;
    DSCA missiles: 10.

    Recipient country: Taiwan;
    Army missiles: 2295;
    DSCA missiles: 2352.

    Recipient country: Turkey;
    Army missiles: 217;
    DSCA missiles: 216.

    Recipient country: United Kingdom;
    Army missiles: 140;
    DSCA missiles: 150.

    Total missiles delivered:
    Army missiles: 7,551;
    DSCA missiles: 8,331.

    Sources: Department of the Army; GAO analysis of DSCA data.

    [End of table]

    Because some SAOs lack Stinger shipping records and cannot always get
    complete records from the Army, officials at DSCA and the three SAOs we
    visited said that SAO officials have in some cases relied on foreign
    government records. However, in August 2000, we reported[Footnote 39]
    that relying on the foreign government's records might pose a risk to
    achieving 100 percent accounting of the missiles because the
    reliability of accountability systems varies from country to country.
    We further reported that DSCA had discovered discrepancies in foreign
    governments' Stinger missile inventories after completing its annual
    inventory in December 1999. DSCA officials stated in August 2000 that
    they would investigate these discrepancies. We recommended that DOD
    reconcile discrepancies in foreign governments' Stinger missile
    inventories where discrepancies existed. DSCA said that its 2000
    inventory results showed no discrepancies that warranted corrections.
    However, the 2000 inventory required inspection of only 5 percent of
    Stingers and used unreliable Stinger control records. As of April 2004,
    our specific recommendation had not been implemented.

    Some SAO officials stated that they prefer to receive Stinger serial
    number information from DOD. However, because DOD does not have
    complete original shipping records, SAO officials have sometimes had to
    rely on the recipient country or the European Stinger Project Group to
    provide records to perform the inventory inspections. For example, DSCA
    officials said that in 2003 the Japanese government provided the only
    available Stinger records in Japan. At one of the SAOs we visited, the
    latest SAO official arrived in 2003 to find there was no Stinger
    paperwork on record. At another SAO we visited, SAO officials had no
    record of the Stingers purchased from the United States and relied
    solely on the European consortium for serial number records for
    consortium-produced Stingers.

    Stinger Inventory Inspections Are Impaired by Inconsistent Practices
    and Incomplete Inventory Records:

    DOD's inventory inspection efforts are impaired because DOD lacks
    procedures for conducting Stinger inspections and requirements for
    keeping inspection records. Without procedures for conducting Stinger
    inspections, DOD security assistance officials overseas use
    inconsistent practices to perform Stinger inventory and physical
    security inspections. In addition, DOD has no requirements for keeping
    records of inventory inspections. As a result, practices for keeping
    inventory inspection records have been left to the discretion of DOD
    officials at SAOs, DSCA, and the Army, and the quality of inventory
    recordkeeping varied widely among the SAOs we visited.

    DOD Officials Use Inconsistent Practices to Perform Stinger
    Inspections:

    Officials at the Army and SAOs said that DOD has no procedures for
    performing Stinger inspections. As a result, SAO officials use
    inconsistent practices to perform Stinger inventory and physical
    security inspections. In addition, even though Stinger sales agreements
    require physical security inspections, DSCA has not issued procedures
    for performing physical security inspections at facilities storing
    Stingers. As a result, we found that SAOs use inconsistent practices in
    conducting security inspections, and SAO officials said they are
    unclear about their responsibilities. At three SAOs that we visited, we
    found the following differences in inspection practices:

    * At one SAO, officials said they had inventoried approximately 25
    percent of the recipient country's Stingers in 2003. This inspection
    involved opening the Stinger system container cases to read the serial
    numbers on the missile systems. SAO officials stated that they were
    unsure whether they were required under the new inventory requirements
    to open all of the Stinger system container cases but that this had
    been their practice for a few years. SAO officials said that they
    looked for noticeable security deficiencies, but were unaware that they
    were required to inspect the physical security of the Stinger system
    storage facilities.

    * At a second SAO, officials said they had inventoried approximately 75
    percent of the country's Stingers in 2003. This inspection involved
    reading the serial numbers on the Stinger system container cases and
    opening approximately 10 percent of the container cases to read the
    serial numbers on the missile systems. SAO officials said they were
    unsure whether they were required under the new inventory requirements
    to open the Stinger container cases but that this had been their
    practice for several years. SAO officials said they performed a
    physical security inspection of the Stinger storage facilities,
    including inspecting the status of lighting, fencing, locks, keys, and
    guard postings. Officials stated that they inspected these security
    features because the primary SAO inspecting official had previous
    physical security experience.

    * At a third SAO, officials said they inventoried 100 percent of the
    Stinger inventory in 2003 by reading the serial numbers on the Stinger
    system container cases. SAO officials said they did not open any of the
    container cases. In addition, SAO officials stated that they did not
    perform any physical security inspection of the Stinger system storage
    facilities because they knew of no requirement to do so.

    We reported in August 2000 that DOD had similar problems in the routine
    monitoring of defense articles the United States sold
    overseas.[Footnote 40] At that time, we reported that DOD had not
    effectively implemented the routine monitoring requirement that its
    field personnel observe and report on foreign governments' use of U.S.
    defense articles and services transferred through the Foreign Military
    Sales program, including Stingers. DOD had not issued guidance
    specifying what monitoring was required. As a result, field personnel
    interpreted differently the requirements and activities that they were
    to perform. We recommended that DOD issue additional guidance for the
    routine observation of U.S. defense articles sold overseas. As of April
    2004, our specific recommendation had not been implemented.

    The lack of inventory inspection procedures may result in Stingers not
    receiving the level of inspection envisioned by DOD and would impair
    DSCA's ability to collect consistent and useful inventory data
    necessary for managing the Stinger end-use monitoring program. DSCA
    officials said that DSCA planned to issue official procedures for
    performing inventory and physical security inspections at the end of
    2003 but had not done so at the time of this report. Notwithstanding
    the absence of inspection procedures, DSCA officials stated that SAOs
    are required to meet the new 100 percent inspection requirements in
    2004 and report on their inspection results by December 1, 2004.
    According to DSCA officials, in 2003 SAOs performed 100 percent
    inventory inspections of Stinger systems in 11 (or almost 60 percent)
    of the 17 countries (plus Taiwan) that have purchased Stingers.

    DOD Lacks Complete and Reliable Records of Inventory Inspections:

    DSCA, Army, and SAO officials said that DOD lacks complete and reliable
    inventory inspection records. Army and SAO officials said the records
    deficiencies occurred because there have been no requirements for
    keeping records of Stinger inventory inspections over the years. In the
    absence of recordkeeping requirements, practices for keeping inventory
    inspection records have been left to the discretion of SAO, DSCA, and
    Army officials.

    In the absence of recordkeeping requirements, we found that the
    condition of Stinger inventory inspection records overseas varied
    widely among the three SAOs we visited. For example, one SAO had most
    of its Stinger inventory inspection records from the past 5 years.
    Another SAO had almost no Stinger paperwork in place. Still another had
    a few scattered records with incomplete inventory inspection
    information contained in them.

    In addition to the SAOs, we found that DSCA has gaps in its inventory
    inspection records. DSCA has maintained a total of 18 annual inventory
    inspection reports from SAOs over the 22-year history of Stinger sales.
    For 2002--the most recent year for which records were available--DSCA
    had on record inventory inspection reports of 6 of 16 countries (plus
    Taiwan) that received Stingers. Moreover, DSCA has no procedures for
    SAOs to report the results of their Stinger inventories. As a result,
    DSCA said that some SAOs report their Stinger missile inventories using
    missile serial numbers but that others do not.

    U.S. Is Determining Feasibility of Countermeasures to Protect
    Commercial Aircraft:

    In response to the conference report accompanying the Emergency Wartime
    Supplemental Appropriations Act, 2003,[Footnote 41] DHS initiated a 2-
    year system development and demonstration program in 2003 for a
    counter-MANPADS system. As we reported in January 2004,[Footnote 42]
    DHS faces significant challenges in adapting a military counter-MANPADS
    system to commercial aircraft. Such challenges include establishing
    system requirements, maturing technology and design, and setting
    reliable cost estimates. Our work on the best practices of product
    developers in government and industry has found that such challenges
    can be successfully overcome by using a knowledge-based approach.
    [Footnote 43] Using this approach, product developers employ specific
    practices to ensure that a high level of knowledge regarding critical
    facets of the product is achieved at key junctures in development. We
    recommended that the Secretary of Homeland Security fully implement a
    knowledge-based approach in its counter-MANPADS development program;
    the Secretary fully concurred.

    Department of Homeland Security Faces Technical Challenges Adapting
    Military Counter-MANPADS Systems to Commercial Aircraft:

    Concerned that the potential for terrorists to use MANPADS against
    commercial airliners has grown in recent years, the U.S. government is
    considering the installation of technical countermeasures on commercial
    aircraft. Members of Congress have also expressed concerns that
    civilians traveling by air must be protected while mitigating the
    potential financial burden for the airlines industry. DHS was tasked
    with researching the potential of adapting countermeasures already used
    by the U.S. military to the commercial fleet. In January 2004, DHS
    awarded the initial contracts for a 2-year program to develop and
    demonstrate a counter-MANPADS system for commercial aircraft. DHS faces
    significant challenges in adapting a military counter-MANPADS system to
    commercial aircraft in the initial phases of its program.

    First, DHS is challenged with establishing system requirements to lay
    out the framework and end-state goals for the program. Requirements
    involving new technologies, system maintenance, system integration, and
    system security may involve trade-offs between competing objectives,
    such as performance and cost. This would enable DHS to derive the most
    effective solution at a realistic life cycle cost.

    Second, DHS is challenged with developing the technology and design to
    a mature level so that it can be adapted for commercial use. For
    example, it is challenging to reduce the high false alarm rate found in
    missile warning systems used by the military. It also is challenging to
    increase the system's reliability by 10 times from the current 300
    hours expected on military systems to 3,000 hours required for
    commercial viability. Fitting a wide variety of commercial aircraft
    body types even though its design, placement, and integration will
    affect each type of aircraft differently and make all aircraft more
    costly to operate. DHS also is challenged with developing a plan to
    safeguard the new equipment on civilian aircraft in a variety of
    settings at airports both within the United States and abroad. Finally,
    it will be a challenge to develop a missile launch notification system
    that effectively passes warning information in the National Airspace
    System.

    Third, DHS is challenged to develop reliable cost estimates regarding
    the procurement, integration, operation, and support of the
    countermeasures system on commercial aircraft. It will be challenging
    to provide a major capital investment to increase the contractors'
    capacity to quickly produce a large number of countermeasure systems.
    (The current military production capacity of four systems per month
    cannot meet the demand for any significant portion of the estimated
    6,800 aircraft in the civilian U.S. fleet.)

    Knowledge-Based Approach Has Been Adopted by Successful Product
    Developers:

    Challenges such as those faced by DHS's counter-MANPADS program can be
    significantly addressed through the use of a knowledge-based approach,
    as demonstrated by our past work[Footnote 44] on the best practices of
    leading product developers in industry and government. This approach
    helps decision makers make informed investment decisions based on
    knowledge they gain at three critical junctures or knowledge points
    during product development, which will reduce risks and increases the
    likelihood of successful outcomes. These three knowledge points are as
    follows:

    * Knowledge Point 1--Needs and resources are matched. This level of
    knowledge is attained when a match is made between a customer's needs
    and the developer's technical, financial, and other resources.
    Achieving a high level of technological maturity at the start of system
    development is a particularly important best practice. This means that
    the technologies needed to meet essential product requirements have
    been demonstrated to work in their intended environment.

    * Knowledge Point 2--The product design is stable. This level of
    knowledge is attained when the product's design is shown to meet the
    customer's requirements. A best practice is to achieve design stability
    at the system-level critical design review, usually held midway through
    development. Completion of engineering drawings at the system design
    review provides tangible evidence that the design is stable.

    * Knowledge Point 3--Production processes are mature. This level of
    knowledge is attained when it is demonstrated that the product can be
    manufactured within cost, schedule, and quality targets. A best
    practice is to achieve production maturity at the start of production.
    This means that all key manufacturing processes produce output within
    statistically acceptable limits for quality.

    A knowledge-based approach also involves the use of controls or exit
    criteria to ensure that the required knowledge has been attained at
    each critical juncture. Using this approach will enable managers to (1)
    conduct activities to capture relevant product development knowledge,
    (2) provide evidence that knowledge was captured, and (3) hold decision
    reviews to determine that appropriate knowledge was captured to allow a
    move to the next phase. If the knowledge attained at each juncture does
    not confirm the business case on which the effort was originally
    justified, the program does not go forward.

    Use of a knowledge-based approach has enabled leading organizations to
    deliver high quality products on time and within budget. Efforts that
    have not done so frequently experience poor cost, schedule, and
    performance outcomes. Figure 4 shows a comparison of a knowledge based
    approach with the DHS counter-MANPADS plan.

    Figure 4: Comparison of Knowledge-Based Approach to DHS Program Plan:

    [See PDF for image]

    [End of figure]

    DHS Has Begun to Use a Knowledge-Based Approach:

    DHS included some knowledge-based elements in its original solicitation
    released on October 3, 2003. For example, DHS plans to conduct design
    reviews, require periodic performance assessments from the contractor,
    use an integrated product team to identify and resolve issues, conduct
    systems engineering work in both phases, and require the development of
    a prototype to help identify and resolve specific design and
    manufacturing risks.

    During our review, we asked DHS to identify its controls or exit
    criteria for use in determining whether needed knowledge had been
    attained by the end of Phases I and II of its program. In its
    solicitation of October 3, 2003, DHS had required the contractor to
    satisfy certain criteria to receive payment for each milestone, but the
    Phase I exit criteria were not knowledge-based. They did not require
    the contractor to demonstrate that key product knowledge had been
    obtained. Rather, the criteria were based on the contractor providing
    information, such as the Long Lead Items List, at key payment
    milestones. Also, the Phase II exit criteria were not identified and
    were to be proposed by the contractor and subject to negotiation.

    When GAO presented DHS officials with recommended exit criteria from
    our past reports, they agreed to integrate them into an updated
    solicitation and use them in monitoring the contractors' progress. For
    example, at Knowledge Point 1, exit criteria include the demonstration
    that critical technologies are mature and system requirements are
    finalized. At Knowledge Point 2, criteria include the completion of 90
    percent of engineering drawings at design review and the demonstration
    that a prototype's design meets requirements. At Knowledge Point 3,
    criteria include the demonstration that manufacturing processes are
    under statistical control. The use of this knowledge-based approach,
    including the use of exit criteria should help ensure that DHS's key
    decisions in developing and demonstrating a counter-MANPADS system are
    based on sufficient information.

    Conclusion:

    The first MANPADS attack on a commercial aircraft outside of a conflict
    area in 2002 highlights a growing potential for terrorists to use these
    easily transportable weapons against commercial aircraft worldwide.
    Beginning in 2003, U.S. multilateral and bilateral diplomatic efforts
    to reduce this threat of MANPADS increased foreign governments'
    commitments to reduce MANPADS proliferation. If adequately implemented,
    these commitments could significantly improve multilateral controls
    over MANPADS exports, decrease excess stockpiles of MANPADS, and
    enhance security over government stocks of these weapons. However,
    obtaining foreign governments' commitments was only the first step
    toward reducing this proliferation; without mechanisms to monitor forum
    members' compliance with their commitments, assessing progress toward
    reducing MANPADS proliferation is difficult. Although the United States
    has afforded a high priority to securing and monitoring its exports of
    Stinger missile systems overseas, DOD's end-use monitoring system has
    serious deficiencies that undercut this purpose. DOD lacks reliable
    information on the Stinger weapons it has sold to foreign governments
    over 20 years because it has established no requirements for DOD
    organizations responsible for end-use monitoring to generate and
    maintain records on the numbers of Stingers shipped and inventoried
    each year and no procedures for consistently carrying out these
    inventories. As a result, DOD lacks the ability to periodically account
    for Stinger missile systems, compare the results against credible
    control records, and examine discovered exceptions.

    Recommendations for Executive Action:

    Since multilateral forums lack mechanisms to monitor countries'
    implementation of their commitments to improve export controls over
    MANPADS, there are few means to assess the extent to which these
    commitments are helping to reduce worldwide MANPADS proliferation.
    Therefore, we recommend that the Secretary of State develop a strategy
    for working within these forums to establish mechanisms to monitor and
    report on (1) countries' implementation of their commitments and (2)
    the impact such implementation of commitments has on the flow of
    MANPADS to black and gray markets.

    Inadequate recordkeeping prevents DOD from knowing the disposition of
    its Stinger missile systems sold overseas. Therefore, we recommend that
    the Secretary of Defense establish standardized recordkeeping
    requirements for all U.S. organizations responsible for maintaining
    records on Stinger systems sold overseas.

    DOD's records on its Stinger missile system sales overseas are
    incomplete, unreliable, and difficult to find and retrieve. In
    addition, its records are divided among multiple organizations
    worldwide, and the quality and extent of the records varied widely
    among three security assistance organizations we visited. Therefore, we
    recommend that the Secretary of Defense establish a centralized
    electronic database to (1) consolidate the records of the U.S. Army,
    DSCA, and U.S. security assistance organizations in countries with
    Stinger missile systems to establish a baseline of the worldwide
    Stinger inventory and (2) track the inventory worldwide.

    Because DOD lacks Stinger inspection procedures, DOD officials overseas
    use inconsistent practices to perform Stinger inspections. Therefore,
    we recommend that the Secretary of Defense direct DSCA to issue
    standardized inventory and physical security inspection procedures for
    U.S. security assistance organization officials.

    Agency Comments and Our Evaluation:

    We provided a draft of this report to the Secretaries of Defense,
    Homeland Security, and State for their review and comment. We received
    written responses from each that are reprinted in appendixes II, III,
    and IV. Homeland Security and State also provided us with technical
    comments, which we incorporated as appropriate.

    DOD stated that it would amend its security assistance manual to
    specifically identify record-keeping standards for end-use monitoring.
    DOD also said that it is developing a database that would consolidate
    the types of information noted in our recommendation. Finally, DOD
    stated that DSCA and the Combatant Commands[Footnote 45] are developing
    checklists and procedures that would provide guidance to SAOs
    conducting Stinger inventory inspections.

    DHS, as a result of implementing our previous recommendation to adopt a
    knowledge-based approach, commented that its counter-MANPADS program
    has in place milestones with entrance and exit criteria that must be
    completed by the contractors before they can advance to the next stage.
    These milestones include the System Requirements Review, Interim Design
    Review, Preliminary Design Review, and the Critical Design Review.
    Entrance and exit criteria for the Systems Requirements Review include
    the completion of a Systems Concept and Concept of Operations, a
    System-level Requirements Analysis, and a Configuration Control
    Document.

    The State Department concurred with our recommendations to the
    Secretary of State, commended the report, and agreed that addressing
    how participating governments implement the MANPADS policy undertakings
    made in December 2003 is a key next step. Consequently, the U.S.
    government and other Wassenaar states are examining implementation
    during 2004 and will continue to do so in future years, according to
    the department. The State Department also provided technical comments
    that we incorporated as appropriate.

    As agreed with your offices, unless you publicly announce the contents
    of this report earlier, we plan no further distribution until 30 days
    from the report date. At that time, we will send copies of this report
    to appropriate congressional committees and to the Secretaries of
    Defense, Homeland Security, and State. We also will make copies
    available to others upon request. In addition, the report will be
    available at no charge on the GAO Web site at
    [Hyperlink, http://www.gao.gov].

    If you or your staff has any questions concerning this report, please
    contact me at (202) 512-8979 or at [Hyperlink, christoffj@gao.gov]. A
    GAO contact and staff acknowledgments are listed in appendix V.

    Signed by:

    Joseph A. Christoff:
    Director, International Affairs and Trade:

    [End of section]

    Appendixes:

    Appendix I: Scope and Methodology:

    To assess the nature and extent of the man-portable air defense systems
    MANPADS threat, we met with officials at the Departments of Defense,
    State, and Homeland Security, and at the intelligence agencies. We also
    met with foreign government officials in Austria, Germany, and the
    United Kingdom, and exchanged correspondence with government officials
    in France. In addition, we met with representatives of the Secretariats
    of the Wassenaar Arrangement and of the Organization for Security and
    Cooperation in Europe in Vienna. In addition, we reviewed U.S.
    documents, including classified and unclassified State Department
    cables, reports, and briefing slides presented to multinational forums,
    and testimony before congressional committees. We also requested to
    meet with officials of the National Security Council to discuss
    prioritization of terrorist threats, but they declined to meet with us
    or respond to our questions.

    To assess the U.S. government efforts to control the worldwide
    proliferation of MANPADS, we reviewed documents and interviewed
    officials in State Department's Nonproliferation Bureau Office of
    Export Control and Conventional Arms Nonproliferation Policy, Office of
    Export Control Cooperation, Office of Policy, Public Affairs and
    Congressional Relations; the State Department's Political and Military
    Affairs Bureau Office of Weapons Removal and Abatement (whose MANPADS
    officials formerly were in the Office of Plans, Policy and Analysis
    until September 2003); and the State Department's Arms Control Bureau
    Office of Conventional Arms Control; as well as the Department of
    Defense's (DOD) Defense Threat Reduction Agency On-site Inspection
    Directorate Interagency Liaison for Europe. To assess the reliability
    of the data provided by the State Department on MANPADS destroyed,
    committed to be destroyed, and U.S. funds expended on the destruction
    and infrastructure improvements to foreign arsenals, we reviewed
    numerous State Department cables, reviewed contractor documentation for
    some MANPADS destruction, and interviewed State officials regarding
    their data collection methods. We determined the State data was
    sufficiently reliable for our reporting purposes. We also obtained and
    reviewed documents and interviewed representatives of the Wassenaar
    Arrangement and the Organization of Security and Cooperation in Europe
    (OSCE) in Vienna, as well as State officials at the U.S. Mission to the
    OSCE and the U.S. Embassy in Vienna. To obtain views of other countries
    on the impact of these multilateral forums on MANPADS proliferation, we
    reviewed foreign government documents and interviewed government
    officials of Austria, France, Germany, and the United Kingdom.

    To assess DOD's end-use monitoring of the U.S.-exported Stinger
    missile, we reviewed documents and interviewed officials at DOD's
    Defense Security Cooperation Agency (DSCA), the U.S. Army, and State.
    We also reviewed documents and met with officials at the U.S. European
    Command in Stuttgart, Germany; the Office of Defense Cooperation in
    Bonn, Germany; the U.S. Embassy in Berlin, Germany; the Office of
    Defense Cooperation in Ankara, Turkey; and the Office of Defense
    Cooperation in London, United Kingdom. In addition, we toured Stinger
    missile storage facilities in Germany and the United Kingdom and
    observed Stinger missile inventory inspections in Turkey. We also had
    telephone discussions with representatives of the Raytheon Corporation,
    the company that produces Stinger missiles for the U.S. Army. To assess
    the reliability of DOD's data on the number and destinations of Stinger
    missiles sold overseas, we reviewed documents and interviewed officials
    at the Army and DSCA. As DOD relies on data provided by the Army to
    track Stingers sold overseas, we assessed those data. In addition, we
    also compared the Army's data to data compiled by DSCA, which DOD does
    not use to track Stingers overseas. Based on prior GAO work, and a
    reasonableness check of the DSCA data, we determined that the DSCA data
    were sufficiently reliable for the purposes of establishing overseas
    Stinger sales, and could therefore serve as a check on the Army data
    that are used by DOD. We learned that the Army generated their data
    from Stinger shipping records, which include the Stinger serial
    numbers, and from Stinger inventory inspection records going back to
    1982. During our interviews, questions arose about the completeness of
    the Army data; when we compared the Army data with the data compiled by
    DSCA, we found that Army records were indeed incomplete. As a result,
    we determined that the Army data were not sufficiently reliable for the
    purposes of tracking overseas Stinger missile sales.

    To assess the Department of Homeland Security's efforts to develop
    technical countermeasures to minimize the threat of a MANPADS attack,
    we compared DHS's plan for its counter-MANPADS system development and
    demonstration program plan against the best practices of commercial and
    military acquisitions identified in our past reports. We focused on
    whether DHS will have sufficient information to make knowledge-based
    decisions at each milestone. To determine what military countermeasures
    are available for adaptation to commercial aircraft and what their
    performance capabilities, cost, and schedule ramifications might be, we
    met with DOD, Air Force, Army, and Navy officials, and analyzed
    relevant documentation, including studies and test reports. We
    interviewed representatives from Northrop Grumman, Boeing, BAE Systems,
    Raytheon Corporation, and Sanders Design International regarding
    countermeasure systems currently in production or development. We also
    met with representatives from the airline industry, air transportation
    association, and RAND. We conducted our work from April 2003 through
    March 2004 in accordance with generally accepted government auditing
    standards.

    [End of section]

    Appendix II: Comments from the Department of Defense:

    DEFENSE SECURITY COOPERATION AGENCY:
    WASHINGTON, DC 20301-2800:

    MAY 0 2004:

    In reply refer to: 1-04/006190-P3:

    Mr. Joseph A. Christoff:

    Director, International Affairs and Trade
    U.S. General Accounting Office:

    441 G Street, N. W.
    Washington, DC 20548:

    Dear Mr. Joseph A. Christoff,

    This is the Department of Defense (DoD) response to the GAO Draft
    report, "Nonproliferation: Further Improvements Needed in U.S. Efforts
    to Counter Threats from Man-Portable Air Defense," dated 16 April 2004
    (GAO-04-519).

    DoD has reviewed the draft report and agrees with the recommendations
    that we improve record-keeping and inventory procedures. Our specific
    comments concurring with these recommendations are provided below.
    Although we concur with the recommendations, there are several areas
    within the draft report where corrections are needed for technical
    accuracy. For example, the report does not recognize the policy
    guidance we have already issued regarding End-Use Monitoring (EUM)
    requirements for Stinger missiles or the implementing directives that
    have been issued by the Combatant Command visited by the GAO. Our
    comments regarding these technical discrepancies are also included in
    this memorandum.

    RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
    establish standardized record-keeping requirements for all U.S.
    organizations responsible for maintaining records on Stinger systems
    sold overseas. (p. 34/GAO Draft Report):

    DoD RESPONSE: Concur. DoD 5105.38-M, "Security Assistance Management
    Manual (SAMM)" and DoD 7000.14-R, "Financial Management Regulation,"
    Volume 15, specify record-keeping requirements for implementing
    agencies and security assistance organizations (SAOs). To make sure
    these requirements are clear, DSCA will amend the SAMM to specifically
    identify the record-keeping standards for End-Use Monitoring (EUM)
    activities.

    RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
    establish a centralized electronic database to 1) consolidate the
    records of the U.S. Army, DSCA, and U.S. security assistance
    organizations in countries with Stinger missile systems to establish a
    baseline of the worldwide Stinger inventory and 2) track the inventory
    worldwide. (p. 34/GAO Draft Report):

    DoD RESPONSE: Concur. DSCA is developing an automated EUM tool that
    will be incorporated into the Security Cooperation Information Portal
    (SCIP) and will consolidate the data recommended by the GAO report.
    Deployment of this tool is tentatively planned for October 2004. It
    will include the following:

    * It will give the security assistance community (e.g., DSCA,
    implementing agencies, Combatant Commands, security assistance
    organizations and host nations) access to input and view data regarding
    deliveries and inventory information/controls for Communication
    Security (C4ISR) articles, STINGER, Advanced Medium Range Air-to-Air
    Missile (AMRAAM), Tube-Launched, Optically-Tracked, Wire-Guided (TOW
    II-B) missiles, JAVELIN missiles, Night Vision Devices (NVD), cruise
    missiles, unmanned aerial vehicles, and articles and services provided
    under grant assistance programs.

    * It will allow for entry of serial numbers, notes, inspection
    histories, technical details, delivery data, current inventory data,
    Presidential Determination dates, and other similar data required to
    successfully track and monitor defense articles and services.

    * It will be secure and compartmentalized by country and Combatant
    Command ensuring that only users with a need-to-know may access
    specific data. Some users (e.g., DSCA and implementing agencies) will
    have access to all data.

    * It will provide a method to track, extract, and report on all data.

    RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
    direct the Defense Security Cooperation Agency to issue standardized
    inventory and physical security inspection procedures for U.S. security
    assistance organization officials. (p. 34/GAO Draft Report):

    DoD RESPONSE: Concur. DSCA has developed checklists for use by EUM
    Tiger Teams evaluating each of the articles listed as Enhanced EUM
    articles which includes Stinger missiles. In October 2003, DSCA
    provided the Combatant Commands draft copies of these checklists. The
    checklists are currently being staffed by DSCA to the implementing
    agencies for comments and recommendations prior to publication and
    dissemination. These checklists will help ensure that EUM Tiger Team
    members are reviewing items completely and consistently. It will also
    help the SAOs to understand what the Tiger Teams will be assessing. In
    addition to these checklists, each Combatant Command with Stinger
    Missiles is developing their own EUM standard operating procedures.
    These procedures will include checklists and other more detailed
    guidance for the SAOs.

    General Comments:

    The purpose of this GAO report was "... to assess (1) the nature and
    extent of the MANPADS threat, (2) the Department of State's efforts to
    control the international proliferation of MANPADS, (3) the Department
    of Defense's end-use monitoring of Stinger missiles, and (4) the
    Department of Homeland Security's efforts to develop technical
    countermeasures." (p. 1) The recommendations directed toward the
    Department of Defense and the focus of our technical comments below
    pertain to number 3 - our end-use monitoring (EUM) program.

    The audit reviewed EUM inventory procedures and discussed at length
    record-keeping practices. These are valid topics and the report cited
    some areas where we need to improve. We are committed to our EUM
    program and will implement the GAO recommendations to enhance the
    targeted areas. While the GAO report highlighted some issues, it did
    not address many aspects of our total EUM program. There are several
    pieces to our overall export control program that must all be
    considered in any evaluation of its effectiveness.

    There are several procedures we have in place to ensure that our weapon
    system technologies are protected and proliferation and terrorist risks
    are mitigated. In fact, our monitoring process begins before a transfer
    ever takes place. Our processes are extensive and cover a range of
    activities that occur before, during, and after a transfer. We check
    vigorously (1) who we sell to, and (2) what they do with it.

    Under security assistance procedures, the Department of Defense only
    provides defense articles, services and training to foreign governments
    and international organizations that have been approved by the
    Department of State and determined by the President as supporting our
    national security and foreign policy objectives. Each country we sell
    Stinger missiles to must in fact be "eligible" - as determined by the
    Department of State and the President on a country-by-country basis.
    Each proposed transfer is thoroughly vetted by many different
    organizations and offices to ensure releasability, disclosure, and
    other concerns are addressed. Foreign customers' requests for Stinger
    missiles are coordinated closely with the Combatant Commands and the
    U.S. country team. The U.S. country team must assess several aspects of
    the transfer to include political impacts in the region as well as the
    ability of the host nation and the security assistance organization in-
    country to properly perform end-use monitoring on the missiles. Formal
    Congressional Notification is required prior to offers of Stinger
    missiles that meet required dollar thresholds. Bottom line: The foreign
    customers to whom we provide Stinger missiles are trusted partners. Our
    vetting and review processes give us a high level of confidence that
    the missiles provided under security assistance programs do not pose a
    terrorist threat. The draft report (p. 2) points out that "... 20
    countries have produced at least 30 different types of MANPADS, with
    between 500,000 and 750,000 weapons believed to be in the worldwide
    inventory today." These missiles, transferred by other countries, pose
    the more significant threat.

    As indicated in the audit, our EUM program includes inventory and
    inspection requirements to be performed by the recipient nation as well
    as our USG security assistance organizations. We recognize the resource
    burden on our security assistance organizations (SAOs) and are working
    with the Defense Threat Reduction Agency (DTRA) to supplement their
    inventory activities. The DTRA personnel are well-versed in inspection
    procedures and should help us ensure inventories are completed
    accurately, consistently, and in a more timely manner.

    Specific Comments:

    1. Title/Highlight Page. "Because DoD has not required DoD agencies to
    retain these records, it does not know how many Stingers have been sold
    overseas."

    Page 21. "DoD lacks reliable control records because there have been no
    DoD requirements for keeping Stinger shipping records over the years."

    DoD Comment: DoD agencies are required to retain security assistance-
    related records - which would include Stinger shipping records. These
    requirements have been in-place for many years and are found in DoD
    5105.38-M, "Security Assistance Management Manual (SAMM)," 3 October
    2003, Chapters 6 and 8, and DoD 7000.14-R, "Financial Management
    Regulation," Volume 15, Chapter 6, January 2002. With the current
    emphasis we are placing on EUM we recognize that more specificity about
    tracking and retaining EUM records would be helpful. The EUM
    functionality currently in-work for the Security Cooperation
    Information Portal (SCIP) should allow us to consolidate existing
    records and make it easier to track these records. As stated in our
    response to Recommendation #1, we will amend the SAMM to make sure the
    record-keeping standards for End-Use Monitoring (EUM) activities are
    more clear.

    2. Title/Highlight Page. "DoD officials overseas use inconsistent
    practices when inspecting Stinger inventories because DoD lacks
    procedures for conducting these inspections."

    Page 26. "The lack of inventory inspection procedures may result in
    Stingers not receiving the level of inspection envisioned by DoD and
    would impair DSCA's ability to collect consistent and useful inventory
    data necessary for managing the Stinger end-use monitoring program."

    DoD Comment: DoD has provided procedures for conducting Stinger
    inventories and inspections---both with regard to inspecting record-
    keeping as well as inventory procedures. Procedures for Stinger
    inventories were provided in DSCA Policy Memorandum 03-10, dated 4 June
    2003. Specifically, the policy required that "Except for missiles
    deployed to hostile areas, the SAO will physically inventory 100
    percent of in-country Stinger missiles, grip stocks and other essential
    components annually. The inventory must include review of the
    recipient's records of monthly two-man verifications as required by the
    Stinger/MANPADS LOA or other arms transfer document note. Unless
    problems indicate the necessity for such action, the manufacture sealed
    missile and weapon round containers should not be opened during the
    inventory." DSCA Policy Memorandum 04-11, dated 2 April 2004, included
    a draft Stinger missile inventory checklist. This checklist provides
    detailed guidance on facility and security requirements as well as
    specific inspection standards to be used by EUM Tiger Teams. The
    checklist also provides signs to look for to identify any tampering
    that may have been done to the missile. These memoranda were
    incorporated in the SAMM, Chapters 5 and 8. Additionally, the Combatant
    Commands' EUM directives and Standard Operating Procedures should
    provide more detailed guidance for these inventories. For example,
    EUCOM Directive Number 90-5, Annex A, "Stinger/MANPADS Procedures/
    Requirements," reiterates guidance in the DSCA policy memoranda and
    includes a detailed checklist to verify SAO inspection actions are
    complete. PACOM and CENTCOM, the other Combatant Commands with
    countries who have purchased Stinger missiles under Foreign Military
    Sales (FMS), have issued similar guidance. DSCA recognizes that even
    more information may be needed and is adding pictures to our checklists
    to help ensure these inventories are consistent across the Combatant
    Commands.

    3. Page 22. "Army and DSCA officials said that there had been great
    pressure in recent years, particularly in the 1990's, to reduce
    paperwork at U.S. missions and offices overseas. Therefore, many older
    Stinger records were likely destroyed during efforts to dispose of
    older paperwork."

    DoD Comment: This statement should not be attributed to DSCA officials.

    4. Page 24. "However, in August 2000, we reported that relying on
    foreign government's records might pose a risk to achieving 100-percent
    accounting of the missiles because the reliability of accountability
    systems varies from country to country. We further reported that DSCA
    had discovered discrepancies in foreign governments' Stinger missile
    inventories after completing its annual inventory in December 1999.
    DSCA officials stated in August 2000 that it would investigate these
    discrepancies. We recommended that DoD reconcile discrepancies in
    foreign governments' Stinger missile inventories, where discrepancies
    existed. However, as of April 2004, our specific recommendation has not
    been implemented."

    DoD Comment: DSCA agrees that foreign governments' records should not
    substitute for mandatory USG inventories. As agreed to in our response
    to the August 2000 audit, DSCA monitored the CY2000 inventory results,
    and found no discrepancies in the reports that warranted corrections.
    In addition, in December 2002, DSCA published DSCA Policy Memorandum
    02-43 that requires the SAO to "establish inventory and reporting
    procedures with the host nation for all Enhanced EUM items."
    Additionally, in June 2003, DSCA published DSCA Policy Memorandum 03-10
    requiring 100% accountability of Stinger missiles by the SAO. The
    requirements in these memoranda have been incorporated into the SAMM.

    5. Page 24. "However, because DoD does not have complete original
    shipping records, SAO officials have sometimes had to rely on the
    recipient country or the European Stinger Project Group to provide
    records to perform the inventory inspections. For example, DSCA
    officials said that in 2003 the Japanese government provided the only
    available Stinger records in Japan. At one of the SAOs we visited, the
    latest SAO official arrived in 2003 to find there was no Stinger
    paperwork on record. At another SAO we visited, SAO officials had no
    record of the Stingers purchased from the United States."

    DoD Comment: DSCA agrees that in some instances the SAOs are overly-
    dependent on host nation records. We are addressing this problem
    through our policy guidance, the EUM SCIP functionality, and our
    Familiarization Visits. However, the reference above to the Japan
    inventories is not correct. In fact, in response to the DSCA Policy
    Memorandum 03-10, in 2003, Mutual Defense Assistance Office (MDAO)-
    Japan (the USG SAO-equivalent office in Japan) conducted a 100%
    inventory of the Japanese Self Defense Forces' Stingers and provided
    corresponding serial numbers to DSCA.

    6. Page 26. "We reported in August 2000 that DoD had similar problems
    in the routine monitoring of defense articles the United States sold
    overseas. At that time, we reported that DoD had not effectively
    implemented the requirement for routine monitoring that its field
    personnel observe and report on foreign governments' use of U.S.
    defense articles and services transferred through the Foreign Military
    Sales program, including Stingers.

    DoD had not issued guidance specifying what monitoring was required. As
    a result, field personnel interpreted differently the requirements and
    activities that they were to perform. We recommended that DoD issue
    additional guidance for the routine observation of U.S. defense
    articles sold overseas. As of April, our specific recommendation had
    not been implemented."

    DoD Comment: DSCA Policy Memoranda 02-43 (4 December 2002), provides
    guidance to the SAOs regarding their EUM responsibilities. Included in
    this policy is the requirement to conduct Routine EUM visits in
    compliance with existing guidance in pamphlet "End-Use Monitoring of
    Defense Articles & Services." While we are focusing most of our efforts
    on the Enhanced items, we also expect the security assistance community
    to conduct Routine EUM in conjunction with other assigned duties. This
    expectation has been communicated through the policy memorandum cited
    above and during Familiarization and Tiger Team visits as well as other
    out-reach programs (e.g., security assistance conferences).

    7. Page 27. "In addition to the SAOs, we found that DSCA has gaps in
    its inventory inspection records. DSCA has maintained a total of 18
    annual inventory inspection reports from SAOs over the 22-year history
    of Stinger sales. For 2002 - the most recent year for which records
    were available - DSCA had on record 6 of 18 countries' inventory
    inspection reports. Moreover, DSCA has no procedures for SAOs to report
    the results of their Stinger inventories to DSCA. As a result, DSCA
    said that some SAOs report their Stinger missile inventories to DSCA
    using missile serial number but that others do not."

    DoD Comment: DSCA provided specific reports that were requested by the
    GAO for Turkey, the U.K., Pakistan, Greece, and Germany. With regard to
    procedures for SAOs to report results of Stinger inventories---DSCA
    Policy memorandum 03-10 mandates that the Combatant Commands
    consolidate and provide Stinger inventory reports to DSCA by 1 December
    of each year.

    The Department of Defense appreciates the opportunity to comment on the
    draft report. My point of contact on this matter is Mr. Leon Yates. He
    may be contacted by e-mail: leon.yates@dsca.mil or by telephone at
    (703) 601-3865.

    Sincerely,

    Signed by:

    TOME H. WALTERS, JR.
    LIEUTENANT GENERAL, USAF
    DIRECTOR:

    The following are GAO's comments on the Department of Defense letter
    dated May 7, 2004.

    GAO Comments:

    1. We incorporated DOD's comments on how it vets and reviews each
    proposed transfer of Stinger missiles to foreign governments to present
    a description of the review that occurs prior to delivery and
    monitoring of Stingers. According to DOD, it provides defense articles,
    services, and training to foreign governments and international
    organizations that have been approved by State and determined by the
    President as supporting U.S. national security and foreign policy
    objectives. DOD said that each proposed transfer of Stinger missiles is
    thoroughly vetted by many different organizations and offices, thus
    providing DOD a high level of confidence that the missiles under
    security assistance programs do not pose a terrorist threat. However,
    these procedures do not negate the need for rigorous and comprehensive
    end-use monitoring of Stingers after their delivery to recipients.

    2. In its comments, DOD stated that it has recordkeeping requirements
    for implementing agencies and security assistance organizations
    regarding security assistance management.[Footnote 46] However, the DOD
    recordkeeping requirements to which DOD referred apply specifically to
    (1) case managers of Foreign Military Sales transfers, not to
    organizations responsible for end-use monitoring and to (2) Stinger
    missiles sold through Foreign Military Sales, not those produced by
    European countries under license agreement with the United States
    (roughly two-thirds of Stingers produced worldwide). DOD said that it
    would amend the appropriate security assistance manual to specifically
    identify the recordkeeping standards for end-use monitoring activities
    to ensure that the requirements are clear.

    3. DOD said it has provided procedures for conducting Stinger
    inventories and inspections, regarding inspection recordkeeping and
    inventory procedures. The document that DOD cited, DSCA Policy
    Memorandum 03-10, dated June 4, 2003, establishes a requirement for
    conducting a 100 percent annual Stinger inventory, but does not provide
    detailed procedures for the SAOs on how such inventories are to be
    conducted. The checklists noted in DSCA Policy Memorandum 04-11, dated
    April 2, 2004, (1) are directed to teams evaluating SAO inspections,
    not to the SAOs themselves, (2) were provided as draft copies to
    Combatant Commands only in October 2003, and (3) are currently out for
    comment and recommendations prior to publication and dissemination,
    according to DOD. Thus, these checklists had no impact on any of the
    inventories or other data that we reviewed. Furthermore, DOD's comments
    about Combatant Commands' directives are contradictory: DOD states that
    the Combatant Commands are both developing these procedures and have
    already issued them.

    4. DOD stated we should not attribute to DSCA officials the point that
    there had been great pressure in recent years to reduce paperwork at
    U.S. missions and offices overseas. However, a DSCA official made this
    statement.

    5. DOD said that the 2000 inventory results showed no discrepancies
    that warranted corrections. However, the 2000 inventory required
    inspection of only 5 percent of Stingers and used unreliable Stinger
    control records. As of April 2004, our specific recommendation had not
    been implemented.

    6. DOD stated that our finding that in 2003 the Japanese government
    provided the only available Stinger records in Japan is incorrect. DOD
    stated that the relevant U. S. office in Japan conducted a 100 percent
    inventory of Stingers in-country and provided corresponding serial
    numbers to DSCA. However, we asked DOD for documentary evidence to show
    that this inventory did not rely on foreign government Stinger records,
    but DOD provided none.

    7. DOD said that it implemented our 2000 recommendation through
    issuance of DSCA Policy Memorandum 02-43, dated December 4, 2002, which
    established SAO responsibilities for end-use monitoring. This guidance
    instructed SAOs to conduct routine end use monitoring with host
    nations, using a December 1996 pamphlet, End-Use Monitoring of Defense
    Articles & Services, incorporated into Appendix 5 of a June 2001
    document, The Management of Security Assistance, to be found at a
    listed Web site. We reviewed these documents and found them
    insufficient to address our 2000 recommendation. For example, the 2002
    DSCA Policy Memorandum lists a requirement to conduct routine end-use
    monitoring, but does not provide procedures or detailed guidance for
    doing so.

    8. We said that DSCA has gaps in its inventory inspection records and
    that DSCA has no procedures for SAOs to report the results of their
    Stinger inventories. DOD commented that DSCA provided specific reports
    that we requested and that DSCA Policy Memorandum 03-10 mandates that
    the Combatant Commands consolidate and provide Stinger inventory
    reports to DSCA by December 1 of each year. First, DSCA did not dispute
    our finding that DSCA has maintained a total of 18 annual inventory
    inspection reports from SAOs over the 22-year history of Stinger sales
    or that for 2002, DSCA had on record inventory inspection reports for 6
    of 16 countries (plus Taiwan). Second, DSCA did not provide only those
    reports it mentioned in response to our specific request. On September
    16, 2003, we requested from DSCA all inventory inspection records
    related to Stingers, including records for those countries that we
    planned to visit. On October 17, 2003,DSCA provided requested records
    for multiple countries, including 4 countries that we did not plan to
    visit; it did not provide the requested records for the United Kingdom,
    which we did plan to visit.

    [End of section]

    Appendix III: Comments from the Department of Homeland Security:

    U.S. Department of Homeland Security
    Science and Technology Directorate
    Washington, DC 20528:

    Homeland Security:

    May 5, 2004:

    Mr. Norman J. Rabkin
    Managing Director
    Homeland Security and Justice
    U.S. General Accounting Office
    Washington, DC 20548:

    Dear Mr. Rabkin:

    Thank you for the opportunity to review the draft report,
    Nonproliferation: Further Improvements Needed in U. S. Efforts to
    Counter Threats from Man-Portable Air Defense Systems.

    Overall, the report looks fine. However, we recommend that the last
    sentence of the second paragraph on page 29 be changed from "Finally,
    it will be a challenge to develop a corresponding air traffic control
    missile launch detection system" to "Finally, it will be a challenge to
    develop a missile launch notification system that effectively passes
    warning information in the National Airspace System." Additionally, it
    might be useful to note that the program has in place a number of
    milestones, complete with entrance and exit criteria that must be
    completed by the contractors before they can advance to the next stage.
    Some examples of these milestones include the System Requirements
    Review, Interim Design Review, Preliminary Design Review, and the
    Critical Design Review. Examples of entrance and exit criteria for the
    System Requirements Review include such things as the completion of a
    System Concept and Concept of Operations, a System-level Requirements
    Analysis, and a Configuration Control Document."

    Please let us know if you have questions regarding our recommendations.
    The point of contact for this action is Mr. Thomas Krones 202 402 5861
    Thomas.Krones@dhs.gov.

    Signed for:

    Anna F. Dixon:

    Director, Bankcard Programs and GAO/OIG Liaison:

    [End of section]

    Appendix IV: Comments from the Department of State:

    United States Department of State
    Assistant Secretary and Chief Financial Officer:
    Washington, D. C. 20520:

    Ms. Jacqueline Williams-Bridgers
    Managing Director:
    International Affairs and Trade
    General Accounting Office
    441 G Street, N.W.
    Washington, D.C. 20548-0001:

    MAY 6 2004:

    Dear Ms. Williams-Bridgers:

    We appreciate the opportunity to review your draft report,
    "NONPROLIFERATION: Further Improvements Needed in U.S. Efforts to
    Counter Threats from Man-portable Air Defense System," GAO Job Code
    320187.

    The enclosed Department of State comments are provided for
    incorporation with this letter as an appendix to the final report.

    If you have any questions concerning this response, please contact
    Ronald Parson, Econ Commercial Officer, Bureau of Nonproliferation, at
    (202) 647-0397.

    Sincerely,

    Signed by:

    Christopher B. Burnham:

    cc: GAO - Patrick Hickey
    NP - Susan Burk
    State/OIG - Mark Duda
    State/H - Paul Kelly:

    Department of State Comments on GAO Draft Report NONPROLIFERATION:
    Further Improvements Needed in U.S. Efforts to Counter Threats from
    Man-Portable Air Defense Systems (GAO-04-519, GAO Job Code 320187):

    The State Department commends the General Accounting Office for its
    report on Man-Portable Air Defense Systems (MANPADS). These weapons are
    indeed a deadly threat to civil as well as military aviation, and have
    the potential for causing great economic dislocation through disruption
    of air travel. For this reason, the Administration has pursued an
    aggressive diplomatic bilateral and multilateral strategy to address
    the threat posed by these weapons. In a variety of fora, during 2003
    all but a few of the producers/exporters of MANPADS have made strong
    commitments with respect to export controls, security for stockpiles at
    home and when exported, and the importance of eliminating excess or
    obsolete MANPADS. Russia, China, France, and the UK all made such
    statements in the G-8 and or APEC. A number of other governments joined
    those statements and elaborated on them in the Wassenaar decision.

    We note the GAO's recommendation that the State Department develop a
    strategy to work in multilateral fora "to establish mechanisms for
    assessing foreign governments' implementation of their commitments to
    reduce MANPADS proliferation," and acknowledge that these multilateral
    political fora - the G-8, APEC, and the Wassenaar Arrangement - lack
    formal mechanisms to monitor members' implementation of commitments. We
    share the GAO view that addressing how participating governments
    implement the policy undertakings made in December 2003 is a key next
    step. It is for this reason that the United States and other Wassenaar
    states are examining implementation during 2004, and will continue to
    do so in future years.

    However, as GAO acknowledges, the G-8 and APEC are not organizations
    but multilateral processes for coordinating national policies. Although
    more formally structured, with an organizing document and a (very
    small) secretariat, the Wassenaar Arrangement too is a policy
    coordinating forum, albeit one specifically focused on export controls
    for munitions and related dual-use technologies. Examination of how
    participating states are implementing the policies discussed and agreed
    upon will be conducted in this context.	We believe these fora provide
    the best opportunity for sustained high level attention and speedy and
    flexible responses to the threats posed by MANPADS.

    [End of section]

    Appendix V: GAO Contact and Staff Acknowledgments:

    GAO Contact:

    David Maurer (202) 512-9627:

    Staff Acknowledgments:

    In addition to the individual named above, Jeffrey D. Phillips, Sharron
    Candon, J. Addison Ricks, M. Elizabeth Guran, Lynn Cothern, Bob Levin,
    Jim Morrison, Terry Parker, Michael Aiken, and Ernie Jackson, made key
    contributions to this report.

    (320187):

    FOOTNOTES

    [1] U.S. General Accounting Office, Combating Terrorism: Interagency
    Framework and Agency Programs to Address the Overseas Threat, GAO-03-
    165 (Washington, D.C.: May 23, 2003).

    [2] 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 DOD
    personnel of U.S. security assistance organizations. Physical
    inspections by DOD personnel are required for Stinger missiles sold to
    foreign governments.

    [3] The Wassenaar Arrangement is a multilateral export control regime
    that aims to contribute to international security and stability by
    promoting greater responsibility and transparency in arms and sensitive
    dual-use (having both civilian and military uses) goods and technology
    transfers.

    [4] The OSCE is the largest regional security organization in the world
    and is active in early warning, conflict prevention, crisis management,
    and post-conflict rehabilitation.

    [5] The heads of state of the Group of Eight nations (Canada, France,
    Germany, Italy, Japan, Russia, the United Kingdom, and the United
    States) meet at an annual summit to discuss the major international
    economic and political issues of the day.

    [6] Section 150 of P.L. 104-164 (22 U.S.C. 2785).

    [7] The name of the country and the exact number of Stingers reported
    is classified information.

    [8] A "counter-MANPADS system" refers to a technical system installed
    on civilian aircraft to defend against attack by MANPADS.

    [9] U.S. General Accounting Office, The Department of Homeland Security
    Needs to Fully Adopt a Knowledge-based Approach to Its Counter-MANPADS
    Development Program, GAO-04-341R (Washington, D.C.: Jan. 30, 2004).

    [10] States participating in the Wassenaar Arrangement include
    Argentina, Australia, Austria, Belgium, Bulgaria, Canada,
    Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary,
    Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway,
    Poland, Portugal, Republic of Korea, Romania, Russian Federation,
    Slovakia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom,
    and the United States.

    [11] "Elements for Export Controls of Man-Portable Air Defense Systems
    (MANPADS)" was adopted at the December 2000 Wassenaar Arrangement
    Plenary.

    [12] Other systems include AIM-9X missiles, AMRAAM (AIM-120) missiles,
    Javelin missiles, TOW II-B missiles, night vision devices, and
    communication security articles. In addition, DOD provides enhanced
    end-use monitoring of some military assistance and financing programs,
    pursuant to Section 505 of the Foreign Assistance Act.

    [13] In addition, Germany, Greece, the Netherlands, and Turkey created
    a consortium called the European Stinger Project Group, which has a
    licensed agreement with the United States to coproduce Stinger missiles
    for its members' use. The memorandum of understanding that supports
    this agreement prescribes the same end-use monitoring requirements for
    consortium-produced Stingers as for those sold directly by the United
    States. Switzerland also had a similar coproduction arrangement with
    the United States, which expired in 2000 and prescribed the same end-
    use monitoring requirements.

    [14] P.L. 108-11.

    [15] U.S. Department of State. Briefing slides. Fifth International
    Conference on Export Controls (Budapest, Hungary: September 2003).

    [16] Actual numbers of MANPADS estimated by intelligence sources to be
    on the black or gray markets are classified.

    [17] "Elements for Export Controls of Man-Portable Air Defense Systems
    (MANPADS)" was adopted at the December 2000 Wassenaar Arrangement
    Plenary.

    [18] The Wassenaar Arrangement December 2003 Plenary revised the
    "Elements for Export Controls of Man-Portable Air Defense Systems
    (MANPADS)." http://www.wassenaar.org/2003Plenary/MANPADS_2003.htm

    [19] Names of the other 12 countries and estimated numbers of MANPADS
    in their stockpiles are classified.

    [20] Congressional Research Service, The Library of Congress, Homeland
    Security: Protecting Airliners from Terrorist Missiles RL31741
    (Washington, D.C.: Nov. 3, 2003).

    [21] The term "brokering" refers to activities of negotiating or
    arranging contracts, selling, trading, or arranging the transfer of
    arms and related military equipment from one third-party country to
    another third-party country.

    [22] "Enhance Transport Security and Control of Man-Portable Air
    Defense Systems (MANPADS): A G8 Action Plan" was adopted at the June
    2003 Group of Eight summit. http://www.g8.fr/evian/english/navigation/
    2003_g8_summit/summit_documents.html

    [23] The Wassenaar Arrangement December 2003 Plenary revised the
    "Elements for Export Controls of Man-Portable Air Defense Systems
    (MANPADS)." http://www.wassenaar.org/2003Plenary/MANPADS_2003.htm

    [24] "OSCE Document on Small Arms and Light Weapons," adopted November
    24, 2000, sets out norms, principles, and measures to address the
    uncontrolled spread of small arms that has contributed to armed
    conflicts.

    [25] The U.N. Register of Conventional Arms includes data provided
    voluntarily by member states on international arms transfers and
    information on military holdings, procurement through national
    production, and relevant policies.

    [26] The identities of the other four countries are classified.

    [27] All known national stocks of MANPADS in Bosnia and Herzegovina,
    Cambodia, and Liberia have been destroyed, and Nicaragua has begun to
    destroy its MANPADS stocks, according to the State Department.

    [28] The international Stabilization Force is a NATO-led, multinational
    military force working in Bosnia-Herzegovina.

    [29] The identities of these countries are classified.

    [30] A security assistance organization (SAO) is a DOD office located
    in a foreign country with assigned responsibilities for carrying out
    security assistance functions. It facilitates U.S. arms sales to and
    defense cooperation with foreign nations. These offices also maintain
    officials that monitor the end use of sensitive weapons systems that
    DOD has sold overseas.

    [31] 1996 Amendment to the AECA, Section 150 of P.L. 104-164 (22 U.S.C.
    2785).

    [32] DOD Directive I-03/004943; Security Assistance Management Manual
    (SAMM) Change E-45.

    [33] SAMM paragraphs 70105.L.9.C and D.

    [34] U.S. General Accounting Office, Internal Control Management and
    Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug. 1, 2001).

    [35] DOD 5105.38-M, "Security Assistance Management Manual" and DOD
    7000-14-R, "Financial Management Regulation," Volume 15. According to
    the SAMM, the case manager integrates efforts for the successful
    performance of a Foreign Military Sales case including logistics and
    financial management and closure. The implementing agency--for
    Stingers, the Army--assigns a case manager to each LOA or Foreign
    Military Sales case before the case is implemented.

    [36] The name of the country and the exact number of Stingers reported
    is classified information.

    [37] The name of this country and the exact number of these Stingers
    reported are also classified.

    [38] According to U.S. Army data, an additional 13,135 Stingers were
    produced overseas for use by five countries under the terms of
    coproduction agreements with the United States.

    [39] U.S. General Accounting Office, Foreign Military Sales: Changes
    Needed to Correct Weaknesses in End-Use Monitoring Program, GAO-00-208
    (Washington, D.C.: Aug. 24, 2000).

    [40] Routine monitoring is the day-to-day observing and reporting,
    while performing other duties, by SAO officials on foreign governments'
    use of defense articles and services transferred through DOD's Foreign
    Military Sales program.

    [41] P.L. 108-11.

    [42] GAO-04-341R.

    [43] In the last several years, we have undertaken a body of work on
    how leading developers in industry and government use a knowledge-based
    approach to product development that reduces risks and increases the
    likelihood of successful outcomes. This best practices model enables
    decision makers to be reasonably certain that key questions about their
    products were fully answered at three critical junctures or knowledge
    points during development. Decision makers can thus make better-
    informed investment decisions about product development.

    [44] U.S. General Accounting Office, Best Practices: Highlights of the
    Knowledge-Based Approach Used to Improve Weapon Acquisition, GAO-04-
    392SP (Washington, D.C.: Jan. 1, 2004); Best Practices: Using A
    Knowledge-Based Approach To Improve Weapon Acquisition, GAO-04-
    386SP (Washington, D.C.: Jan. 1, 2004); Best Practices: Capturing
    Design and Manufacturing Knowledge Early Improves Acquisition Outcomes,
    GAO-02-701 (Washington, D.C.: July 15, 2002).

    [45] A Combatant Command has operational control of U.S. combat forces
    from two or more military departments and is normally organized on a
    geographical basis.

    [46] DOD 5105.38-M, "Security Assistance Management Manual" and DOD
    7000-14-R, "Financial Management Regulation," Volume 15.

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