Key Elements of Export Control System

State and Commerce’s export control systems are based on fundamentally different premises. This difference in who makes licensing decisions underscores the weight the two systems assign to economic and commercial interests relative to national security concerns. Under States’ system, Commerce is not involved, underscoring the primacy of national security and foreign policy concern. Commerce’s system is more transparent to the license applicant than State’s system. Evolution of Export Controls for Commercial Satellites

Export control of commercial communications satellites has been a matter of contention over the years among U.S. satellite manufacturers and the agencies involved in their export licensing jurisdiction—the Departments of Commerce, Defense, State, and the intelligence community. In April 1995, the Chairman of the President’s Export Council met with the Secretary of State to discuss issues related to the jurisdiction of commercial communications satellites and the impact of sanctions that affected the export and launch of satellites to China. The process of planning a satellite launch takes several months, and there is concern that technical discussions between U.S. and foreign representatives may lead to the transfer of information on militarily sensitive components. Observations on the Current Export Control System

The addition of new controls over satellites transferred to Commerce’s jurisdiction in 1996 addressed some of the key areas where the Commerce procedures are less stringent than those at State. There remain, however, differences in how the export of satellites are controlled under these new procedures. Congressional notification requirements no longer apply, although the Congress is currently notified because of the Tiananmen waiver process. Sanctions do not always apply to items under Commerce’s jurisdiction. Defense’s power to influence the decision-making process has diminished since the transfer. Technical information may not be as clearly controlled under the Commerce system. The additional controls applied to the militarily sensitive commercial communications satellites transferred to Commerce’s control in 1996 were not applied to the satellites transferred in 1993.
Why GAO Did This Study

GAO discussed the military sensitivity of commercial communications satellites and the implications of the 1996 change in export licensing jurisdiction, focusing on: (1) key elements in the export control systems of the Departments of Commerce and State; (2) how export controls for commercial satellites have evolved over the years; (3) concerns and issues debated over the transfer of commercial communications satellites to the export licensing jurisdiction of Commerce; (4) safeguards that may be applied to commercial satellite exports; and (5) observations on the current export control system.

What GAO Found

GAO noted that: (1) the U.S. export control system--comprised of both the Commerce and State systems--is about managing risk; (2) exports to some countries involve less risk than to other countries and exports of some items involve less risk than others; (3) the planning of a satellite launch with technical discussions and exchanges of information taking place over several months, involves risk no matter which agency is the licensing authority; (4) recently, events have focused concern on the appropriateness of Commerce jurisdiction over communication satellites; (5) this is a difficult judgment; (6) by design, Commerce's system gives greater weight to economic and commercial concerns, implicitly accepting greater security risks; (7) by design, State's system gives primacy to national security and foreign policy concerns, lessening--but not eliminating--the risk of damage to U.S. national security interests; (8) the addition of new controls over satellites transferred to Commerce's jurisdiction in 1996 addressed some of the key areas where the Commerce procedures are less stringent than those of State; (9) there remain, however, differences in how the export of satellites is controlled under these new procedures; (10) Congress notification requirements no longer apply; (11) sanctions do not always apply to items under Commerce's jurisdiction; (12) the Department of Defense's power to influence the decisionmaking process has diminished since the transfer; (13) technical information may not be as clearly controlled under the Commerce system; and (14) the additional controls applied to the militarily sensitive commercial communications satellites transferred to Commerce's control in 1996 were not applied to the satellites transferred in 1993.