However, in an exception to this  rule, Ex-Im was granted authority to facilitate the financing of U.S. exports  of defense articles and services, provided that it determines that these  items are nonlethal and primarily meant for civilian end use. These three transactions accounted for $1.03 billion in Ex-Im financing, or  just under 3 percent of Ex-Im’s financing for fiscal year 2012 of $35.8  billion. Ex-Im Revised and Implemented Guidance to Address Weaknesses in Monitoring the End Use of Dual-Use Items

Ex-Im addressed weaknesses in monitoring the end use of dual-use  items by revising and implementing its guidance for monitoring these  items, consistent with our August 2014 recommendation. The revised  guidance clarified the responsibilities of Ex-Im staff for monitoring the end  use of exported dual-use items after the bank’s board of directors  authorizes an export transaction. As a result of implementing the revised  guidance, Ex-Im has received in a timely manner all documents required  through June 2015 since our last report, issued in August 2014. Ex-Im Revised Its Guidance for Monitoring End Use

Ex-Im revised its 1997 memorandum on the implementation of its dual- use policy for military applications–-which had not been updated prior to  our 2014 review–-and disseminated the revised memorandum to relevant  staff on March 11, 2015. The engineer is to make an annual  determination as to whether information received during the previous  year was adequate to demonstrate that the transaction complied (or  failed to comply) with the requirements of the bank’s dual-use policy,  as set forth in the financing agreement and the bank’s charter. Ex-Im Did Not Finance Any New Dual-Use Export Transactions in 2014, According to Application Data and Ex-Im Reviews

Ex-Im did not finance any new exports under its dual-use authority in  fiscal year 2014, according to Ex-Im officials and our review of relevant  data on Ex-Im authorizations. We also received technical  comments from Ex-Im officials. Appendix I: Objectives, Scope, and Methodology

To examine how the Export-Import Bank of the United States (Ex-Im)  addressed weaknesses in monitoring the end uses of the dual-use  exports it continued to finance in fiscal year 2013, and to identify what  dual-use exports, if any, Ex-Im reported it financed in fiscal year 2014, we  reviewed Ex-Im documentation regarding its dual-use policy, including a  1997 memorandum on implementing that policy; a revised 2015  memorandum; Ex-Im documentation associated with each of the three  dual-use transactions Ex-Im financed in fiscal year 2012; and data on  dual-use determinations.
Why GAO Did This Study

Since 1994, Ex-Im has had the authority to facilitate the financing of dual-use exports, which include construction equipment used by foreign militaries to build roads. After a 9-year hiatus, Ex-Im financed three dual-use exports in fiscal year 2012, accounting for $1.03 billion, or just under 3 percent of Ex-Im's $35.8 billion financing for that year. The Consolidated and Further Continuing Appropriations Act, 2015, extends a provision for GAO to report annually on the end uses of dual-use exports financed by Ex-Im during the second preceding fiscal year.
In August 2014, GAO reported that monitoring-related documents from borrowers required by the financing agreements were missing or late and that Ex-Im's dual-use monitoring policy did not specify what actions Ex-Im officials should take if the bank did not receive the required documents. GAO recommended that Ex-Im establish steps staff should take in cases where borrowers do not submit required end- use documentation within the time frames specified in their financing agreements and ensure that these efforts are well documented. Ex-Im agreed with GAO's recommendation and revised its guidance.
This report (1) examines how Ex-Im addressed weaknesses in monitoring the end uses of the dual-use exports it finances and (2) identifies what dual-use exports, if any, Ex-Im reported it financed in fiscal year 2014. GAO reviewed Ex-Im documents and interviewed Ex-Im officials.

What GAO Found

The Export-Import Bank of the United States (Ex-Im) addressed weaknesses in monitoring the end use of exported “dual-use” items by revising and implementing its guidance for monitoring these items, as GAO recommended in August 2014. Dual-use items are defense articles and services that Ex-Im has determined are nonlethal and primarily meant for civilian use. Specifically, Ex-Im revised its 1997 memorandum on the implementation of its dual-use policy for military applications and disseminated it to relevant staff on March 11, 2015. The updated memorandum clarified the responsibilities of Ex-Im staff for monitoring end use, and GAO found that bank staff have now taken the following steps:
made determinations , in what is to be an annual process, as to whether the information received was adequate to demonstrate that the transaction complied or failed to comply with the bank's dual-use policy.
As a result, Ex-Im has received in a timely manner all documents required since GAO's last report, issued in August 2014.
Ex-Im did not finance any new exports under its dual-use authority in fiscal year 2014, according to Ex-Im authorizations data and Ex-Im officials.