The statistics are based primarily on  data filed by exporters and their agents into the electronic Automated  Export System (AES) database. Exporters who knowingly ship  U.S. goods to Iran via other countries without a Treasury license are  subject to prosecution by the Department of Justice. U.S. Export Statistics for Iran Erroneously Include Goods Not Exported to Iran

The U.S. government’s official statistics for U.S. exports to Iran  erroneously include many types of goods that U.S. firms did not export to  Iran. The misidentification of Iran as the recipient country in the statistics  is the result of export data filing errors that Census did not detect or  correct. Census officials stated that, as a result of our review, Census has  begun manually checking new export filings reporting exports to Iran. U.S. Treasury Is Licensi Exports to Iran in Accordance with Trade Ban but Cannot Provide Complete and Timely Inform ation on Its Licensing Decisions

Treasury is licensing exports to Iran in accordance with the trade ban but  cannot provide other agencies or Congress with complete and timely  licensing information. Treasury is planning to upgrade it system for tracking licenses for agricultural and medical exports to Iran,  which are permitted by TSRA. It cannot do so  because it relies on paper-based information systems that cannot be  searched to identify licenses for the export of goods to Iran. For  example, a Treasury official informed U.S. Customs and Border Protection  (CBP) officials in 2009 that Treasury’s information systems could not  provide CBP with complete and timely information on licenses issued for  the export of goods to Iran. Given Treasury’s central role in  licensing exports to Iran, its inability to provide complete and timely  licensing information weakens government efforts to determine whether  dual-use and other goods exported to Iran have been properly licensed and  to assess compliance with the trade ban. Iran Is Obtaining Illegal Transshipments of U.S. Military and Dual-Use Goods through Other Countries

According to U.S. officials, Iran is obtaining U.S. military and dual-use  goods that are being illegally transshipped by firms and individuals  through locations in numerous countries, including the United Arab  Emirates, Malaysia, and Singapore. Conclusions

While the United States government has severely restricted U.S. exports to  Iran, it cannot readily determine the extent to which it has issued licenses  for such exports or the extent to which goods marked for Iran are leaving  U.S. ports. Key contributors are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

To assess the extent to which U.S. statistics accurately depict U.S. exports  to Iran, we analyzed the results of a Census Bureau review of records  regarding all types of goods reportedly shipped to Iran from 2004 through  2008 to determine the specific destinations of those goods. We also interviewed  relevant Treasury licensing, information technology, and enforcement  officials. U.S.C. 2. 3.
Why GAO Did This Study

In 1995, the United States banned exports to Iran of most U.S. goods without a Treasury Department license. In 2008, the U.S. media, citing U.S. government statistics, reported that U.S. firms were exporting numerous goods to Iran. The statistics are maintained by the Census Bureau and are based on data filed by exporters or their agents. The United States has also generally banned unlicensed transshipments of U.S. goods to Iran via other nations. In this report, GAO assesses the extent to which (1) U.S. trade statistics accurately depict exports to Iran, (2) Treasury licenses exports to Iran in accordance with the trade restrictions and provides licensing data to enforcement agencies and Congress, and (3) Iran obtains U.S. military and dual-use goods through transshipment. GAO analyzed Census export data, a randomly selected sample of Treasury export licenses, Treasury licensing information systems, and U.S. government transshipment data. It also interviewed relevant U.S. government officials.

What GAO Found

U.S. trade statistics for exports to Iran erroneously include goods that were not exported to Iran. While the statistics indicate that U.S. firms exported 278 types of goods to Iran from 2004 to 2008, 97 of these types of goods were instead exported to Ireland, Iraq, and other countries. The misidentification of Iran as the recipient resulted from errors in export data filings that Census did not detect or correct. As a result of our review, Census officials stated, Census has begun manually checking all new filings of exports to Iran and posting corrections to a Census Web page. While Treasury is licensing exports to Iran in accordance with export restrictions, it cannot provide complete and timely information about the licenses it has issued. Its paper-based licensing information systems cannot be searched to quickly identify licenses for exports of goods to Iran. For example, Treasury was unable to address a 2009 request from U.S. Customs and Border Protection (CBP) officials for complete and timely licensing data to support CBP inspectors at U.S. ports. Treasury's information systems weaken the ability of the government to assess compliance with Iran sanctions. Treasury plans to upgrade its licensing information system for agricultural and medical exports to Iran. However, the upgrade would not address its inability to readily identify licenses for other goods, including civilian items with potential military uses. A wide range of U.S. military and dual-use goods are illegally transshipped to Iran through the United Arab Emirates (UAE), Malaysia, Singapore, and other countries, according to U.S. officials. The Justice Department has prosecuted several individuals for efforts to transship military aircraft parts to Iran.