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NSIAD-00-190R 1 (2000-07-19)

handle is hein.gao/gaobaalqf0001 and id is 1 raw text is: I G ~GAO Accountability * Integrity * Reliability United States General Accounting Office National Security and Washington, DC 20548 International Affairs Division B-285661 July 19, 2000 The Honorable Benjamin A. Gilman Chairman, Committee on International Relations House of Representatives The Honorable Floyd D. Spence Chairman, Committee on Armed Services House of Representatives Subject: Defense Trade: Status of the Department of Defense's Initiatives on Defense Cooperation Representatives of the U.S. defense industry and foreign customers have expressed concerns with the policies and procedures that relate to the transfer or sale of defense articles and services and govern the programs that comprise U.S. security cooperation. Their concerns are that the policies and procedures involved are cumbersome and time-consuming and inhibit businesses from competing in the international marketplace. In response to these concerns, the Department of Defense began reexamining its policies and procedures. These policies and procedures affect (1) the release of classified information to a foreign government or individual, (2) arms transfers, which include government-to-government transfers as well as U.S. industry transfers to foreign governments or foreign companies under contract to a foreign government, (3) U.S. procurement of defense articles and services from foreign companies, and (4) the controls governing foreign ownership of U.S. defense companies. In 1998, the Department commissioned three studies to consider the benefits and risks that an increasingly global defense industrial base would have on national security. Enclosure I summarizes these studies along with related white papers and an interagency report on the export licensing process. Concerned about the national security implications of a globally integrated defense industry, you asked us to examine the Department of Defense's initiatives to change export and procurement policies and procedures. As agreed with your offices, this report provides information on the Department's recent initiatives. Specifically, we identify each initiative and describe its objective and/or source, participants, and status. We are providing this information in enclosure II. GAO/NSIAD-00-190R Defense Trade Page I

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