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GAO-19-673R 1 (2019-09-09)

handle is hein.gao/gaobadzye0001 and id is 1 raw text is: G A U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 September 9, 2019 The Honorable Robert Menendez Ranking Member Committee on Foreign Relations United States Senate Conventional Arms Transfer Policy: Agency Processes for Reviewing Direct Commercial Sales and Foreign Military Sales Align with Policy Criteria From 2014 through 2018, the U.S. government authorized hundreds of billions of dollars in arms transfers to foreign entities, including foreign governments, with more than $180 billion in fiscal year 2018 alone. The United States uses two key arms transfer programs to support foreign policy and national security goals: (1) Direct Commercial Sales (DCS), for which a U.S. corporation and a foreign buyer negotiate the sale of arms, and (2) Foreign Military Sales (FMS), for which the U.S. government and a foreign government negotiate an agreement for the purchase of arms.1 The Department of State (State) is responsible for authorizing both DCS and FMS transfers. State oversees the licensing process for direct commercial sales, while the Department of Defense (DOD) implements foreign military sales. Both DCS and FMS transfers undergo extensive review processes, including national security and foreign policy reviews, intended to ensure these arms transfers safeguard U.S. interests. In addition, five different U.S. Presidents, beginning with President Carter in May 1977, have issued conventional arms transfer (CAT) policies, which provide a framework for the Executive Branch to consider these transfers. The two most recent CAT policies were the Obama administration's Presidential Policy Directive-United States Conventional Arms Transfer Policy (PPD-27), issued in January 2014, and the Trump administration's National Security Presidential Memorandum Regarding U.S. Conventional Arms Transfer Policy (NSPM-10), issued in April 2018.2 Both the prior and current policies required that executive branch entities take into consideration a set of criteria when evaluating proposed arms transfers. You asked us to review the U.S. government's implementation of the CAT policy. Specifically, we determined (1) whether State's and DOD's processes for reviewing proposed arms transfers 1For the purposes of this report, arms transfers include defense articles and services authorized for sale through direct commercial sale, as well as defense articles and services that the U.S. government sells to foreign governments and international organizations through the FMS program. They do not include transfers under the Department of Commerce's jurisdiction including less sensitive items, dual-use items, and basic commercial items. For more information on the roles of various agencies in the U.S. government's export control system, which is intended to manage risks associated with exporting sensitive items and ensure that legitimate trade can still occur, see Export Controls: State and Commerce Should Share Watch List Information If Proposed Rules to Transfer Firearms are Finalized, GAO-19-307 (Washington, D.C.: March 1,2019). 2A CAT Policy Implementation Plan was also released in July 2018. According to State, the implementation plan is intended to provide a whole of government approach to better align conventional arms transfers with national security and economic interests. The plan also seeks to modernize U.S. government policies and processes related to arms transfers. State assesses and reports on progress toward achieving the plan's aims on a quarterly basis, and issued its most recent update in May 2019. GAO-1 9-673R Conventional Arms Transfers Page 1

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