oversight

Export Promotion: The Export-Import Bank's Financing of Dual-Use Exports

Published by the Government Accountability Office on 2012-04-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States Government Accountability Office
Washington, DC 20548




              April 12, 2012

              Congressional Committees

              Subject: Export Promotion: The Export-Import Bank’s Financing of Dual-Use Exports

              Since October 1994, the Export-Import Bank of the United States (Ex-Im) has had statutory
              authority 1 to provide loans, guarantees, and insurance to facilitate the financing of U.S. exports
              of defense articles and services, provided that Ex-Im determines that these items are nonlethal
              and primarily meant for civilian use. 2 These dual-use exports include items such as vehicles
              used by the military mainly for civilian or humanitarian purposes. Legislation providing this
              authority requires us to report annually on the end uses of dual-use exports financed by Ex-Im
              during the second preceding fiscal year.

              This report identifies (1) the dual-use exports, if any, that Ex-Im financed in fiscal years 2010
              through 2011 and (2) the end uses of any such exports. Ex-Im did not finance any dual-use
              exports in fiscal years 2010 and 2011, according to our review of relevant data on Ex-Im
              authorizations.

              To identify the financing of the dual-use exports, if any, in fiscal years 2010 through 2011 and
              the end uses of those exports, we reviewed Ex-Im data on dual-use determinations. In addition,
              we interviewed Ex-Im officials who monitor end-user compliance with dual-use requirements,
              which included the Vice President of the Engineering and Environment Division. We determined
              that Ex-Im data on the end uses of dual-use exports financed by Ex-Im are sufficiently reliable
              for this review.

              We conducted this performance audit from March to April 2012 in accordance with generally
              accepted government auditing standards. Those standards require that we plan and perform the
              audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings
              and conclusions based on our audit objectives. We believe that the evidence obtained provides
              a reasonable basis for our findings and conclusions based on our audit objectives.



              1
               The Export-Import Bank Reauthorization Act of 2006 (P.L. 109-438, Dec. 20, 2006) extended through September
              30, 2011, provisions in 1994 legislation (P.L. 103-428, Oct. 31, 1994) authorizing Ex-Im to finance certain dual-use
              exports. Under this legislation, Ex-Im can use up to 10 percent of its total annual loan, guarantee, and insurance
              authority to support the sale of these dual-use exports. The Consolidated Appropriations Act of 2012 (P.L. 112-74)
              extended Ex-Im’s dual-use financing authority through fiscal year 2012.
              2
               According to Ex-Im, a dual-use export is eligible for financing if convincing evidence exists that the export is
              nonlethal in nature, and the export will be used mainly for civilian activities. Furthermore, Ex-Im may require the buyer
              or end user to provide certification to that extent.




                                                                                                     GAO-12-628R Export- Import Bank
We are not making any recommendations in this report.

We provided Ex-Im a draft of this report. The agency commented orally that the information in
the correspondence is accurate.


We are sending copies of this report to interested congressional committees and to the
President and Chairman of the Export-Import Bank, the Secretary of Defense, and the Secretary
of State. In addition, this report is available at no charge on the GAO website at
http://www.gao.gov.

If you or your staff has any questions about this report, please contact me at (202) 512-4101 or
gomezj@gao.gov. Key contributors to this report were Celia Thomas, Assistant Director;
Rhonda Horried; and Kye Printup.




Alfredo Gomez
Acting Director
International Affairs and Trade




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           List of Committees

           The Honorable Tim Johnson
           Chairman
           The Honorable Richard C. Shelby
           Ranking Member
           Committee on Banking, Housing, and Urban Affairs
           United States Senate

           The Honorable Richard Durbin
           Chairman
           The Honorable Jerry Moran
           Ranking Member
           Subcommittee on Financial Services and General Government
           Committee on Appropriations
           United States Senate

           The Honorable Spencer Bachus
           Chairman
           The Honorable Barney Frank
           Ranking Member
           Committee on Financial Services
           House of Representatives

           The Honorable Jo Ann Emerson
           Chairwoman
           The Honorable Jose Serrano
           Ranking Member
           Subcommittee on Financial Services and General Government
           Committee on Appropriations
           House of Representatives




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