oversight

Export Controls: International Space Station Technology Transfers

Published by the Government Accountability Office on 1999-11-03.

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

                  United States General Accounting Office

GAO               Report to the Chairman and Ranking
                  Minority Member, Committee on Science
                  House of Representatives


November 1999
                  EXPORT CONTROLS

                  International Space
                  Station Technology
                  Transfers




GAO/NSIAD-00-14
Contents



Letter                                                                               3


Appendixes   Appendix I:   Commodities Exported Using Individual Validated
               Licenses                                                             18
             Appendix II: Examples of ISS-Related Commodities Exported
               in 1998 Under No License Required Authority                          19
             Appendix III: Comments From the National Aeronautics and
               Space Administration                                                 20
             Appendix IV: Comments From the Department of Commerce                  26




             Abbreviations

             CBM       common berthing mechanism
             EVA       extravehicular activity
             ISS       International Space Station
             MOU       Memorandums of Understanding
             MDM       multiplexer/demultiplexer
             NASA      National Aeronautics and Space Administration
             OIG       Office of the Inspector General
             RAM       Random Access Memory



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United States General Accounting Office                                                         National Security and
Washington, D.C. 20548                                                                   International Affairs Division



                                    B-283363                                                                                Leter




                                    November 3, 1999

                                    The Honorable F. James Sensenbrenner, Jr.
                                    Chairman
                                    The Honorable Ralph M. Hall
                                    Ranking Minority Member
                                    Committee on Science
                                    House of Representatives

                                    With 16 countries involved, the International Space Station Program is one
                                    of the largest scientific collaborations ever attempted.1 Under international
                                    agreements related to the program, the National Aeronautics and Space
                                    Administration (NASA), as the U.S. representative, is obligated to deliver,
                                    disclose, or transfer technology, data, and commodities necessary to meet
                                    its responsibilities in implementing the program. Concerned about the
                                    extent of safeguards to protect technology and information exported in
                                    support of the space station, you and the late Representative George
                                    Brown asked us to evaluate NASA’s implementation of federal export
                                    control regulations. Specifically, we are providing information on
                                    (1) licenses granted to NASA to export space station-related technology
                                    and commodities and plans to export encryption technology and (2) the
                                    results of internal and external assessments of NASA’s export control
                                    program and NASA’s actions to implement audit recommendations.
                                    Encryption technology provides a capability to maintain the secrecy of
                                    information and is needed to provide secure transmission of command and
                                    control instructions between ground and space elements of the space
                                    station.

                                    A significant percentage of NASA’s international activities may involve
                                    transfers of commodities, software, or technologies to foreign partners by
                                    NASA or authorized contractors. To protect national security and U.S.
                                    foreign policy interests, the export of technology and commodities to the
                                    15 partner countries involved with NASA in the International Space Station
                                    Program is controlled through a system of licenses. The Departments of
                                    Commerce and State are responsible for granting NASA such licenses.


                                    1
                                     The 16 countries are the United States, as lead partner; Canada; Japan; the European
                                    countries Belgium, Denmark, France, Italy, Germany, the Netherlands, Norway, Spain,
                                    Sweden, Switzerland, and the United Kingdom; Russia; and Brazil.




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                   Commerce issues licenses for the export of dual-use items—those items
                   that have both commercial and military applications—on the Commerce
                   Control List. Similarly, State issues licenses for exports of U. S. Munitions
                   List items—articles, services, and related technical data designated as
                   defense articles and services. NASA’s export activities must conform to the
                   procedures and regulations established by Commerce and State.



Results in Brief   Since April 1995, the Commerce Department has issued nine Individual
                   Validated Licenses2 to export specific items and one special comprehensive
                   license that allows NASA to export certain preapproved items without
                   seeking Commerce’s approval each time NASA needs to export them for
                   the International Space Station Program. Although the special
                   comprehensive license was intended to preclude the need for individual
                   licenses, NASA has only used it once because it has not been updated and,
                   according to NASA officials, individual licenses are easier to obtain than
                   updating the special comprehensive license. As new export requirements
                   have materialized, NASA has elected to apply for individual licenses rather
                   than amend the special comprehensive license. The State Department has
                   not issued any licenses to NASA to export technology or commodities for
                   the International Space Station. However, NASA erroneously authorized
                   the export of radiation-hardened electronic parts to Russia in 1997 without
                   first obtaining a license from State. NASA expects to export encryption
                   technology for use in the program but has not determined whether a
                   license is needed. NASA expects that such exports will be limited to its
                   Japanese and European partners.

                   Internal and external reviews of NASA’s export control activities have
                   identified weaknesses, including a need for greater management
                   involvement in export-related decisions and additional training to educate
                   employees involved with technology control about export laws,
                   regulations, and procedures. NASA has taken steps to correct these
                   weaknesses; however, some additional actions are needed. For example,
                   annual internal audits have not provided sufficient information to assess
                   the effectiveness of NASA’s export controls for the International Space
                   Station Program. Resulting reports of audits that were issued in 1997 and



                   2
                    An Individual Validated License is a written authorization from the government to export.
                   After a license application is approved, a license is issued by Commerce bearing the license
                   number and validation date. The license will generally be valid for a 24-month period.




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             1998 provide little detail and analyses beyond completing a required audit
             checklist.

             This report recommends improvements aimed at improving the quality of
             NASA’s internal audits.



Background   NASA had no formalized export control policy when the Space Station
             Program began in 1984, nor when the space station partnership was
             established in 1988. Although NASA issued a technical data and goods
             transfer control plan for the earlier Space Station Freedom Program in
             1991, that plan did not include procedures for making export-licensing
             determinations. When Russia joined the International Space Station (ISS)
             Program in 1993, the need for associated export controls was heightened.
             Thus, NASA established a Space Station Export Control Steering Group
             and an Interagency Export Control Working Group early in 1994 to assist in
             developing an approach to controlling exports of ISS-related commodities.
             Chaired by NASA, the groups comprised senior policy, legal, and technical
             representatives from the Executive Office of the President’s Office of
             Science and Technology Policy and the Departments of State, Commerce,
             and Defense.

             Since 1994, NASA has been developing a more comprehensive technology
             control plan specifically for the ISS Program. The plan has remained in
             draft form but has been modified since its inception. NASA intends to
             finalize its most recent draft plan in mid-November 1999. In the meantime,
             NASA employees, contractors, and centers supporting the ISS Program
             have been instructed to use the draft control plan as guidance in
             implementing ISS-related export activities.

             In 1995, NASA published an agencywide export control program document
             for all programs involved in international activities. NASA based its export
             control program on federal laws and regulations that require licenses for
             exports of controlled technologies, commodities, and services. Commerce
             and State are responsible for granting licenses to NASA and its




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designated contractors for the export of technologies to ISS partners.3
Under the authority of the Export Administration Act, Commerce
established a licensing system for exports of dual-use items—those items
that have both commercial and military applications—on the Commerce
Control List. Similarly, under the authority of the Arms Export Control Act,
State issues licenses for exports of defense articles and defense services
that are on the U.S. Munitions List. The statutory authority to issue
regulations regarding the export of dual-use items and defense articles and
services is delegated to the Secretaries of Commerce and State. Commerce
and State published the Export Administration Regulations and
International Traffic in Arms Regulations, respectively, implementing the
acts. NASA must ensure that its ISS export activities conform to these laws
and regulations. NASA’s export control program document contains a step-
by-step process for NASA employees and contractors to follow in
determining whether technology and commodities can be exported to
foreign countries, with or without a license.

NASA includes the following elements in its decision to export items in
support of the ISS Program: (1) the necessity of the export and its
consistency with NASA’s export control program, (2) any prohibitions on
the export established by federal law or regulation, (3) whether State or
Commerce is responsible for authorizing the export, and (4) whether the
export requires a license. The export classification process includes these
elements.

The line of authority for all NASA export-related activities originates at
NASA headquarters and flows to the agency’s field center export
administrators, program and project managers, and transportation officers.
These officials share responsibility for ensuring compliance with U.S.
export control regulations and NASA’s export control program. NASA’s
program requires training to be conducted at least annually and covers
issues and developments in export controls that impact the agency’s
international activities.



3
 The Export Administration Act (50 U.S.C. app. 2401, as amended) has expired. However,
Commerce carries out the Export Administration Regulations pursuant to an executive
order issued under the President’s authority in the International Emergency Powers Act.
The Arms Export Control Act (22 U.S.C. 2778, as amended) authorizes the President to
control the export and import of defense articles and services. The authority to issue
regulations with respect to export of defense articles and services was delegated to the
Secretary of State by Executive Order 11958.




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Status of Licenses and      Since April 1995, the Commerce Department has issued nine individual
                            licenses to export specific items and one special comprehensive license.
Plans to Export             With one exception, NASA has not used the special comprehensive license
Encryption Technology       granted by Commerce to facilitate exporting the large volume of ISS-
                            related technology and commodities that it expected to transfer to the
                            ISS partners. State has not issued NASA any licenses to export ISS-related
                            technologies. However, NASA inappropriately exported radiation-hardened
                            technology without having obtained a license from State. A centralized
                            database of exported technologies is in development and will include
                            information on items transferred without licenses. While encryption
                            technology has not been exported, the requirement for it is being
                            considered by NASA and its European and Japanese partners.


Licenses Issued to Export   From April 1995 through May 1999, Commerce issued nine individual
ISS Technologies            licenses to NASA for the export of ISS-related technologies. An individual
                            license is granted in response to an application for a specific export. Six
                            licenses were for items shipped to Russia, two for items shipped to Italy,
                            and one license for items shipped to Germany. Appendix I includes a
                            description of the commodities transferred using these licenses and the
                            countries of destination.

                            For ISS-related exports, NASA may request an individual license or use the
                            ISS special comprehensive license. In May 1996, Commerce issued NASA a
                            special comprehensive license to facilitate the large volume of expected
                            exports incidental to the ISS Program and to eliminate the need to apply for
                            an individual license for each item it expected to export. The special
                            comprehensive license is to be used to export only items listed in the
                            bilaterally established exchange list and included in the license. None of
                            the items are under State’s export control jurisdiction. The license covers
                            certain ISS hardware, software, and technical data under the export control
                            jurisdiction of Commerce. The license is only for the use of NASA
                            personnel and approved related entities, such as authorized contractors
                            and subcontractors listed in the license, and only when the entities have
                            received specific contractual direction from NASA.

                            With the exception of one case in which the item exported was returned
                            following a determination that procedures were properly followed, the




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                              special comprehensive license has not been used.4 NASA headquarters
                              export officials said that technologies listed in the special comprehensive
                              license, which was developed more than 3 years ago, need to be
                              reevaluated and that obtaining an individual license to transfer ISS
                              technologies is less complicated than amending the special comprehensive
                              license. In commenting on a draft of this report, Commerce stated that, in
                              1999, the NASA special license was fully entered into its electronic license
                              database, making it easier for NASA to submit changes. Commerce further
                              stated that, to export an item not identified in the original application,
                              NASA would need to submit one form; to export multiple items not
                              previously identified, NASA would submit an amendment form.

                              The special comprehensive license does not relieve NASA from its
                              obligation to request a separate license if one is required. Because
                              Commerce does not review each individual transaction authorized by the
                              special comprehensive license, NASA and the entities authorized to use it
                              must have mechanisms to ensure that each export made under it fulfills the
                              terms and conditions of the license and applicable provisions of
                              Commerce’s export regulations.


NASA Failed to Obtain State   According to NASA officials, State has not issued NASA any licenses
License in One Case           associated with the ISS Program to export items under the export control
                              jurisdiction of State. However, NASA disclosed that in January 1997,
                              radiation-hardened electronic parts were inappropriately exported to
                              Russia without a license. This export occurred because a NASA
                              contractor’s parts supplier had received an erroneous export classification
                              from the manufacturer who was not aware that the parts were on State’s
                              U.S. Munitions List, and NASA did not independently determine whether a
                              license was needed. Additional details about this export and the resulting
                              NASA investigation are discussed on pages 11 and 12 of this report.




                              4
                               NASA verified its internal process of effecting an export under the authority of the ISS
                              special comprehensive license in conjunction with the export of an electrical power system
                              to its Japanese partner. The item was returned within 30 days.




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A Database of All ISS        NASA is not required to acquire a license for all export-controlled items
Export Controlled            that are ISS related. Under federal export control regulations, NASA has
                             exported numerous ISS-related technologies with license exceptions. An
Technologies Is Being
                             exception allows NASA to export, under stated conditions, items subject to
Developed                    Commerce’s Export Administration Regulations that would otherwise
                             require a license. As required by State’s and Commerce’s regulations,
                             NASA’s export control program includes the requirement that records be
                             maintained for at least 5 years on all exports and transfers. NASA’s draft
                             ISS export control plan reiterates these requirements. Appendix II shows
                             examples of ISS-related export controlled commodities NASA exported in
                             1998 without licenses.

                             According to NASA officials, NASA’s centers have retained individual
                             records of all ISS items that the agency has made export classification
                             decisions on and exported since 1995. However, the records were not
                             summarized and the ISS program office could not readily provide us with a
                             complete list of ISS technologies exported to its partners without licenses.
                             Although such a database is not required under export control regulations,
                             having this information would be useful to supplement guidance and as a
                             crosscheck in reaching future export classification decisions. Moreover, it
                             would provide NASA, State, and Commerce with a tool to use in conducting
                             reviews to assess NASA’s compliance with export laws and regulations.

                             According to NASA officials, the database of exported technologies
                             currently in development will be a centralized database and will include
                             information on items transferred without licenses and will be available
                             agencywide. The ISS database development is a Johnson Space Center and
                             ISS program office initiative.


Plans to Export Encryption   To date, no encryption technology has been exported for use in the ISS
Technology Are Being         Program. The requirements for and potential export of encryption
                             technology needed to support the ISS are being discussed by NASA, its
Discussed
                             European and Japanese partners, and agencies that have export approval
                             authority for the technology. To date, no license has been applied for.
                             According to NASA officials, encryption will be needed to provide secure
                             transmission of command and control instructions between ISS ground and
                             space elements. The Japanese and European partners and NASA have
                             agreed to use a common U.S. standard technology as the means of
                             encrypting command and control communications. To use U.S. encryption
                             technology, the Japanese and European partners must agree to provide it a
                             level of protection equal to that provided by the United States, which would


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                    require them to procure hardware from the list of sources approved by
                    Commerce’s National Institute of Standards and Technology. NASA would
                    provide them technical support for the hardware selection, related
                    software development, and encryption key management, enabling them to
                    interpret the coded instructions. The Japanese and European partners are
                    considering a draft agreement that outlines U.S. protection requirements
                    for the technology. If they concur with U.S. protection requirements and
                    sign the agreement, NASA or the supporting contractor could initiate
                    action to obtain a license to export encryption technology to the partners.
                    NASA is collaborating with the National Security Agency and the National
                    Institute of Standards and Technology about exporting the technology to
                    these partners.

                    NASA officials stated that Russia would not be included as a destination in
                    any potential licenses for encryption technology. While Russia and the
                    United States will use a common infrastructure to transmit data between
                    ISS space and ground elements, the Russian Space Agency and NASA will
                    not use a common encryption technology or share such technology. Both
                    the United States and Russia have their own encryption systems. According
                    to NASA officials, Russia and the United States prefer using their own
                    systems.



Reviews of NASA’s   NASA’s export control program is subject to periodic internal reviews and
                    to external reviews by Commerce and State. Moreover, investigations can
Export Control      be triggered by specific events requiring follow-up. The reviews and
Program Have        investigations conducted to date have identified some weaknesses in
                    NASA’s export control program. NASA officials have taken steps to address
Identified Some     many of these weaknesses. However, further actions are needed in some
Weaknesses          areas, such as improving the quality of NASA’s internal audits.




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State’s Review of     In 1998, the State Department requested NASA’s review and comment on a
                      license application involving a U.S. company affiliated with a Russian
License Application   company for radiation-hardened electronic parts. The license application
Triggered NASA’s      had also indicated that NASA had exported the parts to Russia in the past.
                      In reviewing the application, NASA detected a potential issue of improper
Investigation of      export with its prior transfer of the parts to Russia. NASA initiated an
Radiation-Hardened    investigation and found that it had inappropriately exported radiation-
Electronics Parts     hardened electronics parts to Russia for use in the ISS Program. NASA had
                      exported these parts without a license after the parts were erroneously
Exported Without      classified as the lowest level of controlled technology. NASA did not follow
License               its own policy, which is to determine the classification of material proposed
                      for export or to ensure that its contractors have appropriately determined
                      the material’s classification. Instead, a NASA contractor’s supplier
                      determined that the export of the parts to Russia did not require a license
                      and the contractor relied on that determination. NASA, in turn, relied on its
                      contractor’s classification of these parts.

                      The parts were exported to Russia in January 1997. According to a NASA
                      export control official, the supplier’s and manufacturer’s regional office
                      officials were unaware that the radiation-hardened parts were on State’s
                      U.S. Munitions List and therefore required an export license. NASA was
                      unaware of the error for about 18 months until the U.S. company affiliated
                      with a Russian company applied to State for an export license for the same
                      parts, and State referred the license application for NASA’s review in June
                      1998. According to a State official, the request for the license in this
                      instance was to support activities associated with the Russian Mir space
                      station. NASA export control officials told us that the application
                      inaccurately stated that NASA had obtained a license for an earlier export
                      of the same parts to Russia.

                      In a June 1998 letter to State about the incident, NASA formally
                      acknowledged the error and stated that it had reminded the Russian Space
                      Agency and the Russian company that the parts were solely for use in
                      Russian-provided components of the ISS and were not to be used for any
                      other purpose or transferred without NASA’s written approval. The Russian
                      company responded that it had accounted for each of the exported parts
                      and indicated how they were being used and where they were located.
                      NASA accepted this response in good faith.

                      Although NASA may seek advice from the manufacturers to assist in the
                      determination, NASA is ultimately responsible for determining the correct



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                             classification and requesting a license, if required. As a result of this
                             incident, NASA advised State in July 1999 that the ISS program office had
                             instituted specific changes to its export procedures, requiring

                             • a manufacturer export office, rather than a sales office, to confirm
                               export classifications of commercially available items and
                             • a NASA manager to be directly involved in determining export
                               classifications before proceeding with exports.

                             According to NASA, key features of this process include a centralized
                             database to capture all ISS exports and backup data, an Export Control
                             Council to review exports and resolve issues, and documented export
                             compliance training for employees. Also, training conducted by the ISS
                             export administrator highlights the fact that radiation-hardened parts are
                             export controlled. We concur with the need for these steps.


NASA’s Office of Inspector   In March 1999, NASA’s Office of the Inspector General (OIG) completed a
General Assessment           review of the agency’s export activities related to controlled technologies.
                             The report noted that NASA had not identified all export-controlled
                             technologies related to its major programs and did not maintain a catalog
                             of classifications for transfers of export-controlled technologies. The
                             report further stated that agency oversight of training for personnel in the
                             export control program needed improvement and that, as a result, NASA
                             might not have adequate control over export-controlled technologies to
                             preclude unauthorized or unlicensed transfers. The OIG recommended that
                             NASA

                             • establish a policy and procedures for cataloging controlled technology
                               export classifications that would be available for all NASA installations;
                             • define the qualifications of personnel that perform export program
                               audits;
                             • designate only qualified personnel to perform annual audits of the
                               export control program, in accordance with established policy;
                             • establish a policy for resolving and following up on recommendations
                               resulting from export control audits;
                             • enhance the current export control training program for NASA
                               personnel, to include educating them about U.S. export laws and
                               regulations and procedures for classifying and documenting exports;
                               and
                             • expand training on a recurring basis to NASA employees involved
                               directly or indirectly with technology control.



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                           NASA concurred with the OIG report, and according to NASA officials, the
                           agency is taking actions as follows:

                           • The agency plans to establish a central catalog of export control
                             technologies. Each center has been requested to provide the
                             headquarters Export Administrator copies of all classifications made for
                             exports to facilitate the development of the catalog.
                           • NASA is hiring additional staff to conduct training in export controls
                             and write policy guidance. NASA officials told us that it was developing
                             computer-based training and that the agency plans to expand training
                             modules to include more in-depth coverage of export laws and
                             regulations, classification requirements, and procedures useful for
                             conducting the annual audits of the export control program.
                           • In addition to computer-based training, the headquarters’ and centers’
                             export control administrators will continue to conduct training
                             seminars on export controls.
                           • Auditing requirements and auditor qualifications are being included in a
                             NASA program directive and a NASA procedures guide scheduled to be
                             completed at the end of 1999. The directive and guide will also specify
                             how center management will follow up on recommendations resulting
                             from export control audits.


Commerce’s Assessment of   In June 1998, Commerce’s Office of Exporter Services reviewed NASA’s
NASA’s Export Controls     export control program, including the use of the special comprehensive
                           license for the ISS Program. The purpose of this review was to ensure that
                           NASA was complying with the Export Administration Regulations and the
                           terms of the license. Commerce also reviewed pertinent records associated
                           with NASA’s export control program, indicating in its report that NASA did
                           not have a formal procedure in place to ensure that products were at the
                           consignee sites and were being used for the intended purpose. Commerce
                           concluded that, overall, NASA had adequate export controls and was
                           complying with the act’s implementing regulations. However, to ensure full
                           compliance with the implementing regulations, Commerce recommended
                           that NASA

                           • revise its procedures for screening the Denied Persons List, a list of
                             specific persons whose export privileges have been denied by
                             Commerce;




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                       • update its export control audit module to reflect the latest Commerce
                         terminology−using the Denied Persons List instead of the Table of
                         Denial Orders;5
                       • develop a procedure for verifying that exports of certain items are at
                         their intended destinations; and
                       • develop procedures for screening against Commerce’s most current
                         entities list, which provides notice of license requirements for certain
                         end users when there is an unacceptable risk that the commodity or
                         technology may be diverted.

                       NASA has taken steps to implement these recommendations. While
                       Commerce noted that NASA does not have a formal procedure in place to
                       ensure that products are being used by the intended entity and for the
                       intended purpose, it did not make recommendations regarding this point.
                       NASA’s procedures developed in response to Commerce’s review focus on
                       verifying that exports of certain items are at their intended destinations.
                       Ascertaining that usage is as intended is not addressed.


Johnson Space Center   NASA’s export control program requires the agency’s centers to conduct
Internal Audits        annual audits of their export control practices and submit a report
                       describing the review process, audit results, and any recommendations to
                       NASA headquarters. However, such audits have not always been conducted
                       in a comprehensive and rigorous manner. NASA’s OIG found during a 1999
                       review of NASA’s export control program that though a significant portion
                       of Johnson Space Center exports related to the ISS, the Center’s auditor did
                       not review ISS exports. Moreover, we found that the Center’s 1997 and 1998
                       annual audit reports were not sufficiently detailed to provide NASA
                       headquarters with sufficient information to assess the effectiveness of the
                       agency’s export control practices. Center auditors documented their
                       reviews for fiscal years 1997 and 1998 by using a checklist−the NASA
                       Export Control Program Audit Module−that included general questions
                       requiring yes or no answers. Accompanying written reports, which were
                       supposed to include a description of the review process, the audit results,
                       and recommendations, were not prepared as required. Rather, the Center
                       auditors forwarded only the completed checklists, with limited added
                       detail, to the headquarters export administrator. For example, the
                       checklists for 1997 and 1998 included a yes answer in response to a
                       question regarding whether Commerce Export Administration Regulations’

                       5
                           Former terminology for Denied Persons List.




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                          record-keeping requirements were being followed. However, they did not
                          explain how the auditors reached this determination, nor did they include
                          any comments or recommendations on this issue. NASA guidance requires
                          auditors to verify, through sampling, that required screening and licensing
                          procedures are regularly followed and that required documents are
                          maintained in compliance with Commerce’s Export Administration
                          Regulations. In commenting on a draft of this report, Commerce pointed
                          out that the special comprehensive license also requires that NASA
                          conduct a complete system review and not simply compare its procedures
                          to an audit checklist.


Agencywide Self-          In December 1998, NASA initiated an assessment of its export control
Assessment of             program to determine whether its technology transfer and export control
                          procedures were thorough, rigorous, and provided for fully safeguarding
Transfer/Export Control
                          controlled goods and technologies, particularly in its international
Practices                 partnerships and programs. NASA required managers and employees at
                          various organizational levels to complete a questionnaire designed to
                          assess technology controls in their areas of responsibility. Consolidation of
                          all assessments is under way, and NASA’s centers will be briefed on results.
                          NASA officials told us that NASA has no plans to conduct a similar
                          agencywide self-assessment in the future on a regularly scheduled basis.

                          NASA requested feedback on its three-part questionnaire from (1) NASA
                          Enterprise directors, (2) center directors, and (3) center managers that
                          direct projects involving international participation. We examined the
                          assessments completed by the Human Exploration and Development of
                          Space Enterprise, the Johnson Space Center, and the ISS program office
                          since these entities are the most likely to be involved with ISS technology
                          transfers. While the responses about the effectiveness of the
                          implementation of NASA’s export control program were generally
                          favorable, Johnson Space Center and ISS program office assessments cited
                          a lack of adequate staff for export control matters. In particular, the
                          assessments determined that additional personnel were needed for the
                          time critical export classification process. The ISS program office
                          assessment indicated that export control personnel were working with
                          Johnson Space Center management to increase the number of personnel
                          involved.



Conclusions               NASA’s internal audits at the Johnson Space Center have not been
                          comprehensive or detailed enough to judge the effectiveness of NASA’s


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                      export control program or compliance with export control laws and
                      regulations. The reports of audit lack evidence of audit work focused
                      specifically on ISS exports and do not include detailed information on audit
                      methods, findings, and recommendations as required by the agency’s
                      export control program. Since NASA has no plans to conduct the
                      agencywide self-assessment on a regular basis, making the Johnson Space
                      Center’s audit more useful takes on added urgency.



Recommendation        To enhance NASA’s ability to oversee and implement its export controls of
                      ISS-related technologies, we recommend that the NASA Administrator
                      ensure that center-based audits are completed with sufficient detail to
                      enable the agency to identify weaknesses in NASA’s export control
                      procedures.



Agency Comments and   NASA reviewed a draft of this report and stated that the report captured the
                      many facets of export control related to the ISS Program. NASA did not
Our Evaluation        explicitly state whether it agreed or disagreed with our recommendation.
                      NASA also provided technical comments to further clarify understanding of
                      some issues and suggested revisions that we have incorporated where
                      appropriate.

                      NASA’s written comments are presented in appendix III.

                      We also provided drafts of this report to the Departments of Commerce and
                      State. We did not receive a written response from State. However, a State
                      official indicated the agency concurred with the report. Commerce
                      provided written comments, stating that the report is accurate (see app.
                      IV). Both State and Commerce provided technical suggestions for
                      clarification purposes that we incorporated where appropriate.



Scope and             To determine the number and types of ISS-related licenses issued in
                      conjunction with the ISS Program and the destination of technology and
Methodology           commodities exported to date, we compared export license records
                      maintained by NASA headquarters with Commerce’s Export Control
                      Automated Support System database. Our comparison included ISS-related
                      licenses that Commerce issued between fiscal year 1994 and the first
                      quarter of fiscal year 1998. We also reviewed program office listings of ISS-
                      related items it exported without licenses. To obtain information on the



                      Page 16                                         GAO/NSIAD-00-14 Export Controls
B-283363




status of encryption exports, we reviewed NASA records and held
discussions with NASA officials about requirements for such exports and
countries of destination.

To determine the results of past reviews of NASA’s export control program,
we reviewed audit reports conducted by NASA’s OIG and Commerce and
the results of a NASA investigation of radiation-hardened electronic parts.
We also reviewed the methodology and results of recent internal audits of
export control practices conducted by NASA’s Johnson Space Center. We
assessed NASA’s responsiveness to audit recommendations by discussing
follow-up actions with NASA officials and documenting changes in NASA’s
policies and procedures.

We conducted our review from September 1998 through September 1999 in
accordance with generally accepted government auditing standards.


Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 14 days from its issue date. At that time, we
will send copies to the Honorable Daniel S. Goldin, NASA Administrator;
the Honorable Madeleine Albright, Secretary of State; the Honorable
William M. Daley, Secretary of Commerce; the Honorable Jacob Lew,
Director of the Office of Management and Budget; and other interested
parties. We will also make copies available to others upon request.

If you or your staff have any questions concerning this report, please
contact me on (202) 512-4841. Key contributors to this assignment were
Jerry Herley, Samuel Cox, and Shirley Johnson.




Allen Li
Associate Director
Defense Acquisitions Issues




Page 17                                          GAO/NSIAD-00-14 Export Controls
Appendix I

Commodities Exported Using Individual                                                                        Appendx
                                                                                                                   ies




Validated Licenses                                                                                            Appendx
                                                                                                                    Ii




              Licenses             Description                                    Destination
                  a
              1                    Circuit emulator, International Space          Russia
                                   Station system bus upgrade,
                                   multiplexer/demultiplexer (MDM)
              Amendment            Circuit emulator, ISS system bus               Russia
                                   upgrade, MDM
              Amendment            Electronics equipment connectors               Russia
              Amendment            Prototype and flight MDM, field-testing        Russia
                                   equipment, and cable kits
              Amendment            Prototype MDMs                                 Russia
              Amendment            MDMs for payload blocks, command and Russia
                                   control, navigation and guidance, and
                                   testing; connectors; test processors; and
                                   memory cards
              Amendment            Microswitches, MDM spare prototype,            Russia
                                   functional equivalent, and flight circuit
                                   boards
              2                    Connectors, MDM prototypes and circuit         Russia
                                   boards, spare circuit boards, flight
                                   enhanced MDMs, and flight stand
              3                    Random Access Memory (RAM) and                 Russia
                                   optical couplers for developmental and
                                   flight stages
              4                    Synchronous RAM                                Russia
              5                    Microcircuit optical coupler flight parts Russia
                                   (radiation-hardened) for service module
                                   and functional energy block matching unit
                                   requirements
              6                    Hewlett Packard optical coupler circuits       Russia
              7                    Hatch assembly kits, including hatches,        Italy
                                   tracks, trusses, and roller assemblies
              8                    Institute of Electrical and Electronics        Germany
                                   Engineers (Firewire) Ethernet
                                   Hub/Gateway
              9                    Active and passive common berthing             Italy
                                   mechanism (CBM) kits; CBM seal kits
                                   with bold assemblies


              a
                  As shown, license 1 was amended six times.




              Page 18                                                          GAO/NSIAD-00-14 Export Controls
Appendix II

Examples of ISS-Related Commodities
Exported in 1998 Under No License Required
Authority                                                                                           Appendx
                                                                                                          iI




              Description                                    Destination
              Articulating portable foot restraint for ISS   Canada
              extravehicular activity (EVA)
              Seat track material to be used for evaluating Russia
              ISS designs and for interfacing with seat
              track anchors
              Labels fabricated for National Space           Japan
              Development Agency of Japan flight in
              support of the ISS
              Protective caps to provide cover for ISS       Canada
              EVA-installed communication cable
              connector
              Cable, Russian degassing pumps to            Russia
              support the Russian spacesuit unbiblical for
              flight/testing applications
              Fans/hardware                                  Canada
              Bar code reader, laser                         Russia
              Camera equipment (35-70 millimeter f2.8D Russia
              lens, Nikon) in support of Russian segment
              imagery
              Terminal switching unit                        Russia
              Smith press station for training of ISS crews Russia
              22-inch hand rails (class III) for ISS EVA     Russia
              training
              Russian simplified aid for EVA rescue          Russia
              mockup
              Ammonium persulfate reservoir and acid         Russia
              reservoirs
              Laptop computer                                Russia
              Microfixtures                                  Canada
              On-board spacesuit control assembly            Russia




              Page 19                                                 GAO/NSIAD-00-14 Export Controls
Appendix III

Comments From the National Aeronautics
and Space Administration                                            Appendx
                                                                          Ii




Note: GAO comments
supplementing those in
the report text appear at
the end of this appendix.




                            Page 20   GAO/NSIAD-00-14 Export Controls
               Appendix III
               Comments From the National Aeronautics
               and Space Administration




Now on p. 4.




Now on p. 4.




               Page 21                                  GAO/NSIAD-00-14 Export Controls
                 Appendix III
                 Comments From the National Aeronautics
                 and Space Administration




Now on p. 4.




See comment 1.
Now on p. 5.




Now on p. 7.


See comment 2.



Now on p. 7.



See comment 3.
Now on p. 7.



Now on p. 8.




Now on p. 9.




                 Page 22                                  GAO/NSIAD-00-14 Export Controls
                 Appendix III
                 Comments From the National Aeronautics
                 and Space Administration




See comment 2.
Now on p. 9.


See comment 4.
Now on p. 11.




Now on p. 11.




Now on p. 11.




Now on p. 11.




Now on p. 11.




                 Page 23                                  GAO/NSIAD-00-14 Export Controls
Appendix III
Comments From the National Aeronautics
and Space Administration




Page 24                                  GAO/NSIAD-00-14 Export Controls
               Appendix III
               Comments From the National Aeronautics
               and Space Administration




               The following are GAO’s comments on the National Aeronautics and Space
               Administration’s (NASA) letter dated September 29, 1999.



GAO Comments   1. We do not agree that the statement “NASA had no formalized export
               control policy when the International Space Station (ISS) Program began”
               is misleading. However, we have revised the text of the report to provide
               additional explanation. We believe that our report’s background section
               accurately describes the status of the NASA export control policy when the
               ISS Program began as well as the current status of its export control plan
               for the ISS Program.

               2. In our opinion, the terminology “without license” is a more accurate
               characterization of the information that will be included in the database
               being developed.

               3. We believe that our report accurately states that none of the items on the
               bilateral exchange list are under State’s export control jurisdiction.

               4. We have revised the text of the report to clarify this fact.




               Page 25                                          GAO/NSIAD-00-14 Export Controls
Appendix IV

Comments From the Department of
Commerce                                                             Appendx
                                                                           i
                                                                           IV




Note: GAO comments
supplementing those in the
report text appear at
the end of this appendix.




                             Page 26   GAO/NSIAD-00-14 Export Controls
                 Appendix IV
                 Comments From the Department of
                 Commerce




See comment 1.
Now on p. 14.




                 Page 27                           GAO/NSIAD-00-14 Export Controls
                   Appendix IV
                   Comments From the Department of
                   Commerce




GAO Comments       The following are GAO’s comments on the Department of Commerce’s
                   letter dated October 21, 1999.

                   1. We recognize that parties involved in the ISS Program have signed
                   Memorandums of Understanding (MOU). Signing these agreements is
                   recognition by the partners of their responsibility and obligation to comply
                   with the terms of the agreement. However, we believe a mechanism that
                   provides assurance that the partners are complying with the terms of
                   exports is a necessary step in NASA’s implementation of its export control
                   policy. In our opinion, NASA’s procedures for verifying that exports of
                   certain items are at their intended destinations do not provide adequate
                   assurance that the items are being used for the intended purpose.




(707379)   Leter   Page 28                                        GAO/NSIAD-00-14 Export Controls
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Appendix IV
Comments From the Department of
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