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Volume 17, Issue 47
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Monday, March 8, 2010
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GAO Finds Problems in Enforcing Restrictions on Exports to Iran
The Government Accountability Office released last week a report finding certain shortcomings in the enforcement of U.S. restrictions on exports to Iran. This report evaluates the extent to which (1) U.S. trade statistics accurately depict exports to Iran, (2) the Treasury Department 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.
The U.S. has banned the export of most goods to Iran without a license from the Treasury Department. Treasurys general policy is to deny most applications for such licenses, with the exception of those for shipments of certain agricultural and medical goods. The U.S. has also generally banned unlicensed transshipments of U.S. goods to Iran via other nations. This prohibition includes dual-use goods (civilian goods with potential military applications) that the Department of Commerce has licensed for export to other countries.
The report states that while Treasury is licensing exports to Iran in accordance with export restrictions, it cannot routinely provide complete and timely information about the licenses it has issued. Treasury uses two paper-based information systems to record data on all Iran-related licensing decisions, but these systems are not integrated with one another and neither can be searched to specifically identify licenses for the export of goods to Iran. Treasury is planning to upgrade its system for tracking licenses for agricultural and medical exports to Iran, but this upgrade would not include the small number of export licenses for other types of goods, such as civilian aircraft safety equipment with potential military uses.
The report also finds that a wide range of U.S. military and dual-use goods are being illegally transshipped to Iran through various countries. Goods involved in cases of actual or attempted transshipment include parts for Irans U.S.-built fighter aircraft, military helicopters and air defense systems; night vision equipment; submachine guns; computers; laboratory equipment; specialized steel; pumps with nuclear applications; and electronic components for missiles. To address this problem, U.S. agencies have conducted investigations to uncover Iranian procurement networks and prosecuted at least 30 firms and individuals from 2007 through September 2009.
Another problem the report identifies is that U.S. trade statistics on exports to Iran erroneously include goods that were not exported to that country. 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 export data filing errors that the Census Bureau did not detect or correct because of the low dollar value of the transactions. In response, Census has initiated a manual check of new filings of exports to Iran, required filers of export data to select recipient countries from a list instead of allowing them to enter a two-letter international standard country code, and begun posting newly-detected corrections to Iran export data on a Census Web page.
Source Document 1...
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