Less than one-third of the defense export end-use cases closed in fiscal year 2025 were unfavorable, according to an annual report from the State Department’s Directorate of Defense Trade Controls on the performance of DDTC’s “Blue Lantern” end-use monitoring program. The report’s findings highlight the importance for defense exporters to maintain effective compliance procedures.
The Blue Lantern program aims to minimize the risk of diversion and unauthorized use of U.S. defense articles, combat illicit arms trafficking, uncover violations of the Arms Export Control Act, and build confidence and cooperation among defense trade partners. Blue Lantern end-use monitoring includes pre-license, post-license/pre-shipment, and post-shipment checks to verify the bona fides of foreign consignees and end-users, confirm the legitimacy of proposed transactions, and provide reasonable assurance that (1) the recipient is complying with U.S. government requirements with respect to use, transfers, and security of defense articles and services and (2) such articles and services are being used for the purposes for which they are provided.
DDTC maintains a watch list with approximately 295,000 entities (up from about 241,000 in FY 2024) that is used to flag parties on export authorization applications for possible Blue Lantern checks. In FY 2025 DDTC reviewed 173,514 watch list name matches (up from 102,907) and made 3,750 new entries (up from 2,417) and 578 modifications (down from 3,239).
According to the report, in FY 2025 DDTC initiated Blue Lantern checks on more than 390 export authorizations or authorization requests (up from 292) in 82 countries (up from 70). Europe and East Asia and the Pacific each accounted for the largest share of these initiations at 37 percent, followed by the Western Hemisphere at 10 percent, sub-Saharan Africa at seven percent, North Africa and the Middle East at five percent, and South and Central Asia at four percent.
Of the more than 350 Blue Lantern cases closed in FY 2025 (up from 341), 27 percent were deemed unfavorable. South/Central Asia had the highest rate of unfavorable checks at 50 percent (up from 16.7 percent), followed by North Africa and the Middle East at 33 percent (down from 55.3 percent), East Asia and the Pacific at 23 percent (down from 36.2 percent), Europe at 22 percent (down from 41.4 percent), the Western Hemisphere at 17 percent (up from 14.3 percent), and sub-Saharan Africa at 10 percent (down from 40 percent).
The report states that the leading causes of an unfavorable finding in FY 2025 were refusal to cooperate (55 cases, up from 32), derogatory information/unreliable foreign party (29, up from 27), lack of secure storage facilities (5, down from 11), unable to confirm order or receipt of goods (20, up from 10), and inability to confirm existence of foreign party (9, up from 1).
Finally, the report notes that unfavorable cases resulted in several types of actions, including returning without action or denying export license applications, removing parties from approved or pending license requests, updating the DDTC watch list, or referring cases to the Office of Defense Trade Controls Compliance.
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