The State Department’s export licensing program may improve as a result of process changes and two treaties currently being considered by the Bush administration and the U.S. Congress, industry sources said. The Senate, which must ratify them, has received two draft treaties from the White House, one with Australia and one with Britain, that would reduce the burden of the licensing process on those close allies.

“The administration has taken the approach with the U.S.-U.K. and -Australia treaties of taking 20 percent of the cases that are approved almost all of the time” and stripping them from the export licensing process, Jeremiah Gertler, the Aerospace Industries Association’s acting vice president for defense and international affairs, said in a Jan. 4 interview.

Also, two industry sources said the Bush administration appears close to approving the majority of process changes recommended by an industry group, the Coalition for Security and Competitiveness. The coalition recommended 19 changes to the process in March last year. None of the proposed changes require congressional action.

A new government report on the licensing process


the system is “under stress” and

unlikely to improve unless State substantially changes the way

licenses are processed.

The Jan. 3 report by the Government Accountability Office, “State Department Needs to Conduct Assessments to Identify and Address Inefficiencies and Challenges in the Arms Export Process,” was prepared for Rep. Tom Lantos (D-Calif.), chairman of the House Foreign Affairs Committee, and Rep. Ileana Ros-Lehtinen (R-Fla.), the committee’s ranking member.

The report says three key trends demonstrate

the State Department’s Directorate of Defense Trade Controls, which actually processes arms export license applications, is under stress:

First, the number of arms export cases “increased 20 percent between fiscal years 2003 and 2006.”


“median processing times almost doubled during the same period, and third, the number of open arms export cases increased 50 percent from about 5,000 in October 2002 to about 7,500 in April 2007, with a high of more than 10,000 cases in September 2006,” the report said.

The State Department, aware it had a growing problem, took “extraordinary measures – such as canceling staff training, meetings, and industry outreach, and pulling available staff from other duties to process cases” to reduce the number of open cases by 40 percent in three months, the report notes. “However, such measures are not sustainable in the long term, do not address underlying inefficiencies and problems, and may have negative unintended consequences for the mission,” the report said.

“This report confirms that an important safeguard at the State Department has been broken for a long time,”


said in an e-mail response to questions from Space News. “The arms export licensing function is meant to keep dual use U.S.-produced goods and services from falling into the wrong hands overseas, where they can be used as parts for weapons. While a lack of resources in this area has always been an acute problem, the GAO’s new report makes the underlying issue clear: years and years of fundamental mismanagement at the Directorate of Defense Trade Controls [DDTC].”

Lantos said he was encouraged about DDTC’s progress since he asked GAO in 2007 to look into their 10,000-case backlog. “The process has uncovered problems of which even the DDTC was unaware. But more needs to be done,” Lantos wrote, suggesting that the Secretary of State should personally review the Directorate’s operations and monitor the progress of management reforms.

One of the key efforts intended to reduce processing times, creation of an electronic application system, “has not been the promised panacea for improving processing times,” the report said, noting that even Britain and Australia have seen license applications languish

because State does not have processes in place – required by law – to speed them up.