Highlights
– A new report released by the Government Accountability Office highlights problems with the purchasing process of sensitive military and dual-use technologies
– Lack of due diligence requirements allowed GAO investigators to easily purchase sensitive military and dual-use technologies domestically and ship them overseas
– Dearth of laws and regulations enable blind sales to occur
A recent investigation completed by the United States (US) Government Accountability Office (GAO) showcased the ease with which auditors were able to purchase sensitive military and dual-use (commercial and military) technology in the US and subsequently ship the items overseas.
According to recent congressional testimony given by the managing director of forensic and special investigations at the GAO, auditors, posing as representatives from a fictitious company, were able to purchase the following products without having broken any laws:
• Night-vision scopes that US soldiers use in Iraq and Afghanistan
• Hardware to detonate nuclear weapons
• Sensors used in improvised explosive devices
• Gyro chips for guided missiles and military aircraft
No Law, No Problem
According to the GAO report, the auditors purchases were successful because there are no laws or policies in place which require manufactures or resellers to conduct any background checks or due diligence on potential buyers. During its investigation, the GAO found that manufactures and distributors only asked the undercover investigators to sign forms verifying the products purchased would not be used illegally or for terrorist plots.
The GAO’s year long investigation exposes what many security experts and politicians have feared for years – terrorist organizations or unfriendly governments purchasing sensitive military and dual-use technologies domestically and shipping them abroad with little or no resistance. Many terrorist organizations likely understand that there exist a variety of technologies produced by US-based companies that, if acquired, could significantly increase the success of their operations.
By sending operatives to the US, or through various intermediaries willing to engage on their behalf, terrorist organizations could purchase sensitive military or dual-use technologies to be shipped back to their home operations. In addition, the purchases could be done without leaving a paper trail from which the purchaser could be discovered.
Existing Laws And Regulations Do Not Adequately Address Problem
The GAO’s investigation found that current US regulations are designed to keep specific military and dual-use items from being diverted to improper end users, but current regulations focus on controlling the export of these items and do not address the domestic sale of these items. The report stated that preventing the illegal export of sensitive items requires stopping the purchase of the items at the source because once a purchase is completed, the shipment and transport of the items out of the US is unlikely to be detected.
During its investigation, the GAO was able to successfully ship nonfunctional versions of the hardware its investigators purchased via Federal Express to a country in Southeast Asia – well known as a distribution center for terrorist organizations. The items were shipped in nondescript boxes thereby helping to conceal their contents.
Separate GAO Investigation Reveals Additional Problems
In April 2009 a separate undercover investigation conducted by the GAO found that similar military items were available for purchase on popular person-to-person selling websites such as eBay and Craigslist.org. Again, the GAO stated that a lack of due diligence contributes to the potential problem of items being purchased by terrorists or unfriendly governments domestically and subsequently being covertly shipped overseas.
New Laws And Regulations Are Needed To Prevent Blind Sales
The GAO report highlights the need for new laws and regulations to help reduce the potential fraud and increase the security associated with the domestic sale of sensitive military and dual-use technologies. In the near-term, there is a strong possibility new legislation will be passed to require proper background and due diligence checks of potential buyers. The key to garnering the support of manufactures and distributors will be to design a uniform background check system that is easy to use and cost-effective.
Creating a new due diligence requirement at the point-of-sale may not prevent all fraudulent purchases such as straw purchases – any purchase whereby the purchaser is knowingly acquiring an item or service for someone who is unable to purchase the item or service themselves. However, new rules could give criminal investigators the legal authority to pursue these types of nefarious purchases and hopefully prevent the transfer of sensitive technologies into the hands of terrorists or unfriendly governments.
