DOD Needs to Improve Information Sharing on Critical Tech, Export Controls, GAO Says

The Department of Defense is revising its process for identifying critical technologies that should be subject to export controls after the Government Accountability Office said its current process is too broad and lacks interagency coordination. Although the DOD is tasked with sharing a list of critical technologies with agencies that oversee export controls -- including the State, Commerce and Treasury departments -- officials at all three agencies said they sometimes don’t receive the list. None of the agencies received the list in 2019, the GAO said, even though it could have helped them better protect against trade theft and illegal exports.

DOD's new process will “better identify and protect its critical technologies,” including those that are prone to “theft, espionage, and illegal export by adversaries,” the GAO said in a January report. The agency began implementing the process last year and is expected to “complete all steps for the first time” by September. But the GAO said DOD has not yet determined how it will “communicate the list internally and to other agencies.”

State Department officials said they can use the list to impose new arms export controls and add new technologies that provide “critical military or intelligence advantage” to the U.S. Munitions List. Commerce officials said the list will help them better impose export controls and identify dual-use items that can be added to the Commerce Control List. Treasury officials said the list can help inform reviews conducted by the Committee on Foreign Investment in the U.S., which targets transactions involving certain critical technologies. If the list “were sufficiently specific,” the GAO said, “it could allow the committee to more expeditiously identify when a potentially sensitive technology is involved in a transaction under review.”

DOD said it did not “formally disseminate” its 2019 list to the Treasury, Commerce and State departments but said it held “informal discussions” with them about export controls. The GAO said those informal discussions were insufficient. “Without a formal means of disseminating the list,” the report said, “it is not clear whether all of DOD’s identified critical acquisition programs and technologies were conveyed through these discussions.”

DOD also said it expects the National Security Council to lead the U.S. effort in protecting critical and emerging technologies, pointing to the White House’s national strategy document issued in October (see 2010150038). DOD officials told the GAO that “agencies are now expected to coordinate on how they will implement the strategy” but they expect the NSC “to lead a broad interagency coordination effort in developing an implementation plan over the next several months.” That effort will involve 15 federal agencies, the report said.

Although the Defense Department said it held informal discussions on critical technologies with other agencies, it told GAO that formally sharing a list “to all relevant internal and external technology protection stakeholders is key to the department’s efforts to protect” critical technologies. “DOD has long recognized the need to effectively identify and ensure the consistent protection of these technologies from adversaries, but past efforts have not been fully successful,” the GAO said, adding that the agency’s new process offers “some improvement.” DOD didn’t comment.