Background Aviation Maintenance Workforce Different aviation industry employers have distinct workforce needs and may require workers with specific skillsets depending on the type of work performed. The aviation maintenance workforce includes FAA-certificated mechanics and repairmen, as well as non-certificated workers. FAA-certificated mechanics inspect, service, and repair aircraft bodies (airframe) and engines (powerplant), and only they can approve an aircraft for return to service. FAA-certificated mechanics can earn an airframe rating, a powerplant rating, or an airframe and powerplant (A&P) rating. It can take between 1 and 3 years to obtain the required education or training to become certificated. If an FAA- certificated mechanic changes employers, the certificate remains valid. FAA-certificated repairmen service aircraft components and must be recommended for certification by their employer to perform specific tasks such as welding or painting. It can take more than a year to obtain the required experience or training to become certificated. FAA-certificated repairmen are employed by entities such as repair stations that are authorized by FAA to perform specific tasks. A repairman certificate is only valid at the employer for which it was issued. Non-certificated aviation maintenance workers include individuals who are supervised by certificated mechanics or repairmen in performing repair work. FAA maintains data on certificated mechanics and repairmen, including data on characteristics such as age and sex. FAA also maintains some data on non-certificated workers, such as the number employed by FAA- certificated repair stations, but neither the federal government nor the aviation industry maintains data on the total number of non-certificated aviation maintenance workers. Pathways to Becoming FAA-Certificated Career pathways consist of education, training, and support services that enable individuals to obtain industry-relevant certification and employment. There are three distinct pathways to become eligible to take the FAA mechanic tests—military training and experience, AMT School, and practical, or civil work experience (see fig. 1). FAA collects data on the use of the different pathways to becoming a certificated mechanic. Individuals must pass the FAA mechanic tests to become certificated, regardless of the pathway they take to become eligible to take the tests. There are three tests—written, oral, and practical. FAA publishes testing standards for the oral and practical skills tests. Military training and experience. The Community College of the Air Force administers an FAA-approved A&P training program which consists of on-the-job training and various courses for military service members with certain experience. When service members successfully complete the program, the Joint Services Aviation Maintenance Technician Certification Council issues them a certificate of eligibility to take the FAA mechanic tests (see side bar). Aviation Maintenance Technician School. Individuals may also attend an FAA-approved AMT School to become eligible to take the FAA mechanic tests. FAA approves and oversees AMT Schools and it maintains enrollment and mechanic test pass-rate data for each school. The minimum curriculum requirements for these schools are currently prescribed in regulation. The regulation includes the subjects the curriculum must cover and the number of training hours students must complete to become eligible to take the FAA mechanic tests. Given that AMT School curriculum requirements are in regulation, FAA has in the past attempted to amend the requirements through the federal rulemaking process. Practical work experience. People can also become eligible to take the FAA mechanic tests by demonstrating practical, or civil work experience. Individuals may work under the supervision of a certificated mechanic for 18 months for either an airframe or powerplant certificate, or 30 months for an A&P certificate. Practical work experience includes apprenticeships, which combine on-the-job training with classroom instruction. For certificated repairmen, there is no prescribed test, though repairmen must demonstrate their practical experience or have completed formal training to be certificated. Avionics technicians also have no prescribed test, but may seek certain related certifications. Occupational Data The Standard Occupational Classification (SOC) system is a federal statistical standard used to classify workers into occupational categories for purposes of collecting, calculating, or disseminating data such as employment levels and pay. The SOC structure forms the basis for the occupational coding system used by BLS’ Occupational Employment Statistics survey and Current Population Survey. Aviation maintenance workers generally fall into the avionics technicians or the aircraft mechanics and service technicians occupational group (see fig. 2). Both occupational groups include certificated and non-certificated individuals. The most recent revision to the SOC was for 2018. Selected Federal Agencies and the Aviation Maintenance Workforce In addition to the Department of Transportation (DOT) and FAA, several other federal agencies play a role in developing and maintaining a qualified aviation professional workforce. For example, we previously reported on related efforts administered by DOD, DOL, VA, and Education. These agencies provide either financial assistance for education or training in aviation maintenance related fields or administer programs that support career pathways to becoming an FAA-certificated mechanic or repairman. Existing Data Provide Limited Information about the Current Workforce and Potential Future Demand Federal Data Provide Information on the Number of Certificated Mechanics and Repairmen but Likely Overestimate How Many Are Available to Fill Projected Openings As of December 2018, about 295,000 individuals held a mechanic certificate and about 35,000 held a repairman certificate. The median age of FAA-certificated mechanics and repairmen was 54 years old, according to our analysis of the FAA data. Specifically, 52 percent were between the ages of 50 and 70 years old; 19 percent were between 39 and 49; and 19 percent were between 18 and 38. The remaining 10 percent were between the ages of 71 and 89 years old (see fig. 3). In comparison, about 23 percent of the overall workforce was age 55 or over according to BLS data as of 2018. Our analysis of FAA data also found that 3 percent of all aviation maintenance certificate holders were women as of December 2018. This percentage has not changed since we last reported on this workforce in 2014. In comparison, BLS data as of 2018 show that women made-up 47 percent of the total workforce. We were not able to analyze other demographic characteristics for these certificate holders, such as race or ethnicity, because neither FAA nor BLS collects these data. FAA data for 2015 through 2018 also provide some information on the education and work experience of certificated mechanics. These data show that attending AMT School was the most common pathway certificated individuals used to qualify for the FAA tests to become mechanics (see fig. 4). In addition, FAA data provide information on the number of newly certificated individuals and indicate that FAA certificated about 8,600 mechanics and repairmen on average each year for 2014 through 2018 (see fig. 5). BLS data project an annual average of 11,800 job openings in the United States from 2018-2028 for the aircraft mechanics and service technicians occupation due to growth and replacement, which include job openings for both certificated and non-certificated workers. The supply of workers to fill any open or projected job openings in the aviation industry, however, not only depends on the number of people qualified to do the work, but also their availability and willingness to work at a certain wage and under particular working conditions. While FAA data provide information on the number of mechanic and repairman certificate holders who are qualified to perform certain work, less is known about the number of them who are available and willing to work in the aviation industry. FAA data show there were approximately 330,000 certificated mechanics and repairmen as of December 2018, but FAA officials said this number likely overestimates the number of individuals working in the aviation industry. BLS data indicate 136,900 were employed in the aircraft mechanics and service technicians occupation in 2018, but it is not clear how many of those jobs were filled by FAA- certificated workers. In addition, it is unknown how many of the approximately 330,000 certificate holders are retired, deceased, or working in other industries. Individuals who obtain a mechanic certificate from FAA may never work in the aviation industry, or may begin their career in the aviation industry and leave for a job in another industry. Several stakeholders we interviewed said FAA-certificated mechanics possess certain skills that are transferrable to other industries and leave the aviation industry to work for other employers, such as amusement parks. Furthermore, officials explained that once certificated, there is no certification renewal requirement for mechanics. Federal Data Provide Some Information on Current Pay and Demand for Aviation Maintenance Workers, but Do Not Distinguish Between Certificated and Non- Certificated Workers BLS publishes some data on pay for aircraft mechanics and service technicians, such as average hourly and annual wages. However, the occupational classification system BLS and other federal statistical agencies use for aircraft mechanics and service technicians does not distinguish between FAA-certificated and non-certificated workers. This is in part because workers are classified by the work they perform and not necessarily by certification or education, according to SOC classification system principles. As a result, it is difficult to determine employment characteristics such as pay for certificated workers, specifically. BLS data as of May 2018 show that annual wages for aircraft mechanics and service technicians ranged from about $37,000 to about $98,000. According to BLS officials, it is not uncommon for there to be a wide salary range across an occupation, as wages may vary depending on factors such as experience, education, and skills. A DOD official we interviewed also said that employers have told him that they pay certificated aviation maintenance workers more than non-certificated workers. BLS officials said they collected wage and employment data for certificated workers separate from non-certificated workers in employer surveys conducted between 2000 and 2012. However, officials said they stopped collecting these data in part because employers inconsistently reported them. Data limitations at the federal and state levels also make it difficult to determine the demand for certificated aviation maintenance workers. BLS occupational data. On the federal level, BLS occupational outlook data provide some information on potential future demand nationwide for aviation maintenance workers, but the data do not distinguish between certificated and non-certificated workers. As a result, the data provide limited detail about the demand for certificated workers, specifically. According to BLS data, total employment for the aircraft mechanics and service technicians occupation is projected to grow about 3 percent over the 2018 to 2028 time frame, which is slower than the average for all occupations. As previously mentioned, these data project an annual average of 11,800 job openings for this occupation from 2018 to 2028 due to job growth and replacement. DOL certification data. On its public website for career planning and job search, CareerOneStop, DOL provides information on certifications that are frequently mentioned in online job postings and considered to be in-demand. DOL also indicates in its online resources which certifications may draw on training and experience gained in the military. However, DOL does not track or publish data on the demand for occupational licenses, including federal licenses such as FAA’s A&P certification. DOL officials said currently there are no plans to expand the agency’s data collection to include information on the demand for occupational licenses. DOL officials added that for certain jobs that require licenses, the demand for the required licenses mirrors occupational demand for those jobs so collecting those data may not be as meaningful. Workforce Innovation and Opportunity Act plans. On the state level, Workforce Innovation and Opportunity Act plans, intended in part to outline states’ use of federal funds to help workers meet employers’ needs, provide some geographically-specific information on the demand for workers in the aviation industry. Our review of states’ most recent Workforce Innovation and Opportunity Act plans found that 19 states identified the aerospace and aviation industry as a targeted sector for development. However, only certain plans specifically mention the need for certificated mechanics; others refer to the aviation industry more broadly. Employers we interviewed had differing perspectives on potential growth in demand for aviation maintenance workers; some said they were experiencing difficulty finding enough workers to meet their needs, while others said they were not experiencing difficulty. While some stakeholders voiced concerns about the potential for a labor shortage, the selected labor market indicators we reviewed for aircraft mechanics and service technicians (unemployment, wages, and employment) from 2013 through 2018 were not all consistent with the existence of hiring difficulties. See appendix I for our analysis. Officials we interviewed from a regional airline said the majority of the airline’s certificated mechanics come to them directly after completing AMT School and that the airline was having a difficult time finding enough mechanics to fill 60 open full-time positions. On the other hand, officials we interviewed from a major airline said the airline rarely hires certificated mechanics right out of AMT School and that their employees typically come to them with a number of years of experience. The officials from the major airline said that they were not experiencing difficulty recruiting and retaining aviation maintenance workers, but noted that regional airlines may experience hiring difficulties first if there is a shortage of these workers because certificated mechanics often start their careers at regional airlines to gain practical experience before moving on to work at a major airline. Government and Industry Programs Support the Workforce, but FAA Lacks Information that Could Advance Its Workforce Development Efforts Government, Industry, and AMT Schools Administer Programs and Coordinate to Some Extent to Support the Development of Aviation Maintenance Workers’ Skills and Career Pathways Registered Apprenticeship Program Serving Underrepresented Populations The Department of Labor awarded the Connecticut Department of Labor Office of Apprenticeship Training a $1,550,000 grant to fund the Connecticut Apprenticeship Expansion Rx project, which targets the aviation industry, among others. The project aims to serve over 1,600 apprentices and provide underrepresented populations, including women, dislocated, and under- employed individuals an opportunity to acquire industry required credentials. Key partners include industry, educational institutions, and labor unions. Registered Apprenticeship Program for Airframe and Powerplant Mechanics As part of the State Apprenticeship Expansion grant, the Alaska Department of Labor and Workforce Development (DOLWD) is implementing registered apprenticeships in aviation, a relatively new industry in using the apprenticeship model. With the help of the U.S. Department of Labor Office of Apprenticeship in Alaska, two aviation occupations have been approved: Airframe & Powerplant Mechanic and Air Transport Pilot. The Alaska state Apprenticeship Coordinator is working closely with the U.S. Department of Labor Office of Apprenticeship and individual air carriers across Alaska to develop and implement registered apprenticeships for these occupations. Alaska DOLWD has approximately 12 mechanic apprentices and 2 air transport pilot apprentices with various air carrier employers. support Registered Apprenticeship Programs— employer-driven training opportunities that combine on-the-job learning with related classroom instruction. The program facilitates coordination among different stakeholders such as industry, states, and educational institutions to support apprenticeships and employment opportunities. DOL awarded almost $3.8 million in grants and contracts from 2014 through 2018 to promote these apprenticeships for aviation maintenance workers. For example, one grantee is aiming to serve underrepresented populations in the aviation industry, including women, and another is coordinating with industry to develop a registered apprenticeship program for certificated mechanics (see side bars). In addition, the United Services Military Apprenticeship Program, a DOL registered program, provides service members an opportunity to improve skills and qualify for employment in a recognized civilian trade, including as an A&P mechanic, upon completion of military service. VA’s Post-9/11 GI Bill Program. The Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill) provides funding for veterans to pursue an approved program of education, including undergraduate and graduate degrees, non-college degree programs, apprenticeships, and on-the-job training. VA data show approximately $42 million in Post-9/11 GI Bill funds were awarded in fiscal year 2018 to 4,200 veterans enrolled in aviation maintenance post-secondary programs, which include programs at FAA-approved AMT Schools. Education’s financial assistance. Education provides billions of dollars in federal assistance to support students pursuing higher education, which may include training in aviation-related fields. We previously reported that in academic year 2011-2012, Education disbursed $918 million in federal grants to 142,708 recipients and $1.3 billion in federal loans to 114,564 recipients pursuing aircraft mechanic and avionics programs. DOT’s workforce development grant program. DOT is also developing a process for administering a workforce development grant program for aviation maintenance workers. Specifically, the FAA Reauthorization Act of 2018 included a provision for DOT to establish an aviation maintenance workforce development grant program. Once established, eligible entities such as aircraft repair stations, unions, educational institutions, and state or local governments may apply for grants. The program may provide grants for projects such as establishing new educational programs or scholarships for individuals seeking employment in the aviation maintenance industry and supporting service members transitioning into aviation maintenance related careers. In addition, FAA has taken steps to engage other key stakeholders on aviation workforce development initiatives. In September 2018, FAA sponsored an Aviation Workforce Symposium that included participants from industry, AMT Schools, and federal agencies such as Education and DOL. Discussion topics included building the pipeline of workers, maximizing efficiency in training, and promoting productive partnerships. Subsequent to the 2018 symposium, FAA established an Aviation Workforce Steering Committee in February 2019, in part to coordinate efforts across FAA to address various workforce related provisions included in the FAA Reauthorization Act of 2018. The steering committee finalized its charter in April 2019, and the charter states FAA’s intentions of developing productive partnerships with industry, government, and educational institutions to expand the pipeline of aviation safety professionals. As of October 2019, FAA was finalizing a working group structure to carry out the steering committee’s work that will focus on: (1) marketing/communications, (2) educational outreach, (3) training, and (4) partnerships. FAA officials also told us they plan to collaborate with other federal agencies moving forward, including Education, DOL, and DOD. For example, FAA and DOD officials said they are currently discussing options for streamlining pathways for service members with aviation maintenance backgrounds to move into civilian careers in aviation maintenance. According to a DOD official, streamlining pathways could increase the number of service members who become FAA-certificated mechanics and leverage the skills of the over 250,000 current service members with aviation maintenance backgrounds. Additional examples of states, industry employers, and AMT Schools coordinating or partnering to support the aviation maintenance workforce include: Career grants. One state we visited developed a career grant to align students’ programs of study with in-demand occupations in the state. The grant provides tuition assistance to in-state residents working toward selected certificates or degrees at eligible in-state colleges or universities, including aviation maintenance programs. Military pathway program. Officials from a regional airline we interviewed said the airline developed a military transition program to assist service members in preparing for the FAA mechanic tests. The airline funds 100 percent of the program cost, which according to officials is about $11,000 per person. As part of the program, airline officials told us they provide about $5,000 worth of tools to each participant. Training equipment and funding. Officials we interviewed from one school said they strategically opened their AMT program next to a major cargo airline so that students could benefit from employment opportunities there. The officials said the airline also benefits from the close proximity of the school in that it is able to leverage local talent, and the airline provides AMT School students with scholarships, technical support, and surplus equipment to use for training. In another example, officials from a major commercial airline told us the airline partners with over 40 AMT Schools and provides them with funding to improve operations and recruitment. Officials said the goal of the program is to ensure the airline has a pipeline of workers to fill any future job openings. FAA Does Not Use Existing Data to Strategically Target Its Resources and Workforce Development Efforts Despite FAA’s recent efforts to coordinate with other federal agencies on expanding and streamlining pathways for aviation maintenance careers, we found that FAA does not routinely analyze, collect, or coordinate with other stakeholders on certain related data. Such activities could assist FAA in measuring progress toward meeting its workforce related objectives and inform strategic decisions for promoting the development of this workforce. For example, FAA’s strategic plan includes an objective on promoting the development of a robust aviation workforce. In addition, FAA’s Aviation Workforce Steering Committee charter emphasizes providing diverse populations, including youth, women, and minorities, with clear pathways into aviation careers to expand the talent pool from which both government and industry may recruit. However, neither the strategic plan nor the steering committee charter provides specific information on how FAA plans to select and measure any efforts it undertakes related to these objectives. Prior GAO work has emphasized that strategic workforce planning requires monitoring and evaluating progress toward goals, and federal internal control standards state that management should use quality information to achieve its objectives. We identified several areas in which improved data analysis, collection, or coordination could assist FAA in measuring progress and understanding how to target its resources in support of its workforce related objectives. Demographic data. FAA collects certain demographic data on its A&P certification application, such as the age and sex of individuals; however, FAA currently uses these data only to determine eligibility and issue certificates, according to FAA officials. These data could also be used to identify patterns or relationships, such as the trend in female certificate holders by pathway, which could be useful information as FAA aims to increase opportunities for women to pursue aviation maintenance careers. In addition, FAA does not currently collect data on the race and ethnicity of certificated individuals. Such data could provide additional information on the demographics of certificated individuals and help FAA or other stakeholders monitor the progress of any efforts to diversify this workforce. FAA could also leverage BLS data on the race and ethnicity of certificated and non-certificated aircraft mechanics and service technicians more broadly as it begins to develop and implement any activities related to expanding and diversifying the talent pool for recruiting workers into aviation maintenance careers. Pathway data. FAA also maintains mechanic pathway data, but these data do not provide a complete picture of certificated individuals’ education, training, and work experience due to certain data limitations. For example, FAA does not require AMT Schools to report program completion data. As a result, it does not have information such as how many students who enter FAA-approved AMT Schools complete the program. Moreover, FAA does not analyze nationwide trends for AMT Schools using existing data on these schools (such as enrollment or mechanic test pass-rate data) or aggregate information across AMT Schools to better understand the AMT School pathway as a whole. In addition, pathway data collected by FAA do not clearly differentiate between civil and military work experience. Specifically, FAA officials said practical, or civil, work experience pathway data may include information on individuals with both prior military and civil experience. Moreover, according to an FAA official, FAA’s military experience pathway data may include individuals who completed DOD’s FAA- approved A&P training program as well as individuals who met FAA’s on-the-job training requirements through relevant military experience. Combined pathway data may limit FAA’s and DOD’s understanding of DOD’s contributions to this workforce, including the number of individuals who completed DOD’s FAA-approved A&P training program and subsequently obtained mechanic certification from FAA. Supply and demand data. Other federal agencies, such as BLS and DOD, maintain data that relate to this workforce more broadly that could be useful to FAA. For example, FAA could leverage BLS data on the projected employment of certificated and non-certificated aircraft mechanics and service technicians in conjunction with its data on newly certificated workers each year to better understand worker supply and demand. DOD also maintains information on separating service members with aviation maintenance backgrounds, who may be attractive to the commercial aviation industry. For example, according to a DOD official, in fiscal year 2018 over 22,000 service members with aviation maintenance backgrounds separated from the Air Force and Navy. Additional data analysis and coordination could potentially yield useful information on worker supply and demand and areas for promoting the development of this workforce. Without routinely analyzing its existing data on certificated workers, collecting additional data, or leveraging existing workforce data maintained by other federal agencies, FAA will not have certain information it needs to measure progress and strategically target its resources toward its objective of promoting the development of a robust aviation workforce. A robust aviation workforce, including certificated mechanics and repairmen, is necessary for maintaining a safe aviation system. FAA’s recently developed Aviation Workforce Steering Committee presents the agency with an opportunity to engage other federal agencies in discussions on how to leverage data to expand and diversify this workforce. FAA Has Proposed Changing Its Decades Old Mechanic Curriculum Requirements and Its Testing Standards, and Revisions to Them Are Ongoing Even as FAA’s strategic plan states the agency’s focus on promoting the development of a skilled aviation maintenance workforce to integrate new technologies, the agency has acknowledged that the current curriculum requirements for AMT Schools and mechanic testing standards are outdated. Efforts to revise the curriculum requirements for AMT Schools are ongoing through the rulemaking process, and FAA is also currently updating the testing standards for mechanics. The curriculum requirements for AMT Schools have remained largely unchanged for several decades despite numerous attempts to update them as aviation technology has evolved. The minimum requirements are established in regulation and list the subjects that AMT Schools must include in their training curriculum for individuals to be eligible to take FAA’s mechanic tests. FAA officials, employers, and AMT School officials we interviewed said the current curriculum requirements do not emphasize commonly used modern aircraft technologies, such as avionics and composite materials. Because the curriculum requirements are established in federal regulation, FAA has attempted several times to revise them through the rulemaking process. Table 1 provides selected changes or actions relating to these requirements. FAA officials noted several challenges to updating the AMT School curriculum requirements, including competing demands at the department level, the extent of comments FAA has received from stakeholders in response to proposed changes, and the amount of time required to coordinate with internal stakeholders during the review process. We previously reported on factors that affect the amount of time needed to issue a rule for selected agencies, which included similar challenges such as the complexity of an issue, agency management priorities, and the amount of review required at different phases of the rulemaking process. In October 2015, FAA published a notice of proposed rulemaking (NPRM) with the stated goal of updating the existing AMT School curriculum and providing an efficient means of changing specific course items by including them in each school’s operations specifications (see fig. 6). This would eliminate the need to go through the federal rulemaking process to update the curriculum. As part of its ongoing efforts to revise the curriculum requirements for AMT Schools through the rulemaking process, FAA issued a supplemental NPRM in the April 2019 Federal Register that expanded the scope of the NPRM it issued in October 2015 (see fig. 6). Comments on the supplemental NPRM were due in June 2019. As of October 2019, FAA officials said they were in the process of reviewing the comments. In a separate effort outside of the rulemaking process, FAA is currently updating the testing standards for mechanics. The standards were last revised in 2015. FAA has acknowledged that current mechanic testing standards are also outdated. As a result, aviation stakeholders have stated that the mechanic tests include outdated or irrelevant questions. For example, the practical test may include projects on wood airframes and fabric coverings, which are not common to modern commercial aircraft. FAA has stated that the revised testing standards will provide a comprehensive framework for the mechanic tests and serve as a guide for reviewing and revising the oral and written test questions and the practical projects. FAA officials said two offices within the agency are responsible for updating AMT School training curriculum requirements and mechanic testing standards and that these offices have been coordinating efforts to align the two. FAA’s efforts to modernize the curriculum requirements for AMT Schools and its efforts to update the mechanic testing standards started on slightly different paths, in part due to differences in when the working groups were formed and recommendations to address these issues were made (see fig. 7). As of October 2019, FAA had not issued a final rule for modernizing AMT School curriculum requirements as required by the FAA Reauthorization Act of 2018, and it was still in the process of updating testing standards. FAA officials have indicated that they have informed the appropriate committees in Congress that the proposed schedule for issuance of a final rule is in October 2020 and said that the revised mechanic testing standards would likely be finalized after the publication of the final rule amending the curriculum requirements for AMT Schools. An FAA official noted that any delay in finalizing the rule would likely result in a corresponding delay to finalizing the testing standards. Delaying the release of the updated mechanic testing standards could result in the prolonged use of outdated or irrelevant questions on the mechanic tests. FAA officials said that once finalized and implemented, the updated curriculum requirements for AMT Schools and the mechanic testing standards for individuals should be mostly aligned. Conclusions A sufficient supply of aviation maintenance workers is critical to maintaining a safe and robust aviation system and meeting the growing demand for air travel. Current training and skills requirements for these workers are also important because of changing flight technology. Both the federal government and other industries benefit from having a professional, trained, and qualified workforce, and addressing aviation workforce needs is a shared responsibility among these different stakeholders. As the federal agency responsible for certificating aircraft mechanics and repairmen, FAA maintains certain demographic information on these individuals that could shed light on the characteristics and employment of these personnel. However, without strategically using or analyzing the data it has along with data other stakeholders collect, FAA will not have certain information it needs to target its resources or measure and improve progress toward its aviation workforce goals. It may also miss the opportunity to provide other stakeholders with valuable information for supporting these workers. Other agencies and stakeholders may also assist FAA in understanding and promoting the development of the aviation maintenance workforce. FAA’s recently developed Aviation Workforce Steering Committee presents the agency with an opportunity to engage other federal agencies to explore potential data sources and their usefulness and discuss ways to expand, diversify, and strengthen career pathways for the aviation maintenance workforce. Recommendation for Executive Action The Administrator of FAA should direct the Aviation Workforce Steering Committee, as part of its ongoing efforts, to take steps to use existing FAA data and coordinate with other federal agencies to identify and gather the information it needs to measure progress and target resources toward its goal of promoting a robust, qualified, and diverse aviation maintenance workforce. For example, FAA could task a committee working group with developing and implementing ways to improve data sharing among federal agencies to inform decision-making on how to strengthen career pathways and better understand the supply and demand of certificated workers. (Recommendation 1) Agency Comments We provided a draft of this report to DOT, DOL, Education, DOD, and VA for review and comment. DOT provided written comments, which are reprinted in appendix II. DOT concurred with our recommendation. Specifically, DOT agreed that using existing data could potentially contribute to its efforts to develop the aviation maintenance workforce. DOT said it will ask the Aviation Workforce Steering Committee to consider using existing FAA data and to coordinate with other federal agencies regarding other potential data sources to support the FAA’s aviation maintenance workforce goals. DOL provided technical comments, which we incorporated in the report as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretary of the Department of Transportation, the Secretary of the Department of Labor, the Secretary of the Department of Education, the Secretary of the Department of Defense, the Secretary of the Department of Veterans Affairs, and other interested parties. In addition, the report is available at no charge on the GAO website at https://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7215 or gurkinc@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Labor Market Indicator Analysis While no single metric can be used to determine whether a labor shortage exists, certain indicators in conjunction with views of stakeholders can provide insight on this issue. We previously found, based on our review of economic research, that an occupation experiencing a labor shortage would exhibit the following: (1) a low unemployment rate signaling limited availability of workers in that profession, (2) increases in wages offered to draw people into that profession, and (3) increases in employment due to increases in demand for that occupation. Table 2 shows these specific indicators from 2013 through 2018 for the aircraft mechanics and service technicians occupation, measured using Bureau of Labor Statistics (BLS) Current Population Survey data. According to our analysis of BLS data from 2013 through 2018, unemployment rate and change in median wage earnings for the aircraft mechanics and service technicians occupation, which includes both Federal Aviation Administration-certificated and non-certificated workers, were consistent with the existence of hiring difficulties, while the percent change in employment was not. Data on two of the three indicators (unemployment rate and wage earnings) were consistent with difficulties in hiring aircraft mechanics and service technicians. However, because these data combine information for certificated and non-certificated workers, it is difficult to know the extent to which any hiring difficulties represent demand for certificated workers, specifically. In addition, the indicators should be viewed with appropriate caveats. For example, while median wages increased for aircraft mechanics and service technicians in 2018 compared to 2013, they did not increase in every year—and they exhibited decreases of as much as 6.7 percent. The direction of change of the employment indicator was not consistent with hiring difficulties for this occupation. As shown in table 2, from 2013 through 2018, employment for aircraft mechanics and service technicians does not appear to have changed, while employment for all other occupations increased. However, employment for this occupation did not remain constant in every year over that time period and exhibited increases of as much as 12.5 percent and decreases of as much as 21.9 percent. Appendix II: Department of Transportation Agency Comments Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Chelsa Kenney Gurkin at (202) 512-7215 or Gurkinc@gao.gov. Staff Acknowledgments In addition to the contact named above, Betty Ward-Zukerman (Assistant Director), Meredith Moore (Analyst-in-Charge), Ellie Klein, and Chris Woika made key contributions to this report. Additional assistance was provided by James Bennett, Lilia Chaidez, Holly Dye, Serena Lo, Sheila R. McCoy, John Mingus, Michael Naretta, James Rebbe, Almeta Spencer, and Andrew Von Ah.


Background U.S. Export Control System The U.S. government implements an export control system to manage risks associated with exporting sensitive items and ensure that legitimate trade can still occur. The export control system is governed by a complex set of laws, regulations, and processes that multiple federal agencies administer to ensure compliance. State and Commerce each play a role in the U.S. export control system. Historically, State has controlled the export of military items, known as defense articles and services, while Commerce has controlled the export of less sensitive items with both military and commercial applications, known as dual-use items. In addition to firearms, artillery, and ammunition, State controls the export of items such as tanks, fighter aircraft, missiles, and military training, which it lists on the U.S. Munitions List (USML). Commerce controls the export of dual-use items such as computers, radars, and telecommunications equipment, which it lists on the Commerce Control List (CCL). State and Commerce both control the export of items within their jurisdictions by requiring a license or other authorization to export a controlled item; vetting the parties associated with export transactions; monitoring the end-use of exports and other compliance activities; and supporting law enforcement agencies’ investigations of possible violations of export control laws and regulations. Generally, unless a license exemption applies, exporters submit a license application to State if their items are controlled on the USML or to Commerce if they are controlled on the CCL to receive export approval. As part of the application review process, State and Commerce consult with other agencies, including DOD. Additionally, offices within Commerce, DHS, and the Department of Justice (DOJ) investigate potential violations of export control laws and regulations, and conduct enforcement activities. State and Commerce Export Control Lists Items identified on the State and Commerce export control lists are subject to different laws and regulations. The Arms Export Control Act of 1976, as amended, (AECA) provides the statutory authority to control the export of defense articles and services, which the President delegated to the Secretary of State. State’s International Traffic in Arms Regulations (ITAR) implement this authority and identify the specific types of items subject to control in the USML. The USML is comprised of 21 categories of items, each with multiple sub-categories, encompassing defense items such as firearms, missiles, and aircraft. Firearms, artillery, and ammunition represent the first three categories of the USML (see table 1). Additional information on the 21 categories of the USML is presented in appendix II. Within State, the Directorate of Defense Trade Controls (DDTC) is responsible for implementing controls on the commercial export of these items. The Export Control Reform Act of 2018 (ECRA) provides the statutory authority for Commerce to control the export of less sensitive military items, dual-use items, and basic commercial items. Commerce’s Export Administration Regulations (EAR), which contain the CCL, implement this authority. The CCL classifies less sensitive military items, dual-use items, and basic commercial items in 10 categories, such as Nuclear & Miscellaneous, Electronics, and Telecommunications, and in 5 product groups. Appendix II shows the 10 categories and five groups of the CCL. Commerce’s Bureau of Industry and Security (BIS) is responsible for implementing these export controls (see table 2 for a summary of the legal and regulatory frameworks for State’s and Commerce’s export controls). Proposed Transfer of Certain Firearms from State to Commerce Jurisdiction In May 2018, State and Commerce published proposed rules in the Federal Register to request public comments on the proposed transfer of certain items in USML Categories I, II, and III (firearms, artillery, and ammunition) to the CCL. According to State and Commerce’s proposed rules, the purpose of the transfer is to limit the items that State controls to those that provide the United States with a critical military or intelligence advantage or, in the case of weapons, are inherently for military end use. According to the proposed rules, items that do not meet these criteria would be removed from State’s export control jurisdiction and moved to Commerce’s jurisdiction. The proposed rules state that some, but not all, of the firearms, artillery, and ammunition currently controlled for export by State would transfer to Commerce control. The items proposed for transfer to the CCL include non-automatic and semi-automatic firearms up to .50 caliber, and non-automatic shotguns with a barrel length less than 18 inches; as well as parts, components, accessories, attachments, and ammunition for these firearms and shotguns, among other items. According to the proposed rules, if finalized, State would continue to control fully-automatic firearms, shotguns, and modern artillery; silencers, components, parts, and accessories specially designed for automatic firearms and shotguns; and specific types of ammunition, including ammunition for automatic firearms. The proposed rules would also make a variety of conforming changes to the USML and CCL to accommodate the transferred items. The proposed transfer of firearms, artillery, and ammunition is part of an ongoing effort to reform the export control lists by reviewing the USML categories and transferring certain items considered less sensitive to the CCL. Since the export control reform initiative was first announced in 2010 with the objective of modernizing the export control system, State and Commerce have finalized various rulemakings that transferred certain items from USML Categories IV through XXI to Commerce’s control. Firearms, artillery, and ammunition are the last three USML categories proposed to undergo regulatory changes under export control reform. In accordance with the AECA, the President must notify Congress of items proposed for removal from the USML and describe the nature of any controls to be imposed on the items, and may not remove the items until 30 days after providing such notice. State and Commerce published the proposed rules in the Federal Register on May 24, 2018, opening a 45-day public comment period that ended on July 9, 2018. After reviewing public comments, State and Commerce submitted final rules to the Office of Management and Budget for regulatory review on November 7, 2018. The required 30-day congressional notification period pursuant to the AECA began on February 4, 2019, according to a State official. State Reviewed about 69,000 Export License Applications Valued at up to $45.4 Billion for Firearms, Artillery, and Ammunition in Fiscal Years 2013-2017 State reviewed 68,690 export license applications for firearms, artillery, and ammunition with a potential value of up to $45.4 billion during fiscal years 2013 to 2017. The number of export license applications for firearms, artillery, and ammunition remained relatively constant from fiscal years 2013 to 2017, averaging 13,738 annually, even as the total number of licenses reviewed by State declined as the export control reform process transferred items from State to Commerce control (see fig. 1). Firearms, artillery, and ammunition increased from about 16 percent of all license applications reviewed by State in fiscal year 2013 to about 36 percent in 2017. State processes export license applications for permanent exports, temporary exports and imports, and certain types of agreements. During fiscal years 2013 to 2017, about 91 percent of export license applications for firearms, artillery, and ammunition were for permanent exports, about 8 percent for temporary exports and imports, and about 2 percent for agreements. State can take various actions on the export license applications it receives, including approving the license, approving with conditions, returning without action, and denying the license. For fiscal years 2013- 2017, State approved 87 percent of the number of export license applications for firearms, artillery, and ammunition, returned without action 12 percent, and denied 1 percent. State can approve an application but place conditions on the export license, such as limiting the validity period or prohibiting certain types of intermediaries in the export transaction. State can also return without action export license applications that are missing information or that it is otherwise unable to review, and can deny, revoke, suspend, or amend a license for foreign policy or national security reasons. About Two-Thirds of Category I-III Export License Applications Were for Firearms in Fiscal Years 2013-2017 About two-thirds of the export license applications for firearms, artillery, and ammunition that State reviewed during fiscal years 2013-2017 were for firearms and related items controlled under Category I of the USML (see fig. 2). Of the applications for these items, about 57 percent involved non-automatic or semi-automatic firearms—most of which are proposed to transfer to the CCL under Commerce control—and about 4 percent involved fully-automatic firearms—which would remain on the USML under State control. The remainder of export license applications for Category I items included other types of firearms such as combat shotguns, firearm attachments such as silencers and riflescopes, firearm parts and components, and technical data and defense services related to these items. The proposed rules state that some of these items would transfer to Commerce control while others would remain under State control. As shown in figure 2, export license applications for Category II artillery were about 5 percent of all Category I-III license applications from fiscal years 2013 through 2017. According to State, under the proposed rules, modern artillery, their ammunition, and certain related parts and components would remain under State’s control. Category III ammunition represented about 21 percent of the Category I-III export license applications. As stated in the State and Commerce proposed rules, USML Category III would be revised to specifically list the ammunition that it controls, which would include ammunition that has only or primarily military applications. Generally, ammunition used in the non- automatic and semi-automatic firearms that are proposed to transfer to Commerce control would also transfer. About 8 percent of the export license applications involved items controlled in more than one category of USML Categories I, II, and III, which are shown as “Multiple” in figure 2. Volume of Category I-III Export License Applications Varied by Geographic Region of End-User in Fiscal Years 2013-2017 In fiscal years 2013 to 2017, 32 percent of license applications for the export of firearms, artillery, and ammunition were intended for end-users in countries in Europe and Eurasia, 29 percent to the Western Hemisphere, 24 percent to East Asia and the Pacific, 7 percent to the Near East, 3 percent to Africa, 3 percent to South and Central Asia, and 2 percent to multiple countries (see fig. 3). Export license applications for firearms, artillery, and ammunition during fiscal years 2013 to 2017 included applications for end-users spanning 189 countries and territories, yet the top 20 countries represented about 70 percent of the total number of applications (see fig. 4). State and Commerce Export Controls Have Several Different Requirements, Including for Registration, Licensing, End-Use Monitoring, and Congressional Notification State’s and Commerce’s export controls are guided by different laws, regulations, or policies that have several different requirements for registration, licensing, end-use monitoring, congressional notification, public reporting, and enforcement. The AECA requires manufacturers, exporters, and brokers of items on the USML to register with State whereas there is no registration requirement in the law for manufacturers, exporters, and brokers of items on the CCL under Commerce’s jurisdiction. Differences also exist in how State and Commerce screen export license applications and in their license requirements. For example, State and Commerce rely on different internal watch lists to screen applicants. In addition, according to Commerce, certain exports that currently require a State license would not require a Commerce license once transferred to Commerce’s jurisdiction. State and Commerce also conduct end-use monitoring of selected controlled exports differently. For example, State relies primarily on embassy staff to conduct end-use checks and Commerce relies primarily on several export control officers based overseas for this responsibility. In addition, congressional notification and public reporting requirements that under current law apply to firearms on the USML would not be applicable if they are transferred to the CCL. Finally, there are some differences in enforcement of export control laws, such as different maximum fines for civil violations, depending on whether the item is controlled by the ITAR under State’s jurisdiction or controlled by the EAR under Commerce’s jurisdiction. The Law Requires Registration for Items on the USML but Not for Items on the CCL The AECA requires manufacturers, exporters, and brokers of defense articles or services listed on the USML to register annually with State’s Directorate of Defense Trade Controls (DDTC) whereas there is no requirement in the law for registration for manufacturers, exporters, and brokers of items on the CCL. State reported having 13,083 registrants across all 21 USML categories in fiscal year 2017. Registration, which requires a fee payment of at least $2,250 per year, is generally a precondition for obtaining a State export license, unless State grants an exception to a manufacturer or exporter, or a broker is eligible for an exemption. According to a State document, registration provides important information on the identity and location of defense companies and conveys management responsibility for compliance with export control laws. Those registering must disclose any foreign ownership or affiliations and certify that they have not been indicted, otherwise charged with, or convicted of export control violations and other crimes. Manufacturers and exporters whose entire product line transfers to the CCL would no longer have to register, according to Commerce’s proposed rule, while those that manufacture or export any items that remain on the USML, would continue to register with DDTC. Differences Exist in State and Commerce Applicant Screening Processes and License Requirements Both Agencies Review Export License Applications Using an Interagency Process State’s and Commerce’s processes for reviewing export license applications involve opportunities for other Departments to review applications. While DDTC has primary responsibility for reviewing State’s commercial export license applications, other bureaus within State, as well as DOD, also review certain applications, depending on the defense article, defense service, or the destination country. Commerce export license applications also involve an interagency review that includes State, DOD, and the Department of Energy, depending on the item to be exported. Both departments have a process for resolving disagreements among the reviewing bureaus or agencies on the disposition of the application. According to State officials, as part of the interagency review process for Commerce licenses, State has generally reviewed applications for items that have previously moved from the USML to the CCL and would continue to do so for items that would transfer to the CCL under the proposed rules. Moreover, DOD officials told us that DOD intends to review Commerce export license applications for these items during the interagency review process, if the proposed transfer is implemented. This would represent a change from DOD’s current practice to generally not review State’s firearms license applications. DOD officials told us that if the proposed rules are finalized, they believed it is prudent to begin reviewing Commerce license applications for items that would transfer under the proposed rules, at least initially. State and Commerce Use Different Watch Lists to Screen Parties to the Export Transaction State and Commerce each maintain their own internal watch lists to screen all parties identified on license applications. A watch list match would trigger further review of the license and ultimately can result in a denial of the license in some cases. State and Commerce also use watch lists as a means of targeting transactions for possible end-use checks to verify legitimacy of end-users of controlled exports. Both departments’ watch lists include any derogatory information they collect internally from their past screening and end-use monitoring of licenses. For example, if information is identified raising questions about the legitimacy of a party to a license during the application review, that information would be used to update the watch list to inform future license application reviews. State’s and Commerce’s watch lists also include information from automated databases maintained by other U.S. agencies as well as information from law enforcement agencies and the intelligence community. State’s watch list contains over 200,000 entries, including sensitive details related to ongoing and previous law enforcement activities, according to State officials. According to Commerce officials, because State has been responsible for export controls of firearms, artillery, and ammunition, its internal watch list is also more likely than Commerce’s to include derogatory information collected from past screening and end-use monitoring related to exports of these items. However, Commerce does not have access to State’s watch list, according to State and Commerce officials. These officials noted that a Commerce licensing officer can ask State to screen an applicant with State’s watch list on a case-by-case basis, although such checks are not done routinely. State and Commerce officials told us that, in anticipation of the transfer of firearms, artillery, and ammunition to Commerce’s responsibility, the two departments are engaged in ongoing discussions to potentially share State’s watch list with Commerce. According to State officials, these discussions involve determining which specific watch list information Commerce would need and State is able to share, depending on the source of the information. State and Commerce also have to resolve the sharing and updating of information using different information technology infrastructures, according to department officials. As of February 2019, the departments had not reached agreement or established a documented process to achieve the goal of sharing watch list information before implementation of the proposed transfer would occur, according to State and Commerce officials. Information sharing is supported by a policy statement included in the ECRA. The statement says that among other factors, the “export control system must ensure that it is transparent, predictable, and timely, has the flexibility to be adapted to address new threats in the future, and allows seamless access to and sharing of export control information among all relevant United States national security and foreign policy agencies.” Without access to State’s watch list, if the proposed rules are finalized, Commerce may lack critical information needed to effectively screen license applicants for firearms and related exports and target possible cases for end-use monitoring to ensure that these exports are used as intended and by legitimate end-users. Both Agencies Screen License Applications for Human Rights Concerns but Statutory Prohibition Applies Differently Both State and Commerce screen license applications for human rights concerns, but the federal law that prohibits exports to the governments of certain foreign countries on human rights grounds applies differently to items under State’s jurisdiction than under Commerce’s. Under Section 502B of the Foreign Assistance Act of 1961, as amended, in general, “no security assistance may be provided to any country the government of which engages in a consistent pattern of gross violations of internationally recognized human rights.” For this provision, “security assistance” is defined in part as any license in effect with respect to the export to or for the armed forces, police, intelligence, or other internal security forces of a foreign country of (1) any defense articles or defense services licensed for export under section 38 of the AECA, or (2) items listed under the 600 series of the CCL. Licenses under Commerce’s jurisdiction generally may not be issued for items defined as “crime control and detection instruments and equipment” to a country, the government of which engages in a consistent pattern of gross violations of internationally recognized human rights. For items under Commerce’s jurisdiction, the Commerce proposed rule specifies that concern for human rights is a regulatory reason for denying a license for firearms and ammunition under Commerce’s Export Administration Regulations (EAR). Within State, the Bureau of Democracy, Human Rights and Labor (DRL) is primarily responsible for screening export license applications to ensure that exports do not involve parties with human rights concerns. According to DRL officials, the bureau reviews applications for exports to specific countries where human rights concerns exist and prioritizes applications for firearms exports because they are often associated with human rights abuses committed by government police and military units. The officials noted, however, that State rarely denies an export license based solely on human rights concerns. If firearms are transferred to Commerce’s responsibility, DRL will continue to have the primary role in screening license applications for human rights as part of the Commerce-led interagency review process, according to DRL officials. For Commerce license applications, however, State’s position would be weighed together with the positions of Commerce, DOD, and Energy, according to Commerce officials. By contrast, for State export license applications, State alone makes the final determination, according to State officials. State Has Different Requirements than Commerce for End-Users to Certify They Will Not Re-Export Certain Licensed Exports State and Commerce have different end-user certification requirements. State’s export control regulations require that for certain items, applicants provide a written certification from end-users that they will not re-export, resell, or otherwise dispose of the commodity outside of the country listed on the license. This requirement generally applies to all items on the USML that are designated as Significant Military Equipment, including firearms, and ammunition. In contrast, Commerce generally does not require end-user certification for items on the CCL but does require it when it has not verified the legitimacy of end-users and may also impose this requirement on a case-by-case basis. Written end-user certification provides additional assurance and accountability that end-users will comply with the terms and conditions of the license, according to State officials. It also is a deterrent and provides documentary evidence that can be later used in court, if necessary, according to an official from Immigration and Customs Enforcement (ICE). The Law Requires Disclosure of Political Contributions, Fees and Commissions for Items on the USML but Not for Items on the CCL The AECA states that the Secretary of State shall require reporting on political contributions, gifts, commissions, and fees paid or offered, or agreed to be paid by any person in connection with a commercial sale of an item listed on the USML to or for the armed forces of a foreign country or an international organization. State’s export control regulations also require license applicants to disclose certain payment of political contributions, fees, and commissions for certain sales of defense articles and defense services. This requirement applies to exports of $500,000 or more. Applicants must report political contributions in an aggregate amount of $5,000 or more and paid fees or commissions in an aggregate amount of $100,000 or more. Applicants must provide a letter to DDTC containing specific information about the sale, including the amounts of political contributions, fees, or commissions paid, and the name and nationality of each recipient. The disclosures are intended to ensure that purchases made by foreign governments of U.S. defense articles are based on merit without improper influence. Failure of applicants to comply with these disclosure requirements can result in additional oversight measures and civil penalties. According to an ICE official, this disclosure information may provide valuable information in criminal or civil matters. There is no requirement in the law for these disclosures for items listed on the CCL and Commerce licenses do not require these disclosures. Therefore, this information would no longer be collected as part of the licensing process for firearms, artillery, and ammunition that are proposed for transfer to the CCL, according to Commerce officials. According to Commerce, Certain Exports That Require a State License Would Not Require a Commerce License if Transferred to the CCL Consistent with export control regulations, there are several circumstances in which some exports proposed for transfer that currently require State licenses would either require fewer or no Commerce licenses if the proposed rules are finalized, according to Commerce. Multiple end-users on one license. State requires licenses to be limited to only one end-user, while Commerce allows multiple end-users on a single license. The applicant for a State export license must provide a purchase order documenting the proposed export to a single end-user and an additional license would be required for each additional end-user. According to Commerce officials, a Commerce license can have multiple end-users associated with a particular consignee, reducing the total number of licenses for which the applicant must apply. Technical data and defense services. State requires licenses for defense services and technical data whereas Commerce’s export controls do not generally apply to defense services and apply to technical data more narrowly than State. State’s regulations define defense services as “the furnishing of assistance (including training) to foreign persons … in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles.” State’s definition of defense services also includes military training of foreign units and forces including publications, training exercises, and military advice. State’s definition of technical data includes information, such as blueprints, drawings, or instructions. Commerce’s export control regulations generally do not apply to services. For example, training in the basic operation of a firearm controlled by Commerce would not be subject to export controls, according to State officials. In addition, Commerce’s regulations do not control technology or software, if it is “available to the public without restrictions.” For example, Commerce officials told us that Commerce would not require an export license for the posting of instructions for 3D printing of firearms on the internet, if they were publicly available without restrictions. Minimum level of U.S.-origin content. Items subject to State’s controls require a license when they are incorporated into a foreign-made product regardless of the percentage of controlled U.S. content in that product. Commerce does not require a license for items when they are incorporated into foreign-made items unless the controlled U.S.-origin content of a foreign-made product exceeds the applicable minimum percentage which, according to Commerce officials, may be 10 or 25 percent, depending on the destination. This minimum level of U.S.-origin content is referred to as “de minimis treatment.” Commerce’s proposed rule states that de minimis treatment in Commerce’s regulations would apply for all foreign-made items proposed for transfer to the CCL, unless they are being exported to a country that is subject to a United States arms embargo, in which case there would be no minimum threshold for U.S.-origin content. License exceptions. State regulations contain some country-based license exceptions, including for exports to Canada and, more narrowly, to Australia and the United Kingdom whereas Commerce has several different license exceptions under its regulations. For example, Commerce regulations have the “Strategic Trade Authorization” (STA) exception that permits exports of certain items to countries determined to be low risk, which includes NATO partners and other close allies, of which 37 are eligible for a broader STA authorization and seven are eligible for a much narrower STA authorization. Commerce’s proposed rule specifies that it would revise Commerce’s regulations to make firearms and most parts, components, accessories, and attachments ineligible for the STA license exception. However, Commerce estimates that 450 to 650 license applications per year involving certain eligible items would still be authorized under STA exceptions if the proposed rules are finalized. Commerce also has a “Limited Value Shipment” exception, which is available for proposed exports of certain less sensitive firearms parts and components with a value of $500 or less per shipment based on the actual selling price or fair market value. Commerce’s proposed rule specifies that this exception would only be available for certain parts, components, and accessories and attachments for firearms; complete firearms would be ineligible for this exception. State offers a similar exemption but only for licenses with a value of $100 or less, based on the wholesale price. State and Commerce Both Conduct End-Use Monitoring of Selected Controlled Exports but Differences Exist State and Commerce Both Implement End-Use Monitoring Programs State and Commerce both conduct end-use monitoring to verify the reliability of foreign end-users and legitimacy of proposed transactions and to provide reasonable assurance of compliance with the terms of the license and proper use of the licensed items. State recommends that end-use checks involve a site visit whenever possible, while Commerce policy requires that the end-use check include a physical verification on-site with a party to the transaction, according to Commerce officials. State and Commerce also apply their own means of risk-based targeting to select the licenses or exports that will undergo end-use monitoring, however, similarities exist involving selection criteria. For example, State and Commerce may target transactions that involve unfamiliar foreign parties, unusual shipping routes, or derogatory information from watch lists, according to the departments. The number of end-use checks conducted by State averaged about 1.3 percent of its license applications, and those conducted by Commerce averaged about 3.3 percent of its applications from fiscal years 2013-2017. State and Commerce end-use checks may result in either “favorable” or “unfavorable” findings. Commerce may also categorize an end-use check as “unverified.” An “unfavorable” or “unverified” result occurs if the end- use check cannot verify information in the license or reveals facts that are inconsistent with the license. For either State or Commerce, an unfavorable end-use check can lead to denying applications, revoking licenses, removing parties from licenses, updating the watch list, or making referrals to U.S. law enforcement agencies for investigation, according to a State report and Commerce officials. State closed 166 of 766, or 22 percent, of end-use monitoring cases as “unfavorable” in fiscal years 2013-2017 for firearms, artillery, and ammunition licenses. State’s three most common reasons for an unfavorable finding for end-use checks for firearms, artillery, and ammunition were derogatory information on a foreign party, inability to confirm order or receipt of goods, and involvement of an unlicensed party. State relies on U.S. embassy or consulate staff in the country or countries involved in the transaction to conduct its end-use checks. Commerce relies primarily on Export Control Officers (ECOs) positioned overseas to conduct end-use checks. ECOs conducted an average of about 60 percent of Commerce’s end-use checks per year from fiscal years 2013 to 2017. According to Commerce officials, Commerce had a total of nine ECO positions in Beijing, Dubai, Frankfurt, Hong Kong, Istanbul, New Delhi, and Singapore, as of October 2018 (see fig. 5). Six of these nine positions were filled as of this date. The ECOs have areas of responsibility covering multiple countries within their geographic region. For the remaining 40 percent of end-use checks, Commerce relied primarily on its “Sentinel Program” in which BIS special agents based in domestic field offices, along with other responsibilities, travel to destination countries not covered by ECOs to conduct end-use checks. In addition, a small percentage of Commerce’s end-use checks are conducted by Foreign Commercial Service officers or other personnel stationed at U.S. embassies, according to Commerce officials. State conducted 766 end-use checks for firearms, artillery, and ammunition in fiscal years 2013-2017 with the largest share, over 40 percent, in the Western Hemisphere (see fig. 6). None of Commerce’s overseas ECO positions are located in this region nor do any cover it within their areas of responsibility. According to Commerce officials, the number and locations of end-use checks for firearms, artillery, and ammunition, if these items are transferred to the CCL, will depend on how exports of these items factor into the department’s existing targeting criteria. To the extent that Commerce needs to conduct end-use checks for these items in the Western Hemisphere, Commerce officials told us that they plan to cover these checks via the Sentinel Program and, where necessary, through checks by Foreign Commercial Service Officers. The officials noted that they plan to reassess their end-use monitoring efforts after items are transferred to the CCL if the proposed rules are finalized. End-use checks include pre-license checks in support of the license application review or post-shipment verifications after the license has been approved and items have shipped. As shown in figure 7, more than 50 percent of State’s end-use checks specifically for firearms, artillery, and ammunition licenses from fiscal years 2013 to 2017 were pre-license checks. Conversely, about 90 percent of Commerce’s end- use checks for all items subject to the EAR for this period were post- shipment verifications. Commerce noted that it conducts mostly post- shipment verifications because it controls a higher share than State of items that are exported without a license. State Is Required by Law to Notify Congress of Certain Export License Applications for Firearms, Artillery, and Ammunition While Commerce Is Not The AECA requires State to notify Congress before State can approve certain export licenses for firearms, artillery, and ammunition. These notification requirements depend on the proposed export value and type of export, among other factors. For example, the AECA requires State to notify Congress of proposed licenses for the export of USML Category I firearms in the amount of $1 million or more. Additionally, State must notify Congress of proposed licenses for commercial agreements that involve the overseas manufacture of certain USML items, including many firearms, artillery, and ammunition items, regardless of the proposed value. During fiscal years 2013 to 2017, State identified 240 export license applications involving firearms, artillery, and ammunition that required congressional notification, totaling approximately $2.5 billion. Additionally, State identified 41 license applications for commercial technical assistance or manufacturing license agreements involving the overseas manufacture of firearms, artillery, and ammunition that required congressional notification, totaling approximately $5.7 billion. According to State and Commerce officials, these congressional notification requirements would no longer apply to firearms, artillery, and ammunition that move from State’s to Commerce’s export control responsibility because the requirements apply specifically to USML controlled items. The proposed rule transferring firearms to Commerce’s responsibility does not revise Commerce’s export control regulations to add a congressional notification requirement for firearms, according to Commerce officials. State Is Required by Law to Publicly Report More Details on Controlled Exports than Commerce The Foreign Assistance Act, as amended, requires State to report to Congress annually on military assistance and military exports to the governments of each foreign country and international organization and specifies that the report include “a statement of the aggregate dollar value and quantity of semiautomatic assault weapons, or spare parts for such weapons.” The Act also requires that State post all unclassified information from this report on the internet. To comply with this requirement, State posts an annual report that includes the aggregate dollar value and quantity of defense articles and services, by USML category, licensed to each foreign country and international organization, as well as data on the actual shipments occurring during the fiscal year. The report also includes an appendix that breaks out exports specifically for the USML sub-category I(a), which includes non-automatic and semi- automatic firearms, and sub category I(h), which includes firearms components, parts, accessories, and attachments. This reporting requirement only applies to exports of items on the USML, which are licensed by State under the AECA, but does not apply to exports controlled by Commerce. This information on exports, by country, would no longer be available for firearms and other items from Categories I-III of the USML after they are transferred to the CCL if the proposed rules are finalized, according to Commerce officials. Some Differences Exist between Export Control Enforcement of Items Controlled by State and Commerce The statutory penalties available for criminal violations of export control laws are the same regardless of whether the items are on the USML and controlled by State or on the CCL and controlled by Commerce. Criminal violations may result in fines up to $1 million and prison terms up to 20 years, or both. Under the AECA, civil violations of State’s export controls may result in a fine of up to $500,000 but, according to State officials, can be much higher based on inflation under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. State told us that actual civil penalties for civil violations in 2018 ranged from $824,959 to $1,134,602. By contrast, the ECRA set the penalty for civil violations of Commerce’s export controls at up to $300,000 or twice the value of the transaction that is the basis of the violation, whichever is of greater value. According to Commerce officials, this can substantially increase the monetary penalty for civil violations. Criminal violations of either State’s or Commerce’s export control laws may result in prohibiting the violator from involvement in future exports of controlled items. The AECA also precludes the issuance of State licenses to persons convicted of violating certain federal laws, such as the Foreign Corrupt Practices Act. Similarly, Commerce can deny the export privileges, including the ability to obtain a license, of companies and individuals for a period of 10 years from the date of conviction for violating certain federal laws. This prohibition can be expanded to include other related parties, such as those connected with the denied person by virtue of affiliation, ownership, or control. Agencies with responsibility for export control enforcement can vary depending on whether items are controlled by State or Commerce. According to DHS officials, ICE has jurisdiction to investigate potential export control violations and U.S. Customs and Border Protection has primary enforcement responsibility for export control violations at the border, seaports, and airports. The Federal Bureau of Investigation (FBI) can also investigate these cases involving items controlled by either State or Commerce. According to Commerce, the Office of Export Enforcement in BIS has over 100 special agents in U.S.-based field offices authorized to investigate potential violations of Commerce’s export control laws. These investigative resources would be available, in addition to DHS and FBI, to address illegal firearms trafficking if the proposed transfer is implemented, according to Commerce officials. Proposed Rules, If Finalized, Would Reduce State’s and Increase Commerce’s Licensing Volume, but Extent of the Resource Impact on These Agencies Is Unknown According to State, the Proposed Transfer Would Impact Resources from State Fee Collections to an Uncertain Extent State expects to lose revenue from registration fees if the proposed transfer of firearms, artillery, and ammunition to Commerce is implemented. State estimates in its proposed rule that the transfer would result in about 10,000 fewer license applications per year for Category I- III items—a reduction of about 26 percent from the 38,862 applications that State processed in fiscal year 2017. State estimates a recurring annual registration fee revenue loss of about $2.5 million, according to its proposed rule. State officials told us, if the proposed rules become final, there would be additional revenue declines from an uncertain drop in the number of registrants that State cannot estimate. They explained that because many manufacturers and exporters would likely be involved in items controlled by State as well as Commerce, they would still need to register with State. Others involved only in items moving to Commerce would no longer have to register with State. For example, according to State officials, a manufacturer of both semi-automatic weapons that the proposed rules identify for transfer to the CCL and fully automatic weapons that would stay on the USML would still be required to register with State, if the proposed rules are finalized. State officials noted that the decline in the number of license applications resulting from previous transfers of items from the USML to the CCL has not produced a proportional decline in registration revenue. According to data provided by State, registration revenue has dropped less than 25 percent from about $47 million in fiscal year 2013 to about $36 million in fiscal year 2017, while the number of export license applications has dropped more than 50 percent from about 83,000 to almost 39,000. With the decline in license workload that State expects would result if the proposed rules are finalized, State officials told us that four contractors currently responsible for reviewing licenses for firearms and ammunition in DDTC could be moved to other teams with vacancies in order to review licenses for other controlled items. On the other hand, State’s Bureau of International Security and Nonproliferation (ISN), which has lead responsibility at State for reviewing Commerce licenses for items transferring from the USML to the CCL, expects to see an increase in its workload. An ISN official told us his bureau could potentially need an additional 2.5 full-time equivalent staff to review items transferred to the CCL as part of Commerce’s interagency review process. Commerce Officials Believe They Have Sufficient Resources to Handle an Increase in Workload Resulting from the Proposed Transfer Commerce estimates in its proposed rule that it would gain 6,000 additional license applications from the proposed transfer—an increase of about 18 percent above the 34,142 license applications it reviewed in fiscal year 2017. Commerce officials told us that the increased workload to review license applications will also create more work for some related activities. For example, Commerce expects the number of investigative leads and export enforcement investigations to include more firearms- related actions. However, Commerce officials told us they have not estimated the magnitude of these changes. Commerce officials told us they believe they have enough resources to absorb the increase in workload. They noted that they have flexibility to shift license review staff to meet demand created by the additional licenses, if necessary. In addition, BIS received an 18 percent increase in full-time equivalent staff positions, from 367 to 432, in fiscal year 2018. This increase was in response to workload demands created by previous transfers of items from the USML to the CCL, according to Commerce officials. Commerce officials told us that they will continue to assess workload data after the proposed transfer is implemented to determine whether they have adequate staff levels to meet increased workload demands. Conclusions If finalized, the proposed rules to transfer certain firearms, artillery, and ammunition from Categories I-III of the USML to the CCL would apply Commerce’s export control system to these items instead of State’s. However, critical information needed to effectively screen applicants and target licenses for end-use monitoring may be unavailable to Commerce unless State shares its watch list data. Further, because State has been responsible for export controls of firearms, artillery, and ammunition, its watch list is more likely than Commerce’s to include derogatory information collected from past screening and end-use monitoring related to exports of these items, according to Commerce officials. While State and Commerce officials said that they have held discussions regarding how to share relevant information from their internal watch lists, as of February 2019, they had not reached any agreement on how to share watch lists if the proposed rules are finalized. Without such an agreement or process to share State’s watch list, Commerce may lack critical information needed to ensure that items proposed for transfer are used as intended and by legitimate end-users. Recommendations for Executive Action We are making a total of two recommendations, including one to State and one to Commerce. If responsibility for controlling the exports of certain firearms, artillery, and ammunition is transferred from State to Commerce, the Secretary of State should ensure that the Under Secretary of State for Arms Control and International Security Affairs develops a process for sharing State’s internal watch list with Commerce to enhance oversight of these items. (Recommendation 1) If responsibility for controlling the exports of certain firearms, artillery, and ammunition is transferred from State to Commerce, the Secretary of Commerce should ensure that the Under Secretary of Commerce for Industry and Security develops a process for receiving State’s internal watch list and integrating it into Commerce’s licensing review process to enhance oversight of these items. (Recommendation 2) Agency Comments We provided a draft of this report to State, Commerce, DOD, DHS, and DOJ for review and comment. In their written comments, reproduced in appendixes III and IV, State and Commerce agreed with our recommendations. Commerce provided some minor revisions to the recommendation, which we incorporated. DOD, DHS, and DOJ did not provide written comments. In addition, State, Commerce, and DOJ provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate congressional committees and the Secretaries of State, Commerce, Defense, and Homeland Security; and the Attorney General of the United States. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-8612 or gianopoulosk@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our objectives were to assess (1) the volume and value of commercial export license applications State Department (State) reviewed for firearms, artillery, and ammunition—Categories I-III of the U.S. Munitions List (USML)—in fiscal years 2013-2017, (2) how certain export controls differ between State and Commerce, and (3) what is known about the resource implications for State and Commerce due to the proposed transfer. To assess the volume and value of export license applications for USML Category I-III firearms, artillery, and ammunition that State reviewed during fiscal years 2013 to 2017, we obtained data from the interagency export licensing database, USXPORTS. USXPORTS is the system of record for all munitions and dual-use export license applications and adjudications, and is maintained by the Defense Technology Security Administration, within the Department of Defense (DOD). The data on USXPORTS originates from private companies applying for export licenses which, in the case of munitions, State is responsible for adjudicating. The agencies use this database to review and adjudicate applications, and also to report back to the applicants. We interviewed officials from State’s Directorate of Defense Trade Controls (DDTC) in State’s Bureau of Political and Military Affairs to understand the data and identify any limitations on how we use them. We analyzed the data to describe the number and reported value of export license applications, the USML items in the applications, and the reported destination country, among other characteristics. We assessed these data and found them to be sufficiently reliable for the purpose of conducting these analyses, but recognized that approved applications may not necessarily result in actual exports. We also noted some minor data limitations in our report, such as the fact that amendments to export license applications are not associated with destination countries. We did not independently audit the underlying data submitted to DDTC by private companies. To analyze how certain export controls differ between State and Commerce, we reviewed the departments’ proposed rules, relevant laws and regulations, agency guidance, and annual reports related to State’s and Commerce’s export controls. We also interviewed officials from Commerce’s Bureau of Industry and Security; DDTC; State’s Bureau of Democracy, Human Rights and Labor; State’s Bureau of International Security and Nonproliferation; Immigration and Customs Enforcement and U.S. Customs and Border Protection in the Department of Homeland Security; and the Defense Technology Security Administration. We sought to present differences between State’s and Commerce’s export controls that are potentially relevant for items proposed for transfer from the USML to the CCL, rather than every possible distinction between the two departments’ export control systems. To describe the number of export license applications for firearms, artillery, and ammunition that required congressional notification, we reviewed the licensing data from the USXPORTS database. To describe the end-use monitoring conducted on exports of firearms, artillery, and ammunition, we extracted data from State’s Defense Trade Application database and interviewed agency officials to understand the data. We analyzed the data by the number of checks per year, the proportion of pre-license checks to post- shipment checks, the countries where the checks were conducted, and the outcome of the checks. We assessed these data and found them to be sufficiently reliable for these purposes. To assess what is known about the resource implications for State and Commerce due to the proposed transfer, we held discussions with State and Commerce officials, and reviewed annual budget documents and other agency reports. To better understand State’s estimated reduction of 10,000 license applications per year and Commerce’s estimated gain of 6,000 licenses that would result from the proposed transfer of items from the USML to the CCL, we reviewed State’s fiscal year 2013-2017 export license data and the proposed rules. We also discussed the estimates with agency officials. Commerce officials told us that their estimate was fairly broad, based on State’s estimate and their knowledge and experience of differences between the two agencies’ license requirements that account for the difference between the two estimates. We were not able to independently assess the accuracy of either estimate because the license data we collected from State were not disaggregated to identify which items on license applications would be transferring to the CCL under the proposed rules and which would be staying on the USML. Each State license application can involve multiple items across multiple USML Sub-Categories. We also reviewed the number of full-time equivalent staff responsible for export control activities and State’s annual revenue from registration fees paid by manufacturers, exporters, and brokers involved in items on the USML. We discussed State’s registration data with agency officials and while we assessed these data as sufficiently reliable for descriptive purposes, we also determined that these data could not be used to generate reliable estimates about the resource implications for the Department of State because there was no clear pattern in the relationship between applications, registrants, and revenue in the data provided. We conducted this performance audit from February 2018 to March 2019 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: The U.S. Munitions List and the Commerce Control List Defense articles and services subject to export controls under the Department of State’s jurisdiction are listed in the 21 categories of the United States Munitions List (USML). Table 3 shows the 21 USML categories and the dates of rule changes under export control reform that transferred certain items within these categories to the Commerce Control List (CCL). The CCL is divided into ten broad categories and each category is further subdivided into five product groups (see table 4). Appendix III: Comments from the Department of State Appendix IV: Comments from the Department of Commerce Appendix V: GAO Contacts and Staff Acknowledgments GAO Contact Staff Acknowledgements In addition to the individual named above, Drew Lindsey (Assistant Director), Howard Cott (Analyst in Charge), Ashley Alley, Martin de Alteriis, Neil Doherty, Adam Peterson, and Aldo Salerno made significant contributions to this report.