The Export-Import Bank of the United States (EXIM) is a critical player in supporting American exports through loans, loan guarantees, and insurance, with a stated objective to boost US jobs. While EXIM normally restricts support for defense commodities and services, there is an exception for dual-use exports, which include things with both civilian and military purposes. This exception, established by Congress in 1994, allows EXIM to approve such exports if they are nonlethal and largely intended for civilian use. A recent report from the Government Accountability Office (GAO) sheds light on EXIM's surveillance of these dual-use exports, providing significant insights and opportunities for federal contractors.

The GAO report reviews the status of EXIM's supervision of dual-use exports, which it continued to fund in fiscal year 2022, as well as any new dual-use exports financed in fiscal year 2023. As of August 2024, EXIM was actively monitoring a single dual-use export transaction with the Mexican government. This transaction included two satellites: a fixed-service satellite and a mobile satellite. The fixed-service satellite, launched in December 2012, has already completed its monitoring period, with the last payments due in December 2022. However, EXIM continues to monitor the mobile-service satellite, which became active in December 2015 and will stay so until the repayment period ends in January 2025.

The rigorous monitoring procedure for these dual-use exports is governed by particular criteria and involves several EXIM divisions, including the Engineering and Environment Division, the Office of the General Counsel, and the Office of Policy Analysis and International Relations. To ensure compliance with EXIM's dual-use policy, the assigned EXIM engineer is responsible for reminding buyers of reporting dates, recording monitoring actions, and determining compliance using the information provided by the purchasers. In 2024, EXIM successfully received the essential documentation from the Mexican government for the mobile-service satellite, and it was later decided that Mexico continued to comply with the dual-use policy. This outcome emphasizes the need to have strong communication channels and thorough oversight to ensure compliance with EXIM regulations.

Interestingly, the data shows that EXIM did not finance any new dual-use exports in fiscal year 2023. During this time, no applications for dual-use projects were filed for approval to EXIM's Board of Directors, which is remarkable given that the most recent permission for a dual-use transaction happened in fiscal year 2012. This disparity in new dual-use financing may reflect the complexities and strict criteria connected with dual-use exports, or it could indicate a purposeful shift in EXIM's portfolio management. Regardless, this provides an opportunity for federal contractors looking to enter the dual-use export market. Understanding EXIM's specialized standards and compliance methods might give contractors a competitive advantage when seeking finance for dual-use goods and services. Contractors must be prepared to deal with the complexity of dual-use classification, which requires rigorous assessments based on the identity of the foreign end user, the nature of the item, and its planned purpose.

Understanding the severe monitoring and compliance standards will help contractors better position themselves to take advantage of EXIM financing for dual-use goods and services. Contractors, with careful preparation and respect to EXIM's requirements, can open new opportunities and contribute to the larger aims of promoting US exports and job development while navigating the difficulties of the dual-use market.