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Defense Trade: Status of the Defense Export Loan Guarantee Program

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Report Type Reports and Testimonies
Report Date Dec. 21, 1998
Report No. NSIAD-99-30
Subject
Summary:

The National Defense Authorization Act for Fiscal Year 1996 directed the Defense Department (DOD) to establish a loan guarantee program for the sale or long-term lease of defense articles or services to eligible foreign governments. DOD is required to charge fees to cover administrative costs and potential U.S. liability in the event of default on loan payments. In November 1996, DOD established the Defense Export Loan Guarantee Program and designed it to operate at no cost to the government. This report determines the program's status. GAO reviews the level of program activity so far, the program's financial status, and other sources of funding available to borrowing countries. GAO also compares the characteristics of the Defense Export Loan Guarantee Program with those of other U.S. government export financing programs and examines issues related to the planned transfer in 1999 of program responsibilities within DOD.

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