(U) Review of Department of State End-Use Monitoring in Ukraine

ISP-I-24-02
    Report Contents
    Unclassified
    Sensitive But Unclassified

    (U) Summary of Review

    (U) Between the time of Russia’s full-scale invasion of Ukraine in February 2022 and the time of this Office of Inspector General (OIG) review, the U.S. government had committed to providing approximately $30 billion in civilian and military security assistance to Ukraine.1 U.S. law requires the establishment of a program for end-use monitoring (EUM) of U.S.-origin defense articles and services sold, leased, or exported under the authority of the Arms Export Control Act or the Foreign Assistance Act of 1961.2 Although the Department of State (Department) has broad interagency policy responsibilities for the supervision and direction of exports of U.S.-origin defense articles and services, it has EUM responsibility only for the programs it directly manages, including commercial sales monitored by the Blue Lantern program3 and direct foreign assistance to Ukraine’s State Border Guard Service and the National Police of Ukraine. OIG estimated the total property subject to EUM by the Department in Ukraine was $311.7 million at the time of this review.4

    (U) OIG’s objectives for this review were to determine whether the Department is: (1) implementing the required EUM for security assistance programs in Ukraine and appropriately developing any new procedures in response to challenges affecting the Department’s ability to safeguard such equipment; and (2) coordinating EUM and other safeguard activities in accordance with its responsibilities in 1 Foreign Affairs Manual (FAM) 013 to provide direction and leadership to other U.S. government foreign affairs agencies.

    (U) OIG found that Embassy Kyiv had resumed limited in-person “primary” EUM activities in Ukraine as the evolving security situation allowed, but the Department bureaus responsible for EUM in Ukraine also depended on secondary EUM procedures, including relying on the Ukrainian government to assist directly and indirectly with EUM. According to Department officials, the Ukrainian government was forthcoming in providing detailed information related to the recipients of donated equipment, the location of such equipment, and details of battlefield losses, as necessary. At the time of this review, Department bureaus had not identified any instances of misuse of equipment subject to EUM. The Department required the same commitments from recipients and agreement to monitoring activities that applied before the February 2022 invasion. Although bureaus were developing or implementing pilots for new secondary EUM procedures, none had designed formal evaluations for these pilots. OIG identified several ongoing challenges to conducting EUM, such as security restrictions and ad hoc processes for reporting battlefield losses.

    (U) OIG also found the Department provided interagency direction and leadership for the coordination of EUM and other safeguard activities for security assistance programs in Ukraine.

    (U) OIG made 6 recommendations: 2 to the Bureau of International Narcotics and Law Enforcement Affairs, 2 to the Bureau of International Security and Nonproliferation, and 2 to Bureau of Political-Military Affairs. In its comments on the draft report, the Department concurred with all 6 recommendations. OIG considers all 6 recommendations resolved. The Department’s response to each recommendation and OIG’s reply can be found in the Recommendations section of this report. The Department’s formal written responses are reprinted in their entirety in Appendix C.

     

    1 (U) For more information, see: Department of State, “U.S. Security Cooperation with Ukraine,” https://www.state.gov/u-s-security-cooperation-with-ukraine/ and “Bureau of International Narcotics and Law Enforcement Affairs: Ukraine,” https://www.state.gov/bureau-of-international-narcotics-and-law-enforcement-affairs-work-by-country/ukraine-summary/.
    2 (U) See 22 United States Code (U.S.C) § 2785(a).
    3 (U) The Bureau of Political-Military Affairs conducts the Blue Lantern program for defense articles and services exported through direct commercial sales. This is discussed in more detail later in the report.
    4 (U) As of February 10, 2023, the Department of Defense (DoD) Office of Inspector General estimated that the United States has provided more than $1.8 billion in defense articles to Ukraine that require enhanced EUM. See Management Advisory: DoD Review and Update of Defense Articles Requiring Enhanced End-Use Monitoring (DODIG-2023-74, May 19, 2023).

    Recommendation Number
    1
    Closed Implemented Significant

    The Bureau of International Narcotics and Law Enforcement Affairs should develop and implement new end-use monitoring standard operating procedures, or update existing procedures, for use in non-permissive conditions. The bureau should consult with the Bureau of Political-Military Affairs and the Bureau of International Security and Nonproliferation and, as practicable, seek to adopt common approaches where there are common items provided or recipients.

    Recommendation Number
    2
    Open Resolved Significant

    The Bureau of International Security and Nonproliferation should develop and implement new end-use monitoring standard operating procedures, or update existing procedures, for use in non-permissive conditions. The bureau should consult with the Bureau of Political-Military Affairs and the Bureau of International Narcotics and Law Enforcement Affairs and, as practicable, seek to adopt common approaches where there are common items provided or recipients.

    Recommendation Number
    3
    Open Resolved Significant

    The Bureau of Political-Military Affairs should develop and implement new end-use monitoring standard operating procedures, or update existing procedures, for use in non-permissive conditions. The bureau should consult with the Bureau of International Narcotics and Law Enforcement Affairs and the Bureau of International Security and Nonproliferation and, as practicable, seek to adopt common approaches where there are common items provided or recipients.

    Recommendation Number
    4
    Open Resolved

    The Bureau of Political-Military Affairs should plan and conduct an evaluation of alternative end-use monitoring procedure pilots in Ukraine.

    Recommendation Number
    5
    Open Resolved

    The Bureau of International Narcotics and Law Enforcement Affairs should plan and conduct an evaluation of alternative end-use monitoring procedure pilots in Ukraine.

    Recommendation Number
    6
    Open Resolved

    The Bureau of International Security and Nonproliferation should determine whether to test alternative end-use monitoring procedure pilots in Ukraine and, if so, conduct an evaluation of them.