Summary

Since October 1994, the U.S. Export-Import Bank (Ex-Im) has had statutory authority to provide loans, guarantees, and insurance to help finance U.S. exports of dual-use (military and civilian) defense articles and services, provided that it determines these items are nonlethal and meant primarily for civilian use. These dual-use exports include such items as vehicles that are used by the military for civilian or humanitarian purposes. The legislation also requires us to report annually on the end uses of the dual-use exports financed by Ex-Im during the second preceding fiscal year--which, for the purposes of this letter, corresponds to 2005. Since we last issued a letter in 2001 reporting on Ex-Im financed dual-use exports, the enclosure to this letter provides detailed information regarding the dual-use exports financed during fiscal years 2002 through 2004.

In fiscal year 2005, Ex-Im did not finance any dual-use export projects. According to Ex-Im officials, dual-use items were last financed in 2002, and Ex-Im has not considered any requests for dual-use financing since then. The officials attributed the program's decline to a shift in Ex-Im's portfolio from transactions with governments to private sector transactions.