You are given two reports by the government agency.  

Report 1:
This report provides background information and issues for Congress on the Aegis ballistic missile defense (BMD) program, which is carried out by the Missile Defense Agency (MDA) and the Navy, and gives Navy Aegis cruisers and destroyers a capability for conducting BMD operations. The issue for Congress is whether to approve, reject, or modify Department of Defense (DOD) acquisition strategies and proposed funding levels for the Aegis BMD program. Congress's decisions on the Aegis BMD program could significantly affect U.S. BMD capabilities and funding requirements, and the BMD-related industrial base. For an overview of the strategic and budgetary context in which the Aegis BMD program may be considered, see CRS Report RL32665, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress , by Ronald O'Rourke. Most of the Navy's cruisers and destroyers are called Aegis ships because they are equipped with the Aegis ship combat system—an integrated collection of sensors, computers, software, displays, weapon launchers, and weapons named for the mythological shield that defended Zeus. The Aegis system was originally developed in the 1970s for defending ships against aircraft, anti-ship cruise missiles (ASCMs), surface threats, and subsurface threats. The system was first deployed by the Navy in 1983, and it has been updated many times since. The Navy's Aegis ships include Ticonderoga (CG-47) class cruisers and Arleigh Burke (DDG-51) class destroyers. A total of 27 CG-47s (CGs 47 through 73) were procured for the Navy between FY1978 and FY1988; the ships entered service between 1983 and 1994. The first five ships in the class (CGs 47 through 51), which were built to an earlier technical standard in certain respects, were judged by the Navy to be too expensive to modernize and were removed from service in 2004-2005, leaving 22 ships in operation (CGs 52 through 73). A total of 62 DDG-51s were procured for the Navy between FY1985 and FY2005; the first entered service in 1991 and the 62 nd entered service in FY2012. The first 28 ships are known as Flight I/II DDG-51s. The next 34 ships, known as Flight IIA DDG-51s, incorporate some design changes, including the addition of a helicopter hangar. No DDG-51s were procured in FY2006-FY2009. The Navy during this period instead procured three Zumwalt (DDG-1000) class destroyers. The DDG-1000 design does not use the Aegis system and does not include a capability for conducting BMD operations. Navy plans do not call for modifying the three DDG-1000s to make them BMD-capable. Procurement of DDG-51s resumed in FY2010, following procurement of the three DDG-1000s. A total of 20 DDG-51s were procured in FY2010-FY2019. DDG-51s procured in FY2017 and subsequent years are being built to a new version of the DDG-51 design called the Flight III version. The Flight III version is to be equipped with a new radar, called the Air and Missile Defense Radar (AMDR) or the SPY-6 radar, that is more capable than the SPY-1 radar installed on all previous Aegis cruisers and destroyers. Sales of the Aegis system to allied countries began in the late 1980s. Allied countries that now operate, are building, or are planning to build Aegis-equipped ships include Japan, South Korea, Australia, Spain, and Norway. Most of Japan's Aegis-equipped ships are currently BMD-capable, and Japan plans to make all of them BMD-capable in coming years. The Aegis-equipped ships operated by South Korea, Australia, Spain, and Norway are not BMD-capable. Aegis ships are given a capability for conducting BMD operations by incorporating changes to the Aegis system's computers and software, and by arming the ships with BMD interceptor missiles. In-service Aegis ships can be modified to become BMD-capable ships, and DDG-51s procured in FY2010 and subsequent years are being built from the start with a BMD capability. The Aegis BMD system exists in several variants. Listed in order of increasing capability, these include (but are not necessarily limited to) 3.6.X variant, the 4.0.3 variant, the 4.1 variant (also known as the Aegis Baseline [BL] 5.4 variant), the 5.0 CU (Capability Upgrade) variant (also known as the BL 9.1 variant), the 5.1 variant (also known as the BL 9.2 variant), and the 6.X variant (also known as the BL 10 variant). Figure 1 summarizes the capabilities of some of these variants (using their designations as of 2016) and correlates them with the phases of the European Phased Adaptive Approach (or EPAA; see discussion below) for European BMD operations. As shown in Figure 1 , the Aegis BMD system was originally designed primarily to intercept theater-range ballistic missiles, meaning short-, medium-, and intermediate-range ballistic missiles (SRBMs, MRBMs, and IRBMs, respectively). In addition to its capability for intercepting theater-range ballistic missiles, detection and tracking data collected by the Aegis BMD system's radar might be passed to other U.S. BMD systems that are designed to intercept intercontinental ballistic missiles (ICBMs), which might support intercepts of ICBMs that are conducted by those other U.S. BMD systems. With the advent of the Aegis BMD system's new SM-3 Block IIA interceptor (which is discussed further in the next section), DOD is now evaluating the potential for the Aegis BMD system to intercept certain ICBMs. Section 1680 of the FY2018 National Defense Authorization Act ( H.R. 2810 / P.L. 115-91 of December 12, 2017) directed DOD to "conduct a test to evaluate and demonstrate, if technologically feasible, the capability to defeat a simple intercontinental ballistic missile threat using the standard missile 3 block IIA missile interceptor." DOD's January 2019 missile defense review report states the following: The SM-3 Blk IIA interceptor is intended as part of the regional missile defense architecture, but also has the potential to provide an important "underlay" to existing GBIs [ground-based interceptors] for added protection against ICBM threats to the homeland. This interceptor has the potential to offer an additional defensive capability to ease the burden on the GBI system and provide continuing protection for the U.S. homeland against evolving rogue states' long-range missile capabilities. Congress has directed DoD to examine the feasibility of the SM-3 Blk IIA against an ICBM-class target. MDA will test this SM-3 Blk IIA capability in 2020. Due to the mobility of sea-based assets, this new underlay capability will be surged in a crisis or conflict to further thicken defensive capabilities for the U.S. homeland. Land-based sites in the United States with this SM-3 Blk IIA missile could also be pursued. A March 18, 2019, press report states: The Pentagon plans a "first-of-its-kind" test of an unprecedented weapons capability to intercept and destroy an enemy Intercontinental Ballistic Missile "ICBM" -- from a Navy ship at sea using a Standard Missile-3 Block IIA. The concept, as articulated by Pentagon officials and cited briefly in this years' DoD "Missile Defense Review," would be to use an advanced SM-3 IIA to "underlay" and assist existing Ground-Based Interceptors (GBI), adding new dimensions to the current US missile defense posture.… The testing, Pentagon officials tell Warrior, is slated for as soon as next year. The effectiveness and promise of the Raytheon-built SM-3 IIA shown in recent testing have inspired Pentagon weapons developers to envision an even broader role for the weapon. The missile is now "proven out," US weapons developers say…. "The SM-3 IIA was not designed to take out ICBMs, but is showing great promise. This would be in the upper range of its capability -- so we are going to try," the Pentagon official told Warrior…. The SM-3 IIA's size, range, speed and sensor technology, the thinking suggests, will enable it to collide with and destroy enemy ICBMs toward the beginning or end of their flight through space, where they are closer to the boundary of the earth's atmosphere. "The SM-3 IIA would not be able to hit an ICBM at a high altitude, but it can go outside the earth's atmosphere," the Pentagon official said. "You want to hit it as far away as possible because a nuke could go off." A March 26, 2018, press report states the following: [MDA] Director Lt. Gen. Sam Greaves said MDA "is evaluating the technical feasibility of the capability of the SM-3 Block IIA missile, currently under development, against an ICBM-class target." "If proven to be effective against an ICBM, this missile could add a layer of protection, augmenting the currently deployed GMD [ground-based missile defense] system," Greaves said in written testimony submitted March 22 to the Senate Armed Services strategic forces subcommittee. [Greaves] said MDA will conduct a demonstration of the SM-3 Block IIA against an ICBM-like target by the end of 2020." The BMD interceptor missiles used by Aegis ships are the Standard Missile-3 (SM-3), the SM-2 Block IV, and the SM-6. The SM-3 is designed to intercept ballistic missiles above the atmosphere (i.e., exo-atmospheric intercept), in the midcourse phase of an enemy ballistic missile's flight. It is equipped with a "hit-to-kill" warhead, called a kinetic vehicle, that is designed to destroy a ballistic missile's warhead by colliding with it. MDA and Navy plans call for fielding increasingly capable versions of the SM-3 in coming years. The current versions, called the SM-3 Block IA and SM-3 Block IB, are to be supplemented in coming years by SM-3 Block IIA. Compared to the Block IA version, the Block IB version has an improved (two-color) target seeker, an advanced signal processor, and an improved divert/attitude control system for adjusting its course. Compared to the Block IA and 1B versions, which have a 21-inch-diameter booster stage at the bottom but are 13.5 inches in diameter along the remainder of their lengths, the Block IIA version has a 21-inch diameter along its entire length. The increase in diameter to a uniform 21 inches provides more room for rocket fuel, permitting the Block IIA version to have a burnout velocity (a maximum velocity, reached at the time the propulsion stack burns out) that is greater than that of the Block IA and IB versions, as well as a larger-diameter kinetic warhead. The United States and Japan have cooperated in developing certain technologies for the Block IIA version, with Japan funding a significant share of the effort. The SM-2 Block IV is designed to intercept ballistic missiles inside the atmosphere (i.e., endo-atmospheric intercept), during the terminal phase of an enemy ballistic missile's flight. It is equipped with a blast fragmentation warhead. The existing inventory of SM-2 Block IVs—72 as of February 2012—was created by modifying SM-2s that were originally built to intercept aircraft and ASCMs. A total of 75 SM-2 Block IVs were modified, and at least 3 were used in BMD flight tests. MDA and the Navy are now procuring a more capable terminal-phase (endo-atmospheric intercept) BMD interceptor based on the SM-6 air defense missile (the successor to the SM-2 air defense missile). The SM-6 is a dual-capability missile that can be used for either air defense (i.e., countering aircraft and anti-ship cruise missiles) or ballistic missile defense. A July 23, 2018, press report states the following: The Defense Department has launched a prototype project that aims to dramatically increase the speed and range of the Navy's Standard Missile-6 by adding a larger rocket motor to the ship-launched weapon, a move that aims to improve both the offensive and defensive reach of the Raytheon-built system. On Jan. 17, the Navy approved plans to develop a Dual Thrust Rocket Motor with a 21-inch diameter for the SM-6, which is currently fielded with a 13.5-inch propulsion package. The new rocket motor would sit atop the current 21-inch booster, producing a new variant of the missile: the SM-6 Block IB. On September 17, 2009, the Obama Administration announced a new approach for regional BMD operations called the Phased Adaptive Approach (PAA). The first application of the approach is in Europe, and is called the European Phased Adaptive Approach (EPAA). EPAA calls for using BMD-capable Aegis ships, a land-based radar in Europe, and two Aegis Ashore sites in Romania and Poland to defend Europe against ballistic missile threats from countries such as Iran. Phase I of EPAA involved deploying Aegis BMD ships and a land-based radar in Europe by the end of 2011. Phase II involved establishing the Aegis Ashore site in Romania with SM-3 IB interceptors in 2016. Phase 3 involves establishing the Aegis Ashore site in Poland with SM-3 IIA interceptors by perhaps FY2020. The completion of construction of the Poland site has been delayed by at least a year, MDA says, due to contractor performance issues. Each Aegis Ashore site in the EPAA is to include a structure housing an Aegis system similar to the deckhouse on an Aegis ship and 24 SM-3 missiles launched from a relocatable Vertical Launch System (VLS) based on the VLS that is installed in Navy Aegis ships. Although BMD-capable Aegis ships were deployed to European waters before 2011, the first BMD-capable Aegis ship officially deployed to European waters as part of the EPAA departed its home port of Norfolk, VA, on March 7, 2011, for a deployment to the Mediterranean that lasted several months. Under the FY2020 budget submission, the number of BMD-capable Navy Aegis ships is projected to increase from 38 at the end of FY2018 to 59 at the end of FY2024. During the period FY2018-FY2024, the portion of the force equipped with earlier Aegis variants is to decrease, and the number equipped with later variants is to increase. On October 5, 2011, the United States, Spain, and NATO jointly announced that, as part of the EPAA, four BMD-capable Aegis ships were to be forward-homeported (i.e., based) at the naval base at Rota, Spain. The four ships were transferred to Rota in FY2014 and FY2015. Navy officials have said that the four Rota-based ships can provide a level of level of presence in the Mediterranean for performing BMD patrols and other missions equivalent to what could be provided by about 10 BMD-capable Aegis ships that are homeported on the U.S. east coast. The Rota homeporting arrangement thus effectively releases about six U.S. Navy BMD-capable Aegis ships for performing BMD patrols or other missions elsewhere. The Aegis BMD development effort, including Aegis BMD flight tests, has been described as following a development philosophy long held within the Aegis program office of "build a little, test a little, learn a lot," meaning that development is done in manageable steps, then tested and validated before moving on to the next step. For a summary of Aegis BMD flight tests since 2002, see Appendix A . Japan is modifying all six of its Aegis destroyers to include the Aegis BMD capability. As of August 2017, four of the six ships reportedly had been modified, and Japan planned to modify a fifth by March 2018, or perhaps sooner than that. In November 2013, Japan announced plans to procure two additional Aegis destroyers and equip them as well with the Aegis BMD capability, which will produce an eventual Japanese force of eight BMD-capable Aegis destroyers. The two additional ships are expected to enter service in 2020 and 2021. Japanese BMD-capable Aegis ships have participated in some of the flight tests of the Aegis BMD system using the SM-3 interceptor (see Table A-1 in Appendix A ). Japan cooperated with the United States on development the SM-3 Block IIA missile. Japan developed certain technologies for the missile, and paid for the development of those technologies, reducing the missile's development costs for the United States. Japan plans to procure and operate two Aegis Ashore systems that reportedly are to be located at Ground Self-Defense Force (GSDF) facilities in Akita Prefecture in eastern Japan and Yamaguchi Prefecture in western Japan, and would be operated mainly by the GSDF (i.e., Japan's army). The two systems reportedly will be equipped with a new Lockheed-made radar called the Long Range Discrimination Radar (LRDR) rather than the Raytheon-made SPY-6 AMDR that is being installed on U.S. Navy Flight III DDG-51s, and reportedly will go into operation by 2023. A July 6, 2018, press report states that "The U.S. and Japan are looking to jointly develop next-generation radar technology that would use Japanese semiconductors to more than double the detection range of the Aegis missile defense system." An October 12, 2018, press report states that "the South Korean military has decided to buy ship-based SM-3 interceptors to thwart potential ballistic missile attacks from North Korea, a top commander of the Joint Chiefs of Staff revealed Oct. 12. Other countries that MDA views as potential naval BMD operators (using either the Aegis BMD system or some other system of their own design) include the United Kingdom, the Netherlands, Spain, Germany, Denmark, and Australia. Spain, South Korea, and Australia either operate, are building, or are planning to build Aegis ships. The other countries operate destroyers and frigates with different combat systems that may have potential for contributing to BMD operations. The Aegis BMD program is funded mostly through MDA's budget. The Navy's budget provides additional funding for BMD-related efforts. Table 1 shows MDA procurement and research and development funding for the Aegis BMD program. Research and development funding for the land-based SM-3 is funding for Aegis Ashore sites. MDA's budget also includes additional funding not shown in the table for operations and maintenance (O&M) and military construction (MilCon) for the Aegis BMD program. One issue for Congress is whether to approve, reject, or modify MDA's FY2019 procurement and research and development funding requests for the program. In considering this issue, Congress may consider various factors, including whether the work that MDA is proposing to fund for FY2019 is properly scheduled for FY2019, and whether this work is accurately priced. Another potential issue for Congress concerns required numbers of BMD-capable Aegis ships versus available numbers of BMD-capable Aegis ships. Some observers are concerned about the potential operational implications of a shortfall in the available number of BMD-capable relative to the required number. Regarding the required number of BMD-capable Aegis ships, an August 15, 2018, Navy information paper states the following: The [Navy's] 2016 Force Structure Assessment [FSA] sets the requirement [for BMD-capable ships] at 54 BMD-capable ships, as part of the 104 large surface combatant requirement, to meet Navy unique requirements to support defense of the sea base and limited expeditionary land base sites…. The minimum requirement for 54 BMD ships is based on the Navy unique requirement as follows. It accepts risk in the sourcing of combatant commander (CCDR) requests for defense of land. - 30 to meet CVN escort demand for rotational deployment of the carrier strike groups - 11 INCONUS for independent BMD deployment demand - 9 in forward deployed naval forces (FDNF) Japan to meet operational timelines in USINDOPACOM - 4 in FDNF Europe for rotational deployment in EUCOM. A related potential issue for Congress is the burden that BMD operations may be placing on the Navy's fleet of Aegis ships, particularly since performing BMD patrols requires those ships to operate in geographic locations that may be unsuitable for performing other U.S. Navy missions, and whether there are alternative ways to perform BMD missions now performed by U.S. Navy Aegis ships, such as establishing more Aegis Ashore sites. A June 16, 2018, press report states the following: The U.S. Navy's top officer wants to end standing ballistic missile defense patrols and transfer the mission to shore-based assets. Chief of Naval Operations Adm. John Richardson said in no uncertain terms on June 12 that he wants the Navy off the tether of ballistic missile defense patrols, a mission that has put a growing strain on the Navy's hard-worn surface combatants, and the duty shifted towards more shore-based infrastructure. "Right now, as we speak, I have six multi-mission, very sophisticated, dynamic cruisers and destroyers―six of them are on ballistic missile defense duty at sea," Richardson said during his address at the U.S. Naval War College's Current Strategy Forum. "And if you know a little bit about this business you know that geometry is a tyrant. "You have to be in a tiny little box to have a chance at intercepting that incoming missile. So, we have six ships that could go anywhere in the world, at flank speed, in a tiny little box, defending land." Richardson continued, saying the Navy could be used in emergencies but that in the long term the problem demands a different solution. "It's a pretty good capability and if there is an emergent need to provide ballistic missile defense, we're there," he said. "But 10 years down the road, it's time to build something on land to defend the land. Whether that's AEGIS ashore or whatever, I want to get out of the long-term missile defense business and move to dynamic missile defense." The unusually direct comments from the CNO come amid growing frustration among the surface warfare community that the mission, which requires ships to stay in a steaming box doing figure-eights for weeks on end, is eating up assets and operational availability that could be better used confronting growing high-end threats from China and Russia. The BMD mission was also a factor in degraded readiness in the surface fleet. Amid the nuclear threat from North Korea, the BMD mission began eating more and more of the readiness generated in the Japan-based U.S. 7th Fleet, which created a pressurized situation that caused leaders in the Pacific to cut corners and sacrifice training time for their crews, an environment described in the Navy's comprehensive review into the two collisions that claimed the lives of 17 sailors in the disastrous summer of 2017. Richardson said that as potential enemies double down on anti-access technologies designed to keep the U.S. Navy at bay, the Navy needed to focus on missile defense for its own assets. "We're going to need missile defense at sea as we kind of fight our way now into the battle spaces we need to get into," he said. "And so restoring dynamic maneuver has something to do with missile defense. A June 23, 2018, press report states the following: The threats from a resurgent Russia and rising China―which is cranking out ships like it's preparing for war―have put enormous pressure on the now-aging [U.S. Navy Aegis destroyer] fleet. Standing requirements for BMD patrols have put increasing strain on the U.S. Navy's surface ships. The Navy now stands at a crossroads. BMD, while a burden, has also been a cash cow that has pushed the capabilities of the fleet exponentially forward over the past decade. The game-changing SPY-6 air and missile defense radar destined for DDG Flight III, for example, is a direct response to the need for more advanced BMD shooters. But a smaller fleet, needed for everything from anti-submarine patrols to freedom-of-navigation missions in the South China Sea, routinely has a large chunk tethered to BMD missions. "Right now, as we speak, I have six multimission, very sophisticated, dynamic cruisers and destroyers―six of them are on ballistic missile defense duty at sea," Chief of Naval Operations Adm. John Richardson said during an address at the recent U.S. Naval War College's Current Strategy Forum. "You have to be in a tiny little box to have a chance at intercepting that incoming missile. So we have six ships that could go anywhere in the world, at flank speed, in a tiny little box, defending land." And for every six ships the Navy has deployed in a standing mission, it means 18 ships are in various stages of the deployment cycle preparing to relieve them. The Pentagon, led by Defense Secretary Jim Mattis, wants the Navy to be more flexible and less predictable―"dynamic" is the buzzword of moment in Navy circles. What Richardson is proposing is moving standing requirements for BMD patrols away from ships underway and all the associated costs that incurs, and toward fixed, shore-based sites, and also surging the Navy's at-sea BMD capabilities when there is an active threat.... In a follow-up response to questions posed on the CNO's comments, Navy spokesman Cmdr. William Speaks said the Navy's position is that BMD is an integral part of the service's mission, but where long-term threats exist, the Navy should "consider a more persistent, land-based solution as an option." "This idea is not about the nation's or the Navy's commitment to BMD for the U.S. and our allies and partners―the Navy's commitment to ballistic missile defense is rock-solid," Speaks said. "In fact, the Navy will grow the number of BMD-capable ships from 38 to 60 by 2023, in response to the growing demand for this capability. "The idea is about how to best meet that commitment. In alignment with our national strategic documents, we have shifted our focus in an era of great power competition―this calls us to think innovatively about how best to meet the demands of this mission and optimize the power of the joint force."... While the idea of saving money by having fixed BMD sites and freeing up multimission ships is sensible, it may have unintended consequences, said Bryan McGrath, a retired destroyer skipper and owner of the defense consultancy The FerryBridge Group. "The BMD mission is part of what creates the force structure requirement for large surface combatants," McGrath said on Twitter after Defense News reported the CNO's comments. "Absent it, the number of CG's and DDG's would necessarily decline. This may in fact be desirable, depending on the emerging fleet architecture and the roles and missions debate underway. Perhaps we need more smaller, multi-mission ships than larger, more expensive ones. "But it cannot be forgotten that while the mission is somewhat wasteful of a capable, multi-mission ship, the fact that we have built the ships that (among other things) do this mission is an incredibly good thing. If there is a penalty to be paid in peacetime sub-optimization in order to have wartime capacity--should this not be considered a positive thing?" McGrath went on to say that the suite of combat systems that have been built into Aegis have been in response to the BMD threat. And indeed, the crown jewels of the surface fleet―Aegis Baseline 9 software, which allows a ship to do both air defense and BMD simultaneously; the Aegis common-source library; the forthcoming SPY-6; cooperative engagement―have come about either in part or entirely driven by the BMD mission.... A Navy official who spoke on condition of anonymity, to discuss the Navy's shifting language on BMD, acknowledged the tone had shifted since the 2000s when the Navy latched onto the mission. But the official added that the situation more than a decade later has dramatically shifted. "The strategic environment has changed significantly since the early 2000s―particularly in the western Pacific. We have never before faced multiple peer rivals in a world as interconnected and interdependent as we do today," the official said. "Nor have we ever seen technologies that could alter the character of war as dramatically as those we see emerging around us. China and Russia have observed our way of war and are on the move to reshape the environment to their favor." In response to the threat and Defense Secretary Jim Mattis' desire to use the force more dynamically, the Navy is looking at its options, the official said. "This includes taking a look at how we employ BMD ships through the lens of great power competition to compete, deter and win against those who threaten us." A January 29, 2019, press report states the following: The Navy is looking to get out of the missile defense business, the service's top admiral said today, and the Pentagon's new missile defense review might give the service the off-ramp it has been looking for to stop sailing in circles waiting for ground-based missile launches. This wasn't the first time Adm. John Richardson bristled in public over his ships sailing in "small boxes" at sea tasked with protecting land, when they could be out performing other missions challenging Chinese and Russian adventurism in the South China Sea and the North Atlantic…. "We've got exquisite capability, but we've had ships protecting some pretty static assets on land for a decade," Richardson said at the Brookings Institute. "If that [stationary] asset is going to be a long-term protected asset, then let's build something on land and protect that and liberate these ships from this mission." Japan is already moving down the path of building up a more robust ground-based sensor and shooter layer, while also getting its own ships out to sea armed with the Aegis radar and missile defense system, both of which would free up American hulls from what Richardson on Monday called "the small [geographic] boxes where they have to stay for ballistic missile defense." Another related potential issue for Congress concerns burden sharing—how allied contributions to regional BMD capabilities and operations compare to U.S. naval contributions to overseas regional BMD capabilities and operations, particularly in light of constraints on U.S. defense spending, worldwide operational demands for U.S. Navy Aegis ships, and calls by some U.S. observers for increased allied defense efforts. The issue can arise in connection with both U.S. allies in Europe and U.S. allies in Asia. Regarding U.S. allies in Asia, a December 12, 2018, press report states the following: In June, US Navy Chief of Naval Operations (CNO) Admiral John Richardson said during a speech at the US Naval War College that the US Navy should terminate its current practice of dedicating several US Navy warships solely for Ballistic Missile Defense (BMD). Richardson wanted US warships to halt BMD patrols off Japan and Europe as they are limiting, restrictive missions that could be better accomplished by existing land-based BMD systems such as Patriot anti-missile batteries, the US Terminal High Altitude Area Defense (THAAD) anti-missile system and the Aegis Ashore anti-missile system. In the months since dropping his bombshell, Richardson—and much of the debate—has gone quiet. "My guess is the CNO got snapped back by the Pentagon for exceeding where the debate actually stood," one expert on US naval affairs told Asia Times. But others agree with him. Air Force Lt Gen Samuel A Greaves, the director of the US Missile Defense Agency (MDA), acknowledges Richardson's attempts to highlight how these BMD patrols were placing unwelcome "strain on the (US Navy's) crews and equipment." But there are complications. While it may free US Navy warships for sea-control, rather than land defense, there is a concern that next- generation hypersonic cruise missiles could defeat land-based BMD systems, such as Aegis Ashore, while the US Navy's Aegis-equipped warships offer the advantages of high-speed mobility and stealth, resulting in greater survivability overall. As Japan prepares to acquire its first Aegis Ashore BMD system – and perhaps other systems such as the THAAD system which has been deployed previously in Romania and South Korea – the possibility that the US Navy will end its important BMD role represents abrupt change…. Japan's decision to deploy Aegis Ashore can fill in any gap created by a possible US Navy cessation of BMD patrols. "The land-based option is more reliable, less logistically draining, and despite being horrendously expensive, could be effective in the sense that it provides a degree of reassurance to the Japanese people and US government, and introduces an element of doubt of missile efficacy into [North Korean] calculations," said [Garren Mulloy, Associate Professor of International Relations at Daito Bunka University in Saitama, Japan], adding, however, that these systems could not cover Okinawa. "Fixed sites in Japan could be vulnerable, and the Aegis vessels provide a flexible forward-defense, before anything enters Japanese airspace, but with obviously limited reactions times," Mulloy said. "Aegis Ashore gives more reaction time – but over Japanese airspace."… The silence about this sudden possible shift in the US defense posture in the western Pacific is understandable: it is a sensitive topic in Washington and Tokyo. However, the Trump administration has urged its allies to pay more for their own defense needs and to support US troops deployed overseas. Meanwhile, Tokyo needs to proceed cautiously given the likelihood that neighbors might view a move on BMD as evidence that Tokyo is adopting an increasingly aggressive defense posture in the region. But for them, it is a no-win situation. If the US does ditch the BMD patrol mission, China and North Korea might view the shift as equally menacing given that it greatly enhances the US Navy's maritime warfare capabilities. Another potential issue for Congress is whether to convert the Aegis test facility in Hawaii into an operational land-based Aegis BMD site. DOD's January 2019 missile defense review report states, in a section on improving or adapting existing BMD systems, that Another repurposing option is to operationalize, either temporarily or permanently, the Aegis Ashore Missile Defense Test Center in Kauai, Hawaii, to strengthen the defense of Hawaii against North Korean missile capabilities. DoD will study this possibility to further evaluate it as a viable near-term option to enhance the defense of Hawaii. The United States will augment the defense of Hawaii in order to stay ahead of any possible North Korean missile threat. MDA and the Navy will evaluate the viability of this option and develop an Emergency Activation Plan that would enable the Secretary of Defense to operationalize the Aegis Ashore test site in Kauai within 30 days of the Secretary's decision to do so, the steps that would need to be taken, associated costs, and personnel requirements. This plan will be delivered to USDA&S, USDR&E, and USDP within six months of the release of the MDR. A January 25, 2019, press report states the following: The Defense Department will examine the funding breakdown between the Navy and the Missile Defense Agency should the government make Hawaii's Aegis Ashore Missile Defense Test Center into an operational resource, according to the agency's director. "Today, it involves both Navy resources for the operational crews -- that man that site -- as well as funds that come to MDA for research, development and test production and sustainment," Lt. Gen. Sam Greaves said of the test center when asked how the funding would shake out between the Navy and MDA should the Pentagon move forward with the recommendation. Another potential issue for Congress concerns the potential for ship-based lasers, electromagnetic railguns (EMRGs), and gun-launched guided projectiles (GLGPs, previously known as hypervelocity projectiles [HVPs]) to contribute in coming years to Navy terminal-phase BMD operations and the impact this might eventually have on required numbers of ship-based BMD interceptor missiles. Another CRS report discusses the potential value of ship-based lasers, EMRGs, and GLGPs for performing various missions, including, potentially, terminal-phase BMD operations. Another potential oversight issue for Congress is technical risk and test and evaluation issues in the Aegis BMD program. Regarding this issue, a December 2018 report from DOD's Director, Operational Test and Evaluation (DOT&E)—DOT&E's annual report for FY2018—stated the following in its section on the Aegis BMD program: Assessment • Results from flight testing, high-fidelity M&S, HWIL, and distributed ground testing demonstrate that Aegis BMD can intercept non-separating, simple-separating, and complex-separating ballistic missiles in the midcourse phase. However, flight testing and M&S did not address all expected threat types, ground ranges, and raid sizes. • FTM-45 successfully and fully demonstrated the Aegis BL 9.2 organic engagement capability and corrective action for the previous FTM-29 missile failure. FTM-29 was only partially able to demonstrate EOR capability given the in-flight missile failure. In FTM-29, the Aegis Weapon System supported the SM-3 Block IIA missile and demonstrated bi-directional communication between the SM-3 Block IIA guidance section and the KW until loss of signal at horizon. However, the weapon system did not exercise all aspects of communication after KW eject. DOT&E considers the FTM-29 failure to be an example of a shortfall in conducting ground testing in an operationally representative way, and an example of a deficiency found in OT that DT should have discovered. • The MDA implemented process improvements to better identify, report, and fi x common failures and anomalies identified during SM-3 ground testing prior to flight testing. • SM CTV-03 demonstrated the capability of the Aegis BMD 4.1 upgrade to fi re an SM-6 Dual I missile. The BMD 4.1 build incorporates BL 9.C1 capabilities into the BMD 4.0 baseline. • FS-17 demonstrated the Aegis BMD 4.0.3 capability to interoperate with NATO partners over operational communication architectures during cruise missile and ballistic missile engagements, and to use remote data provided by NATO partners to prosecute remote engagements. JFTM-05 Event 2 demonstrated inter-ship communication between U.S. and Japanese destroyers using a realistic communications architecture while prosecuting ballistic missile engagements. Pacific Dragon demonstrated interoperability between U.S. Aegis BMD assets, Japanese destroyers, and Republic of Korea naval assets. • Aegis BMD has exercised rudimentary engagement coordination with Terminal High-Altitude Area Defense firing units, but not with Patriot. The MDA plans to include Patriot in FTO-03. MDA ground tests have routinely demonstrated that inter-element coordination and interoperability need improvement to increase situational awareness and improve engagement efficiency. • The MDA has been collaborating with DOT&E and the Under Secretary of Defense (Research and Engineering) to establish an affordable ground testing approach to support assessments of reliability. DOT&E cannot assess SM-3 missile reliability with confidence until the MDA is able to provide additional ground test data that simulates the in-flight environment. DOT&E is working with the MDA to determine if existing ground test venues are able to provide the needed missile reliability data. Recommendations The MDA should: 1. Ensure that ground tests of all SM-3 missile components, sections, and all-up rounds use the same configuration as will be flown in flight tests (i.e., "test as you fly"). 2. Determine how to properly score acceptance ground test data for production missiles to enable their use in estimating SM-3 reliability. 3. Fund and execute high-fidelity M&S RFRs for Aegis BL 9.2 SM-3 Block IIA and SM-6 Dual II scenarios that span the engagement battlespace. Regarding the SM-6 missile, the January 2018 DOT&E report also stated the following: Assessment • As reported in the DOT&E FY18 SM-6 BLK I FOT&E Report, the SM-6 remains effective and suitable with the exception of the classified deficiency identified in the FY13 IOT&E Report. The SM-6 Block 1 satisfactorily demonstrated compatibility with Aegis Weapon System Baseline 9 Integrated Fire Control capability. • In FY17-18, the Navy developed and tested specific software improvements to SM-6 BLK I to mitigate the classified performance problems discovered during IOT&E. As previously reported, testing conducted by the Navy demonstrated the software improvements perform as intended, but did not eliminate them. Recommendation 1. The Navy should continue to improve software based on IOT&E results and verify corrective actions with flight tests. Table 2 summarizes congressional action on the FY2020 request for MDA procurement and research and development funding for the Aegis BMD program. Appendix A. Aegis BMD Flight Tests Table A-1 presents a summary of Aegis BMD flight tests since January 2002. As shown in the table, since January 2002, the Aegis BMD system has achieved 33 successful exo-atmospheric intercepts in 42 attempts using the SM-3 missile (including 4 successful intercepts in 5 attempts by Japanese Aegis ships, and 2 successful intercepts in 3 attempts attempt using the Aegis Ashore system), and 7 successful endo-atmospheric intercepts in 7 attempts using the SM-2 Block IV and SM-6 missiles, making for a combined total of 40 successful intercepts in 49 attempts. In addition, on February 20, 2008, a BMD-capable Aegis cruiser operating northwest of Hawaii used a modified version of the Aegis BMD system with the SM-3 missile to shoot down an inoperable U.S. surveillance satellite that was in a deteriorating orbit. Including this intercept in the count increases the totals to 34 successful exo-atmospheric intercepts in 43 attempts using the SM-3 missile, and 41 successful exo- and endo-atmospheric intercepts in 50 attempts using SM-3, SM-2 Block IV, and SM-6 missiles.

 

 Report 2:
U.S. agencies perform a wide variety of activities that contribute to export promotion, and responsibility for these activities is widely dispersed. Some of the services these agencies provide are intended, at least in part, to assist U.S. companies in entering foreign markets or expanding their presence abroad. For example, the U.S. government distributes trade-related information to exporters, conducts foreign country market research, and provides counseling to U.S. companies throughout the export process. U.S. agencies may also use diplomatic tools to advocate on behalf of U.S. companies to help ensure they can compete on a level playing field in export markets. Three of these agencies—State, Commerce, and USDA—receive appropriations that are restricted from being used to promote the sale or export of U.S. tobacco or tobacco products. These agencies promote the growth of other U.S. exports through various activities, as discussed in table 1. Congress has restricted the use of funds that are generally appropriated for State, Commerce, and USDA from being used to promote the sale or export of U.S. tobacco and tobacco products since the 1990s. In 1990, we reported that U.S. policy and programs for assisting the export of tobacco and tobacco products worked at cross purposes to U.S. health policy and initiatives, both domestically and internationally. Congress later restricted the use of funds that are generally appropriated to State, Commerce, and USDA from being used to promote the sale or export of U.S. tobacco and tobacco products. During fiscal years 1994 through 2003, Congress prohibited funds generally appropriated for USDA through annual appropriations acts from being used to promote the sale or export of tobacco or tobacco products. In fiscal year 2004, Congress permanently prohibited funds appropriated for USDA from being used to promote the sale or export of tobacco or tobacco products. According to USDA officials, USDA stopped its efforts to gather and disseminate tobacco-related production and consumption information overseas in the early 2000s. Congress restricted the use of certain appropriated funds, including appropriations for Commerce and State, from being used to promote the sale or export of U.S. tobacco and tobacco products from fiscal years 1998 through 2017. Congress passed the Departments of Commerce, Justice, State, the Judiciary and Related Agencies Appropriations Act, 1998, which prohibited the funds provided by the act from being used to promote the sale or export of tobacco or tobacco products. This act also prohibited the funds provided by the act from being used to seek the reduction or removal of foreign country restrictions on the marketing of tobacco or tobacco products. The act provided an exception for the funds to be used to address foreign-country restrictions on tobacco marketing that are not applied equally to all tobacco or tobacco products of the same type. These restrictions have been enacted through annual appropriations acts through fiscal year 2018. In fiscal year 2018, Congress altered the restriction language on tobacco promotion in the act making appropriations for State, which, according to State, makes promotion activities permissive with respect to the use of State appropriations. Congress used the term “should” in the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018 (2018 State Appropriations Act) instead of the term “shall” as in prior acts making appropriations for State. Specifically, the 2018 State Appropriations Act states that “None of the funds made available by this Act should be available to promote the sale or export of tobacco or tobacco products. . . .” In contrast, prior acts making appropriations for State stated “None of the funds made available by this Act shall be available to promote the sale or export of tobacco or tobacco products. . . .” According to State officials, they interpreted the term “shall” in prior appropriations acts as a mandatory action, whereas the use of the term “should” gives the agency more discretion in how it addresses the restrictions. However, State has not changed how it addresses the restrictions and does not plan to promote the sale or export of U.S. tobacco, according to State officials. The legislation restricting fiscal year 2018 appropriations provided to Commerce and USDA from being used to promote tobacco retains the mandatory “shall” language. According to Commerce and USDA officials, the change to State’s restriction language does not affect the agencies’ activities because Commerce and USDA are still subject to the mandatory restrictions outlined in their agencies’ appropriations language. State collaborates with Commerce, USDA, and other agencies to develop and periodically issue an interagency guidance cable to implement funding restrictions on promoting tobacco. According to officials, this cable serves as the primary source of guidance for implementing the restrictions on promoting tobacco for their officials at all posts overseas. State collaborates with Commerce, USDA, and other agencies to develop and periodically issue an interagency guidance cable to all posts overseas to facilitate their implementation of funding restrictions on promoting tobacco. State officials draft the updated cable and Commerce, USDA, and other agency officials have the opportunity to review and comment on it before State issues it through its cable system. This cable serves as the primary source of guidance for implementing the restrictions, according to officials at these agencies (see table 2). State has updated and issued the interagency guidance cable four times since 2013 to address changes in tobacco technology and other emerging issues, according to State officials. We identified two significant changes to the cable over the past 5 years. Addition of information concerning attendance at corporate social responsibility events: In May 2013, State added a provision that post officials should consult with headquarters before attending corporate social responsibility events involving U.S. tobacco companies. State officials in headquarters acknowledged that post officials may not link some activities, such as participating in corporate social responsibility events, to the promotion of or selling of products. They noted that this is why it is important to make post officials aware of the actions they should or should not take through the interagency guidance cable. Changes to the scope of tobacco products: In recent updates to the cable, State expanded the description of “tobacco and tobacco products” to address the emergence of new delivery systems for tobacco. Specifically, in 2014 State added the language “tobacco delivering products, such as electronic cigarettes” to provide an example of a tobacco product. In 2016, State changed the description to “electronic nicotine delivery systems such as e-cigarettes.” Then in 2018, State added “non-combustible products such as smokeless tobacco” to the description of tobacco products. In response to the revised funding restriction language in the 2018 State Appropriations Act, State modified the 2018 cable stating that the changes make promotion activities permissive with respect to the use of State appropriations. However, State decided not to change the portion of the cable describing specific actions officials should or should not take in the version it issued in April 2018, because according to State officials, they do not plan to promote tobacco. In addition, Commerce and USDA officials said that the change to State’s restriction language has not changed how they interpret the guidance. Commerce relies on both the interagency guidance cable as well as its client eligibility policy to implement restrictions on promoting tobacco. Commerce’s client eligibility policy applies to all export promotion services that Commerce provides and educates officials on how to effectively manage U.S. company requests for commercial assistance. The policy’s section on exceptions and other bases for declining services to companies states that Commerce is prohibited by law from promoting the export of tobacco or tobacco-related products. Commerce issued its updated client eligibility policy in October 2018. USDA relies on the interagency guidance cable to provide direction to its officials overseas, and does not have agency-specific guidance for implementing its permanent funding restrictions on promoting tobacco. USDA officials said that the cable sufficiently addresses the funding restrictions on the agency’s promotion activities and helps to ensure that all officials serving at posts overseas conduct activities in a consistent manner. Most State, Commerce, and USDA officials overseas we interviewed were aware of the restrictions on promoting tobacco. Most officials we interviewed had received some guidance concerning the restrictions, but several officials did not recall receiving the interagency guidance cable. Moreover, two of the agencies’ current training courses do not address the restrictions. Officials in 21 of the 24 offices overseas we interviewed were aware of the restrictions. The three offices that were not aware of the restrictions were from State. Although these officials were not aware of the restrictions, they said they had never provided services to U.S. tobacco companies. Commerce and USDA headquarters officials said that it is widely known within their agencies that staff should not promote tobacco. Commerce and USDA officials said the guidance concerning these restrictions has been consistent for many years and that staff in the field and in headquarters are very aware of the restrictions. Most officials overseas had received some guidance concerning the restrictions on promoting tobacco. Officials in 21 of the 24 offices overseas we interviewed had received written or verbal guidance concerning the restrictions on promoting tobacco at some point in their career. For example, officials in 15 offices mentioned receiving the State-issued interagency guidance cable when we asked them what type of tobacco-related guidance they had received. In addition, officials in four of the eight Commerce offices recalled receiving agency-specific guidance. Some officials said that their supervisors had informed them they are not allowed to promote tobacco exports. Some officials did not recall receiving the interagency guidance cable, which agency officials said serves as the primary source of guidance for implementing the restrictions, and some were not aware that State periodically issues the cable. For example, one USDA official stated that he could not recall the last time he received guidance and noted that cables can easily be overlooked. He recommended that USDA improve its efforts to distribute the cable and have supervisors maintain an annual checklist to ensure staff have read and understand it or incorporate it into annual training. A State official told us that he was in Washington, D.C. when State issued the prior cable and he did not learn about it until he had been stationed at his next overseas post for several months. A Commerce official noted that some officials new to post may not receive the interagency guidance cable for several months. All officials working overseas can access the interagency guidance cable through the State cable database or access other resources if a tobacco- related issue arises. For example, the Commerce client eligibility policy and the interagency guidance cable are available on an internal Commerce website. USDA officials in headquarters stated that they do not remind officials overseas about the restrictions or available guidance, but that, in response to our audit work, they plan to send an annual reminder. Finally, many post officials we interviewed said that they are aware of the activities their colleagues are undertaking and would have the opportunity to educate their colleagues before they provided any services to a tobacco company. Officials in 15 of the 24 offices overseas we interviewed said they did not receive any training concerning restrictions on promoting tobacco. In the past, State, Commerce, and USDA did not include information about the funding restrictions or related guidance in training materials. State and USDA officials in headquarters confirmed that training materials for officials conducting export promotion activities overseas do not address funding restrictions on promoting tobacco. According to an official at State’s Foreign Service Institute, tobacco products may be discussed in a trade-related course when describing those products officials should not advocate for, or in the 6-month economic studies course when examining the nexus between trade issues and public policy. However, State could not provide documentation of where this is specifically addressed in its curriculum. A USDA official stated that none of the Foreign Agricultural Service training courses explicitly discuss restrictions on promoting tobacco. According to Commerce officials, the training for new trade specialists did not include information about the restrictions on promoting tobacco when Commerce last provided the training in 2014. However, in response to our audit work, Commerce added this information into its training materials for new trade specialists in September 2018. Officials who do not receive training on the restrictions early in their careers may not be aware that they are prohibited from promoting tobacco. For example, one Commerce official told us he did not know about the restrictions while serving at his first post when he attended a meeting that involved representatives from the tobacco industry. He noted that he now questions whether he would have attended the meeting if he had known about the restrictions. Federal internal control standards state that appropriate training, aimed at developing employee knowledge, skills, and abilities, is essential to an organization’s operational success. If agencies do not explicitly include information about the restrictions and related guidance in training materials for officials conducting export promotion activities overseas, officials may work at a post for several months, or longer, before learning about the restrictions. The State, Commerce, and USDA officials we interviewed said they have implemented the funding restrictions on tobacco as outlined in the interagency guidance cable issued by State. For example, post officials said they have not promoted the sale or export of tobacco or tobacco products or attended events solely sponsored by tobacco companies, though many officials said they attended events at which officials from tobacco companies were present. Post officials identified three areas of the guidance that may benefit from additional clarification, according to interviews with agency officials and our review of agency emails. Our interviews with State, Commerce, and USDA officials in 24 offices in nine countries and our review of agency documents, showed that posts have implemented the interagency guidance outlining actions they should not take (see table 3.) Post officials identified three areas of the guidance that may benefit from additional clarification, according to our interviews with agency officials and our review of agency emails: attendance at events, the types of permitted services, and the description of tobacco products. Officials from all three agencies raised questions about whether and when it is permissible to attend events at which tobacco company representatives are present. The guidance does not specifically address attendance at events also attended by representatives of tobacco companies. State headquarters officials said the vast majority of questions received from posts concern whether personnel at a post may participate in an event when representatives from a company engaged in the tobacco industry are also expected to participate in that event. We also reviewed emails in which Commerce officials asked for additional guidance about attending events or meetings with tobacco companies. For example, one post official asked whether the embassy could invite a tobacco company to participate in an embassy-organized trade mission that would include meetings with the local governor and mayor. In this case, Commerce headquarters officials advised that the tobacco company’s participation could be construed as U.S. government support for the company’s commercial activities and recommended against including the tobacco company. A USDA official in headquarters also noted that attending events could, in some cases, be construed as supporting tobacco companies, and noted that this is an area where staff could use more guidance. Representatives from several tobacco control organizations expressed concern that interactions between U.S. government officials and representatives from tobacco companies at events organized by business associations created a perception that the U.S. government supported tobacco company sales in the country. For example, in 2017 a business association hosted a trade mission to one Southeast Asian country that included representatives from 30 U.S. companies, including a U.S. tobacco company. In response, two tobacco control organizations wrote to the U.S. ambassador in that country voicing their concern that U.S. government officials’ attendance at meetings that included the tobacco company representatives violated the spirit of the interagency guidance cable and gave the appearance that the U.S. government supports the tobacco company. Subsequently, the Deputy Chief of Mission distributed guidance specific to that post stating that officials were not allowed to attend a trade mission’s events or meetings if representatives from a tobacco company were scheduled to give a presentation. Several post officials said that attending events organized by business associations is a key function of their job. They attend these events to, among other things, exchange information about the local business climate and learn about the concerns of American companies. Commerce and USDA officials identified ambiguities in the guidance concerning the types of services they are allowed to provide to tobacco companies or the tobacco industry. In 14 of the 21 Commerce emails we reviewed, officials at posts asked for additional guidance about the types of services they are permitted to provide to tobacco companies or the types of companies or products they can support. For example, some post officials asked whether they could engage with the host country government to obtain information about pending tobacco-related legislation at the request of a tobacco company. In one case, Commerce headquarters advised post officials that the restrictions did not prohibit them from raising concerns on a legislative proposal that would discriminate against foreign tobacco companies. They further noted that because of the sensitive nature of tobacco-related issues, any policy decision to engage should be weighed carefully. Commerce’s client eligibility policy does not provide a description of the types of actions Commerce officials should and should not take with regards to tobacco companies and products. The interagency guidance cable also does not provide information about some types of services, such as whether officials should engage with host country government officials to learn about pending tobacco-related legislation. According to a USDA official, some officials overseas interpret “promotional” activities differently and did not agree on whether both marketing and trade-related activities, such as enforcing trade agreements, are promotional activities. Commerce officials at post asked for additional guidance about whether they could provide export promotion services to companies exporting certain tobacco-related products in 3 of the 21 emails we reviewed. For example, some Commerce officials asked whether they could provide services to companies selling component parts for electronic nicotine delivery systems, such as e-liquids. Commerce’s prior client eligibility policy, issued in May 2017, did not include a list of tobacco products covered by the policy; whereas, the interagency guidance cable issued in 2014 states that tobacco products include tobacco delivery systems, such as electronic cigarettes, and the updated version issued in 2018 added non-combustible products, such as smokeless tobacco, to this description. However, neither the interagency guidance cable nor Commerce’s updated client eligibility policy specifically states whether the description includes component parts for electronic cigarettes and other tobacco products. GAO previously reported that electronic cigarettes include a wide range of products that share the same basic design and generally consist of three main parts: a power source, a heating element, and a cartridge or tank containing liquid solution, which is often sold separately. According to State officials in headquarters, the guidance on promoting tobacco was written for a broad audience and to make post officials mindful of the restrictions. They said they trust that officials overseas will use their professional judgment and in-country expertise to determine if post’s support for an event or a company will be construed as promotion of a tobacco product. Moreover, State and Commerce officials said that they expect officials overseas to ask headquarters questions to clarify the interagency guidance cable. While federal standards for internal control state that management should clearly document internal controls in policies and guidance to prevent officials from failing to achieve an objective or address a risk, we found that the interagency guidance does not provide examples of the factors post officials should consider when attending business association events. The guidance also lacks sufficient examples of the types of services officials are allowed to provide to tobacco companies and a clear description of tobacco products. More specific guidance would help ensure that State, Commerce, and USDA officials consistently implement their agency-specific funding restrictions on promoting tobacco exports. The United States exported over $2 billion in tobacco and tobacco-related products in 2017. Congress has enacted restrictions on the use of certain appropriated funds to promote the sale or export of U.S. tobacco or tobacco products since the 1990s, and State, Commerce, and USDA have developed and updated guidance to implement these restrictions. However, not all officials were aware of the restrictions and more than half had not received training about the restrictions. Including information about the restrictions in training materials would help make officials aware of the restrictions early in their careers and prompt them to seek guidance if a tobacco-related issue arises. If officials conducting export promotion activities are unaware of the funding restrictions on promoting tobacco sales and exports, they may also be unaware of the activities they should and should not undertake. Moreover, some officials said that the guidance is unclear in some areas. Although officials said they need to attend business association events to support all U.S. companies conducting business in a country, they were unsure whether they can attend events where representatives from U.S. tobacco companies may be present. In addition, some officials also indicated that the current guidance lacks clarity on the types of services officials are allowed to provide to tobacco interests and what constitutes a tobacco product. Although we did not identify any instances in which a State, Commerce, or USDA official directly promoted U.S. tobacco products, clearer guidance would help to ensure that officials will consistently implement their agency-specific funding restrictions. We are making three recommendations, including two to State and one to USDA. Specifically: The Secretary of State should work with the Foreign Service Institute to include information about the funding restrictions and relevant guidance on promoting the sale or export of tobacco or tobacco products in its training materials for employees conducting export promotion activities overseas. (Recommendation 1) The Secretary of Agriculture should include information about the funding restrictions and relevant guidance on promoting the sale or export of tobacco or tobacco products in training materials for employees conducting export promotion activities overseas. (Recommendation 2) The Secretary of State, in consultation with the Secretary of Commerce and the Secretary of Agriculture, should assess the interagency guidance cable on promoting tobacco in light of questions raised by officials at posts overseas and update it to address ambiguities, as needed. (Recommendation 3) We provided a draft of this report to State, Commerce, USDA, and USTR for review and comment. In their comments, reproduced in appendix III, State concurred with our recommendations and described planned actions to address them. USDA concurred with the recommendation and told us that they had no comments on the draft report. Commerce and USTR told us that they had no comments on the draft report. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the appropriate congressional committees, the Secretary of the Department of State, the Secretary of the Department of Commerce, the Secretary of the U.S. Department of Agriculture, the U.S. Trade Representative, and other interested parties. In addition, the report will be 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) 512-3149 or gootnickd@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 IV. This report examines (1) the guidance select U.S. agencies have issued to implement funding restrictions on promoting tobacco exports overseas, (2) to what extent overseas officials from select U.S. agencies were aware of the restrictions and guidance, and (3) to what extent select U.S. agencies have implemented this guidance overseas. To address our first objective, we reviewed U.S. appropriations laws that prohibited the funds appropriated therein from being used to promote the sale or export of tobacco or tobacco products. We also reviewed guidance issued by the Departments of State (State) and Commerce (Commerce) concerning the promotion of tobacco exports overseas. We also interviewed officials in headquarters from State, Commerce, the U.S. Department of Agriculture (USDA), and the Office of the U.S. Trade Representative (USTR) about the funding restrictions on promoting tobacco exports overseas and the development and revision of guidance on tobacco promotion. To address our second objective, we interviewed officials in headquarters from State, Commerce, and USDA about any training officials posted overseas receive concerning the funding restrictions on promoting tobacco exports. In addition, we held structured interviews with 35 State, Commerce, and USDA officials overseas conducting export promotion activities and reached out to an additional 10 officials to ask about activities associated with the solicitation of gifts and attendance at corporate social responsibility events. These officials were located across 11 posts and in 9 countries. We interviewed officials in Cambodia, Croatia, Dominican Republic, Honduras, Indonesia, Philippines, South Africa, Thailand, and Vietnam. Because multiple officials from one agency attended a meeting in some cases, we are reporting their combined responses as one “office” response. Thus, we are reporting the results from the 24 offices we interviewed—9 State, 8 Commerce, and 7 USDA offices. We selected this non-generalizable sample of countries based on criteria that included the countries’ large or increasing amounts of U.S. tobacco imports, relatively high tobacco smoking prevalence rates, and geographic dispersion. The information obtained from these interviews is neither generalizable nor reflects the experiences of all State, Commerce, and USDA officials serving at posts overseas, but it does provide insights into officials’ experiences at post and illustrative examples across our sample on the topics discussed. To address our third objective, we interviewed officials in headquarters from State, Commerce, and USDA about post officials’ implementation of guidance regarding the promotion of tobacco exports, the types of questions they receive from post officials about the funding restrictions and guidance, and the additional advice they provide to post officials overseas. We asked post officials about the clarity of guidance, whether they attended events sponsored or attended by representatives of U.S. tobacco companies, and whether they discussed tobacco-related issues with host country government officials during our structured interviews with the 24 State, Commerce, and USDA offices overseas. We also analyzed a Commerce database, agency emails, and State cables and conducted a literature search. Commerce documents all the fee-based services it provides to companies in a database. We obtained a list of approximately 30,000 fee-based services Commerce provided in fiscal years 2013 through 2017, which included the name of the companies to which Commerce provided these services. We then downloaded a list of 763 U.S. tobacco companies from Nexus using criteria such as industry classification codes related to tobacco and tobacco products and the location of company headquarters. We limited the list of U.S. tobacco companies to those with revenues greater than $5 million. We then compared the two lists to determine if Commerce provided any fee-based services to U.S. tobacco companies. To assess the reliability of the Commerce fee-based services data, we reviewed relevant documentation and interviewed knowledgeable officials about system controls. We determined that Commerce’s fee-based services data were sufficiently reliable for the purposes of our reporting objectives. In addition, we requested State, Commerce, and USDA email communications concerning tobacco-related issues sent between January 2015 and February 2018 from post officials to headquarters. State was only able to provide one such email. USDA provided several emails, but the emails were not from USDA post officials to USDA officials in headquarters. Commerce provided us 21 emails that matched our request and an additional 20 emails from officials working throughout the United States. We analyzed the Commerce email communications to identify commonly asked questions or concerns about the existing guidance and actions the agencies should take to support U.S. tobacco companies or the tobacco industry. We also requested State cables from the eight countries in our sample sent between January 2013 and December 2017 that referenced at least 1 of the 10 U.S. tobacco companies with the highest revenues. We received and reviewed cables from six of these countries. We also conducted a literature search to identify instances in which U.S. government officials may have conducted activities addressed by the interagency tobacco guidance cable. To identify relevant articles, such as trade or industry articles, we searched various databases, including ProQuest and Nexus. From these sources, we identified one article relevant to our research objective. We performed these searches in December 2017 and searched for articles published from January 2013 to December 2017. We also interviewed representatives of the tobacco control community and business associations to obtain their perspectives concerning U.S. government support for tobacco exports and U.S. government interactions with U.S. tobacco companies. Specifically, we interviewed the World Health Organization (WHO), four global or regional tobacco control nongovernmental organizations, and several local nongovernmental organizations in two countries in our scope. In addition, we interviewed officials from the local American Chamber of Commerce and the U.S.- Association of Southeast Asian Nations Business Council in two countries. The information obtained from these interviews is neither generalizable nor reflects the experiences of all tobacco control organizations or business associations, but it does provide insights into these officials’ experiences. We conducted this performance audit from November 2017 to December 2018 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. The United States exported over $2.1 billion in tobacco and tobacco products in 2017. Figure 1 shows how tobacco exports fluctuated from 2007 to 2017. Specifically, total tobacco exports have ranged from a high of approximately $2.4 billion in 2007 to a low of about $1.7 billion in 2012. U.S. tobacco exports to Asia have decreased by 68 percent over the past 11 years, whereas exports to North America have increased 10-fold (see fig. 2). Most of the decrease in exports to Asia is attributable to reduced exports to Japan, which fell 95 percent from 2007 to 2017. Most of the increases in exports to North America are attributable to Canada, which accounted for approximately 40 percent of total U.S. tobacco exports in 2017. David B. Gootnick, (202) 512-3149 or gootnickd@gao.gov. In addition to the contact named above, Cheryl Goodman (Assistant Director), Celia Thomas (Assistant Director), Amanda Bartine, Leah DeWolf, Jewel Conrad, Aldo Salerno, and Neil Doherty made key contributions to this report. Grace Lui, Justin Fisher, and Ming Chen provided technical assistance.

Question: Write a one-page summary of the report 1.

Answer: The Aegis ballistic missile defense (BMD) program, which is carried out by the Missile Defense Agency (MDA) and the Navy, gives Navy Aegis cruisers and destroyers a capability for conducting BMD operations. Under the FY2020 budget submission, the number of BMD-capable Navy Aegis ships is projected to increase from 38 at the end of FY2018 to 59 at the end of FY2024. BMD-capable Aegis ships operate in European waters to defend Europe from potential ballistic missile attacks from countries such as Iran, and in in the Western Pacific and the Persian Gulf to provide regional defense against potential ballistic missile attacks from countries such as North Korea and Iran. The Aegis BMD program is funded mostly through MDA's budget. The Navy's budget provides additional funding for BMD-related efforts. MDA's proposed FY2020 budget requests a total of $1,784.2 million (i.e., about $1.8 billion) in procurement and research and development funding for Aegis BMD efforts, including funding for two Aegis Ashore sites in Poland and Romania. MDA's budget also includes operations and maintenance (O&M) and military construction (MilCon) funding for the Aegis BMD program. Issues for Congress regarding the Aegis BMD program include the following: whether to approve, reject, or modify MDA's FY2020 funding procurement and research and development funding requests for the program; required numbers of BMD-capable Aegis ships versus available numbers of BMD-capable Aegis ships; the burden that BMD operations may be placing on the Navy's fleet of Aegis ships, and whether there are alternative ways to perform BMD missions now performed by U.S. Navy Aegis ships, such as establishing more Aegis Ashore sites; burden sharing—how allied contributions to regional BMD capabilities and operations compare to U.S. naval contributions to overseas regional BMD capabilities and operations; whether to convert the Aegis test facility in Hawaii into an operational land-based Aegis BMD site; the potential for ship-based lasers, electromagnetic railguns (EMRGs), and hypervelocity projectiles (HVPs) to contribute in coming years to Navy terminal-phase BMD operations and the impact this might eventually have on required numbers of ship-based BMD interceptor missiles; and technical risk and test and evaluation issues in the Aegis BMD program.