Tobacco Exports: Agencies Have Implemented Restrictions on Promoting Tobacco Overseas but Additional Actions Could Strengthen Their Efforts

GAO-19-124 Published: Dec 06, 2018. Publicly Released: Jan 04, 2019.
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Fast Facts

Worldwide, tobacco use kills more people annually than tuberculosis, malaria, and HIV/AIDS combined.

Congress restricts the Departments of State, Commerce, and Agriculture's promotion of tobacco exports. We found that most, but not all, officials overseas were aware of the restrictions and didn't promote tobacco.

However, officials told us that some of the guidance around the restrictions was unclear. For example, descriptions of restricted tobacco products didn't indicate whether the component parts of e-cigarettes were included.

We made 3 recommendations to improve training and guidance.

Types of e-cigarettes and e-cigarette parts

Photos of disposable and reusable e-cigarettes and e-liquid. Photos of the reusable one show it assembled and in its 3 parts.

Photos of disposable and reusable e-cigarettes and e-liquid. Photos of the reusable one show it assembled and in its 3 parts.

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Highlights

What GAO Found

Congress has restricted the use of certain appropriated funding to promote tobacco exports and the Departments of State (State), Commerce (Commerce), and Agriculture (USDA) have issued interagency guidance through the cable system that they rely on to implement these restrictions. State collaborates with these and other agencies to periodically update this cable. The cable informs officials about the types of actions they should take—such as providing routine business facilitation services to all U.S. companies—and the types of actions they should not take—such as attending events sponsored by tobacco companies.

Trends in U.S. Tobacco Exports, 2007 through 2017

Highlights_5_v2_tobacco sales_102383_njd

Most, but not all, officials overseas that GAO interviewed were aware of the restrictions and received some guidance concerning the restrictions. However, GAO found that some officials did not recall receiving the interagency guidance cable. In addition, State and USDA's current training materials do not address the restrictions. Federal internal control standards state that appropriate training is essential to an organization's operational success. Thus, providing officials overseas with training about the funding restrictions and related guidance would help to ensure that officials are aware of the restrictions.

U.S. officials overseas have implemented restrictions on promoting tobacco, but some officials said that the interagency guidance lacks clarity. Officials said that they have not promoted tobacco by, for example, attending events sponsored solely by tobacco companies. However, officials identified three areas of the guidance that are unclear: (1) attendance at events not sponsored by U.S. tobacco companies but attended by representatives of these companies; (2) the types of services officials can provide tobacco companies; and (3) the description of tobacco products, such as whether component parts for electronic cigarettes are included. 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. By providing more specific guidance, the agencies would help ensure that officials consistently implement the funding restrictions on promoting tobacco.

Why GAO Did This Study

The World Health Organization estimates that tobacco use kills over 7 million people each year, more than tuberculosis, HIV/AIDS, and malaria combined. Since the 1990s, Congress has enacted restrictions regarding the use of certain appropriated funds to promote U.S. tobacco exports.

GAO was asked to review the implementation of these restrictions. This report examines (1) guidance select U.S. agencies have issued to implement these restrictions, (2) whether overseas officials from select U.S. agencies were aware of the restrictions and guidance, and (3) select U.S. agencies' implementation of the guidance overseas. GAO reviewed U.S. laws, agency guidance, and internal communications; analyzed Commerce data; and interviewed agency officials in Washington, D.C. and in 24 offices across 11 overseas posts in 9 countries. GAO selected these countries based on criteria that included U.S. tobacco export totals, smoking rates, and geographic dispersion.

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Recommendations

GAO recommends that (1) State and USDA include information about the funding restrictions and guidance in training materials for relevant employees and (2) State, in consultation with Commerce and USDA, assess and update the interagency guidance cable, as needed, on promoting tobacco in light of questions raised by officials at posts overseas. State and USDA concurred with the recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of State 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)
Closed – Implemented
State concurred with this recommendation. In response to GAO's recommendation, State's Economic Bureau posted the updated 2019 guidance cable regarding funding restrictions on promoting tobacco to the bureau's intranet site in the fall of 2019. Although State has not updated its training materials, the posting of the cable guidance to the Economic Bureau's intranet site meets the intent of the recommendation as the relevant information will be more accessible to new and veteran economic officers overseas.
Department of Agriculture 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)
Closed – Implemented
USDA concurred with the recommendation. In November 2019, USDA updated training slides for a course given to Foreign Service Officers that included information about the restrictions on promoting tobacco and reminded attendees about available guidance.
Department of State 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)
Closed – Implemented
State concurred with this recommendation. In response to GAO's recommendation, State published updated guidance in October 2019 that (1) encourages post officials to leverage their expertise and knowledge of local culture to assess whether posts' participation in an event is likely to be construed as U.S. government support for the sale or export of tobacco products and (2) recommends that post officials consult with agency officials in headquarters for additional guidance if the post is considering any engagement that may appear to support the sale or export of tobacco products. The updated guidance also clarifies that posts may engage with entities requesting U.S. engagement or support to obtain relevant information necessary to determine the nature of a request and assess such a request against the guidance.

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