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Assistant Secretary of Defense for Strategy, Plans, and Capabilities Dr. Mara Karlin Testimony to the House Foreign Affairs Committee Hearing on Modernizing U.S. Army Exports and a Stronger AUKUS

MCCAUL: Committee on Foreign Affairs will come to order. The purpose of this hearing is to discuss the challenges our allies in US industry face with our arms exports processes and how those challenges can be bridged to ensure America remains the partner of choice. And the trilateral security partnership between Australia, the United Kingdom, and the United States is successful.

I now recognize myself for an opening statement. From its increasingly aggressive posture in the waters surrounding Taiwan to Chairman Xi's stated goal to unify with Taiwan, the malign actions of the Chinese Communist Party pose a clear and present danger.

I've seen China's tactics firsthand. I recently led a congressional delegation to Asia where I met with our Indo-Pacific command, the 7th Fleet, and leaders in Japan, South Korea, and Taiwan including President Tsai.

After I met with President Tsai, the CCP sanctioned me a badge of honor as far as I'm concerned. In response to my delegation's visit and Speaker McCarthy's meeting with President Tsai, the CCP launched more than 70 aircraft into Taiwanese airspace and deployed 11 warships including an aircraft carrier to encircle the island nation.

The CCP is testing their capabilities and Taiwan's vulnerabilities in preparation for a potential invasion. This will not intimidate us. In fact, it only strengthens our resolve to foster a more innovative defense industrial base that can develop and supply weapons for deterrence and if necessary, for defense.

After seeing Taiwan's defense capabilities firsthand, I can say that they're not where they need to be. Weapon sales I signed off on four years ago and the ranking member have yet to make it to Taiwan. President Tsai asked me where are my weapons.

I paid for them. The war in Ukraine has shown us that weapons are needed before, not after conflict erupts. Now more than ever, we need to work with our allies to counter this growing threat. The AUKUS partnership between Australia, the United Kingdom, and the United States is just that and it will establish critical deterrence measures.

However, for this trilateral partnership to succeed, we must reform prohibitive policies and complicated arms export rules as soon as possible through bipartisan legislation. It is this committee's responsibility to examine the policy and effectiveness of the United States government for military sales and the international traffic and arms regulations known as ITAR, the regulatory measure which controls the export of defense and military technologies from US defense companies.

Last month I held a classified roundtable with our AUKUS partners first and then from our US industry representatives to discuss the challenges we face in the region due to growing CCP aggression and how best to address them. We heard from them that much more needs to be done.

Specifically, ITAR and our antiquated arms sales processes need legislative fixes for AUKUS to be successful. One of our AUKUS partners dedicates 1 percent of their annual defense budget to simply navigate US export controls. In another case it took a year and a half of paperwork to support the upgrade of a weapons system that we previously sold to them.

Our approach to defense and military technology exports is in dire need of reform. This administration has failed to deliver, so Congress took bipartisan action in the last NDAA. My Taiwan Enhanced Resilience Act ensures that there can be creative solutions such as foreign military financing grants, training for Taiwan forces and war reserves stockpiles to bolster Taiwan's defense.

Chairwoman Young Kim's Arms Export Delivery Solutions Act mandates the administration to report on why our weapons to Taiwan are delayed and to provide interim capabilities in the face of these delays. I also included a provision to better bring American innovation into Pentagon procurements to address delayed weapons development and address high-tech challenges like quantum computing, hyper sonics and artificial intelligence.

Rebuilding our arsenal of democracy will require new thinking and innovative dynamic companies. To that end the House recently passed legislation that I introduced with the ranking member to strengthen the AUKUS partnership through cooperation on advanced capabilities. This legislation focuses on ensuring the State Department is authorizing technology transfers quickly to fully support implementation of this partnership.

I will continue to lead efforts to help ensure the successful implementation of AUKUS throughout this Congress through additional bipartisan legislation. The longer outdated and costly regulations stand in the way of successful implementation, the more it plays into the CCP's hands and erodes our closest ally security.

We are in a great power global competition and for far too long at both the Department of Defense and State Department it's been business as usual. The year-long delays are unacceptable. We need results not interagency finger pointing. We can no longer accept the status quo of an ineffective and outdated system.

The United States does not seek conflict but only through strength can we provide the deterrence necessary to secure the peace in the region and around the globe. History has shown that projecting weakness invites aggression and emboldens dictators and despots.

I still believe in Ronald Reagan's policy of peace through strength and that was a doctrine that defeated the Soviet Union and one we must continue to employ to project American strength across the globe. Chair now recognizes the Ranking Member, Mister Meeks.

MEEKS: Thank you, Mister Chairman and first let me start by thanking our witnesses for appearing before this committee today. We so appreciate being able to hear from both of you on the critical work that the Biden administration is doing with our allies and partners in pursuit of our shared security.

For over a year now we have seen how the United States in lockstep with our allies and partners has come to the aid of the Ukrainian people who are defending themselves against Russia's brutal unprovoked war of aggression. With over 35 billion dollars in military assistance provided since Russia's full-scale invasion the administration's commitment to Ukraine's defense and that of Europe is ironclad and proven.

Like Russia in Europe, we are seeing similar aggressive behavior from China and the Indo-Pacific under the under the direction of President Xi. The People's Republic of China has engaged in a rapid military buildup and become more aggressive in its coercive tactics against Taiwan in each of the military economic and diplomatic realms.

China has also made significant advances in key military capabilities such as long-range bomber aircraft, cruise missiles, and hyper sonics. Last August just after I joined Speaker Pelosi on her historic trip to Taipei and other countries in the Indo-Pacific a record number of PRC aircraft violated Taiwan's air defense identification zone and engaged in increasingly provocative maritime actions.

In its continued support for Taiwan the Biden State Department has approved a record number of armed cases for Taiwan in the last two years to ensure it has the capabilities to defend itself and to deter potential Chinese military action. As Secretary Blinken has stated when it comes to Beijing the United States will compete with confidence, cooperate where we can, and contest when and where we must.

An integral part of this strategy is the recently announced AUKUS trilateral security framework between the United States, Australia, and the United Kingdom which aims to strengthen defense cooperation and interoperability in the Indo-Pacific.

This new security framework represents an important step forward for the United States in the Indo-Pacific and for our shared security in countering China's pacing threat. Within the border of the AUKUS agreement, Pillar 1 will strengthen Australia's undersea warfare capabilities at a critical time to counter the PRC's aggression and burden share in the region.

Pillar 2 advances military capabilities with the intent of developing and enhancing joint capabilities among Australia, the UK, and the United States. Doing so will engender greater cooperation and ultimately improve security and interoperability in the region. Part of Pillar 2's focus includes efforts to improve processes related to arms exports and sharing of sensitive defense technologies between the participants.

Now, this must include encouraging and guiding our partners on how to strengthen their regulatory frameworks to enable us to share advanced defense technologies safely. Now, I know both agencies represented here by our witnesses have been intensely focused on this in recent months. And I'm hoping to hear more about what progress has been made thus far and the path forward.

In short, to provide for the success of AUKUS and for the promise of Pillar 2 to be fully realized and implemented, we must get it right, especially given the persistent and significant threat the PRC poses. In the Indo-Pacific and across the globe, we are facing rapidly evolving threats which underscore the importance of reinforcing our alliances to safeguard our shared security.

And I'm supportive of the Biden Administration's efforts to do so in Europe with our NATO allies and in East Asia in providing our allies as well as Taiwan the capabilities not only to defend themselves but to deter potential aggression. The United States can and must continue to stand as a leader among nations. Leveraging not only our military strength but also our diplomatic tools that are grounded in our values so we may defend our security, protect our interests, and stand up for the rights and independence of free peoples throughout the world. And with that, I yield.

MCCAUL: The gentleman yields back. Other members of the committee are reminded that opening statements may be submitted to the record. I ask unanimous consent that the gentleman from Connecticut, Mister Courtney, be allowed to sit on the dice and participate in today's hearing. Welcome sir. And without objection, so ordered.

We're pleased to have a distinguished panel of witnesses before us today. First, Miss Jessica Lewis is the Assistant Secretary for the Bureau of Political and Military Affairs at the Department of State. And Doctor Mara Karlin is the Assistant Secretary of Defense for Strategies, Plans, and Capabilities at the Department of Defense.

This committee recognizes the importance of the issues before us and are grateful to have both state and DOD here today to speak with us on these important issues. Your full statements will be made a part of the record. And I now recognize Assistant Secretary Lewis for her opening statement. Thank you.

LEWIS: Chairman McCaul, Ranking Member Meeks, honorable members of the committee, thank you for the opportunity to speak with you today. Almost exactly 20 years ago today, I started my career with the House Foreign Affairs Committee and it is an honor to be here again today.

I want to recognize the historic work that this committee is achieving under your leadership on critical foreign policy issues, whether it is AUKUS or otherwise. And I am excited to talk to you about the role of the State Department in realizing AUKUS, one of the Biden-Harris administration's key national security initiatives.

Today, I am going to first provide an overview of AUKUS, second outline our roadmap for realizing AUKUS, including our AUKUS trade authorization mechanism, and third discuss the importance of export controls.

I will also speak briefly on foreign military sales. AUKUS, involves two pillars. Pillar one, providing Australia with a conventionally armed nuclear powered submarine capability at the earliest possible date. And pillar two, trilaterally developing and providing joint advanced military capabilities.

Ranging from artificial intelligence to hyper sonics to cyber, pillar two presents a generational opportunity to advance the key technologies of the future with two of our closest allies. But make no mistake, the success of AUKUS is not predetermined. It must be built.

For AUKUS to succeed, we need to both innovate boldly and to protect our technology from those who wish to take advantage of any vulnerability in our systems. As Australian Deputy Prime Minister said last week, this is a big task. The barriers in both systems are vast and complex. There is no silver bullet.

As such, to implement AUKUS, we are innovating within our existing regulatory system while simultaneously pursuing broad changes through legislation and international agreements. The roadmap consists of three steps. First, the AUKUS trade authorization mechanism, known as ADAM, legislative changes, and international consultations.

First, the Department of State will implement a novel use of our existing authorities. The AUKUS trade authorization mechanism will provide an interim solution expediting and optimizing technology sharing and defense trade among only the AUKUS partners. Second, and simultaneously, the administration plans to consult closely with Congress and propose legislative changes to meet the ambitions of AUKUS.

To that end, we will seek legislation to clear a path to new exemptions for much of our defense trade with the UK and Australia. Under this legislative proposal, AUKUS partners will have many transfers pre-approved and not subject to case-by-case review.

Third, the administration will also be seeking commitments from our AUKUS partners on shared standards for protection of defense information and material. Let me walk you through the first piece of this roadmap, the state AUKUS trade authorization mechanism.

Under this authorization, the governments of the United States, the United Kingdom, and Australia will work together to create seamless, secure, and speedy defense trade between and among AUKUS partners while also safeguarding our national security. We will define the AUKUS authorizations by three overlapping criteria, which are, first, a list of the project areas that fall within the scope of AUKUS.

Second, a list of the technologies that cannot receive this preferential treatment. And third, a list of the approved communities or entities within each country that are going to receive or access this technology. All transfers under this authorization could proceed without any further need for an authorization or license while maintaining the records necessary to conduct compliance.

While state is clearing a path to new exemptions, we are simultaneously moving forward with broader legislation and international action to develop a collective approach that streamlines defense trade with Australia and the UK while also protecting our technology.

And as we follow through on the vision President Biden set out, it will also be crucial to maintain strong protections to ensure that the technological momentum our three countries achieve remains secure. Export controls have only grown more important during this era of strategic competition.

For years, we have seen widespread evidence that our strategic competitors, including the People's Republic of China, Russia, and then in addition, North Korea and Iran, are seeking to obtain and exploit our advanced military and civilian technologies. In this moment, we need to do all we can to move faster on AUKUS and also make sure that we have a calibrated approach to export controls.

Finally, I would like to speak briefly about what we are doing to improve the speed of our foreign military sales writ large. We call this the FMS process, and we're working to deliver efficiencies both in the context of AUKUS and for our security partnerships across the globe. US government stakeholders, including the Departments of State, Defense, and the NSC, are all identifying efficiencies in the foreign military sales process to optimize defense trade.

The State Department has identified 10 areas for improvement to the FMS process, and we would be happy to brief you further on these recommendations. In closing, I'd like to reiterate that for AUKUS to succeed, we need to facilitate the flow of defense technologies and know-how between our three nations while safeguarding against hostile actors who would damage this collaboration and our competitiveness. We are confident that we will succeed, and we look forward to working with Congress to achieve this. Thank you, and I look forward to your questions.

MCCAUL: Thank you, US Secretary Lewis. I now recognize Assistant Secretary Karlin for her opening statement.

KARLIN: Chairman McCaul, Ranking Member Meeks, distinguished members of the Committee, thank you for the opportunity to speak with you today on the AUKUS partnership. AUKUS partners took a monumental step forward in March when we announced the optimal pathway for Australia to acquire and develop a conventionally armed nuclear-powered submarine capability that strengthens the global nonproliferation regime.

But that is only one part of AUKUS. We are actively pursuing cooperation under AUKUS on a range of advanced capabilities, sending a strong message to the world in favor of a free and open Indo-Pacific. Today, I hope to reinforce three main topics as they relate to AUKUS. First, how AUKUS fits into the 2022 National Defense Strategy.

Second, how we are seizing the generational opportunity that AUKUS presents. And third, why we need to expand defense cooperation with our closest allies and partners. In framing the security environment, the 2022 National Defense Strategy describes the People's Republic of China as our most consequential strategic competitor for the coming decades, and it underscores how new and fast-evolving technologies are complicating escalation dynamics.

The National Defense Strategy describes integrated deterrence as a holistic response to the strategies that our competitors are pursuing, and directs the use of campaigning to gain military advantage. It calls on the Department of Defense to build enduring advantages across the defense ecosystem to shore up our foundations for integrated deterrence and campaigning.

And it describes allies and partners as a center of gravity for the strategy. What is needed now, more than ever before, is an approach that enhances our AUKUS partners' conventional military capabilities, opens support to a more integrated defense industrial base, increases information sharing, and implements cooperative policies that reflect the concepts laid out in the National Security Strategy.

What cannot be overstated is this. We cannot do this alone, and our AUKUS partners stand shoulder to shoulder with the United States, as they have for many decades. As President Biden and Secretary Austin have said, AUKUS is a generational opportunity, and I want to thank this committee for its broad bipartisan support. Your work and support is vital to making AUKUS a success.

Together with our AUKUS partners, we have identified several advanced capability opportunities in areas that range from artificial intelligence and quantum to hyper sonics. Over time, the work we do will advance our own capabilities as well as our partners, and will enable us to address the challenges that we will collectively face.

We have reached a point in the global security environment and technology landscape where there is not only a benefit, but an imperative to expand our defense technology sharing practices. AUKUS is the beginning of a path that will lead to a more integrated and open defense ecosystem that balances the threats of strategic competition by harnessing the strengths of our collective capabilities.

The US network of alliances and partnerships is a strategic advantage that competitors cannot match, and maintaining this requires an active whole-of-government approach. We have supported our Ukrainian partners against Russia's illegal and unprovoked invasion of Ukraine without putting a single US service member on the front lines of that conflict.

As our response to Russia's invasion has proven, we must maintain the ability to cut off bad actors from dangerous capabilities. But we must also maintain the tools and vision to share and collaborate with our allies and partners. Preparation for future conflicts, or deterring them from occurring in the first place, will rely on our ability to expand and enhance military partnerships before any shots are fired.

American business is one of the strongest and most resilient assets in the national toolkit. We need to widen the aperture, foster collaborative defense innovation, advance military interoperability with our allies and partners, and leverage our collective strengths as a force multiplier.

AUKUS has provided a lens into not only what military capabilities our closest allies need, but also what barriers exist that hamper pursuit of our integrated national security strategy, and how we need to adapt our approach to meet our national security objectives.

To that end, the administration plans to consult closely with Congress to propose legislative changes that would allow increased exemptions to licensing requirements for AUKUS partners, and expanded to permit transfers of both unclassified and classified defense articles and services.

This bold approach is critical to ensuring the AUKUS partnership continues to innovate and to progress to meet the challenges of the global security environment. Mister Chairman, Ranking Member Meeks, and distinguished members of the committee, thank you for the opportunity to meet with you today, and I look forward to answering any questions you may have.

MCCAUL: Thank you, Secretary Karlin. I now recognize myself for questions. First, we look forward to more of these conversations with you. Obviously, this is very important. We need more speed in the process. I think ITAR well intended, but we need exemptions not just with Pillar 1 dealing with nuclear submarines, but also with Pillar 2 if we're going to take the threat from China seriously.

And I've been, many both private sector and our partners, including Australia, have told me how important these exemptions are to speed up the process. My first question is, Pillar 1 has the exemptions. As Pillar 2 does not. How would you plan to implement these exemptions to Pillar 2? Secretary Lewis?

LEWIS: Thank you for that question, Mister Chairman. And I agree with you that I think that it's very important that we focus on Pillar 2 to create a speedy, safe, and secure way to move forward with this defense trade between the three countries. So let me talk both about the interim period and then on the legislative front.

We're really looking for new exemptions. And the idea is that if we know what is included under the AUKUS program, if we know technologies that cannot be included, something, for example, that might be prohibited by a treaty, and we know who's receiving it, then we'll be able to, in essence, pre-approve and have these transfers move forward without needing a license on the front end.

And I think when we talk about exemptions, that's fundamentally what we're all trying to get at. So, we'd be looking at a pre-approval, not case-by-case process. We also are going to be looking at moving forward with third-party transfers, a blanket exemption under AUKUS.

And what that means is for items that are US defense articles that are controlled by one country, that they can be moved to another country within AUKUS without needing authorization. So, all of these are the pieces that we want to move forward with. We have this interim proposal so that we can get moving right now.

On the legislative side, we -- and I agree with you completely that we need more of these, and we want to come and sit down and work with you and your excellent staff on getting that legislative language exactly right.

MCCAUL: I think codifying will give certainty to our partners and also our contractors as well. I look forward to seeing your proposal legislation. We'd like to move, I think time is of the essence here, and so I look forward to working with both of you. Miss Karlin, do you have anything to add to that?

KARLIN: Sir, I would just add this is a historic opportunity, so it does require historic change. And so, as we are pursuing this legislative proposal, we'd like to consult very closely with all of you on how best to make that happen. But this really is a notable moment for ensuring that we can have stability and security in such a critical region of the Indo-Pacific.

MCCAUL: Thank you. And we'll obviously consult with our Armed Services Committee colleagues as well. Let me ask you, perhaps both of you, as I mentioned when I was in Taiwan, President Tsai asked me where are my weapons. I didn't have a good answer.

And she said, I paid for them. And you see the threat as they circled the island in a very aggressive way. The ranking member and I signed off on 22 weapons systems. And as I look at the list, the earliest that any can be delivered is by 2025 and some as late as 2029. And I'd like to enter these into the record, if I may, without objection. But why is this taking so long?

LEWIS: Let me start. And we agree that there is urgency to make sure that Taiwan is prepared as part of deterrence to keep China from moving forward. Let me take a moment and talk about the way that the arms sales process works. As once you clear a sale, which we have sent up here, it then goes on contract.

And only once it is on contract and Taiwan, in this case, has paid for it, does production start. And so, I don't have the exact list, but I'm fairly sure I'm correct that we are now in the point where we are looking at the production timeline for those weapons to be built. Let me say a couple of things about that.

We agree that the defense industrial base needs to work together with us and the Department of Defense to speed up industrial production. This is a worldwide problem, not just Taiwan specific. And the Department of Defense has taken urgent steps led by the deputy secretary on this issue.

When it comes to Taiwan specifically, I think, since 2017, we have sent up billions of dollars in arms sales to be authorized through this committee. And in addition, over the past year, we've signed off on more arms sales to Taiwan than in the previous decade. Now, we need to work on them getting produced and getting to Taiwan quickly.

MCCAUL: And I would just say time is of the essence. I think they're going to try to influence the election, presidential election in Taiwan. If they fail, then they're going to be looking at some blockade event. And so, my question is, and I asked the secretary this question, can we redirect some of our weapon's sales from one country and send it into Taiwan? And then secondly, why can't we do third party sales of some of these weapon's systems that other countries have? And we would simply give them permission to put these weapons in country.

LEWIS: Well, I think we need to look at all available options. Obviously, for third party transfers, one country would have to agree to transfer those weapons. But I think you're right to ask us to take a look at all of those, including some of the new authorities that were included in the bill that I know that you authored as well.

MCCAUL: Thank you. I'd like to speed it up. And Miss Karlin, do you have any additional thoughts?

KARLIN: Thank you. Well, I'd first of all just like to thank Congress for the Taiwan Enhanced Resilience Act. I think that's been really important and shows the bipartisan support for this important effort. Having appropriated resources can make that a little bit easier, of course, in terms of being manifested.

I would also like to note, as Assistant Secretary Lewis briefly highlighted, our deputy secretary has directed the department to find ways to accelerate and bolster Taiwan's self-defense capabilities to strengthen cross-strait deterrence, looking at both material and non-material capabilities. And it's focused, it's a senior level effort, and it's across the entire department to ensure that this critical issue is getting the resources and the attentions that it needs.

MCCAUL: I know you did an FMF, and thank you for that. I will be talking to the Senate Foreign Relations Committee about, and also the Appropriations Committee about appropriating our authorization. With that, I recognize the ranking member, Mister Meeks.

MEEKS: Thank you, Mister Chairman, and thank you for your testimony. And I think that we have on this committee tried to work in a bipartisan way, understanding the need and the expediency of trying to make sure that our allies are working, we're working collectively together as we saw take place at the G7.

And one of the things that I've been trying to figure, I've been asking a lot, because why does it, and I've listened to your explanation, why does it take so long to have the production line done? And I hear what you're saying. And when I talk to a number of those in the industry themselves, it takes time. It takes time for them to get the employees back on line and what it takes to produce. And it just, there's no way they tell me that they can expedite, quicker than they've been doing.

I don't know whether there's something that we can do to engage to help them in that manner or not. But that's what they're telling me. They're telling me it is just difficult. Once it is authorized, once we go through the steps that you've enunciated here, it just takes that amount of time to do business to align it together. Do you find that to be the case also?

LEWIS: Well, let me start by saying I do think we are having a couple of factors happening at the same time. One, we're seeing a significant increase in demand for defense articles around the world, both obviously not just because of the Ukraine war, in addition because of the challenges in the Indo-Pacific.

And so, there is an increased demand. That also coincided with COVID. It coincided with supply chain issues. I do think, however, that there are steps that we can take working with industry. Sometimes it's a matter, and Doctor Karlin may have more of this, on finding a part from a sub-sub supplier that had been shut down that we need to get moving again.

Sometimes it's investing a little money up front so that a production line can get started. I think there are a whole host of steps that we can take with industry as they look at the challenges that they have, in terms of hiring new staff, adding actual capabilities.

MEEKS: Which is basically what I was asking. Is there ways that you all can work together, to make sure that production is happening in a more timely fashion. Let me ask Doctor Karlin, one of the concerns that I do have is, in the 2023 worldwide threat assessment. The US director of national intelligence emphasized the threat that's posed by China's persistent efforts to acquire foreign science and technology information and expertise, especially in the defense space, and emphasized the extensive use of economic espionage and cyber theft.

Now, I have some concerns because I don't want some of our sensitive equipment and technology and brain to go to China. And so, it also, particularly in Australia, they said that there was an area of opportunity for China, given its location and the comparatively nascent regulatory architecture that Australia's intelligence services emphasized this threat in its own 2023 threat assessment.

And its director stating that the targeting of Australian defense industry personnel having increased and I quote, since the AUKUS announcement last year. Which gives me concerns and we know what China has been doing in a nefarious way. So, I want to make sure that the Australian and the UK regulatory structures that are controlling sensitive defense technologies that are comparable to what we have in the United States, are they the same? Do they differ? Is it safe? Just make sure it does not get in the hands of the Chinese.

KARLIN: Sir, as Australia and the UK are among our closest allies in the world and they have mature defense trade control processes. We have a long history of working with them and have shared some of our most sensitive military technology to date. F35 being a great example or F18s as well. Not to mention submarine technology.

As it relates to AUKUS specifically, we will work very closely with them on ensuring we have trilateral standards for secure defense trade. Making sure that all of us have the technological, security, legal and regulatory frameworks that are providing export controls consistent with those that we implement in the United States as well.

MEEKS: So, thank you for that. Are there any improvements you think that needs to be done? When we do talk to our allies in Australia and the UK, sometimes we have had conversations. Are there any improvements that you think in the regulatory structure necessary to ensure appropriate protections against malign actors? And what if any risk to our national security is related to sensitive defense capabilities if our regulatory frameworks are misaligned?

LEWIS: I very much appreciate the question and I think it is important that we take these serious issues under consideration as we move forward with AUKUS. Again, we do have full confidence that we can work with our allies to protect these technologies. What I would also say is that any time that we are putting together a structure like we are putting together with this new AUKUS authorization, we always have to come together to make sure that we are aligned, that we have crossed every T and dotted every I. But I am very confident that we will be able to do this given that these are two of our closest allies.

MEEKS: Yeah. Thank you. I yield back.

MCCAUL: The chair recognizes Mister Smith.

SMITH: Thank you very much, Mister Chairman. Thank you both for your leadership and for being here today to testify. Let me just ask, Secretary Lewis, you pointed out that the administration will also be seeking commitments from our AUKUS partners on shared standards for the protection of defense information and materials consistent with the steps the United States takes to protect such information and materials.

Perhaps you could elaborate on some of those steps, whether or not those commitments are actually yielding fruit. And I would just point out, for decades the United States, as we all know, especially with dual use items, aided and abetted the Chinese Communist Party post-Tiananmen Square.

They used about anything they wanted and they built up a capacity and a capability courtesy of us and, of course, the Europeans. So hopefully there's been lessons learned there. When it comes to our two allies, our two great allies we're talking about, I was wondering if you could speak to the issue of, yes, defense, corporations are one thing, and I'm sure you're looking at that very closely.

I hope you're also looking at colleges and universities. I chaired a series of hearings on Confucius Institutes and was shocked to some extent. I even asked the GAO to look into it and they came back and said the agreements are confidential. They wouldn't even share what they've agreed to with the Chinese Communist Party.

And we know it's a malign influence that they're having on college campuses and university campuses. But we also know that that gives them a launching pad to be eyes and ears on the spot there to try to, particularly in colleges where there's a great deal of defense work going on.

And I'm wondering if we're doing that well in the United States to ensure that those vulnerabilities are not exploited, but also with our two partners, UK and with -- because they have Confucius centers too and they have many of them. The whole world has them, but they have many of them as well.

LEWIS: Again, thank you for the question and I do think you are raising an incredibly important issue, which is as we move forward with speed within the AUKUS framework, we also need to make sure that we do it in a secure way.

And I think you are flagging a particular challenge when it comes to the PRC, because as you point out, we know the PRC has a long history of trying to exploit our technology to take our intellectual property. They've looked at trying to get into a whole range of our technology and I am aware of the issues that you raised related to universities.

Again, I think when it comes to the question of Australia and the UK, because these are truly our closest allies, because of the sophistication of their systems and the way we are able to work very closely together, I am absolutely confident that we will be able to have the highest standards that you would expect to make sure that those exports and intellectual property don't end up in the wrong hands.

I very much appreciate you raising concerns related not just into the defense field, but as we look across educational institutions and universities and we will be certain to take that into account.

SMITH: I do appreciate that very much. Let me just ask, do you see any enhanced role for cooperation with the quad countries, Australia, Japan, of course us, and perhaps even with the Republic of Korea?

LEWIS: Thank you for the question. I think at this moment in time we are very focused on getting AUKUS right and that is the focus of what we are doing right now. As we progress, we are always happy to look at ways that we can further cooperate with other allies and partners.

SMITH: Thank you so much. I yield back the balance.

MCCAUL: The Chairman yields. The Chair recognizes Mister Sherman.

SHERMAN: Capitalist economy tends to move toward just-in-time delivery. Get it to your customer just when they are ready to pay for it. So, with baby formula, sometimes we have a shortage. With certain drugs we have a shortage. And we are seeing a shortage in munitions as well. What concerns me is that we don't have enough, together with all our allies, to provide enough artillery shells, et cetera, to Ukraine.

And their ability to fire artillery shells is one-tenth of what our ability is. That is to say, that is a much smaller military. Have we -- do we have a system in defense procurement where we can pay companies not for what they deliver but for just having standby manufacturing capacity? Miss Karlin.

KARLIN: Thank you very much. I think Russia's unprovoked and aggressive war in Ukraine has helped a whole lot of folks internalize something that we had seen in the environment but probably hadn't appreciated the extent possible, which is that criticality of investing in defense industrial bases, both of our own and our allies.

SHERMAN: But more specifically, do we have a system where we pay military defense contractors to have standby manufacturing capacity?

KARLIN: I might specifically highlight that Congress has given I know the Department of Defense has this multi-year procurement authority for munitions. And at that

SHERMAN: I didn't say multi-year procurement. I said standby manufacturing. You pay somebody just to be ready to produce in the future. Not for what they have produced but for the capacity to produce. It is a yes or no question. Do you have an answer?

KARLIN: 5I just want to ensure I understand the question, sir.

SHERMAN: Is there any. Do you have the capacity to contract with a private munitions manufacturer to say in addition to what we may pay you for what you deliver, we're going to pay you to have a plant out somewhere that you're not even using that's ready to go in an emergency? Do we have that capacity or not? Do we use it or not?

KARLIN: I would like to get back to you on that.

SHERMAN: OK. Get back to me on that.

KARLIN: If I might say that we are focused in particular because there's such a...

SHERMAN: I've got limited time here.

KARLIN: OK. Thank you.

SHERMAN: We have a process for approving foreign military sales. Often that process is slow. We've had discussions in this committee for over 20 years on that. And Congress has passed some legislation. I've been involved in drafting it to speed that process forward.

Miss Lewis. Are we in a position where if somebody applies to make a foreign military sale, that that file gets dealt with immediately or is there literally a backlog where you've got to put that file aside because you're working on something else? Can we immediately fully staff every application?

LEWIS: You mean at the State Department before it comes here?

SHERMAN: At the State Department.

LEWIS: Yes. We immediately staff once a case comes in. Now that's whether it's on the commercial side or as you were referencing, the foreign military sale side.

SHERMAN: So, and I think this is critical because not only do we have the foreign policy implications and a relationship with the country that's applying, but every time we get a foreign military sale, that builds the defense infrastructure here in the United States. And every time somebody is turned down by the United States and goes somewhere else, that builds the military infrastructure somewhere else. And that somewhere else is not fully aligned with us since we declined. Do you take into consideration in saying yes or no what effect the saying no will have on both our infrastructure and the infrastructure of where else they may go for the military equipment?

LEWIS: We certainly take into consideration all of the issues that we're required to, which includes a whole range of things, including the impact on that country, whether they're competitors, human rights issues, and all of those factors are taken into account.

SHERMAN: I just want to point out finally, burden sharing comes up. We like to say that we're only doing 3.5 percent. We mislead the American people. We say that it's well over 4 percent. And the difference comes from not counting veterans benefits as a cost of having a military. In the private sector, any CPA who didn't treat provision for retiree benefits as a cost of doing business would be in jail. So, we're spending well into the fours. We're asking others to do twos. I'm glad Ukraine and Australia are at least meeting that standard. I yield back.

MCCAUL: The gentleman yields. The chair recognizes Mister Wilson.

WILSON: Thank you very much, Mister Chairman. And thank both of our witnesses for being here today. And I share the concern of Congressman Brad Sherman in regard to artillery shells. We actually have been brought to my attention by the Chairman of the Armed Services Committee, Mike Rogers, that we have nearly two million in inventory to pick them artillery shells.

And these have already been -- these types of weapons have already been used by Putin. And additionally, the Ukrainians also have used these weapons or artillery shells. Our very valued ally, Turkey, has provided these shells. And so, I hope every effort will be looked into providing these. We have them in inventory.

In fact, they may become obsolete if we don't use them sufficiently. And a great way to get away with obsolescence is to provide them immediately to Ukraine. With that in mind, I'm really grateful that South Carolina is playing an important role with the Australia-United Kingdom-US Trilateral Security Pact towards acquiring nuclear-powered submarines.

Currently, there are four Australian naval officers training at the Navy Nuclear Power Training Command and Nuclear Power Training Unit located at Joint Base Charleston. This training is directly advancing and improving the Australian Navy capability under the Trilateral Security Pact by ensuring that we can train Australian Navy leaders on the nuclear capabilities that are tied to their projected submarine acquisitions.

These officers will graduate next month, and we look forward that more officers and enlisted personnel will be coming in the future. And Secretary Karlin, Chairman Mike McCaul has made it so clear, but it just has to be stated over and over again, the delays in foreign military sales truly are putting the American, I believe putting the American people at risk.

We should be working for peace through strength, not exhibiting the vulnerabilities of our allies and the United States in particular by having weakness of not providing the equipment. And it's my understanding it takes 18 months for a standard contract to be fulfilled.

To me, that's just -- it puts our allies and all of us at such risk. With the tensions that we have with the Chinese Communist Party, with war criminal Putin invading Ukraine, we need to expedite. And so, what will be done to expedite in certainly less time is just absolutely crucial. That's just inexcusable 18 months.

KARLIN: Congressman, I completely agree with you that we have got to be able to provide the capabilities to our allies and partners as quickly as possible in support of their requirements and also in support of our national defense strategy. Last summer, Secretary Austin established a foreign military sales tiger team that focused on identifying efficiencies, clearing systemic issues, and accelerating the responsiveness of the system to meet the capability requirements of our allies and partners.

And this tiger team has focused on friction points within our process and has identified dozens of recommendations that are focused on exactly what you are saying, sir. So, we are firmly committed to making sure that we can move as quickly as possible. Some of the solutions look like actually making sure we have got a data-driven approach.

So, we have a complete picture of where in the process these different sales are. Some of this looks like ensuring there is accountability in implementing the recommendations and making sure, frankly, that the most senior leaders of the department are tracking the particularly important ones. And so, we have done a number of things on that and our colleagues at the State Department have as well as Assistant Secretary Lewis.

WILSON: To me, Chairman McCaul has been very creative for you, and that is that much of this equipment could be provided from the inventories of our allies and then we backfill to the allies. This just needs to be expedited. We see that with Australia. Really the people of Taiwan are at such risk.

It has been very frustrating to me as we work with the world's largest democracy, India. They found that you can have expedited military sales from Putin. And so, we need to be there to get ahead of that.

The world's largest democracy should not be relying on war criminal Putin. We should be providing the ability for the equipment to be provided as quickly as possible so that we can provide peace through strength to protect the United States, protect the Indo-Pacific, to protect the people of India. I yield back.

MCCAUL: The gentleman yields. The Chair recognizes Mister Connolly.

CONNOLLY: Thank you, Mister Chairman, and welcome. I want to ask about capability. The Ukraine war has highlighted weaknesses and strengths in our allied capability in responding to the Russian aggression and depredation in Ukraine.

We formed this alliance, AUKUS, and I guess I want to ask you about the capability of one of those allies, Australia. The Australian government issued a report, the Defense Strategic Review, earlier this year, and they concluded, quote, the current Australian military is no longer fit for purpose, unquote. That's a stunning conclusion. Assistant Secretary Karlin, are you familiar with this report?

KARLIN: I am indeed.

CONNOLLY: And does it concern you?

KARLIN: I think it is heartening that Australia's government recognizes the urgent need for.

CONNOLLY: Yeah, I get it. That's the State Department line, not the Defense Department. Are you concerned about a report that says they're not fit for purpose? Isn't that a pretty sweeping statement?

KARLIN: I think they are recognizing that they need to make important changes. That is hard and that is important. And I applaud them for doing that. I would rather that they recognize the need for this --

CONNOLLY: All right. We'll note your applause. I guess I'm noting my concern and asking whether, as people trying to form an alliance, the depth of that concern and you're heartened. Assistant Secretary Lewis, are you concerned at that conclusion and what it means in terms of what the United States has to do, working with this ally, who's certainly motivated to make sure that they are fit for purpose?

LEWIS: Well, sir, I really appreciate you raising these issues. I also believe that we are going to be able to work hand in glove with Australia. Our experience with Australia when we look at the capabilities that they have acquired over the years, I think you, Doctor Karlin mentioned the F-35, for example, they have shown us time and time again, that they're able to take a problem, work on it and handle the most sophisticated technology and capabilities that anyone in the world has.

So, I remain competent. And may add one more thing? I also think that the AUKUS both Pillar I and Pillar II are going to provide all of us are opportunities to strengthen our capabilities.

CONNOLLY: What do you think -- what do you think the phrasing means, they're not fit for purpose? If you're so confident.

LEWIS: I'm not able to assess exactly what that phrasing means. I think it -- I assume it means that they are -- that the person who wrote the report is saying that they need to make improvements to be fit for purpose.

CONNOLLY: Yes, they in fact identified six major areas where in -- where serious improvements have to be made. Are you familiar with the report?

LEWIS: I have not read that particular report.

CONNOLLY: Going back to you Assistant Secretary Karlin. You are familiar with the report.

KARLIN: Indeed. I would say as the US military has had to make important shifts as it has moved away from the post 9/11 wars. So, to do allies and partners, particularly those who are worried about security instability in the Indo-Pacific.

CONNOLLY: Do you think that -- let's say it means something. We're not fit for purpose. Is that do -- do you think in part to disinvestment or lack of investment in the defense sector in Australia over the years?

KARLIN: I think it's probably due, I would defer to them, of course, but I think it is probably do more toward them seeing a threat picture that looks different. And then putting AUKUS for example at the heart of this DSR, as you're citing, is actually quite positive. It shows for example, the need to invest in really sophisticated undersea capability, which is particularly relevant given what that changing security environment looks like in the Indo-Pacific.

CONNOLLY: Yeah. I agree with you. I mean -- listen, I'm -- I believe in Australia, I want Australia to be a partner. But I also want us to recognize where there are weaknesses that have to be addressed. As I started out, I've been very involved in NATO and the European response to the situation in Ukraine. And we -- we've got to be candid about acknowledging weaknesses to address them. And that -- this report really caught my eye earlier this year.

And I just want to make sure that as we proceed, especially as we proceed to talk about nuclear submarines, that capability across the board, and the Australian military has got to be upgraded, if we're going to meet the threat. And I take your point that there's sort of a renewed appreciation of the threat assessment in the region. But we can't -- we can't ignore years of neglect when they in fact occur. And by the way, finally, that brings us back to the chairman's point about Taiwan.

We don't have to 1929 -- I mean, 2029 to address defense capability in Taiwan, I don't think we're go ing to have that luxury. And that's why we got to accelerate that timeline. I would echo the Chairman's response. I appreciate both of you being here. And I yield back. Thank you, Mister Chairman.

MCCAUL: Gentleman yields. Chair recognizes Mister Perry.

PERRY: Thank you, Mister Chairman. Secretary Karlin, look, I know we're here to talk about AUKUS and the United States needs to be a serious force. And if we're going to lead even in that part of the world and have partners, they're going to want to know that we're serious as well. It's my understanding your office is responsible for drafting the national defense strategy. Is that -- am I out of line there or that correct?

KARLIN: That's fine.

PERRY: OK. I thought so. And another life people like me waited for that to come out to see what was in it to guide us. Power projection, planning strategy, posture, force array, et cetera. And I'm just thinking about when I go to the section entitled strength, resiliency and adaptability. The report states that climate change is one of the biggest threats to the defense ecosystem. That goes on to say that joint forces must -- the joint force must integrate climate change into its threat assessments.

OK. Fine, so to speak. We live in a world of limited resources. I sure you know that. That's acutely -- I think people in town are acutely aware of that right now. Can you quantify to me? Is there some -- is there some weapon that China or Russia or Iran or any of our adversaries have that's going to imperil our traditional fuel sources? If we just say -- if -- and I don't know exactly what you mean because I read this climate change -- integrate climate change into a threat assessment.

Is there -- is there something they have some climate weapon that we're trying to avoid or counteract? How do renewable fuels do any better at counteracting whatever weaponry they have, whatever strategy they have than traditional fuels, for instance?

KARLIN: So, what that part of the national defense strategy is trying to get at sir, is the operational impact of changes in the weather. So, for example, rising sea levels affects our bases that are on the water and we need to account for that.

PERRY: OK. So, that's it. That's the only thing that we're doing as far as you're concerned in that space.

KARLIN: So that is -- that is one example.

PERRY: One example. But there are -- you would acknowledge, there are many other examples.

KARLIN: It's trying to get at how the security environment is changing, and the impact that that is having on our forces ability to operate whether it's --

PERRY: That's what I'm looking for. The direct impact because as far as I know, the military, the Navy, in particular had been dealing with rising and lowering sea levels, if not for tides, if anything else, ever since it's been the Navy and the Marines. And the army, if you've been in the Army, you sleep out in the rain. I don't know. Look, I've read through your credentials, you've got a long you've published a lot, you've been around a lot. I don't know if you've ever done a carrier landing under goggles.

I don't know if you've flown a low-level mission in the trees under a FLIR. I don't know if you've humped the pack through the trails of Afghanistan. But the folks that are depending on what you write have to do those things. And here's what they're not focused on. They're not focused on a recycling program where the enemy is raining fire down on their heads. They're trying to stay alive and win the war with the least amount of casualties as quickly as possible.

And I wonder, and I'm concerned, because this is what we project what -- this is what we project to the folks in AUKUS and all around the world as the leader. And if we can't focus on the lethality and readiness, lethality and readiness and maybe in your case, because it's a national military strategy, force projection, then we're in the wrong business, ma'am. We've got our eye off the ball. And I don't know if you've noticed recruiting levels lately. But maybe instead of this paragraph, there ought to be a paragraph on why recruiting levels are unsustainable and why Americans no longer wants to be in the military and why they no longer can qualify to be in the military because they're overweight or because they've been incarcerated or because they have addictions.

Maybe that should be the focus instead of climate change and rising sea levels. If the base has rising sea levels, maybe you want to look at China and just build a base out of a reef that doesn't -- where no base exists. Maybe that should be the military strategy. And I wonder if you've considered any of that.

KARLIN: This national defense strategy is arguably among the punchiest and piteous the Department of Defense has put out. It has one very clear priority, which is the urgent need to sustain and strengthen deterrence focused on the People's Republic of China. It looks at that from a strategic perspective and from an operational perspective as well. And sir, part of the reason that we don't need to build islands the way that the Chinese do is because dozens of countries have welcomed our troops around the world to have bases there.

PERRY: On bases that aren't underwater because of rising sea levels. Mister Chairman, I yield back.

MCCAUL: Gentleman yields back. Chair recognizes Mister Keating.

KEATING: Thank you, Mister Chairman. I'd like to thank the witnesses. I'm curious, and I guess we could do it in the context of AUKUS Pillar II but we could do it more broadly. I'm just concerned on an ongoing basis as we're developing technology, advanced technology and defenses together. The issue of artificial intelligence and A.I. is a concern, a growing concern about making sure we have controls over that kind of advanced technology. So, it can't be get out of control or be misused somehow.

When we're doing this research, is that an area that we're doing independently or in conjunction with our allies? Like in AUKUS Pillar II?

KARLIN: AUKUS Pillar II is really trying to look at advanced capabilities exactly, as you say, sir. Artificial intelligence being one example. Hypersonics being another example. And trying to figure out how we can better collaborate with our -- with our allies to realize these capabilities, develop them, exercise them.

KEATING: But what about controlling them? Are we doing research so that somehow these can't somehow get out of control spinning into a catastrophe?

LEWIS: Sir, if I may, I think that you hit on a critically important point, which is why when we move forward with AUKUS, it doesn't mean that everything that anybody wants to send or share will just be sent. We are still going to have to know the technologies that, for example, can't be moved. We're still going to have to know who's going to receive them. And the reason that will be -- but then we want -- once we know that we want them to be able to move quickly and smoothly.


LEWIS: But what you're saying is, we need to make sure that we have protections in place to make sure that they don't get exploited.

KEATING: Even for our own use.

LEWIS: Yes, And I think that is something that particularly I know, there are concerns in the AI space but that we really are going to have to look at across the board.

KEATING: I do think it's something that we have to pay particular attention to going forward, given the advancements in AI. Secondly, we've talked about delays quite a bit. And they're not just simply explained through a one-dimensional view of what causes delays. If you could, I'm on services as well. We're well aware of this. Some of our members here aren't. Could you describe that period of -- the valley of death when you're taking it from prototype to real product and what you're doing about that? And explain that delay. What valley of death means in terms of delays in production?

KARLIN: Absolutely. There are technologies that will be developed. And then the question is really, do you decide to mass produce them? Do you decide that they need to pop out in the right quantities so that they are relevant for the force? And that is sort of that valley of death of how do you make that transition? I can assure you, sir, this is an area Deputy Secretary Hicks and Undersecretary Shyu have been extremely focused on it. And how do we make that easier? Particularly, how do we make that easier for those smaller businesses who maybe don't have the same level of experience of working with the department.

KEATING: So, some of these delays aren't just pure regulation or delay in it -- there are real-life reasons for these delays. And certainly, we can do more. And Assistant Secretary Shyu, I think is doing extraordinary work in this particular area herself. And I just want the members here to understand this isn't just an issue of red tape or slowing down. There's very real technological and production issues that are here, financial issues.

And by the way, for the members of Congress that are here. Budgeting from CR to CR to CR and not dealing with a real budget. We have to take responsibility as well, when we don't act the way we're supposed to act with real order. So, I yield back.

MCCAUL: Gentleman yields back. Mister Mast is recognized.

MAST: Thank you, Mister Chairman. I appreciate both of you being here. Obviously, a lot of conversations blurb between both agencies, both bureaus. So, I want to start with longer-range missiles and start with you, Miss Lewis. Just -- can you discuss with us right now, what is the UK doing to provide longer-range capabilities as their role to support the UK or the Ukraine?

LEWIS: Sir, first of all, we are all working very hard to get Ukraine the capabilities they need.

MAST: Longer-range though specifically. I understand.

LEWIS: Yeah. I am not going to go into details on the exactly what the UK is providing or not. I do think that all of our partners have different capabilities that they're able to provide at different times. And I think the goal is to make sure that as the fight changes in Ukraine that Ukraine has what it needs for the fight. So, whether it was in the beginning when we were looking at Stingers and Javelins to tanks later in the war to air defense right now. We are working together, both with the UK but with a whole host of about 50 other countries to make sure they get what they need.

MAST: It doesn't seem like the most effective way to wage war in that micromanaging way that you're looking at each and every distance. Is this the appropriate time given what bipartisanly has been discussed here about the timelines to get munitions from one place to another, even with allies. Not at war, those timelines are just not reasonable to be the most tactical and the most capable entities on the battlefield. And so, I think it does hurt the system as a whole. But let's move to our own personal opinions if you're not willing to speak about UK on this. Are you concerned about Ukraine having longer-range capabilities?

LEWIS: I believe that Ukraine has been responsible and with what we have --

MAST: Quantify responsible please.

LEWIS: When we started working with Ukraine, we have provided them over the past 15 months over $36 billion in security assistance. They have used those weapons to fight the war to defend their homeland. I was just in Ukraine, actually last week.

MAST: What would you consider irresponsible?

LEWIS: Well, to step back from Ukraine, we have rules about how our weapons can be used across the board.

MAST: Let's just stick with Ukraine. What would you consider your response?

LEWIS: I think when we've provided weapons to Ukraine, we have provided them for them to use them in Ukraine. We've provided them to use them to fight the war to defend their sovereignty and territorial integrity.

MAST: So you consider it irresponsible for them to attack Russia in sovereign Russian territory.

LEWIS: We have not provided weapons for that purpose.

MAST: Miss Carlin, you work on strategy?

KARLIN: Indeed. Thank you.

MAST: I take that would be sound strategy.

KARLIN: It is our assessment from the Department of Defense perspective that with the existing Gimmlers capability that the Ukrainians have on the HIMARS, they can reach the vast majority of targets that they need to inside Ukrainian territory. Moreover, we are working --

MAST: I'm asking about outside of Ukrainian territory.

KARLIN: Right now, we are really focused on making sure they have what they need to deliver effects on the battlefield to regain their sovereign territory.

MAST: I think it's also an important consideration when looking at the battlefield or to understand how Russia might look at the battlefield, that whether -- I'm not trying to get you to say something that that you shouldn't. I understand the concerns about what you're saying is responsible or not responsible. But to have an ally have a capability adds another dimension to what Russia has to think about, has to calculate for. Whether our ally uses it for that purpose or not, I think it is important that you bear in mind what we make Russia have to worry about. In that, Mister Chairman, I thank you for the time.

MCCAUL: But I -- the gentleman yield.

MAST: Who was that? Mister?

ISSA: This is the chairman right now.

MAST: Yes, absolutely. Mister Issa.

ISSA: Thank you. Following up on the gentleman's questions that I think were implied, is it correct that some weapons Ukrainians have could fire and hit some parts of Russia? And based on guidance and agreements they have not?

LEWIS: My understanding, I think as you know, the weapons that Doctor Karlin just described, do you have a different ranges and different capabilities.

ISSA: Let me rephrase that. Have they fired on Russia during this engagement at all?

LEWIS: Not that I'm aware of, but I'm not -- I may not -- there may be things I'm not aware of, but I'm not aware of them having done that.

ISSA: OK. I think that was part of the gentleman's question. I appreciate. The gentleman yield and we now go to the gentleman from California, Mister Barra.

BERA: -- to do some framing because Xi Jinping and the PRC are going to frame AUKUS as being offensive and being anti-China, et cetera. And the truth is very supportive of AUKUS, very supportive of our working with our allies. But it is in response to the PRC's aggression in the maritime space. Its aggression in the South China Sea. Its aggression in the Indian Ocean region. And it is a response to keep a rules-based order to keep freedom and navigation to continue what really has been a peaceful, prosperous, stable number of decades in in East Asia in the Indian Ocean region, in the Indo Pacific. One that China and -- or the PRC and Xi Jinping are moving to disrupt. So, I reject Xi Jinping's narrative that these are -- this is the United States being offensive with partners and allies.

In fact, it's Xi Jinping's economic coercion, reaction to legitimate questions by the Australians uncovered origins and their ham-handed economic coercion, retaliation that really has pushed Australians to be one of our more hawkish allies here and understand the competition that we face and where Xi Jinping wants to take the PRC. So, I applaud the work of the administration. I think this is a very important deal. And very important for us to again, maintain an architecture a rules-based order freedom of navigation, maritime security for not just the AUKUS partners, but also for the other countries in the region.

When I look at gray zone tactics around Vietnam's exclusive economic zone, when I look at gray zone tactics around the Philippines, when I look at Xi Jinping's aggression in the streets of Taiwan, again, is not the United States that is changing this -- the dynamic in the region. It is intentional led under Xi Jinping's his leadership. And I am all in favor of dialogue with the PRC and trying to reset this, but it is not the United States that's looking for conflict. It is Xi Jinping creating that context.

So bringing it back AUKUS, I also sit on the intelligence community and very much appreciate the partnership that we have with Australians. But also, as we start to share critical technologies, the Chinese are very good at stealing those technologies. And I do worry about cyber risks. I do worry about how we maintain security around the -- these technologies. And maybe either one of you, or both of you if you'd want to talk to things that we should be thinking about from the congressional side as we develop and share the most sensitive technologies that we can make sure that our partners have the highest level of cybersecurity as well.

LEWIS: Well, thank you. And I agree, I think this is a critically important issue for us to look at. I want to start by saying that because it is Australia and UK, and because we've had such close cooperation with them on some of our most sensitive technologies, intelligence capabilities, we really do believe that we can work together as we put standards in place, not just on the cyber front but really across the board to make sure that we maintain that mission critical control over these key capabilities and sometimes information.

I think that when we look at other examples where we have worked very closely with countries, particularly as it relates to their export controls, we have been able and I am confident that we will be able to do that in this environment and this AUKUS alliance as well. Excuse me. AUKUS authorization that we will be able to make sure that all that we align both from the technical level but all the way up to the strategic level.

KARLIN: I might just add to Assistant Secretary Lewis' point, the emphasis on the trilateral standards, really all three of us taking this as seriously as possible. And I think we have really found in the conversations with our Australian and British colleagues that we all have the same strategic perspective and why we want to ensure, why AUKUS exists and why it needs to be a success.

ISSA: Great. Thank you.

KARLIN: Thank you.

ISSA: I yield back. I think the gentleman who now recognize myself for around two questions. Following up on my colleague's question. You use the word would be. So, it's fair to say that you have some items which you believe that particularly Australia will engage, provide and comply with that would allow you to have that full confidence currently rather than wood? Is that correct?

LEWIS: I think it's both. We currently have competence and we will continue to have confidence. I think as you --

ISSA: But you are going to ask them to do certain things in order to comply fully with our goals of not having sensitive equipment in any way fall into other hands.

LEWIS: We are going to ask all three countries to do that. Yes.

ISSA: OK. I just want to make it clear that it's a confidence that those laws and other efforts will be -- will take place that causes you to ask for authorization, but recognize that it doesn't actually begin the transfer until those terms are met.

LEWIS: I think just to be clear and I appreciate the question. We also believe we are going to do multiple things simultaneously. So given the urgency that we have heard from you and that we feel ourselves, we believe under our current authorities that we have now that we are going to be able to set up this structure using the articles that we know that some with our AUKUS --

ISSA: Sure. I appreciate you do everything you can do without our permission and then come to our permission when you only are absolutely positive, you need it. Nothing surprising there after 24 years. But you -- the urgency is an interesting tee up for my next question. It is primarily a DOD question. But earlier today, there was a figure of 36 billion that has been expended in Ukraine in actual weapons system. A fair number is what I heard one of you say. Currently, there's about 19 billion a backlog with Taiwan. Now in 15 months, $36 billion, some of it pretty advanced weapons, some of it bread and butter weapons have been successfully transferred. And for the most part expended on the battlefield. Is that a fair statement?

LEWIS: Sir, I believe so unexpended, but I don't want to say that --

ISSA: Sure. I mean, shooting the shit as fast as they can. Let's be honest. We were there. We were there. We didn't -- we didn't see them holding back just in case they someday wanted to use it.

LEWIS: Indeed, we have no evidence of that.

ISSA: OK. So based on the assumption that 30-plus billion has been literally expended, delivered and expended in a 15-month period, what is our basis not to provide in a similar speed, as though they were at war, the $19 billion, rather than as an expenditure, but as a deterrent? And I'm asking this, because everybody has a reason you can't do something until the shit hits the fan. OK? Then it's come as you are, bring what you have, go find it and get it.

I want to know why we have not in light of Xi Jinping's aggression and threats of almost immediate invasion. Why we have not expedited, as though they were similar to Ukraine, at least some of that $19 billion that they've agreed to pay for.

LEWIS: Well, you and here in Congress, actually, in the most recent defense authorization bill, provided us the ability to do so with $1 billion. So the vast majority of the assistance that has gone to Ukraine has gone through something called the --

ISSA: I'm not talking about Ukraine. I'm talking about to Taiwan.

LEWIS: Sir, I understand. I'm just -- I'm saying that we have used something called the presidential drawdown authority, which is -- allows us to take from DOD stocks and provide directly to Ukraine.

ISSA: So you're saying that it is the drawdown authority that accounts for virtually all of the $36 billion of transfers to Ukraine?

LEWIS: it accounts for the vast majority over $20 billion of it. And it is the speediest way to move forward. And Congress gave us that ability with Taiwan and the Secretary of Defense recently said that we are planning to move forward on that $1 billion as provided for by Congress.

ISSA: Now, with the remaining time, a billion ain't what it used to be. Would you say fairly, that the type of deterrent equipment necessary by Taiwan to truly cause China to think again about invasion would be dramatically greater than one billion? Meaning we need to look at the one billion and exponentially increase it to the extent that the authority could be used? That's a fair statement, isn't it?

LEWIS: I think that what Taiwan needs is significant. Obviously, I would defer to Congress on what it chooses to authorize.

ISSA: OK. I like that. With that we recognize the gentlelady from Pennsylvania, Miss Wild.

WILD: Thank you, Mister Chairman. My first question is for Assistant Secretary Lewis. There are two distinct components of our strategy to defend core US interest vis-a-vis, the PRC. First is building a broad coalition that will stand up against PRC attempts to undermine global rules. And the second is deepening security and strategic cooperation with our closest allies and partners to deter the PRC from considering military options but sometimes these two things come into conflict.

Some of our partners in Southeast Asia have expressed concerns about AUKUS and fear that our initiative could in fact, ratchet up tensions in the region. How do we reassure those partners that AUKUS is a defense and deterrence focused initiative, and that we are going to be a responsible partner in the competition with China so that they are less hesitant to support us?

LEWIS: Thank you for the question. And I do think it is really important that we talk about AUKUS for what it is. And really, it is about deepening and strengthening the very close alliances that we already have with Australia and the UK. And it's an opportunity for us to take some of these very critical capabilities on AI, on cyber and hypersonics and work together. I think when we talk to some of our allies in the region, as they raise these concerns, I think the message is, this is one piece of an Indo-Pacific strategy that is going to involve working together with different countries in different ways.

And I think as Secretary Blinken said, our goal with China is to compete, where necessary to cooperate where we can on mission critical issues that affect the whole globe. And then confront if we need to. And so, I think it's very important that we need to get that message across and we are working part of my job. And I know part of Doctor Karlin job is to work with all of our other allies and partners throughout the region as they look at both their security needs, their defense capabilities and the ways that they wish to deepen and strengthen their relationships with the United States and are others allies and partners.

WILD: Do you believe we can do that in a way that will be reassuring to them?

LEWIS: I do believe we can do that. Yes.

WILD: All right. I have more questions for you that I'm going to submit in writing. But I want to move on to a question I have of Assistant Secretary Karlin having to do with the production, the output of our defense hardware. It's my understanding that we are currently producing roughly 1.2 Virginia class submarines a year. And we'd like it to see it closer to three. My understanding further is that part of AUKUS Pillar I is that Australia has signaled plans to make an investment into our shipbuilding industry, which obviously would help with production. But on the other hand, I have concerns about what the impact might be on American workers and families if this kind of investment is made.

I say that as a representative of a district that is on the leading edge of advanced specialized manufacturing, including in the defense field. Can you address that, please?

KARLIN: Absolutely. And as you know, ma'am, the most recent requests for a defense budget included 4.6 billion in in investments in our submarine industrial base for both maintenance and production, because we want to increase the number you highlighted and we want to have more submarines available and ready. Exactly as you know, the Australians have committed to make a significant contribution to our submarine industrial base.

That is particularly important. Obviously, it is meaningful in terms of jobs for Americans in terms of helping our industry. But I would highlight it's also especially important because investment early we have seen in the industrial base is going to bear fruits. And we have watched this with things to Congress's leadership in recent years. That that that trajectory looks increasingly better.

WILD: OK. So -- but how is it going -- what's the interplay going to be in terms of how we make sure that we produce as much as we can here while still accepting this generous investment?

KARLIN: Thank you. The -- I don't know that these will clash. The investment that the Austrians will be making. The significant investment in our submarine industrial base will be for our industrial base specifically for what we are producing, obviously, much of that is for our own submarines and then of course, those that one would ultimately sell to Australia. So, I don't think there's a mutual exclusivity here.

WILD: OK. I think we may be talking about two different things. My time is up.

ISSA: Gentlewoman's time has expired. The Chairman now recognizes Chairman Green for five minutes.

GREEN: Thank you, Mister Chairman, for holding this important hearing -- important hearing today and for your work to strengthen America's alliances during a critical point in our nation's history. The AUKUS partnership represents one of the most critical strategic frameworks for countering the Chinese Communist Party in the Indo-Pacific and around the globe. Working alongside our closest allies, the UK and Australia is a golden opportunity to roll back the gains the CCP has made not only in the Indo-Pacific but in other critical domains of competition such as cyber and financial markets.

As we celebrated Victory in Europe Day, this week, it was a timely reminder of what can be achieved when we work together with freedom-loving partners. However, without consistent effort and efficiency, and effective diplomacy, there is no way AUKUS can live up to this potential. The Biden administration wants to take a victory lap for signing this agreement, but doesn't seem willing to make the effort to ensure we're leveraging it in the fight against the CCP. American leadership is the most essential component of this alliance. But how can our partners trust us when they see how we treat our Taiwanese allies where we have $19 billion in backlog and weapons systems deliveries while they experience an existential threat to their way of life.

I recognize the inherent challenges present in achieving the goals of AUKUS many of which stem from bureaucratic inefficiencies and outdated statutes that don't move at the pace of the threat or technology. I do thank our witnesses for their commitments to tackling these issues head on. I also thank my colleagues on this committee for making arms export reform a priority. And that's what I'd also like to speak about. I would like to address the issue of ITAR's and ITAR's exemptions.

This last week, I traveled to the United Kingdom and I met with among others, the defense minister. He raised a very serious concern that Canada is granted an ITAR's full exemption. But the UK, our greatest ally is not. He cited a specific example of a UK company that has technology that would advance our hypersonic missile capability. But the company -- if the company sells to the US under ITAR, that technology becomes exclusively controlled by the United States.

That company has chosen not to sell the technology to the United States to help us with our capability. He also said compliance costs have him spending a half a billion pounds every year. He specifically said that half a billion pounds could buy American equipment for him if he didn't have to do that with compliance. The U.K. wants an exemption to ITAR's equivalent to Canada. Yeah. As Winston Churchill noted regarding our World War II alliances, there's only one thing worse than fighting with allies and that's fighting without them.

We've got to fix this issue with England. To miss the opportunity to have this capability is unacceptable. And I have intentions to bring a bill that would do just that. And I'd like to ask my first question. Would you guys support that? And if not, why not?

LEWIS: Sir, first of all, let me start by saying I think you raise sort of the core issue that we are trying to address here today, which is how to make sure that our defense trade but specifically in this case, our defense trade under AUKUS with two of our closest allies can move with speed, and with safety and in a secure way. As we look at the issue of how to make that happen we have put together a plan that encompasses actually not only the ITAR which only governs actually our commercial sales, but actually our foreign military sales which are our government to government sales.

And just for reference 90 percent of the sales that the trade that we do, for example, with Australia is actually under the foreign military sales process.

GREEN: Right. I mean, he's asking very specifically for an ITAR's exemption that would -- we're not talking AUKUS in this case. Hypersonics are not a part of AUKUS as I understand AUKUS. I understand there's a second phase of this, that's AI and other things, right? But hypersonics aren't in there. I'm not going to go into detail in this setting on what he shared with us about the capabilities, advancement, that that would be for our development of that resource. But it ain't happening because that company has made a business decision.

They made a business decision not to give their technology that then would restrict their sale anywhere else. And we -- I mean, it's the United Kingdom. They've been with us. I mean, the blood that has been shared spilled on the soil together on beaches in Normandy all over Europe. I mean, there is no reason why we can do the same with Canada but we can't do it with the UK. And so, my argument is we're going to bring legislation and I would love for you guys to support this ITAR's exemption and with that, I yield.

MAST: Gentleman's time has expired. Chair now recognizes Miss Jacobs for five minutes.

JACOBS: Thank you, Mister Chair, and thank you both for being here. As we're talking about how to improve our arms exports, I think one of the things that is going to be really important is ensuring that our Arms Transfer Policy aligns with our values and our broader strategic foreign policy goals. It's not only important for human rights and all of the good things and moral reasons, but I think it's actually really important for our long-term security and our ability to have these alliances in the future.

So I was really encouraged by the Biden administration's new conventional arms transfer policy, and in particular, one of the specific changes that changes the standard from actual knowledge that arms would be used to commit atrocities, to commitment not to transfer arms that would more likely than not contribute to atrocities. So Assistant Secretary Lewis, I wanted to see if you could talk about how this policy is materially going to change things. How you plan to do monitoring and evaluation to assess its impact on arms transfers, and how you're going to implement this new standard.

LEWIS: Well, first of all, thank you for the question. I think, the conventional arms transfer policy which is the policy that governs all of our arms transfers around the world. And actually, you have -- you could have read for my talking points on that specific change that we made as it relates to the Human Rights standard. I would recognize that the QAT Policy also includes a whole host of other things. For example, trying to make our weapons looking at different ways to finance them, and a whole host of other things as we move forward.

But to get to your specific question, we already work very closely with our colleagues in the -- in DRL, the bureau that oversees our human rights issues, as we look at Arms Transfers. And so, we are using these criteria as we evaluate all of the transfers. We are going to continue our current and use monitoring programs. Some of which are done by the Defense Department, some of which are done by the State Department, depending on the authorities, again, to make sure that we comply with the law.

And then in addition, I think you're probably aware that we also have to do Leahy vetting when it is -- when arms transfers are funded through using US government money. So there's a whole host of ways that we have to address this criteria in the QAT Policy.

JCAOBS: I'm glad you brought up US monitoring because while this revised policy says the US will monitor ensure transferred arms are used responsibly and in accordance with the conditions and obligations of the policy, including human rights and international humanitarian law. As you both know, at the moment, current US and US monitoring programs are really only focused on diversion risks. But they actually don't monitor or track how US items are being used, including in UN human rights or international humanitarian law violations.

So how will implementation of the QAT address this gap and how we do and use monitoring?

LEWIS: Well, I do think we are going to continue to do and use monitoring as it complies with both the law and this program. I think we are -- and again, part of that includes the work that we do with DRL. And the other pieces of the Bureau -- I'm sorry, of the State Department that work on these issues. I know that this has been something that from the President on down making sure that we consider human rights as we look at these arms transfers will continue to be at the core of our policy.

JACOBS: OK. Well, that sounds great, although it sounds like most of what you're saying is what you have been doing and not necessarily what's changed based on this policy. So I'll look forward to working with you to make sure that we're actually -- this is not just a continuation, but actually doing something new. I wanted to go to the FMS 2023 that you all just put out. It references the QAT Policy in it which I think is great. However, the FMS 2023 policy itself doesn't mention human rights concerns at all.

So how will the QAT Policy and FMS 2023 fit together? And how will you ensure that retooling FMS doesn't sideline the very human rights concerns that you're addressing -- trying to address through the new QAT Policy?

LEWIS: Thank you for that question. I think it's actually a really important question to answer. These two things to me work -- they align actually quite well together. If you look at what we put in the FMS 23 plan, we are looking at things about prioritizing, having priorities as we look at the arm sales that we transfer. We're looking at making sure we take a regional perspective. We're looking at issues related to the training of the people who do the work in our embassies to get arm sales to move. We're looking at improving our processes with Congress. So, I don't think any of that work is incongruent with the same the principles laid out in the -- in the QAT Policy.

MCCAUL: Gentlelady's time has expired. Chair now recognizes Mister Barr for five minutes.

BARR: Thank you, Mister Chairman. Thank you to our witnesses for being here and discussing the important trilateral relationship. That is, I think, critical to deterring the Chinese Communist Party in the Indo-Pacific. So let me start with Taiwan. Assistant Secretary Lewis, we know that Taiwan is waiting on a number of FMS deliveries from conventional weapons like the Abrams tank to F-16 upgrades, asymmetric harpoons and HIMARS. Is state working with the defense industrial base to prioritize delivery of these asymmetric weapons that would be most effective at countering cross-strait invasion and be happy for our defense department want us to offer her thoughts as well.

LEWIS: Sir, I think that we are all very focused on getting Taiwan what it needs to defend itself. As you know, that $19 billion that you're discussing is our sales that have already moved through our process and are now in the production phase. And I think I will just say one or two things and then let Doctor Karlin speak more to that because the Defense Department has really been leading the charge on key capabilities to reduce the timelines or increase production so that we can get those mission critical capabilities to partners like Taiwan.

KARLIN: Thank you. We are running an effort that is chaired by Deputy Secretary Hicks to make sure that Taiwan is getting the material and non-material capabilities it needs as quickly as possible. And then there's the most senior level attention as possible. We are constantly engaging Taiwan as well to work with them in terms of an understanding of what those capabilities would look like obviously in line with our long-standing policy and our commitments. I would also just take a moment now to think Congress because as it relates to our own military, Congress's support a multiyear procurement of munitions has been -- especially important for our military, as we look at ensuring that we have the most combat-credible force to deal with --

BARR: Yeah. And Doctor Karlin, there's a lot of bipartisan work going on not just in this committee, but also in the Select Committee on the strategic competition between United States and China. And you're going to see those recommendations on multi-year procurement. The industrial base needs certainty on this. And this is -- this has got to be a absolutely top priority of accelerating those FMS and getting those capabilities. Now, yesterday, what have you to that democracy. Let me follow up out of -- all of the open FMS cases with Taiwan. How many can we expect to be completed by the end of this calendar year?

LEWIS: I think in this setting, we are not going to discuss when things will be delivered, happy to continue that conversation.

BARR: Yeah. Fair point. Just know that this is an urgent priority for the Congress as you know. Let me ask you about AUKUS governance. Assistant Secretary Lewis, how is the State Department planning on deciding which sectors or projects or AUKUS projects that will qualify for expedited approvals under the AUKUS trade authorization concept?

LEWIS: Sir, we are going to be sitting down both with Australia and the UK to work through exactly those details. So obviously, it needs to fit into the definitions of what we're working on within AUKUS. And then I think the second piece of that is, we're also looking at making sure we understand sort of what's excluded. And we did that very carefully because it's easier to move quickly when you have a clear list of --

BARR: Black list.

KARLIN: And -- right. What cannot move as opposed to sort of trying to keep a track of what can move.

BARR: And again, I don't know if this is the right setting. But is there an example of a technology, a critical technology that is so sensitive that it could not be shared in the AUKUS?

LEWIS: I think I can answer that in a -- in a broad -- in a broad way. We have certain items that we are prohibited from transferring under treaties, for example, that would violate our nuclear Non-Proliferation laws.

BARR: OK. To both of our witnesses, clarity is key for AUKUS' success. Industries wanting to participate in this opportunity, need to know what is possible for this to work. They need a green light, red light system. Have either of your agencies actually sat down with your counterpart ministries in the UK or Australia and outline specifically, what barriers exist in their laws or regulations that could hinder implementation?

LEWIS: We have been in a really a nonstop conversation with our counterparts in Australia and the UK, to try to make sure that all of our systems are aligned. And that will -- that will need continue as we continue to work through all of these steps to move forward.

BARR: That's great. Well, I appreciate that effort to give industry that clarity. With that, I yield back.

MCCAUL: Gentleman yields back. Chair recognizes was manning

MANNING: Thank you, Mister Chairman. Doctor Karlin, as you know, our ally, Japan faces serious challenges from China. I was recently on a congressional trip to Japan. We spent a great deal of time focusing on the dramatic increase of Japan's military budget, and the increasing importance of our relationship. And as you know, the next AUKUS step, the expansion into hypersonic weapons falls squarely into Japan's priorities. So can you talk about whether there are ways Japan can contribute to different aspects of AUKUS and whether they could be brought into deeper cooperation with this group in the future?

KARLIN: Thank you. First, I would just like to applaud the extraordinary investments that we see by Japan exactly. As you know, ma'am, they really are meaningful. We are also from the Department of Defense perspective doing all we can to strengthen that relationship. Most recently announcing that we're going to send our most capable Marine Regiment out to Japan. Regarding an any sort of expansion, right now, we're really focused on ensuring that AUKUS can succeed as designed. And then as we've generated momentum on it, et cetera, we are absolutely interested in looking at exploring opportunities to integrate partners into kind of certain activities or so as we go forward.

MANNING: Are there security or other concerns that Japan would -- technology concerns that Japan would have to overcome to create a closer relationship with AUKUS?

KARLIN: I think we would want to ensure just as we were saying about the trilateral need to make sure we've got elevated standards. I think with any country we'll work with in such an intimate way on sensitive technology cooperation. We all -- we have the same strategic goal, let's make sure that operationally we can make that a reality.

MANNING: OK. And under Pillar II, the agreement seeks to expand technology sharing cyber and quantum capabilities as you're just describing an artificial intelligence. How important is it that we have the upper hand in these critical areas? And can you talk about what safeguards need to be put in place to prevent China from seeking to steal our technology and undermine our capabilities?

KARLIN: Thank you, it is incredibly important. As we see the security environment shifting, and I would highlight as we see the military technological environment shifting as well, for us to be able to collaborate closely with our allies. And to be clear, all boats are rising here. We -- it's a two-way street. We are also getting things from them. And given these changes a failure to collaborate and integrate and innovate will actually only hurt us, I think, in this competition.

We have got to do that, though, with these meaningful safeguards. And I do believe as it relates to Australia and the UK, specifically, that we're in a similar headspace on the need to ensure that security.

MANNING: Thank you. Assistant, Secretary Lewis, can you talk about some of the challenges the defense production industry is facing overall? The impact it's having in terms of our assistance to Taiwan and other countries? And what can and needs to be done to help strengthen our supply chain?

LEWIS: Thank you for that question. And I'll certainly talk about what we're seeing. I think we are really at a moment of what I call tectonic change when it comes to security assistance and cooperation around the world. Because we are seeing not only because of the war in Ukraine, but because countries are concerned about the PRC threat. And we're seeing the eastern flank of Europe really change its security posture. Dramatic increases in both security needs and defense spending.

And that is happening at the same time that our defense and industrial base is emerging from COVID, just as many other industries in the United States have done. And we are working very closely with the defense industrial base to increase their production, to see where we can make investments. And then, as Doctor Karlin has outlined, the defense -- the Deputy Secretary of Defense has honed in on a specific set of capabilities, where we need to really move more quickly.

KARLIN: If I could just add.


KARLIN: Just really thanking Congress for the CHIPS Act which has some profound relevance for all of this because it'll help us bolster Central American industry to maintain our military and technical logical edge without which, frankly, much of this just won't be feasible.

MANNING: And if they were cause to what has been achieved through our CHIPS Act because of the deficit negotiations, would that have a negative impact?

KARLIN: I think there would absolutely be national security implications if we are unable to make the meaningful change that we need as a country to shore up our defense industrial base, which really is a core strategic asset.

MANNING: I want to thank you both for your service to our country. And with that, I yield back.

MCCAUL: Gentlelady yields back. Chair recognizes Mister Burchett.

BURCHETT: Thank you, Mister Chairman. As the -- someone whose questions get asked kind of late in the -- in the day and as the 435th most powerful member of Congress, I expect when I asked my questions, you all are at a shock. And maybe you can proclaim how profound my questions were and how intellectually they were -- they were presented to you because that's why when it -- when we record this and show it to my folks back home, that's what I want them to think anyway. So thank you all so much.

Secretary Karlin. Ma'am, do you believe that stability in the Middle East is any way possible shape, form or fashion honestly?

KARLIN: Sir, stability in the Middle East resource writ large. I do believe we can have some stability and security in the Middle East. Over the years it has gone up and down right now if we just look at Yemen as an example. We've had the longest period of quiet since the Civil War broke out. And that is indeed a positive.

BURCHETT: OK. But you said this morning, any efforts to increase security and stability in the region should be welcomed by all. And of course, China has worked with Iran to build relationships with the Saudis. You believe that that should be welcomed?

KARLIN: I think efforts to bring the countries together in a more peaceful way are a positive. That said, I think it is quite clear that many of our Gulf countries have a threat perception of Iran irresponsible and aggressive behavior that is quite in line with ours as well.

BURCHETT: OK. China seems to be attempting to become a diplomatic actor in the region. Do you think that's a good thing?

KARLIN: I think to the extent, the People's Republic of China is trying to play a more positive role in the region, that is a good thing. I do want to emphasize that there is absolutely no comparison to the level scope scale of U.S. involvement in the Middle East, decades and decades long than what we see the People's Republic of China. I would also just note for our partners in the Middle East, of course, that as they increasingly cooperate with the People's Republic of China, we will of course, look at the technological implications of that cooperation. The communications of that cooperation as well, to ensure that our robust relationship cannot -- can result in this security that we need to.

BURCHETT: Yes, ma'am. Not feel like any effort of the Chinese towards anything is looking out for China. And with them, their involvement in the Middle East I think that is -- to me, that's a dangerous situation. I think it shows -- especially any alignment with Iran who's -- who have stated that they don't believe Israel should exist to me is a -- is an affront. To me and a lot of people that I represent. Do you think the Chinese involvement, the Middle East is a threat to the Abraham Accords?

KARLIN: Do you want to get that? Sorry. I don't know that I would see it as a threat that Abraham Accords per se. I think on the face of it, it is clear that the People's Republic of China has a relationship with Iran. And it is also clear that like us, the Gulf countries are worried, understandably about Iran's irresponsible and aggressive behavior. So, I think that the -- those who participate in the Abraham Accords would want to be aware of how various countries understand the threats in the region. Who is fomenting threats in the region and how best to tackle them.

BURCHETT: OK. The Israeli defense chief of staff says Iran has -- right now is more enriched uranium than ever before and is increasingly aggressive. Do you think your plan of deterrence is working?

KARLIN: We take effort to deter Iran very seriously across the US government. I would note most recently in late March when there was an attack by Iranian-sponsored militias. The US military responded, I think, within 12 hours or so and we believe the Iranians understood what that response was as well.

BURCHETT: Again, I would -- I'd hoped the State Department and the White House would pay special attention to the situation with Iran. I just -- with their statements of hostility towards Iran historically and currently, I think as -- it ought to be a notable awareness for us and the Chinese are hooking up with them, I would be really concerned. So, anyway, thank you, ma'am and I yield the remainder of my three seconds. Mister Chairman.

MCCAUL: We thank the gentleman for his eloquence and for yielding back. The Chair now recognizes Mister Moskowitz.

MOSKOWITZ: Thank you, Mister Chairman. You know, actually, kind of continuing the same line of thought from the previous speaker, I just got back from Israel, Jordan, Egypt, and Italy with the speaker and we met with the King of Jordan, we met with the president of Egypt, the foreign minister of Egypt, the CIA Director of Egypt, the Prime Minister of Israel, the President of Israel, the Speaker of the House, the prime minister of Italy, the president of Italy, the Speaker of the House of Italy, and there was a consistent theme among these four countries and that was China and, also, the consistent theme was is that they were very honest.

They want to do business with the United States. They want to buy our equipment. They think our stuff is superior but if we can't sell it to them they're going to get it somewhere else and that's new, I think, for the United States. That similar equipment can be purchased from Russia and China. Since the fall of Soviet Union maybe we've not had that in the space. Also, we heard from them that if we -- if we start to pull out of the region, whether it's in Africa or in the Middle East because we're focused elsewhere. China is coming in and China is not coming in with grants, they're coming in with loans. Loans that at some point in time China is hoping maybe won't get paid, so that they can take further control of those countries' economics.

Also, when China comes in, they don't lift these countries up and give -- the projects their funding don't come to the workers of those countries because they bring in Chinese labor to build all of these things and so I have serious concerns over -- that I think we're a general fighting the last war and that we have not changed with the times. Secretary Karlin, did I hear you say or did someone bring up that it takes 18 months to do a contract?

KARLIN: Someone did raise that figure. I can't corroborate that figure. I don't know if Secretary Lewis can either.

LEWIS: I can't either on that. I'd be happy -- can I address the issues that you raised previously?

MOSKOWITZ: Please, yeah, sure, absolutely.

LEWIS: Because we've actually spent a lot of time thinking about this. The United States currently is about 41 percent of the world market on arm sales. That's you take a 10 year average and that's -- and that's -- we've actually increased from 38 percent to 41 percent. Russia has fallen from the second largest producer in the world to the third largest producer and China is down there in the single -- in the single digits so -- and our sales combined are -- is larger than the next sort of five countries aligned below us.

MOSKOWITZ: Listen, I understand where the data is. I'm telling you where it's going, okay, if we don't fix some of these problems. There, you know, when these folks are looking us in the eye and telling us we purchased these things, we haven't received them, we'd like them from you, we still think you're the best partner but at some point in time we're going to buy them elsewhere or in some instances in Egypt they already have, that's putting us on notice that something isn't working.

Another -- one of my colleagues asked you about excess capacity. Let me tell you what he's asking, okay?

LEWIS: Hm-hmm.

MOSKOWITZ: Because this is no different than with COVID supply chain, right? We didn't -- we had to buy stuff from all over -- all over the world. We were competing with everybody but Antarctica for materials during COVID, okay, and most of the stuff was procured from China and other countries. It wasn't made here and we incentive -- we had all this money and we incentivize all these companies to bring these new lines, right, to make masks in country. It took months and months and months and months to do that or for them to change their lines to ventilators.

It took months and months to do that and so what he's asking is that, are there excess lines that are already built, right? Are we incentivizing producers to break -- to have excess lines? In the event we get into, I don't know, a war or a proxy war so that when we use the production act we're not waiting. We saw when we use the production act, it wasn't like this. It's still months to bring these lines online. So that's what the question was. Do we have excess capacity? Are we incentivizing excess capacity that we can bring online because it's already built.

KARLIN: I think we are not at that stage yet, frankly, because we are trying to increase that capacity. I hope that we will be at that stage going forward but right now what we're trying to do especially in key areas is to signal to industry and Congress has actually, obviously, been really, really important in this to be able to signal where we want to priorities -- where we want to prioritize and how we can increase the security and the resilience of the -- of the defense industrial --

MOSKOWITZ: My last question because I'm out of time. Do we know and if you can't share it that's fine, do we know how many days we -- if we've gotten to a hot war, do we know how many days of supply we have before we would be in an existential situation?

KARLIN: That would depend specifically on what platform you're talking about but we would be delighted to have that conversation in another forum.

MOSKOWITZ: Thank you, Mister Chairman. I yield back. Gentleman yields. Chair recognizes Miss Young Kim.

KIM: Thank you, Chairman McCaul, and I want to thank all of our witnesses for joining us today. As a chairwoman of the Indo Pacific subcommittee, one of my priorities is ensuring that our foreign military sales programs are supporting the most vulnerable allies and partners in the region. Last Congress, Chairman McCaul and I introduced The Arms Exports Delivery Solutions Act, which requires an annual report from DOD and DLs that details the efforts being taken to address the multibillion dollar backlog of arms sales to Taiwan and our other allies in the Indo Pacific and two weeks ago, we received the 5508 report due to us from that legislation regarding foreign military sales and in that report the State Department highlights challenges such as the supply chain issues and long lead deliveries as causes for delays to that process.

Question to you, Miss Lewis, one of the report requirements is for a description of interagency efforts to support Taiwan's attainment of operational capabilities including training, where's that part of the report?

LEWIS: I think if -- we're certainly happy to discuss that with you further and if there's additional information you need in the report I guess what was --

KIM: It's not in the report that's why I'm asking but the report also require a description of the action that department is planning to take or has taken to prioritize Taiwan's FMS cases so when can we expect that portion?

LEWIS: If there is anything that's not included we'll be happy -- I'll be happy to take that back and make sure that you get that. I'm also happy to answer any questions now or in another setting if that's --

KIM: Well, would you agree, then, the couple questions I asked it's not there so would you agree this report is incomplete and when should we expect to get the rest of the report that includes the information that we were asking through that legislation?

LEWIS: I'm happy to take that back and get back to you as soon as we can.

KIM: OK. Well, one of the requirements in Section 5508-B is for the State Department and DOD to recommend to Congress authorities we can use an actions we can take to support expedited arms shipments to Indo Pacific allies and the report does not have these recommendations so what are they?

LEWIS: Well, I think we've covered some of those here today because the issues that the region and that Taiwan are facing in terms of the production timeline, challenges that we are having, are not specific to the region. These are across the board challenges for our defense industrial base and so I think, again, the work that Kat Hicks, Secretary -- Deputy Secretary Hicks has done at DOD to prioritize specific capabilities we have done things, for example, we had lines that were cold, meaning, they had -- they had stopped producing items, gone back figured out why is that line cold, sometimes that comes down to a specific widget that a sub producer may have gone out of business. Gone back to getting those --

KIM: Thank you, I look forward to getting that specific recommendations in the report when you complete that. Section 5508 also require the State Department and DOD to submit the report by March 31 of this year so why were your agencies unable to meet that deadline and why is the report incomplete?

LEWIS: My understanding is we submitted the report on April 17. I think as you know we have a large number of reports that are --

KIM: April 17 is still not March 31. So I hope that we can expect the next report which is due March 31 of next year 2024 to be on time?

LEWIS: Of course.

KIM: Next question, AUKUS is intended to strengthen the ability of the US, Australia and the UK to support each respective governments security and defense interests and much of the conversation around this security pact has been about nuclear powered submarines. So what are the areas of cooperation other than the transfer of nuclear powered submarines to Australia that AUKUS can serve as a platform for?

KARLIN: Thank you. There are indeed two pillars, if you will, of AUKUS. One is, as you note, the United States providing Australia with a conventionally armed nuclear powered submarine capability at the earliest possible date while setting the highest Non-Proliferation standard, that's kind of known as pillar one. Pillar two is that AUKUS will develop and provide joint advanced military capabilities to promote security and stability. As of now, a handful of those areas include hypersonics, artificial intelligence, for example, what we really want to do is be able to lift up all of our defense industrial bases and to cooperate together so we can enhance our competitive military edge.

KIM: Thank you. Very quickly, last question, I know there is a lot of numbers being thrown around about the exact dollar amount for Taiwan arms that's on backlog right now. So is it 19 billion, 20 billion, 21 billion, do you know?

LEWIS: Ma'am, I think that it depends what you're counting. I think our view is those have come out of the US government system and our items that are being -- that are in production and so again, we have -- we would have to go industry by industry to analyze that further.

KIM: Thank you. My time's up, I yield back.

MCCAUL: Gentlelady, yields back. Chair recognizes Miss Kamlager-Dove.

KAMLAGER-DOVE: Thank you, Mister Chair. First, completely unrelated, I just want to say that Tina Turner died today and she was the master of soft diplomacy and also a former constituent of mine so I'm a little sad but I am glad that this committee is holding a hearing on the important topic of US arms exports policy and reclaiming the underutilized oversight role that Congress plays in our security cooperation for trusted partners, with closely aligned goals such as Ukraine and Taiwan.

US security assistance can be essential in helping our allies deter aggression and defend against existential threats but as the revised CAT policy acknowledges when our defense material is transferred to actors who do not employ it responsibly, US weaponry can and has been used to violate human rights and international humanitarian law, harm civilians and undermine long term US interests in stability and good governance abroad. There was an earlier question about end-use monitoring and I have a follow up question to that. What tools and resources would the US government need to conduct robust monitoring of how arms delivered to security cooperation partners are actually used?

LEWIS: Well, we do and use monitoring, and I'll talk about the State Department side and the Defense Department does something similar. So when weapons are transferred, we have -- on our side, it's on the commercial side, we have the responsibility to account for those weapons. There are site visits, there are simple mechanisms such as making sure literally you have a log of those weapons, you know where they are and a whole host of other ways to ensure that we know that they have been delivered and accounted for properly.

I know the Defense Department has similar mechanisms in place for their end-use monitoring but I think one of the things that I actually think is really important is as we look at the human rights question, I think it's not just an issue of end-use monitoring, I think the Leahy vetting piece is actually equally as important and so I think is, you know, what the -- we have all of our partners have to sign agreements on the use of US origin defense equipment and comply with the arm -- the laws of armed conflict and international humanitarian law and respect for human rights and then when it comes to Leahy vetting we have to get down even to the unit level to ensure that we are -- when that's -- just to clarify when it is provided using US government funding that we are not providing those two units that have committed gross violations of human rights.

So I think for me, and we tend to talk about end use monitoring but I actually think for me it's the combination of that with the Leahy vetting that is mission critical in terms of meeting the goals that you're laying out.

KAMLAGER-DOVE: Right, because there's a difference between how they're being accounted for and then what they're actually being used for?

LEWIS: And who they're going to.



KAMLAGER-DOVE: Would you like to add to this Miss Karlin?

KARLIN: Thank you. The only point I would add to what a certain Lewis was saying is that when we are training partner militaries we spend a ton of time on things like rule of law, and human rights and we do that because it is our values. We also do that because there's a lot of evidence that it will make them more effective and so we want to want to ensure that they take that approach. In line --

KAMLAGER-DOVE: That sounds like the honor system.

KARLIN: I'm not sure if I understand, as in --

KAMLAGER-DOVE: You said we go was through these trainings and we're talking about the use of international law, human rights violations, et cetera, and so letting folks know what they should not be using them for.

KARLIN: Absolutely and also helping them understand that that's ultimately not effective so they shouldn't do it because it is wrong and they shouldn't do it because it won't ultimately achieve their strategic games.

KAMLAGER-DOVE: Right, also recognizing that people still do bad things with our weapons, and so there has to be consequential maneuvers as well.

KARLIN: Absolutely, may want it --

LEWIS: Yeah, all I would say is I think you have to look at these as combined. I think it is very important that we do provide training and that we include in any training that we provide the human rights law, international humanitarian law, et cetera, because people need to know the rules of the game and then you're right, then in addition, we have to do the other pieces.

KAMLAGER-DOVE: So my last question for Miss Karlin is under the Biden's administration's new guidance, do you anticipate any changes to the weaponry amounts or recipients of arms transfers that we've seen in the past?

KARLIN: I think you're referencing the updated CAT policy.

KAMLAGER-DOVE: Hm-hmm, correct.

KARLIN: And we have absolutely use that to inform our own FMS, Tiger team, look, as I know, my State Department colleagues have as well and we will ensure that that threshold that is highlighted, the notable change in the threshold, you know, applying it more likely than not threshold, we'll inform how we look at these transfers.

KAMLAGER-DOVE: Great. Thank you, Mister Chair, I yield back.

KIM: Thank you. I now recognize Mister Huizenga for five minutes.

HUIZENGA: Well, thank you, Madam Chair. Appreciate this. I don't want to dwell too long on this. So let's move quickly before I get to ITAR, and foreign military sales, but going off of what my colleague Mister Mast had asked early -- earlier, is there evidence that Ukraine has struck Russia directly?

LEWIS: I thought he asked a slightly different question, I think --

HUIZENGA: OK, well, then I'll clarify that question.

LEWIS: Yeah.

HUIZENGA: Is there evidence that Ukraine has struck Russia?

LEWIS: I have seen news reports indicating that, beyond that I don't have any specific evidence myself.

HUIZENGA: OK. Do we know whether any US arms or US supplied arms were used in that?

LEWIS: We have seen those same news reports and I believe that we are looking into that, as I think you would also know and as I said before we provide our weapons for the Ukrainians to use in their fight in Ukraine and I just want to say again that what we all know that, obviously, that the war would end today if Russia stopped its aggression.

HUIZENGA: Do you have any concern about F-16s that's just been announced of a potential transfer to Ukraine that that could be used or misused?

LEWIS: I do not have any concerns about that. I think that as --

HUIZENGA: Because you believe the Ukrainians would use them as for the purpose intended?

LEWIS: I believe so but obviously that hasn't happened yet but that would be my understanding.

HUIZENGA: OK. Would it not be better to have say Poland send the MiG-29s?

LEWIS: I believe Poland has already sent them MiG-29s which they are -- they are already trained on in using and so the announcement that was made would be providing them with this additional training and capability.

HUIZENGA: All right. All right, I'm going to -- I'm going to move on with -- I'll leave with this statement, many of us had encouraged this administration to get whether it was TOW missiles, other arms in earlier prior to the conflict so that it could not be used as a view towards escalation that the US is directly involved. I think that would have been a much better situation.

I'm going to move on to ITAR and the foreign military sales. I've been at this for a fair amount of time. I was a district director for my predecessor. I was a state legislator. I have been in this position, both in an older district and a new district. I've talked to suppliers and both in the district and in Michigan, virtually all of them over the years have relayed difficulties that they face in compliance with some of the various frameworks, ITAR being one of those, and regardless, it seems that the same issues arise.

Current ITAR framework is too burdensome and clients costs are too significant, for smaller, oftentimes mom and pop or small business shops with innovative technologies who instead choose to enter the commercial market rather than using military. In fact, I had a small supplier tell me that they're facing pressure from their tier one supplier to use non ITAR regulated products because they do not want to deal with the headache of ITAR in their final supply chain. So Assistant Secretary Lewis, how is state working to stop this process from getting in the way of innovative companies looking to bring their products to market within the defense industrial base?

LEWIS: Well, I think, as you know, we have looked at these issues across the board and when it comes to ITAR in terms of AUKUS I think we -- I laid out a plan where we are going to be able to create a smooth moving system where we already know the people who are going to receive it on the end.

HUIZENGA: But this is only going to be within AUKUS?

LEWIS: I'm sorry?

HUIZENGA: Only within AUKUS.

LEWIS: We are doing that within AUKUS right now. We've also created in addition to AUKUS open general licenses which allow some technology to also move freely and I'm happy to continue to work with you. I'm a former staffer, so I appreciate the importance of talking to the people back in your district if there are specific issues. I know that in addition, we have gone through a series of changes in our regulations, and sometimes as simple as updating the website so that people can understand what's there to try to help people with these compliance issues.

HUIZENGA: All right. OK, my last few seconds here. Artificial Intelligence, we can't be --continue to be flat footed, what assurance do we have that your department -- from your department the United States is working to come back or deter the use of AI technologies against ourselves or our allies from places like China and is there an attempt for our allies and our partnership members to be sharing that information?

LEWIS: I think we're working across the interagency on all of those issues.

HUIZENGA: Yield back.

KIM: All right, I now recognize Mister Costa for five minutes. Oh, he's not here. Mister Crow, you are now recognized for five minutes.

CROW: Thank you, and thank you to both of you for coming in today and for your testimony, Assistant Secretary Lewis, I'd like to start with you, your bureau has encountered a significant explosion of workload in the last year in particular but we have the largest land war in Europe since World War Two, we have a modernizing NATO with significant new investments. We have AUKUS and other deals going on right now, can you just touch on for a moment, the impact of that workload on your bureau because at the same time, as there's a lot of people who here criticizing the speed at which you do things, a lot of these folks also are cutting your resources and your budget as well and making it harder for you to actually do the things that they're asking you to do. So I'd love to just comment on what your folks are doing day in and day out and the impact of that workload on them?

LEWIS: Well, I very much appreciate the question. I have to say I came to the bureau about two years ago, and it is an extraordinary team of professionals. We have over 25 percent our veterans in my bureau and then a significant number who we also have active duty military serving and the reason they serve in the Bureau of Political-Military affairs is because they believe in the mission and they believe that -- and they -- our workloads in some cases have increased over the past 15 months 15,000 percent and those same team --

CROW: 15,000?

LEWIS: 15,000 percent for some of the pieces of my bureau and when I talk to my team and I say, hey, you're here working late, you might be here over a weekend to get something to Ukraine or to get something to Taiwan or to one of our partners and allies they tell me, that's what we're here to do, there's been nothing else we'd rather do. In spite of that, we still move 95 percent of cases on the foreign military side within 24 to 48 hours, it is extraordinary the work that is being done. I would note that we had a $3 billion increase in foreign military financing going to the eastern flank. My team has taken that on.

We have concurrence and over $9 billion and growing from the Defense Department and the team also negotiates all of our security cooperation agreements. In a normal year, my security cooperation team negotiates four of those, this year they're negotiating nine. The reason they're negotiating nine of these agreements is because countries around the world want to deepen and strengthen their security cooperation relationship with us and we are in charge of making sure that the -- that we have the underlying agreements to do that. So it has been extraordinary and I'm both honored and humbled to be at the head of this bureau at this mission critical time.

CROW: Well, that is an extraordinary effort and I appreciate you paint me that picture and I thank you and your team for doing that critical work. So, with additional funding, say hypothetically if Congress were to provide additional funding to your bureau, what would you use that funding for and what would the impact of it be?

LEWIS: I have to be careful to not get ahead of any specific asks, but what I would say is I am working very hard to increase the staff that we have to meet the mission. I've always believed that one of the jobs of a good manager is to make sure your people match your mission as your mission shifts and change and we are literally in the process of doing that and so I think we would continue that work.

CROW: Thank you very much. Doctor Karlin to you next, are you aware of the administration reconsidering policy with regard to cluster munitions and providing cluster munitions to Ukraine?

KARLIN: Thank you. Right now, we're really focused on making sure that Ukraine gets what it needs that can be effective on the battlefield, immediately, and we have thanks to Congress's support, I think seeing the extraordinary impact of that over the last 15 or so months, obviously, cluster munitions would have a serious humanitarian impact, and that has informed our thinking to date.

CROW: OK. Lastly, could you Doctor Karlin comment on the impact of technology and telecommunications investments by the PRC in places around the world and the impact that that has on our ability to develop enhanced intelligence relationships and export control relationships with our allies and partners?

KARLIN: We absolutely look vigilantly at how and in what ways the PRC makes such investments and I have been heartened to see that many of our partners around the world have increasingly recognized that there will be pros and cons, if you will, of engaging in such activity and I think we have seen a number of examples of partners who've recognized that that that's actually not smart.

CROW: Are we doing enough to communicate the risks, long term and short term if they were to accept those types of investments?

KARLIN: I can tell you, we're doing a lot from the Department of Defense to these, you know, where there are certain partners that we are -- that we understand that they may be pursuing such relationships. We articulate to them in a frank conversation the implications of doing so and, frankly, the implications for our relationship.

CROW: Thank you. I yield back.

KIM: I now recognize Mrs. Radewagen for five minutes.

RADEWAGEN: Thank you, Madam Chair, t?lofa lava, good afternoon. I want to thank the both of you for appearing and testifying today. We're nearly at the two year mark since the original announcement for AUKUS and since then, nefarious actors have spread misinformation about what AUKUS is, quite simply, I want to address the Treaty of Rarotonga, which formalized a nuclear weapons free zone in the South Pacific. I was there when they signed it.

Now, we Pacific Islanders have a long memory and the nuclear weapons legacy of the early Cold War still impacts us today. We all know that AUKUS has nothing to do with nuclear weapons. Can you describe how the Department of Defense and the State Department are addressing misinformation regarding AUKUS and are you meeting and working with Pacific island nations to address their potential concerns regarding AUKUS?

KARLIN: We are absolutely looking at this important point that you're raising, ma'am, and I think you see the fruits of those conversations in the reactions to the announcement that the three heads of state made about two months or so ago on the submarines piece, which is that our colleagues around the Indo Pacific largely understood what we were doing and understood what we weren't doing and so while we recognize that there may be some parties who want to foment misinformation about what we're doing, I think having those really kind of active channels of dialogue with these partners has been incredibly important and we are finding that there is, you know, pretty, pretty clear understanding among those partners of why we are engaged and what that looks like.


LEWIS: And all I -- all I would add is, first of all, I think your voice is very important in this and I think we're being very intentional when we talk about conventionally armed but nuclear powered submarine capability and being very clear about what that means. I also know that we're working hard to strengthen our relationships across the Indo Pacific and one of these defense cooperation agreements that we just signed was signed was with the PNG, with PNG and I think that indicates that, in addition to this conversation, we need to continue to work to deepen and strengthen our security cooperation relationships.

RADEWAGEN: Thank you for your answers, now on to the meat of the hearing, do you feel there's a sufficient mechanism to solve both strategic level and policy level concerns between the three partners and can you please explain how that mechanism works?

LEWIS: Yes. I think the short answer is yes. I think these are some of our closest partners -- I'm sorry, closest allies around the world. We already have a mechanism in place that allows us to meet regularly and to sit and talk through both the strategic questions but sometimes also really, these nitty-gritty technical issues which when it comes for -- to defense trade actually are mission critical and we are meeting regularly with them now and that will continue going forward.

KARLIN: I might just add, ma'am, this is a historic opportunity that will require historic change. We are clear eyed about that Congress's bipartisan support of AUKUS and realizing the intention of AUKUS is also really critical to that and I believe our British and Australian colleagues get that too.

RADEWAGEN: Thank you, Madam Chair. I yield back the balance of my time.

KIM: Thank you. I now recognize Mister Schneider for five minutes -- oh, Mister Costa is here, sorry.

COSTA: Thank you, Madam Chairperson. Doctor Karlin, just spent a lot of discussion over the pace of AUKUS and implementation timelines and I think on a bipartisan basis, no one's satisfied with the timelines we're looking at right now. I hope you're not satisfied with them. We had a committee hearing briefing with defense contractors last month and got a number of perspectives. There was a briefing or comment from one of the witnesses from ADRIAN, a smaller defense manufacturer, said that we ought to look at reimagining our procurement practices on capability development.

They used as an example NASA instead of trying to do the ground up and everything, they're now -- NASA is looking at really setting details for specifications on how the goals should be designed and implemented and then let the private sector try to achieve it. Once those goals are established in terms of what the end results the Department of Defense is seeking. I want to know whether or not are you folks are looking at changing your approach and looking at specific purpose or goals, in other words, don't tell the industry what to build but tell them the mission and let the innovation occur? So what's your reaction to this idea and how could it be applied for departments to move quicker? Whether we're talking about AUKUS in our current supply chain efforts with the war in Ukraine?

KARLIN: I think it's a really reasonable and important approach, especially as we recognize how the technological and security environment is changing as it relates to AUKUS specifically, this is why we really want to work closely with Congress on a bold and innovative approach with legislative change that we can advance AUKUS projects and the cornerstone of that would be exempted defense trade for AUKUS projects and bilateral defense trade to include classified information sharing.

So we want to work with you closely on developing that because as I said earlier, this really is a historic opportunity. So we are going to need to make historic change. I think the moment does call for that.

COSTA: No, and I think there's an opportunity here and frankly, and it reminds me that old adage, you know, one of the definitions of insanity is expecting, you know, doing things the way you've always done them and expect different results. It's not going to happen and so we need to reimagine what the challenges we faced with China in our efforts dealing with AUKUS and also, I think that applies in our current situation. I mean, I hear department defense concerns about our own supply chains and our own needs and certainly NATO partners are feeling similarly. So we ought to look at how we can do this better than we have in the past.

KARLIN: I think that's exactly right. I mean, the goal of AUKUS is we're really trying to increase our capability, our interoperability and to deliver deterrence in every phase and we need that to succeed and that requires the cooperation of our entire US government. In addition, of course, to our British and Australian --

COSTA: Yeah, let me just make one comment and this relates to the big picture that we're all dealing with here as it relates to the -- lifting the deficit and getting our budget done by October 1st and I'll just underline what Representative Keating said, I've been here 19 years and I've heard Secretary of States and Secretary of Defenses that are Republicans and that are Democrats and they all concur whether when we talk about our budget process, that the most difficult situation that we put the Department of Defense in and State is when we engage in these continuing resolutions for a month, for two months, and contracts on your part are not resolved.

They're left in limbo. Defense contractors don't know exactly what the lay of the land is and what to expect and we make ourselves most vulnerable when we don't do our jobs, and we don't provide a budget on time. That's an editorial comment and it hasn't gotten much better here in the last 19 years. We need to work on that. That's Congress's responsibility. Thank you. I yield back the balance of my time.

KIM: Thank you. I now recognize Mister Waltz for his five minutes.

WALTZ: Thank you, Madam Chair. Miss Karlin, you've said a couple of times and I certainly agree that this is historic opportunity that needs historic change, as it pertains to AUKUS. I want to speak for a few minutes as it pertains to Taiwan, would you agree that that's a historic threat? That's certainly the case in multiple national defense strategies, I think you would agree. I think that also needs historic change in terms of our processes.

We've talked about an AUKUS bubble, I think we need to talk about a Taiwan bubble and how we can accelerate, fast track, provide waivers and work with the Congress to really peel back the layers on these weapons systems and get them there faster as a deterrent measure. Miss Lewis, you said we need -- you've said a couple of times that -- you agree, we need to look at all options but I don't think that's good enough. We need to understand what's actually being done and then what barriers we need to remove to move faster.

So in that vein, Miss Karlin on the DOD tiger team, you mentioned 12 recommendations. Can you give some examples of what those recommendations were and can you provide those 12 recommendations to the committee?

KARLIN: I think you -- congressman, you may be referring to the State Department tiger team, they outlined 10 recommendations.


KARLIN: So I might defer to Secretary Lewis about --

WALTZ: OK but didn't Kat -- Defense Secretary Hicks also have a DOD tiger team?

KARLIN: Yeah, so there has also been an FMS tiger team that the Department of Defense has run as well.

WALTZ: And with their recommendations?

KARLIN: There have been a couple of key recommendations. The entire --

WALTZ: What are they?

KARLIN: So a couple of key initiatives that I would highlight. So one is the need for us to have a data driven approach so that we can accelerate the development of a common operating picture on security cooperation, effectively, we want to be able to figure out FMS cases, where are they from initiation to delivery, how do we have that whole lifecycle?

WALTZ: So this is an FMS tiger team, not a Taiwan?

KARLIN: So there are two separate efforts.


KARLIN: That's the FMS tiger team, the other effort that you may be referring to is the effort that Deputy Secretary Hicks has been highlight.

WALTZ: Right.

KARLIN: Yes, exactly, so that that one is on Taiwan and that one is looking at how we can ensure that we are finding ways to accelerate and bolster Taiwan self-defense capabilities.

WALTZ: And Miss Karlin, what are we doing, right? That -- I understand we went to the tiger team last year, there's recommendations, we identified needs, like, can you -- can you provide the committee what you're actually putting in place, timelines, troops to task so to speak and what then the effect will be on the systems to accelerate them? Is that possible?

LEWIS: Yup, may I -- may I jump in here?

WALTZ: Sure.

LEWIS: Because some of these are actually State Department authorities. So let me just walk you through a few of them. The first one is that the -- we are looking at using a new authority for Taiwan that Congress provided which is a billion dollars.

WALTZ: I know the PDA got it.

LEWIS: Right.

WALTZ: 500 million announced, Hm-hmm.

LEWIS: Well, that -- just to -- the reason I'm focusing on that is that -- it provides us the ability to immediately deliver, which I think is the question that you were asking so that is -- that is thing one. The second thing and I can't go into all of the details here but what I can tell you is we have looked at a specific set of capabilities and specific systems that Taiwan needs and we have been able to prioritize those systems both in terms of if we have let's say a hundred of them, making sure a certain percentage go to Taiwan and again I can't get into all the details here for obvious reasons. We have been able to also make sure that certain systems are being produced more quickly, so they get to Taiwan more quickly.

WALTZ: But we still have a case where we have MQ-9, MQ-9 ISR, right? That's 2027 or later, the Chairman has his list of 2022, for example, the harpoons took two years to get on contract award, the F-16s were just delayed, I mean we have a series of major end items that are due somewhere between 2027 and 2029 and yet she has told his military to be ready by '27 and arguably some analysts think he will accelerate before Taiwan has these capabilities and from a deterrent standpoint, that's too late and if we look at the model in Ukraine, and providing all of these systems after the country is devastated, at huge expense to global stability and the taxpayer, that is a -- that is a losing model.

So I look forward to working with you and I think we need a tiger team here in the Congress to peel back these layers and understand where we can accelerate authorities, whether it's enhancing the PDA or accelerating those authorities to move faster. Thank you.

KIM: Thank you.

WALTZ: I yield my time. Thank you, Madam Chair.

KIM: Thank you. I now recognize Mister Schneider for five minutes.

SCHNEIDER: Thank you, Madam Chair, and I want to thank the witnesses for your time here today and as was noted and you said very well, this is a historic opportunity that requires historic change in long term strategic thinking and also, as mentioned, I look forward to working together with the administration and this committee to try to clear away obstacles and work to develop a smart, secure path forward for what is a vitally important region for our nation and for the world.

When it comes to collaborating with close partners in tough neighborhoods, there's a lot to be learned, I think, from the history or history of collaborating with another key ally, in this case, specifically Israel, our assistance has helped the Israel Defense Forces become one of the most effective militaries in the world. Less well known, however, is that the US assistance has helped develop Israel's formidable defense industrial base. So when it comes to the Indo Pacific, how would you think about goals of supplying our allies with capabilities versus helping them build up their own indigenous capabilities or capacities and capabilities, specifically, in the case of Taiwan?

LEWIS: Well, this is a very interesting question and we actually have paid close attention to the development of Israel's defense industrial base and they really have developed some very significant capabilities. I think, as we look across the Indo Pacific and Taiwan, when we talk about developing indigenous capabilities, we need to do that in collaboration with our defense industrial base and we have to make sure that we develop things -- I'm going to get a little technical here, cooperative agreements, co-production agreements, all of these kinds of things.

We're very sensitive to the fact that our industry has to lead the way on the decision making in terms of what makes sense for them to do in coordination with another country but I do think when we have countries that have significant capabilities, that have an educated workforce, that have potentially their own defense industrial base, that it makes sense to look at that potential moving forward.

SCHNEIDER: Assistant Secretary Karlin?

KARLIN: I would completely concur with the Secretary Lewis's point.

SCHNEIDER: OK. And I know, just for the sake of time, I have many more questions but we have only a little bit of time, I'm going to yield back so others can speak.

KIM: Thank you very much. I now recognize Mister Kean for five minutes.

KEAN: Thank you, Mrs. Chairman. Thank you, also to our witnesses for being with us today. From the war in Ukraine to the preparation of defenses in Taiwan and request from our allies for equipment made in America, United States, once again, stands as the arsenal for democracy. I like many of my colleagues, the AUKUS is a once in a generational opportunity to seek to counter the CCPs malign influence in the Indo Pacific and also strengthen our relationships with close regional allies.

The success of this partnership requires that our arms exports are able to meet the security needs of our allies at a time when our friends in Asia and Europe continue to look to the United States for leadership. What is the specific choke points it needs to slowing things down that you think we -- that you've identified that we can cut through more quickly for foreign military sales?

LEWIS: Let me start by talking about what we've identified at the State Department and then talk a little bit about the defense industrial base, and then Doctor Karlin may have more to add. So just to start with, as I said before, 95 percent of our cases move through the foreign military sales process in 24 to 48 hours. So we really took a look at what is -- what sort of -- what are the challenges in the other five percent so we have made a list of recommendations, so the first one is to make sure that we are prioritizing correctly based on our national security goals. That sounds like just talk but that actually could make a significant difference in terms of being able to move forward on key priorities.

Second of all, we're looking at regions. So rather than having to say, okay, we can provide this new capability only to one country, when we start that analysis, look at it from a regional perspective. So we're prepared to move quickly and answer those questions for the entire region. We're also looking at other things like working with this committee here on the congressional notification process to make for -- make sure that as streamlined as possible and happy to talk about more details there.

KEAN: Yeah, that would be great.

LEWIS: There are a whole host of other things but just to give you a sense. KEAN: We're going to talk region for a quick sec on Ukraine.


KEAN: Now that the Pentagon has realized that over estimated value of the ammunition missiles and other equipment sent to Ukraine by around three billion, and has additional drawdown authority, this Biden administration prepared to increase weapon packages is transferred into Ukraine for the apparent critical counter offensive because I am concerned that the administration has been rationing weapons to Ukraine ahead to counter the offensive and served presidential drawdown authority when in reality it didn't have to and it's known that since March.

KARLIN: Thank you for raising this. I have seen no evidence that the department has rationed its support to Ukraine. Indeed, I can't tell you of another time where I've seen the department has mobilized for raising assistance that has had an direct impact on the battlefield so quickly. As you do highlight, sir, during our regular oversight process of the drawdown authority, these inconsistencies and how equipment for Ukraine was valuated were discovered, effectively, what happened in a handful of cases was that replacement costs were used rather than net book value was used.

So the amount of the equipment, the value of it was over overestimated. That has not constrained our support whatsoever and the DOD comptroller has worked to reissue guidance to ensure that that that clarity is there.

KEAN: And then finally, and I'll yield back after this, I was pleased to see the recent announcement regarding the administration's decision to allow Ukrainian pilots to train on F-16s, however, this administration still refuses to provide (INAUDIBLE) which could have had an immediate impact on battlefield as Ukraine prepares it's counter offensive with other members of this committee have brought up that our allies are sending the equipment and training in for long before this president has. I just want to end with that statement. I yield back.

KIM: Thank you. I now recognize Mister Lawler for five minutes.

LAWLER: Thank you Madam Chair. As you both know, US arms exports to Turkey have been highly controversial in the past few years. Most recently, Turkey has requested to upgrade and add to its existing fleet of F-16 fighter jets and last month the Administration approved the software's -- software sale to the country to modernize its fleet. Notably, the administration didn't approve the sale of 40 Additional F-16s Turkey requested. Can you please describe the process for reviewing and potentially approving this request?

LEWIS: I'm happy to address that. Let me just clarify. I think the second sale you mentioned was for upgrades that were mission critical for their ability to fly in essence, this the software that went into the planes.

LAWLER: Hm-hmm.

LEWIS: I'm not --

LAWLER: That's what I said, the software, yup.

LEWIS: Yes, and then I'm not -- I'm unclear as to the third one you mentioned. You were saying we did not approve something specifically?

LAWLER: Didn't approve the sale of 40 Additional F-16s.

LEWIS: I'm not aware that that's -- it's the new one. That -- just to be clear, there -- when -- we have reviewed that and I think at this point when we place things into tiered review, which is the process where we put sales before the committee, we can't discuss anything publicly so I think at this point, I think what would be the most effective to say is that we have certainly reviewed that case and that we are moving forward expeditiously.

LAWLER: OK. Given President Erdogan's relationship with Vladimir Putin, will the upcoming runoff election in Turkey impact this decision making at all?

LEWIS: I think as we look at arm sales decision making, we look at a whole host of criteria. I'm not aware as of right now that -- I know the election is happening in real time that we have sales before as where the outcome of that election would influence our decision making on a particular sale.

LAWLER: And this past February Secretary Blinken visited Turkey, how did the secretary address the situation with President Erdogan?

LEWIS: I wasn't -- I'm not privy to his specific conversation but I know he addressed a whole host of issues while he was there, ranging from obviously issues with NATO, Turkey as a NATO ally, and then a whole host of additional concerns that we have involving the region and I'm sure although again, I was not there for that, that they discussed other issues like Ukraine, and NATO accession.

LAWLER: OK. When I visited Taiwan with the chairman of this committee, President Tsai expressed the need for increased defense training and cooperation and delivery of critical weapons systems. It's absolutely crucial that we provide Taiwan with the aid they so desperately need to stand up to Chinese aggression in the Indo Pacific. Unfortunately, there's been a huge arms backlog and I sent a letter today to Secretary Blinken along with some of my colleagues on that trip that urged the State Department to address the shipment delays as it is not consistent with US law to leave Taiwan without unnecessary arms that they purchased. What exactly is the root cause of this delay and what is the State Department and DOD doing to address it so that we can efficiently and effectively get these weapons systems to them? As we saw in Ukraine, the failure to get these weapons systems to the Ukrainian people, government early, military early was part of the problem here.

LEWIS: Well, sir, and I'm glad you raised this issue. I think, as you pointed out, these are sales that have already moved through the department and through Congress, and what the challenges are now moving forward really is on the production side.

LAWLER: Right. So what is -- what is the State Department and DOD doing to address that?

LEWIS: Well, we have to work with industry on that and so as I -- because industry is the one producing them. So what we are --

LAWLER: Right, so what are we doing?

LEWIS: Well, what we are doing is, one, we are working on them, having them increase production for specific capabilities, so that they can produce more of the items needed. We're also looking where possible to prioritize out of what's being produced for Taiwan. I'm not going to get into the specifics of what we're doing in each capability in this setting but we are working through that with industry but ultimately, industry is the one who has to -- they have to produce these items.

LAWLER: Right, but we're paying them so we need to -- we need to -- we need to expedite this process.

LEWIS: Taiwan is actually paying.

LAWLER: Right, they're purchasing the weapons.

LEWIS: Yes, yes.

LAWLER: But it's -- as a result of Defense Department contracts and State Department contracts, we need to expedite the process.

KIM: The gentleman's time is up. In the interest of time because the votes are being taken I would like to call for Mister Courtney, for five minutes.

COURTNEY: Thank you, Ma'am Chairwoman and again, for the record, I just want to thank Mister McCaul and Mister Meeks for the courtesy to join you from the Armed Services Committee to talk about AUKUS which there's great interest. After the announcement on March 13, at Naval Base Point Loma, March 13th, when the three heads of government, three navies, stacked hands to make an extraordinary commitment, the government of Australia really within days, announced a commitment of $386 billion which was supported by the opposition party to execute AUKUS over the life of the program. I think it's important to note this is a country with 26 million people. That's smaller than the state of Texas and state of California. So obviously they have committed in a big way. In terms of making sure that this is a success.

Doctor Karlin, the Department of Defense sent over three requests for AUKUS implementation which are in this committee. The first is a bill to authorize sale of two Virginia class submarines to Australia, the second to authorize the Australian government to invest $2 billion into the US submarine industrial base. The third is to authorize training to Australian private industry to begin developing its own submarine industrial base. Can you talk for a moment about the need for Congress to reciprocate Australia's extraordinary commitment by moving forward in terms of getting these bills to the President's desk?

KARLIN: Absolutely. First of all, Congressman Courtney, thank you for your tremendous leadership on all things AUKUS. It has been just tremendous, as I noted. So we need to act on these three legislative proposals for pillar one, the submarine piece of AUKUS for several reasons.

So first is it's a signal of our commitment to AUKUS which is critical for generating deterrence across every phase of the optimal pathway. Acting now sends a message to our defense industrial base as well that there will be a persistent flow a business to come which is a topic of course that we've heard a lot about over these last few hours and really ensuring that that submarine industrial base is able to start taking the steps that it needs with Australia's contribution, frankly, Australia is going to be making a significant investment in our submarine industrial base and absent this legislative proposal, we actually don't have a way to take that money in and so we know that our submarine industrial base you know better than just about anyone has issues that long predate and have nothing to do with AUKUS, which is why the administration has tried to make a historic investment in the submarine industrial base.

Australia wants to do so alongside us and we want to be able to absorb all of that and you noted, of course, that they have made robust commitments and really shown that they have a skin in the game and then other legislative proposal that you highlight is we need to start training Australians as soon as possible, frankly, because we want them to be able to build the capacity to safely and responsibly be stewards of conventionally armed nuclear powered submarines.

So that's really why that's the case and then, of course, the ship transfer legislation, we need to just show just how seriously we are taking this. So we have an ally in Australia who has made major commitments in terms of putting its money where its mouth is to demonstrate its seriousness with AUKUS. This is in all of our interest to be clear and we want -- we want to show that we can take their investment, that we can train them to be responsible and that we will also be able to deliver on the submarines, all of which I would just underscore helps our submarine industrial base.

COURTNEY: Great. Thank you and I'm sure again, Mister McCaul and all our colleagues in this committee are going to do everything we can to demonstrate on a bipartisan basis, just what Australia is doing on its own bipartisan basis. There was a fourth proposal which came over last week on the Defense Production Act, which President Biden and Prime Minister Albanese announced on Saturday at the G7, which is basically to include Australia and the UK within the scope of the Defense Production Act, which will help stimulate all those other technologies that are part of pillar two. Again, can you talk about the need to make sure that we move this measure swiftly?

KARLIN: Absolutely. Look, pillar two is -- it's the scope, the scale, the complexity of it is really unlike anything that we have ever done, right? This is a generational opportunity and the announcement that the President made over the weekend really highlighted how this change would accelerate and strengthen AUKUS implementation, it would build new opportunities for US investment in the production and purchase of Australian critical minerals, critical technologies, and other strategic sectors.

So while we were -- are still looking, of course, at what it would mean for a specific AUKUS projects, it underscores the point I made earlier that this is a two way street that actually given the security environment, given the rapidly evolving technological environment, we need to be able to work with one another as much as possible.

COURTNEY: Right. Thank you, Madam Chairman. I yield back.

KIM: Thank you. I thank the witnesses for their valuable testimony and the members for their questions. The members of the committee may have some additional questions for the witnesses and we will ask you to respond to those in writing and pursuant to Committee rules all members may have five days to submit questions, statements and extraneous materials for the record subject to the length limitations. Without objection, the committee now stands adjourned.