C4.1.1.
Presidential Determination.
The USG may sell, grant, or lease defense articles and services to a country or international organization only if the President makes a determination that the prospective purchaser is eligible based on the criteria summarized in Table C4.T1. Additionally, DoD and other agencies may have statutory authorization to expend appropriated funds on “pseudo” cases, which are usually administered under the FMS system and for which the USG is the purchaser. Pseudo cases are described in detail in
Chapter 15.
Table C4.T1. Presidential Determination Criteria for FMS Eligibility
| # |
FMS Eligibility Criteria |
| 1 |
The President finds that the furnishing of defense articles and defense services to such country or international organization will strengthen the security of the United States (U.S.) and promote world peace;
|
| 2 |
The country or international organization has agreed not to transfer title to, or possession of, any defense article or related training or other defense service so furnished to it or produced in a cooperative project, to anyone not an officer, employee, or agent of that country or international organization, and not to use or permit the use of such an article or related training or other defense service for purposes other than those for which furnished, unless the consent of the President (Department of State) has first been obtained;
|
| 3 |
The country or international organization has agreed that it shall maintain the security of such article or service and provide substantially the same degree of security protection afforded to such article by the U.S.; and
|
| 4 |
The country or international organization is otherwise eligible to purchase or lease defense articles or defense services.
|
|
Source:
Foreign Assistance Act of 1961, as amended (FAA) section 503(a) (22 U.S.C. 2311),
and
AECA section 3(a) (22 U.S.C. 2753).
|
C4.1.2.
Purchasers Currently Eligible.
Questions regarding eligibility should be referred to DSCA (Strategy Directorate). Tables C4.T2A. through Table C4.T2D. list the FMS country and international organization codes.
Table C4.T2. Security Cooperation (SC) Customer and Regional Codes and FMS Eligibility Tables
C4.1.3.
Other Factors Determining Eligibility.
C4.1.3.1.
Defense articles and services are not generally sold to foreign purchasers under the AECA unless they are part of the national defense establishment, under the direction and control of the ministry responsible for defense matters. Prior DSCA and DoS approval must be obtained for the sale or lease of defense articles, defense services, or training to foreign organizations and personnel that are not part of the Defense Ministry. Requests should be directed to the DoS Bureau of Political-Military Affairs at
PM-RSAT@state.gov
for host-nation funded items and
PMSecurityAssistance@state.gov
for grant items. DSCA and any relevant IA should be informed of the request.
C4.1.3.2.
Changes in Eligibility Status.
An eligibility determination is not a guarantee that a sale will be made. Sales may be suspended and certain items may not be releasable to the requesting country for policy reasons or requirements of law.
Table C4.T3.
provides reasons that could cause a country to lose its eligibility status. Availability of, or conditions for, waivers are specific to each provision of law. If DoS determines that it is necessary to limit or suspend Security Assistance (SA) to a particular country, the Director, DSCA, issues instructions to the Security Cooperation (SC) community. Details about this process can be found in
Section C6.6.
Questions relating to a country’s current eligibility should be referred to DSCA (Operations Directorate).
Table C4.T3. Reasons for Change of Eligibility Status (not inclusive)
| Unnecessary Military Expenditures |
|
When the President finds that any economically less-developed country is diverting development assistance to military expenditures or is diverting its own resources to unnecessary military expenditures to a degree that materially interferes with its development, such country will be immediately ineligible for further sales and guarantees until the President is assured that such diversion will no longer take place.
(AECA section 35 (22 U.S.C. 2775)).
Applies to sales, credits, and guaranties subsequent to such a determination; existing sales, credits, and guaranties need not be terminated.
|
| Support to Terrorists |
|
The United States shall not provide any assistance to any country if the Secretary of State determines that the government of that country: repeatedly provided support to international terrorists
(FAA section 620A (22 U.S.C. 2371));
provided assistance or military equipment to the government of any country for which the Secretary has made a determination under
FAA section 620A, sections 620G (22 U.S.C. 2377)
and
620H, (22 U.S.C. 2378));
knowingly transferred Man-Portable Air Defense Systems (MANPADs) to a government or organization that supports terrorism.
(Section 12, P.L.109-472, Section 12 – Statement of Policy);
or granted sanctuary from prosecution to any individual or group which has committed an act of international terrorism or otherwise supports international terrorism
(Section 7022, P.L. 111-8).
The President may waive the application of
Section 7022
to a country if the he determines that national security or humanitarian reasons justify a waiver.
|
| Communist Countries |
|
No assistance shall be furnished to any Communist country unless the President exercises the waiver authority under
FAA section 614(a) (22 U.S.C. 2364),
and reports to Congress that such assistance is vital to the security of the U.S. and promotes the independence of the recipient country from international communism.
(FAA section 620(f), (22 U.S.C. 2370)).
|
| Indebted to any U.S. Citizen or Person |
|
No assistance shall be provided to the government of any country which is indebted to any U.S. citizen or person for goods or services furnished (where available legal remedies are exhausted, the debt is not denied or contested, etc.)
(FAA section 620(c) (22 U.S.C. 2370)).
|
| Nationalized, Expropriated, or Seized U.S. Property, or Imposed Discriminatory Taxes |
|
The President shall suspend assistance to the government of any country when the government has nationalized, expropriated, or seized U.S. property, or have imposed discriminatory taxes. Assistance shall also be suspended if a country has initiated steps to repudiate or nullify existing agreements with U.S. citizens or entities without taking proper compensatory action
(FAA section 620(e) (22 U.S.C. 2370)).
|
| Uses Equipment and/or Services in Substantial Violation of an Agreement with the U.S. |
|
Any assistance to any country shall be terminated if such country uses equipment and/or services in substantial violation of an agreement between the U.S. and that Government
FAA section 505(d) (22 U.S.C. 2314) (
and
AECA section 3(c) (22 U.S.C. 2753)).
|
| Default in Payment to the USG in Excess of Six Months |
|
No assistance shall be furnished to any country which is in default in payment to the USG on interest or principal on any FAA-authorized loan in excess of six months
(FAA section 620(q) (22 U.S.C. 2370)).
|
| Illicit Drug Production or Drug Transiting |
|
Fifty percent of U.S. assistance shall be withheld for any country determined to be a major illicit drug producing or drug transiting country and to have failed to take adequate steps to include preventing such drugs from being produced or transported, sold to USG personnel or their dependents, or from being smuggled into the United States
(FAA section 490(a) (22 U.S.C. 2291j)).
|
| Deliver or Receive Nuclear Enrichment or Reprocessing Equipment, Material, or Technology, or Transfer a Nuclear Device to a Non-Nuclear-Weapon State |
|
No assistance may be used to provide assistance to any country that the President determines delivers or receives nuclear enrichment or reprocessing equipment, material, or technology [and has not entered into an agreement with the International Atomic Energy Agency (IAEA) to place all such equipment under an IAEA safeguards system], or transfers a nuclear device to a non-nuclear-weapon state
(AECA sections 101-103 (22 U.S.C. 2799aa-aa2)).
Often referred to as the Symington-Glenn Amendment.
|
| Default in Payment to the USG in Excess of Twelve Months |
|
No assistance may be provided to any country in default in payment to the USG on interest or principal for a period of more than one calendar year on any foreign assistance or loan (e.g., a development assistance, FMF, or ESF loan),
(Section 7012, P.L. 111-8).
(Renewed in the annual S/FOAA, and commonly referred to as the Brooke Amendment.)
|
| Prohibits or Restricts Transport or Delivery of U.S. Humanitarian Assistance |
|
No assistance shall be furnished to any country when it is made known to the President that the government of such country prohibits or otherwise restricts, directly or indirectly, the transport or delivery of U.S. humanitarian assistance
(FAA section 620I (22 U.S.C. 2378-1)).
|
| Severing of Diplomatic Relation |
|
No assistance shall be furnished to any country which severs diplomatic relations with the U.S. or with which the U.S. severs such relations
(FAA section 620(t) (22 U.S.C. 2370)).
|
| Consistently Intimidates or Harasses Individuals in the U.S. |
|
No letters of offer may be issued, no credits or guarantees may be extended, and no export licenses may be issued to any country determined by the President to be engaged in a consistent pattern of acts of intimidation or harassment directed against individuals in the U.S.
(AECA section 6 (22 U.S.C. 2756)).
|
| Trafficking in Persons |
|
No assistance may be provided to any country that does not comply with minimum standards for the elimination of trafficking in persons and is not making significant efforts to bring itself into compliance with such standards
(P.L. 106-386, Section 110.
Also see
FAA section 134 (22 U.S.C. 2152d)).
|
| Tax U.S. Assistance |
|
No assistance may be provided to any country that does not agree that assistance provided by the United States shall be exempt from taxation, or reimbursed, by the foreign government
(Section 7013, P.L. 111-8).
|
| Recruit and Use Child Soldiers |
|
No assistance may be provided to any country that is clearly identified as having governmental armed forces or government-supported armed groups, including paramilitaries, militias, or civil defense forces, that recruit and use child soldiers
(Section 404(a), P.L.110-457).
|
| Prevents a U.S. Person from Providing Defense Articles/Services on the Basis of Race, Religion, National Origin, or Sex |
|
No sales should be made, and no credits or guarantees extended to or for any country, the laws, regulations, official policies, or governmental practices of which prevent any U.S. person from participating in the provision of defense articles/services on the basis of race, religion, national origin, or sex
(FAA section 505(g), (22 U.S.C. 2314)).
A similar provision prohibits military sales, sales credits, or guarantees
(AECA section 5 (22 U.S.C. 2755)).
|
| Military Coup or Decree |
|
No assistance shall be furnished to any country whose duly elected head of government is deposed by military coup or decree
(Section 7008, P.L. 111-8).
|
| Gross Violations of Human Rights |
|
No security assistance may be furnished to any country the government of which engages in a consistent pattern of gross violations of internationally recognized human rights
(FAA section 502B (22 U.S.C. 2304)).
|
C4.2.1.
Sales Determinations.
When the eligibility criteria in
Section C4.1.
have been met, the Secretary of State determines whether there will be a sale to a country or international organization and the amount thereof, whether there will be a lease to a country or international organization, and whether there will be any other delivery or performance under any sale or lease.
See Section C11.6.
for information on leases and
Chapter 15
for pseudo cases. Decisions to issue licenses or approve sales under the AECA or to furnish military assistance under the FAA must take into account the extent to which such exports, sales, or assistance contribute to an arms race, increase the possibility of outbreak or escalation of conflict, or prejudice the development of bilateral or multilateral arms control arrangements
(FAA, section 511 (22 U.S.C. Section 2321d);
see also
AECA, section 38(a)(2) (22 U.S.C. 2778),
and
42(a) (22 U.S.C. 2791).
C4.2.2.
Retransfer Restrictions.
All purchasers or grant recipients must agree that they will not transfer title or possession of any defense article or related training or other defense services to any other country without prior consent from the U.S. Department of State (DoS) pursuant to
AECA section 3(a)(2) (22 U.S.C. 2753)
and
FAA, section 505(a), (22 U.S.C. 2314).
Special care must be taken to ensure that minor repair parts, fuel, or other defense articles that lose their identity when co-mingled, are controlled by the recipient government using procedures that assure all retransfers are properly approved.
See Chapter 8
for information on re-transfers.
C4.2.3.
Proper Use of Materiel and End Use Monitoring (EUM).
Sales and assistance may be made to countries only for purposes of internal security, legitimate self-defense, for preventing or hindering the proliferation of weapons of mass destruction and of the means of delivering such weapons, civic action, or to permit the recipient country to participate in regional or collective arrangements consistent with the United Nations (UN) Charter, or requested by the UN
(AECA, section 4 (22 U.S.C. 2754);
and
FAA, section 502 (22 U.S.C. 2302).
Proper use of U.S.-origin items is a joint responsibility of the recipient and U.S. personnel. U.S. representatives have primary responsibility until items are physically transferred to the recipient. The recipient then assumes this responsibility, including transfer to a third party or other disposal or change in end-use, based on agreements under which transfers are made.
See Chapter 8
for information on EUM.
C4.2.4.
English Language.
The SCO Chief must ensure that a forwarding letter accompanies each contractual document (e.g., LOA) emphasizing that the English language text is the official binding version. The host country is responsible for translating documents. When the SCO Chief determines an informal translation of an English text is in the U.S. interest, the U.S. may provide an informal translation, for purposes of communicating between USG and purchaser representatives only, using the same practices as the U.S. Diplomatic Mission. Translators must clearly mark the translated document “Informal and unofficial translation - English text governs.”
Detailed procedures for FMS programs including writing LOAs and managing cases are found in
Chapter 5
and
Chapter 6.
The following broad policies apply and should be noted early in the FMS process.
See Chapter 9
for detailed financial policy information. Broad financial policies that should be noted early in the FMS process are available at
Section C9.3.
C4.3.1.
International Weapons Competitions.
Foreign nations often compete weapon system procurements. The foreign Government’s defense or economic ministry solicits bids or proposals from defense industries in the international market. Depending on the nation’s acquisition process, the solicitation may be a formal request for information, a tender or proposal, an invitation to bid, or a similar document that states the review criteria for proposal submissions. Given the size of the U.S. industrial base, the U.S. response may consist of more than one offering. In the international competition, the foreign nation evaluates proposals submitted by both the U.S. and non-U.S. competitors against the solicitation criteria.
C4.3.1.1.
Foreign Solicitation.
In an international competition, the foreign nation releases its solicitation in the international market. When submitted through appropriate channels
(See Section C5.1.3.)
the solicitation is an LOR and initiates USG processes (e.g., NDP-1, technology transfer, and other reviews) to determine whether it is in the U.S. best interest to participate in the competition. The U.S. response in an international competition may include FMS, Direct Commercial Sale (DCS), international cooperative agreement, or a combination of these programs.
See Section C5.2.
for more information on LOR responses. Most foreign solicitations are released to international defense industries rather than to Governments; however, the FMS process should not be excluded from the response solely on the basis of how the foreign solicitation was released or conditioned.
C4.3.1.2.
Lead Agency for Advocacy.
DSCA is the DoD focal point for policy regarding U.S. participation in international competitions. The Department of Commerce (DoC) is the lead USG agency for policy regarding advocacy of U.S. offerings to foreign governments. The Military Departments (MILDEPs) and defense contractor team develop the proposal, which is presented by the appropriate MILDEP as the representative of the U.S. government.
Table C4.T4.
identifies the lead agency and advocacy for the USG responses.
Table C4.T4. Lead Agency and Advocacy in International Competitions
| Number of U.S. Responses |
Number of Services Involved |
Lead DoD Agency |
USG Advocacy |
|
One
|
One
|
MILDEP responsible for the weapon system or technology offered
|
The one U.S. system offered is articulated as the formal U.S. position.
|
|
More than one
|
One
|
MILDEP responsible for the weapon systems or technologies offered
|
USG personnel may not favor the merits of one U.S. proposal over another. U.S. advocacy must be generic - the U.S. proposals are combat proven, interoperable with many nations, technologically superior, worldwide supportable, etc. This neutral stance extends to USG presence in meetings with foreign officials. If USG personnel are present for one U.S. contractor presentation, every effort must be made to be present for all briefings on other U.S. offerings. Only when one U.S. MILDEP and/or contractor team remains in the competition can the United States advocate one U.S. offering. This occurs if all other MILDEP and/or contractor teams self-eliminate or the foreign nation formally states these proposals are no longer under consideration.
|
|
More than one
|
DSCA
|
C4.3.1.3.
Responsibilities of the DoD Lead Managing the USG Response.
The DoD lead facilitates the USG’s deliberative processes in order to develop the policy decisions that affect the proposals as early as possible. The DoD lead obtains the views of the key USG stakeholders: DoS, DoC, Office of the Under Secretary of Defense for Policy (OUSD(P)), Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics (AT&L)), Defense Technology Security Administration, DSCA, and the MILDEPs. The DoD lead ensures MILDEP and/or contractor teams submit proposals that are consistent with internal U.S. decisions, are as responsive as possible to the requirements of the foreign solicitation, and meet the solicitation’s schedule. In cases of multiple U.S offerings, the DoD lead must facilitate all U.S. proposals impartially so that there is no perception that one offering is preferred over another and there is no biased interpretation of policy. The DoD lead must bring together all competing MILDEP and/or contractor teams to highlight issues, perform joint problem solving, establish plans and agreements, ensure that the U.S. entrants are being held to the same standards, address cross-cutting issues, and coordinate responses with the foreign purchaser.
C4.3.2.
Total Package Approach (TPA).
A TPA ensures that FMS purchasers can obtain support articles and services, to include construction of necessary support facilities, required to introduce and sustain equipment. The complete sustainability package must be offered to the purchaser when preparing Price and Availability (P&A) data or LOAs. In addition to the system itself, other items to consider in a total package include: training, technical assistance, initial support, ammunition, follow-on support, etc.
C4.3.3.
False Impressions.
Problems can occur when foreign purchasers expect to obtain certain articles and services from the USG but conditions prevent these sales. National Disclosure Policy specifically requires avoidance of creating false impressions. USG personnel must consider releasability, disclosure, sanctions, and all required coordination before indicating to a potential purchaser that a sale from the USG is possible.
See Section C3.2.2.
C4.3.4.
Neutrality.
DoD prefers that countries friendly to the United States fill defense requirements with U.S. origin items. Unless an item has been designated as “FMS Only,” DoD is generally neutral as to whether a country purchases U.S.-origin defense articles or services commercially or through FMS channels. In some instances, such as for certain Government Furnished Equipment (GFE) and Government Furnished Materiel (GFM),
AECA, section 38(a)(3), (22 U.S.C. 2778))
controls apply and items are sold only via FMS.
C4.3.5.
FMS-Only Determinations.
The AECA gives the President discretion to designate which military end-items must be sold through FMS channels exclusively. This discretion is delegated to the Secretary of State. Generally, as a matter of policy, this discretion is exercised upon the recommendation of DoD.
C4.3.5.1.
The DoS approves or disapproves all sales and is responsible for the continuous supervision and general direction of all sales. Each MILDEP or DoD Component develops the recommendation for FMS-Only designation considering the criteria in
Section C4.3.5.2.
and
Section C4.3.5.3.
The MILDEP or DoD Component forwards FMS-Only systems designations recommendation with rationale to DSCA (Programs Directorate, Weapons Division) and DTSA. DTSA enforces DoD FMS-Only designations through the export licensing process. Questions regarding FMS-Only designations should be directed to the MILDEP or DoD Component. Requests for further assistance with FMS-Only designations may be directed to DSCA (Programs Directorate, Weapons Division) for reconciliation or referral to the appropriate DoD element for resolution in accordance with NDP-1 or
DoD Instruction 2040.02.
C4.3.5.2.
Four general criteria are used to determine whether a sale should be required to proceed through the FMS process: Legislative/Presidential restrictions; DoD/MILDEP policy, directive or regulatory requirement, e.g., the National Disclosure Policy; government-to-government agreement requirements; and interoperability/safety requirements for U.S. Forces.
C4.3.5.3.
These criteria, particularly DoD/MILDEP policy, can be further understood by considering four possible elements:
C4.3.5.3.1.
U.S. Political-Military Relationship with the End-User.
The geopolitical situation and security relationships are taken into account when considering the appropriateness of recommending FMS-Only. The inherent strengths of FMS or DCS licensing methods are also considered in selecting the method that best suits the interests of U.S. and the foreign purchaser within the context of existing world security circumstances.
C4.3.5.3.2.
Sale of a New or Complex System or Service.
DoD may recommend FMS-Only:
C4.3.5.3.2.1.
To maximize the purchaser’s ability to assimilate the technologies and manage its acquisition/logistics.
C4.3.5.3.2.2.
For enhanced interoperability and cooperation between U.S. and purchaser’s military forces.
C4.3.5.3.2.3.
For end-items or services that require complex systems integration with other combat systems.
C4.3.5.3.2.4.
For end-items or services that require access to sensitive U.S. government databases, libraries, or software-source code.
C4.3.5.3.2.5.
For end-items or services that require EUM or on-site accountability.
C4.3.5.3.3.
Diversion and Exploitation of Defense Systems Technologies.
Security of sensitive technologies requires greater scrutiny in the transfer process. Defense systems and munitions that are not particularly complex or sensitive but still require enhanced control to prevent proliferation to rogue states or terrorist organizations represent another area where FMS may be more appropriate than DCS.
C4.3.5.3.4.
Feasibility of Separating Weapon System Components into FMS/DCS Elements.
At times, purchasers may desire all or a portion of a sale to be DCS. It is possible to separate the FMS-Only aspects of a purchase from the portion that can be sold DCS.
C4.3.6.
Direct Commercial Sales (DCS) Preference.
Companies may prefer that a sale be made commercially rather than using FMS procedures. When a company receives a request for proposal from a country and prefers DCS, the company may request that DSCA (Strategy Directorate) issue a DCS preference for that particular sale. The company’s request must include a copy of the purchaser’s solicitation for a price quotation. Approved DCS preferences should be held within SCOs and at the item manager level to allow proper screening of LORs. The process outlined in this section is a best efforts commitment by DoD. Failure on the part of the DoD Component to comply with these procedures will not invalidate any resultant FMS transaction. Before approving DCS preference for a specific transaction, the following are considered.
C4.3.6.1.
Article or Service Exclusions.
Items provided on blanket order lines and those required in conjunction with a system sale do not normally qualify for DCS preference.
C4.3.6.2.
Specific Sale Exclusions.
Articles or services that may otherwise qualify for DCS preference may be required to be sold through FMS procedures to certain countries and for sales financed with Military Assistance Program (MAP) or, in most cases, with FMF funds. The Director, DSCA, may also recommend to the DoS that it mandate FMS for a specific sale.
C4.3.6.3.
P&A or LOA Requests.
DCS preferences are valid for one year. If during this time period, the IA receives a request from the purchaser for the same item, it should notify the purchaser of the DCS preference, using the following text:
Figure C4.F1. IA Notification to the Purchaser of DCS Preference
C4.3.6.4.
The IA must determine whether commercial activity has ceased, determine whether guidance in
Section C4.5.11.
applies, or seek further guidance from DSCA (Strategy Directorate).
C4.3.7.
Concurrent FMS and Commercial Negotiations.
Purchasers should avoid concurrent FMS and commercial requests. If the purchaser’s national policy or specific circumstances require that both FMS and commercial data be obtained, the purchaser should submit a request for exception to DSCA (Strategy Directorate). IAs may not engage in FMS-commercial comparison studies unless the Director, DSCA, grants an exception for a specific circumstance.
C4.3.7.1.
FMS Data Obtained First.
If the purchaser obtains FMS data and later determines it should request a commercial price quote, the purchaser should cancel the LOR prior to requesting commercial data. If an LOA has been offered and the purchaser then solicits formal bids from private industry for the same item, the IA should query the purchaser as to its intentions and indicate that the LOA may be withdrawn.
C4.3.7.2.
Commercial Data Obtained First.
If the purchaser requests FMS data after soliciting bids from contractors, the purchaser must supply information to the IA showing that commercial acquisition efforts have ceased before any FMS data is provided.
C4.3.8.
Travel in Support of Security Cooperation Programs.
U.S. military and DoD civilian employees who travel to and from a foreign country on SC business, regardless of whether the travel is financed by FMS administrative or case funds, must use the same commercial air carrier, class of service, and routing that the transportation officer requires of other DoD travelers. Waivers from the normal travel procedures will be granted to SC travelers on the same basis and in the same manner as provided for DoD personnel traveling on regular defense business. See
Joint Federal Travel Regulations (JFTR), Volume 1, Uniformed Service Members;
and
Joint Travel Regulations (JTR), Volume 2, DoD Civilian Personnel.
C4.3.9.
Use of Federal Acquisition Regulation (FAR) and DoD FAR Supplement (DFARS).
When procuring for a foreign Government, DoD will apply the same contract clauses and contract administration as it would use in procuring for itself, except where deviations are authorized in the DFARS. If a sole source procurement requested by a foreign Government appears to be motivated by objectives in conflict with this requirement or with any U.S. legislation, the MILDEP’s proposed sole source denial memorandum must be forwarded to DSCA (Operations and Strategy Directorates, and the Office of General Counsel) for coordination.
C4.3.10.
Diversion of Materiel.
DoD policy requires a determination that the sale of a defense item will not degrade U.S. defense efforts by taking needed equipment from U.S. stocks (withdrawals) or disrupting deliveries of critical items from production for U.S. Forces (diversions), unless the sale of the item is in the overall U.S. national interest.
See Secton C6.4.6.
for information regarding diversions.
C4.3.11.
Insurance.
Purchasers must self-insure FMS shipments or obtain commercial insurance without any right of claim against the United States. This includes for returns. When requested by the purchaser, the IA may obtain insurance and include it as a separate LOA line item. For FMS cases already implemented, an Amendment can add authorized insurance coverage. Whenever an IA provides these services to a purchasing country or organization, it should obtain insurance from a U.S. insurance firm if possible. Providing insurance is an exceptional arrangement and the purchaser should be encouraged to make arrangements for insurance on subsequent cases.
C4.3.12.
Classification of Security Cooperation Information.
SC information shall be unclassified unless the DoS, the Under Secretary Of Defense (Policy) (USD(P)), the Assistant Secretary of Defense for International Security Policy (ASD(ISP)), or the Director, DSCA, directs classification in a particular situation, or unless the national security classification criteria of
Executive Order (E.O.) 12958,
DoDM 5200.01 Vol. 1.,
and corresponding MILDEP regulations warrant classification for national defense purposes.
C4.3.12.1.
Purchaser Requests to Classify Security Assistance/Security Cooperation Information.
Under exceptional circumstances and when approved by any of the organizational elements above in
Section C4.4.13.
and DSCA, SA/SC information may be classified at the request of the purchaser.
See Section 5.4.10.
for information the purchaser must provide when making such a request. FMS purchasers should be discouraged from requesting classification of FMS cases and related information. Under certain circumstances,
10 U.S.C. 130c
protects purchaser’s sensitive FMS information from public dissemination, although information so protected would not necessarily be classified. Congress has set a high standard for classification of FMS cases and, when congressional notification is required,
AECA, section 36(b)(1) (22 U.S.C. 2776)
requires a description of the damage to national security of the United States that could be expected to result from public disclosure of the information as justification.
C4.3.12.2.
Factors Determining Classification.
The primary factors considered by the DoS, USD(P), and the Director, DSCA, in requiring classification of FMS information are: whether the purchaser considers the information to be classified, the extent to which disclosure of the information would reveal the purchaser’s order of battle, taking into consideration the nature and quantity of defense articles sold and the degree to which the purchaser relies on the United States as a source of military supply; the extent to which disclosure of the information could be expected to stimulate demands by third countries upon the United States or upon other supplying nations for defense articles, thus encouraging global or regional instability or fostering an arms race; and to prevent unauthorized disclosure of the fact that a specific defense article is or may be sold to a particular foreign Government.
C4.3.12.3.
Levels of Classification.
All SC information that is classified is CONFIDENTIAL unless the DoS, USD(P), or the Director, DSCA, directs a higher level of classification, or unless the national security classification criteria of
E.O. 12958,
DoDM 5200.01 Vol. 1.,
and corresponding MILDEP regulations warrant a higher level of classification for national defense purposes.
C4.3.12.4.
Declassification.
All classified SC information shall be declassified when the originating agency so determines unless a longer period of classification is either directed in a particular situation by the DoS, USD(P), or the Director, DSCA, or is warranted by the national security classification criteria of
E.O. 12958,
DoDM 5200.01 Vol. 1.,
and corresponding MILDEP regulations for national defense purposes.
C4.3.13.
Department of Defense Support to Direct Commercial Sales.
U.S. industry may request defense articles and services from the DoD to support a DCS to a foreign country or international organization. Defense articles and/or services provided to U.S. industry must be accomplished pursuant to applicable statutory authority including
AECA, section 30 (22 U.S.C. 2770),
which authorizes the sale of defense articles or defense services to U.S. companies at not less than their estimated replacement cost (or actual cost in the case of services) for incorporation into end items to be sold by such company on a direct commercial basis to a friendly foreign country or international organization.
Section C11.5.
further clarifies authorized DoD support (articles or services) under this section. It is important that defense industry representatives identify early in the DCS planning process whether support from the DoD will be required. If DoD support is deemed necessary, meetings with DoD representatives should be arranged to discuss the level of support required and the method for funding the associated costs.
The FMS program transfers defense articles and services to eligible countries and international organizations.
AECA section 47 (22 U.S.C. 2794)
defines the terms “defense article” and “defense service.” The
U.S. Munitions List (22 CFR part 121)
designates specific items that fall into these categories and includes an asterisk (*) by Significant Military Equipment (SME). Any item of SME that has a nonrecurring research and development cost of more than $50 million or a total production cost of more than $200 million is considered Major Defense Equipment (MDE).
See Chapter 9
and
Appendix 1
for the rules and charges regarding Nonrecurring Cost Recoupment (NCR) charges for MDE.
C4.4.1.
Source of Supply.
Defense articles or services may be sold from DoD stocks, or the DoD may enter into contracts to procure defense articles or services on behalf of eligible foreign countries or international organizations. DoD procurements for FMS use standard Federal Acquisition Regulation (FAR) contract clauses and contract administration practices except where deviations for FMS are authorized in the Defense Federal Acquisition Regulation Supplement (DFARS). IAs may procure from foreign sources as required to conduct FMS acquisitions in accordance with the DFARS under the same acquisition and contract management procedures used for other defense acquisitions to meet U.S. standard inventory requirements. IAs should not enter into such sales arrangements for equipment not in the U.S. inventory unless DSCA (Strategy Directorate and Office of the General Counsel) have approved an exception.
C4.4.2.
Materiel Standards.
It is DoD policy that defense articles sold under FMS programs should reflect favorably upon the United States. Defense articles offered and sold under FMS are new or unused or, as a result of refurbishment, possess original appearance insofar as possible and, as a minimum, have serviceability standards prescribed for issue to U.S. Forces. If the purchaser desires exclusively new equipment, this requirement is stated in the LOA. If the purchaser wishes to purchase “as is” (no assurance of serviceability), this is also stated in the LOA. In addition to full disclosure of item condition, the purchaser is informed of unusual safety or environmental risks known at the time of sale. This information is included in the LOA with reference to separate publications or correspondence as appropriate.
C4.4.3.
Logistics Support.
The DoD considers the support of U.S. origin defense articles critical to the success of the SA program. Systems in use with U.S. Forces are supported through the DoD procurement system. Support items that are stocked, stored, and issued due to common application with end items in use, should be provided even though the end items may have been acquired commercially or system support buyout is complete.
See Chapter 6.
C4.4.3.1.
When a system is to be phased out of the DoD inventory, countries that have acquired the system under FMS are given the opportunity to determine item requirements and to place final orders designed to maintain system capability through its service life. These orders are consolidated to ensure economic buys.
See Section C6.4.7.
C4.4.3.2.
DoD will take reasonable steps to support systems that are not used by U.S. Forces including items that were never adopted by U.S. Forces. Support is provided for these items when mutually satisfactory arrangements are made with the country involved and supply sources are available. Effort is made to support non-standard items, whether acquired commercially or through FMS, when this effort serves U.S. interests.
C4.4.4.
Communications Security (COMSEC) Equipment.
Combatant Commanders’ (CCDR) requirements to communicate with foreign governments via secure transmissions will necessitate a requirement for release and delivery of U.S. COMSEC. Transfer of U.S. COMSEC must be done in conjunction with a Combatant Command’s (CCMD) interoperability requirement or otherwise support a U.S. policy objective.
See Section C3.1.
and
Section C3.2.,
for information on the technology transfer process.
See Section C3.7.3.
for information on INFOSEC case processing.
C4.4.5.
Coproduction.
Coproduction policy is provided in
DoD Directive 2010.06.
Per
DoD Directive 5530.3,
the Director, DSCA must provide written approval to enter into negotiations for coproduction programs pursuant to an LOA. Requests for DSCA authority must include a description of the project as well as fiscal and legal memoranda. Discussions on coproduction programs may be initiated by the Implementing Agency or by authorized representatives of foreign Governments or international organizations. When partially or fully implemented through
DoD Directive 5530.3
agreements, the Implementing Agency recommendation is forwarded to DSCA for authorization to proceed and includes the information shown in
Table C4.T5.
Table C4.T5. Information Required for DSCA Authorization of Coproduction Agreements
| # |
Required Information |
1 |
The program origin, nature, scope, and supporting rationale
|
2 |
Implications of proposed technology transfer, including the scope and limitations of any needed NDP-1 exceptions
|
3 |
Impact on U.S. industry prime and subcontractors, and the views of these producers
|
4 |
Impact on any other authorized foreign production of the same article
|
5 |
Impact on the U.S. production base for the article
|
C4.4.5.1.
Classification of DoD Directive 5530.3 Coproduction Agreements.
DoD Directive 5530.3
agreements for coproduction of MDE are classified “CONFIDENTIAL,” as a minimum, until the agreement is concluded. Programs implemented via LOAs are subject to normal LOA classification guidance.
See Section C4.3.12.
C4.4.5.2.
FMF-Financed Coproduction Program.
AECA, section 42(b) (22 U.S.C. 2791(b))
requires the DoS to advise Congress prior to use of Foreign Military Financing (FMF) to finance coproduction or licensed production in a foreign country. DSCA (Operations Directorate) memoranda to the DoS advises of the country, type of proposed transaction (FMS LOA or direct commercial sale), description of program, the extent of foreign production, and impact on employment and production within the United States. Normally approval is staffed concurrently with the related
AECA, section 36(b) (22 U.S.C. 2776(b))
notification. DSCA (Operations Directorate) shall not approve release of an FMS LOA or FMF funding until the DoS has advised Congress.
C4.4.6.
Monitoring Coproduction Agreements.
LOAs or
DoD Directive 5530.3
agreements are structured to assure there are acceptable monitoring provisions for each program and the Implementing Agency receives adequate data to prepare status reports. When USG responsibilities can be satisfied only with access by USG personnel, a note must be included in the LOA and the
DoD Directive 5530.3
agreement.
See Appendix 6
Coproduction Reporting and/or Validation for the exact note wording.
C4.4.7.
Design and Construction Services.
AECA, section 29 (22 U.S.C. 2769)
authorizes the sale of design and construction services to eligible foreign countries and international organizations provided that full costs are paid to the United States.
C4.4.7.1.
Design and construction services are offered under normal FMS procedures. Management and oversight of design and construction services is performed by construction agents designated by
DoD Directive 4270.5.
When part of a larger program, construction services may be provided in two ways:
C4.4.7.2.
The U.S. Army Corps of Engineers is responsible for construction cases when it is the construction agent designated by
DoD Directive 4270.5.
For other construction cases, the IA will provide construction services through its designated construction agent. In this latter situation, the IA and construction agent will conclude an internal agreement to provide for U.S. Government management of the construction by the construction agent and to define program management relationship
C4.4.8.
White Phosphorous Munitions.
Requests for white phosphorus munitions should be submitted in accordance with the procedures explained in
Table C5.T1g.
Requests should indicate, by type of ammunition, the quantity, and intended use. Requests should be accompanied by the U.S. Mission’s opinion as to whether the amount requested is reasonable in relation to the intended use, current on-hand inventories, and predictable usage rates of such items. Requests must also contain assurance from the host Government that white phosphorus munitions are used only for purposes such as signaling and smoke screening. The DSCA (Operations Directorate) shall coordinate the request. Upon approval, the DSCA (Operations Directorate) advises the DoD Component and provides the special conditions that must be included in the LOA.
C4.4.9.
M-833 and Comparable Depleted Uranium Rounds.
FAA, section 620J (22 U.S.C. 2378a)
allows the sale of M-833 depleted uranium ammunition and comparable anti-tank rounds containing a depleted uranium penetrating component to NATO member countries, major non-NATO allies, Taiwan, and countries for which a Presidential national security interest determination has been completed. Such a determination
(Presidential Determination No. 94-37 of July 19, 1994)
has been completed for the M-833 round for Bahrain and Saudi Arabia and the M-829 round for Saudi Arabia and Kuwait.
C4.4.10.
Ship Transfers.
Vessels 20 years old or more and no more than 3,000 tons (light load displacement) or less may be transferred after 30 continuous days of the date that the U.S. Navy (USN) notifies Congress of its intent to make the transfer. Naval vessels that are less than 20 years old or more than 3,000 tons may be transferred only after enactment of legislation authorizing the transfer.
10 U.S.C. 7307
prescribes these criteria and Congressional oversight provisions.
See Section C11.3.
for information on Excess Defense Articles (EDA) Congressional notification requirements.
C4.4.11.
Technical Data Packages (TDPs) for Defense Articles Manufactured by Watervliet Arsenal.
TDPs from a Government-owned and operated defense plant manufacturing large caliber cannons (e.g., Watervliet Arsenal) to a foreign Government, or assistance to a foreign Government in producing defense items currently manufactured or developed in a Government-owned and operated defense plant manufacturing large caliber cannons, may be transferred if the statutory exceptions in
10 U.S.C. 4542
are met. The Secretary of the Army must determine if these requirements can be met before committing to such transfers; notify the Congress of every transfer agreement; and submit a semiannual report to Congress on the operation of this law and all agreements entered into under it.
C4.4.12.
Stinger/Man-Portable Air Defense System (MANPADS).
Transfer of U.S.–origin MANPADs and components is based upon the recipient’s ability and commitment to implement security and accountability controls at least equivalent to those employed by the United States, which exceed the Wassenaar Arrangement’s Elements for Export Controls of MANPADs. All security cooperation organizations and personnel, to include MILDEPs and SCOs, must get specific approval from DSCA (Programs and Strategy Directorates) prior to any discussions on MANPADS with any potential purchaser. This includes discussion of sales for replacement batteries, parts, components, or expendables for MANPADS. This requirement stands even for countries previously sold MANPADS or approved for MANPADS sales.
See Table C5.T1f.
and
Chapter 8
for more information on Stinger/MANPADS.
C4.4.13.
Foreign Liaison Officer Support.
Countries may locate a representative in the United States to assist with their programs. LOAs may be written to cover administrative costs (e.g., office space, secretarial support) for these personnel.
See Section C4.5.1.
for the types of foreign representative services and expenses that may not be included on an LOA. For more information about visits, assignments, and exchanges of foreign nationals
See DoDD 5230.20.
C4.4.14.
Night Vision Devices (NVDs).
NVDs are man-portable devices that incorporate image intensification, infrared, thermal, or sensor-fused technologies. NVDs fall under Category XII(c) of the
U.S. Munitions List (22 CFR part 121)
and are designated as sensitive, unclassified SME. The Defense Technology Security Administration (DTSA) is responsible for NVD export policy and requires the case-by-case review of all requests for the international transfer of such items through FMS or direct export licensing. Each review considers input from the MILDEPs, the acquisition community, and the Joint Chiefs of Staff. Image intensifier tubes ordered as spare parts or replacements for destroyed, lost, stolen, or missing devices also require a case-by-case review except when replacing defective or damaged tubes that are returned to the USG on a direct exchange or repair and return basis. The technical capabilities of replacement tubes will not exceed the export restrictions set forth in the original authorization. NVDs taken from DoD stock may not be sold or transferred without an accompanying data sheet verifying that the technical capabilities of the image intensifier tubes do not exceed export restrictions.
See Table C5.T1e.
for more information on processing requests for NVDs and
Chapter 8
for End-Use Monitoring (EUM) responsibilities.
C4.4.15.
Medical Countermeasures.
Purchases of medical countermeasures such as drugs, vaccines, and other medical interventions against biological and chemical agents require the approval of the Office of the Assistant Secretary of Defense for Global Strategic Affairs (GSA)/Countering Weapons of Mass Destruction (CWMD). It is essential that IAs submit LORs for these items to DSCA (Operations Directorate and Strategy Directorate) as soon as the requirement is known to allow sufficient staffing time. DSCA (Strategy Directorate) staffs the request with the Office of the Secretary of Defense (OSD). Based on OSD’s direction, DSCA advises the IA how to respond to the purchaser’s LOR. If the decision is to prepare an LOA, the IA develops and submits the LOA to DSCA for countersignature. DSCA forwards the LOA to OSD for further staffing and approval as appropriate. If approved, DSCA countersigns the LOA. If disapproved, DSCA advises the IA how to respond to the purchaser.
C4.4.16.
Geospatial Intelligence (GEOINT).
GEOINT provides the capability to visually depict physical features and geographically referenced activities on the Earth. It consists of imagery, imagery intelligence, and geospatial information (topographic, aeronautical and hydrographic maps, and charts data). GEOINT is essential to the guidance systems in many weapons. National Geospatial-Intelligence Agency (NGA) GEOINT data are either shared with the international community through agreements and arrangements under the authority of the Director of the NGA and/or the Director of National Intelligence, or can be purchased from NGA. Implementing Agencies are responsible for coordinating the release of the GEOINT data with NGA in advance.
See Table C5.T1d.
for additional information.
C4.4.17.
Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance (C4ISR).
Transfers of U.S. C4ISR to eligible countries and international organizations must support a CCDR’s interoperability requirements. A purchaser’s desire to be interoperable with the United States is insufficient justification for release. Pre-coordination with DSCA, the respective CCMD, IAs, the SCO, and the foreign purchaser is required before a C4ISR LOR is submitted,.
See Section C3.7.3.
for more information on C4ISR and
Table C5.T1c.
for more information on processing LORs for C4ISR.
Certain items may be transferred using FMS procedures only by exception. Questions concerning what may or may not be authorized for a particular country should be directed to DSCA (Operations Directorate). The following categories of items may not be included in LOAs without special staffing or approvals as noted below.
C4.5.1.
Administrative Expenses for Foreign Government Representatives.
The USG does not serve as the disbursing agent for funds received under LOAs unless those funds are required for defense articles and services provided by DoD, another federal agency, or through a DoD procurement contract. LOAs must not include transportation, lodging, per diem, or other administrative expenses of foreign Government representatives even though such expenses may relate to the procured materiel and/or services. In exceptional situations, DSCA may specifically authorize an LOA to include the payment of travel and living allowances (TLA) for international students.
See Chapter 10
regarding TLA. Foreign purchasers may not use LOAs to lease commercial or General Services Administration (GSA) vehicles. Foreign purchasers are responsible for making and paying for these arrangements outside the FMS process.
C4.5.2.
Cluster Munitions.
No military assistance will be furnished for cluster munitions, no defense export license for cluster munitions may be issued, and no cluster munitions or cluster munitions technology will be sold or transferred, unless (1) the submunitions of the cluster munitions have a 99 percent or higher functioning rate; and (2) the agreement applicable to the assistance, transfer, or sale of the cluster munitions or cluster munitions technology specifies that the cluster munitions will only be used against clearly defined military targets and will not be used where civilians are known to be present
(Section 7056(b) of the Department of State, Foreign Operations and Related Programs Appropriations Act 2009, Division H of the Omnibus Appropriations Act, 2009, P.L. 111-8).
Appendix 6
LOA Note on Cluster Munitions. Cluster munitions are munitions composed of a non-reusable canister or delivery body containing multiple, conventional explosive submunitions. This applies to systems delivered by cruise missiles, artillery, mortars, missiles, tanks, rocket launchers, or naval guns that deploy payloads of explosive submunitions that detonate via target acquisition, impact, or altitude, or that self-destruct (or a combination of both). Cluster munitions technology includes, but is not limited to, cluster munition components, accessories, attachments, parts, firmware, software, or other related technical data. This restriction does not apply to technology used to clear or disarm unexploded cluster munitions.
C4.5.3.
Anti-Personnel Landmines.
All SCOs and personnel to include MILDEPs and SCOs must get specific approval from DSCA (Strategy Directorate) prior to any discussions on landmines with any potential purchaser.
C4.5.4.
Napalm.
Napalm, including napalm thickener, dispensers, and fuses will not be provided through FMS or commercial contracts.
C4.5.5.
Riot Control Agents.
Riot control agents will not be provided via FMS, but certain types are available on a commercial basis. Such proposed commercial sales require that an export license be obtained from the DoS, Directorate of Defense Trade Controls.
C4.5.6.
Certain Training.
C4.5.6.1.
Counterterrorism Training.
Counterterrorism training may be requested through the Assistant Secretary of Defense for Special Operations and Low Intensity Conflict (SO/LIC) under the Counterterrorism Fellowship Program (CTFP). DSCA should be informed of any request for antiterrorism or counterterrorism training. Foreign officers nominated to receive such training are vetted using the same DoD and/or DoS procedures in place for all International Military Education and Training (IMET) and FMS training.
C4.5.6.2.
Military Intelligence Training.
Limited military intelligence training is available. The scope of this type of training is limited to training that is directly related to combat or operational intelligence, or to intelligence management of combat or operational intelligence at the joint military staff level. In case of doubt about whether or not a particular course or type of training falls into one of these two categories, the SCO should obtain a clarification from DSCA (Programs Directorate).
C4.5.6.3.
Police Training.
The AECA does not prohibit police training or related programs; however, subject to certain exceptions, the
FAA, section 660 (22 U.S.C. 2420),
generally prohibits use of funds available to carry out the FAA for police training. DSCA (Strategy Directorate) and DoS approval must be obtained before offering defense articles or services related to police training through FMS procedures.
C4.5.6.3.1.
With certain exceptions, the FAA prohibits using funds authorized under that Act to conduct any police training or related programs either in a foreign country or in the U.S. All related military assistance under the FAA, not just training, is subject to this prohibition with certain statutory exceptions as found in
FAA, section 660 (22 U.S.C. 2420).
C4.5.6.3.2.
Police training in the context of the FAA prohibition includes military police as well as civilian police if the military police perform on-going civilian law enforcement functions. Neither the name given to a unit nor the ministerial authority under which it operates is sufficient to determine whether a particular unit is a “police unit.” The determining factor is the nature of the functions performed by the unit. Assistance in foreign countries for any civilian law enforcement function (except maritime law enforcement or international narcotics control) is prohibited.
C4.5.6.3.3.
The prohibitions discussed above do not apply to units with the sole function of internal security that involves combat operations against insurgents, or legitimate self-defense of national territory against foreign invasion, whether or not the unit is called police.
C4.5.6.3.4.
If some personnel from a smaller unit within a larger unit that is eligible for assistance are detailed to on-going civilian law enforcement functions, then just the smaller unit is prohibited from receiving grant support under the FAA. However, no grant funds may be used in any program of internal intelligence or surveillance on behalf of any foreign Government either within the U.S. or abroad.
C4.5.6.3.5.
If foreign students are authorized to attend military police training, foreign Governments must certify that the students are not involved in any civilian law enforcement functions for at least two years after receiving the training. Law enforcement includes apprehension and control of political offenders and opponents of the Government in power (other than prisoners of war), as well as persons suspected of common crimes.
Page Updated 09-12-2012
