C8.1.1. End-Use Monitoring (EUM) is a program designed to verify that defense articles or services transferred by the United States Government (USG) to foreign recipients are being used in accordance with the terms and conditions of the transfer agreement or other applicable agreement. In accordance with the Foreign Assistance Act (FAA), section 505, and the Arms Export Control Act (AECA), section 3 (22 U.S.C. 2753) and section 4 (22 U.S.C. 2754) as reflected in the Letter of Offer and Acceptance (LOA) Standard Terms and Conditions, recipients must agree to use U.S.-provided defense articles, training, and services only for their intended purpose; not to transfer title to, or possession of, any defense article or related training to anyone not an officer, employee, or agent of that country or of the USG without prior written consent of the USG; to maintain the security of any article with substantially the same degree of protection afforded to it by the USG; and to permit observation and review by, and to furnish necessary information to, representatives of the USG with regards to use of such articles. EUM provides USG oversight to ensure these conditions are met. All potential end-use violations must be reported through Department of State (DoS) channels. Information regarding any potential violations should also be forwarded to the Golden Sentry program team at DSCA (Programs Directorate, Weapons Division), the appropriate Combatant Commander (CCDR), and the Military Department (MILDEP).
Table C8.T1. End-Use Monitoring Legal and Policy References
Reference | Subject |
---|---|
Requires EUM of defense articles and services sold, leased, or exported under the AECA or the FAA. |
|
Establishes standards for identifying high-risk exports for end-use verification. |
|
AECA, Section 3(g), Section 4 (22 U.S.C. 2753(g) and 2754) and 2754) |
Requires agreements for the sale or lease of articles on the United States Munitions List (USML) (made after November 29, 1999) to state that the USG retains the right to verify credible reports that the article(s) has been used for purposes not authorized under AECA, section 3. |
Requires Recipient agreement to use the materiel/services properly; return net proceeds from sales as required; and permit observation of the end-use of articles, services, and training. |
|
Implementation of Trade Security Controls (TSC) for Transfers of DoD U.S. Munitions List (USML) and Commerce Control List (CCL) Personal Property to Parties Outside DoD Control. |
|
Registration and End-Use Monitoring of Defense Articles and/or Services |
|
DoD 4160.28-M |
Defense Demilitarization Manual |
Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives. |
C8.2.1. Section 40A of the AECA (22 U.S.C 2785) requires the President to establish an EUM program to improve accountability with respect to defense articles sold, leased, or exported under the AECA or FAA. The Director, DSCA, has been delegated authority by the Secretary of Defense and USD(P) to administer DoD’s EUM program, known as Golden Sentry, to comply with Section 40A of the AECA. Section 40A requires, to the extent practicable, the EUM program be designed to provide reasonable assurance that the recipient is complying with the requirements imposed by the USG with respect to the use, transfer, and security of defense articles and defense services. The program must also provide for the end-use verification of defense articles and services that incorporate sensitive technology, and/or are particularly vulnerable to diversion or other misuse, or whose diversion or other misuse could have significant consequences. Congress requires an annual report describing actions taken to implement Section 40A, including a detailed accounting of the costs and number of personnel associated with the monitoring program.
C8.2.2. Golden Sentry’s objective is to ensure compliance with technology control requirements in order to minimize security risks to the United States, partner nations, and Allies. EUM includes all actions to prevent misuse or unauthorized transfer of defense articles or services from title transfer until disposal. The type of defense article or service generally determines the level of monitoring required. The Director, DSCA, and/or Combatant Commander (CCDR) may also determine, in consultation at the General Officer, Flag Officer, or Senior Executive Service (SES) level, that a change in physical security and accountability monitoring may be warranted considering the specific defense article or service in question and based on assessment of the threat to security in the area or for other compelling reasons. When changing events or other unusual circumstances prompt Security Cooperation Organizations (SCO) concern regarding the end-use and security of U.S.-provided defense articles and services, SCOs should contact DSCA (Programs Directorate) to discuss the situation and obtain further guidance.
C8.2.3. EUM Responsibilities. Monitoring the use of U.S.-origin items is a joint responsibility of the partner nations and the USG, to include the Military Departments (MILDEPs), the Combatant Commands (CCMDs), and the SCOs. USG representatives have full responsibility for defense articles until title is transferred to the partner nation. The partner nation assumes this responsibility based on the terms under which the transfers are made, including restrictions on physical security and accountability. USG representatives retain a continuing responsibility under Golden Sentry to assist DSCA to verify the appropriate end-use and security of U.S.-origin defense articles and defense services sold or transferred on a government-to-government basis. Table C8.T2. lists DoD organizations and their EUM responsibilities.
Table C8.T2. DoD End-Use Monitoring Responsibilities
Organization | Responsibility |
---|---|
DSCA (Programs Directorate) |
|
MILDEPs and Implementing Agencies (IAs) |
|
Combatant Commands (COCOMs) |
|
Security Cooperation Organizations (SCOs) (including Defense Attaché Offices and U.S. Diplomatic Missions with Security Assistance responsibilities) |
Functions that must be performed by a USG employee who is also a U.S. citizen:
Functions that may be performed by direct hire Locally Employed Staff authorized to perform inherently governmental duties, or a U.S. contractor when directly supervised by a USG employee:
|
Defense Threat Reduction Agency (DTRA) |
|
Defense Institute of Security Assistance Management (DISAM) |
|
C8.2.4. Post-delivery Monitoring. Post-delivery monitoring is performed by USG personnel assigned to SCOs or deployed to the host nation in support of SCO functions. The Golden Sentry program employs two post-delivery monitoring methodologies to perform DoD’s EUM responsibilities: Routine and Enhanced EUM. To assist SCOs in conducting post-delivery monitoring of both types, a EUM application is available in the Security Cooperation Information Portal (SCIP-EUM) as a repository of data and means to generate reports. CCMDs and SCOs develop EUM Standard Operating Procedures (SOP) to implement country-specific EUM policy and procedures. A copy must be forwarded to eumhelpdesk@dsca.mil. Written SOPs must contain as a minimum the following information:
Table C8.T3. SOP Minimum Information Requirements
# | SOP Minimum Information Requirements |
---|---|
1 |
EUM responsibilities and procedures for conducting Routine and Enhanced-EUM (EEUM). |
2 |
Host nation EUM points of contact and EUM visit scheduling requirements. |
3 |
Maintenance of records of Routine EUM visits and all EEUM physical security and accountability checks (Memorandums for Record or other written documentation). |
4 |
Host nation internal physical security/accountability procedures. |
5 |
Procedures for record keeping, reporting inventories, losses, theft, unauthorized access, third party transfers/disposal/damaged/expended defense articles, and reporting possible violations and corrective action. |
6 |
Procedures for capturing and submitting to the CCMD and DSCA actual and projected costs associated with performing EEUM functions |
C8.3.1. Routine EUM is required for all defense articles and services provided via government-to-government programs. SCO personnel are required to observe and report to the CMD, DSCA, an DoS any potential misuse or unapproved transfer of U.S.-origin defense articles. SCO personnel perform Routine EUM in conjunction with other security cooperation functions, during visits to the host nation’s installations, through interaction with other assigned embassy personnel, and from any other readily available or opportune source of information. SCOs must document Routine EUM on at least a quarterly basis and maintain records for five years.
C8.3.1.1. To assist SCOs in conducting routine monitoring, DSCA has developed an FMS Routine EUM Summary Report located in the SCIP-EUM database under the Queries/Reports menu. This provides a "watch list" of specific categories of defense articles exported via FMS that includes, but is not limited to: battle tanks, armored combat vehicles, artillery systems, fixed and rotary wing aircraft, unmanned aerial systems, warships and military vessels, missiles and missile systems, military vehicles, bombs, crew served and individual weapons, platform-mounted night vision systems, and man-portable NVDs monitored through Routine EUM. To assist SCOs in documenting routine monitoring performed, DSCA developed a Routine EUM Template located in the SCIP-EUM database under the Support-Policy/Procedures Memos.
C8.3.2. Articles or Services Requiring Additional Controls on End-Use. There are instances in which particular items normally subject to Routine EUM are transferred with notes restricting the conditions under which they may be transported, stored, or employed. SCOs should be aware of these restrictions and alert to indications or reports that suggest failure to comply.
C8.3.2.1. Arms, Ammunition and Explosives (AA&E). AA&E items require special protection, and the requestors must submit a plan for safeguards of these items during the Letter of Request (LOR) and/or Pre-LOA process. The DoD applies stringent AA&E controls while these items are in U.S. custody, and the same standards must be applied to the items upon release to the purchaser. Although recipient countries generally do not assume control of sensitive AA&E items within the continental United States, except as cargo loaded and prepared for departure, USG security standards must apply throughout the lifecycle of the weapon system (e.g., transportation, delivery, testing, operational use, storage, and destruction processes). Additionally, a site survey may be required to ensure that appropriate physical security measures are in place at the destination prior to the delivery of the weapon systems. See DoD 5100.76-M, and the Section C7.15 for more information regarding AA&E items.
C8.3.2.2. White Phosphorous and Cluster Munitions. Munitions containing White Phosphorous (See Section C4.4.8.) and cluster munitions permissible for transfer under U.S. law (See Section C4.4.6.) are transferred with notes restricting the conditions under which they may by employed. SCOs should be aware of host nation inventories of these weapons and the restrictions on them, and alert to reports of how the host nation is employing them in operations. SCOs should report to DSCA (Programs Directorate) any information that suggests these items are not being used in accordance with the terms under which they were sold.
C8.4.1. Definition. Enhanced EUM, based on the principle of trust with verification, is required for defense articles and services or individual transfers specifically designated for EEUM by the MILDEP's export policy, the inter-agency release process, or by DoD policy as a result of consultation with Congress. All EEUM-designated defense articles are required to be sold on defined order lines using an EEUM-coded Military Articles and Services Listing (MASL) and are accompanied by specialized physical security and accountability notes. The defense articles listed in Table C8.T4. below have been designated for EEUM for all FMS-eligible countries. Figure C8.F1. identifies the decision process used to determine whether an item or an individual transfer will be identified and designated for EEUM. Other defense articles may require EEUM on a case-by-case basis as a result of the transfer approval process. SCOs will provide the host nation formal notification of all finding noted during EEUM checks and request the host nation to provide within 60 days the actions taking to correct the findings.
Table C8.T4. Defense Articles Designated for EEUM for all FMS-eligible Countries
EEUM-Designated Defense Articles | Description |
---|---|
Advanced Medium Range Air-to-Air Missiles (AMRAAM) |
AMRAAM or other specified AMRAAM defense articles (Guidance Control Units (GCUs)). |
Air Intercept Missiles-9X (AIM-9X) |
AIM-9X Missiles, Guidance Units (GU), Captive Air Training Missiles (CATM), and Special Air Training Missiles (NATM). |
Communication Security (COMSEC) Equipment |
COMSEC items are managed and controlled by the National Security Agency (NSA). NSA, CCMDs, and Embassy COMSEC Custodians are responsible for implementing the necessary procedures to ensure physical security and accountability measures required by the Communication Interoperability & Security Memorandum of Agreement (CISMOA). |
Harpoon Block II Missiles |
Harpoon Block II missile and/or other specified Harpoon Block II Missile defense articles, (Retrofit kits and GCUs). |
Javelin Missiles and Command Launch Units (CLUs) |
Javelin Missiles and CLUs only. |
Joint Air-to-Surface Standoff Missiles (JASSM) |
JASSM or other specified JASSM defense articles, (Instrument Telemetry Vehicle (ITV)). |
Joint Standoff Weapons (JSOW) |
JSOW or other specified JSOW defense articles, (Captive Flight Vehicles (CFV), and Missile Simulator Units (MSU)). |
Large Aircraft Infrared Countermeasures (LAIRCM) |
LAIRCM components as specified in the LOA note. |
Night Vision Devices (NVDs) |
For each FMS offer of NVDs, the Implementing Agency will include the DSCA NVD Approval memorandum as supporting documentation to the LOA. For NVD exports, the host nation must provide the SCO a copy of the physical security and accountability control plan (NVD Control Plan) for the protection and security of NVDs. The physical security and accountability control plan must be provided within 30 days of signing the LOA. NVDs will not be delivered until receipt of the NVD Control Plan. SCO will review and maintain a copy of the purchaser's physical security and accountability control plan and forward a copy to eumhelpdesk@dsca.mil . SCOs must provide a written report to DSCA (Programs, Weapons Division) within 30 calendar days of any reported loss, theft, or unauthorized access of any NVD provided to the host nation. |
Standard Missiles-3 (SM-3) |
Standard Missiles-3 (SM-3). |
Standoff Land Attack Missiles Expanded Response (SLAM-ER) |
SLAM-ER or other specified SLAM-ER defense articles, (Retrofit kits and Guidance Navigational Units (GNU)). |
Stinger Missiles and Gripstocks |
Stinger Missiles designated for EEUM may include, but are not limited to: MANPADS, AVENGER, Linebacker, and Vehicle Mounted Stinger Launch Platform (VMSLP). |
Terminal High Altitude Area Defense (THAAD). |
THAAD missiles or Radar systems. |
Tomahawk Missiles |
Tomahawk Missiles. |
Tube-Launched, Optically-Tracked, Wire-Guided Missiles (TOW-2B) |
TOW-2B Missiles only. |
Unmanned Aircraft Systems (UAS) designated as Category I by the Missile Technology Control Regime (MTCR) |
UAS components as specified in the LOA note. |
C8.4.1.1. SCOs are responsible for maintaining an accurate database of all EEUM-designated defense articles exported to the host nation by using the EUM application in the SCIP database for inventory monitoring and historical data. SCIP-EUM provides a centralized, secure information repository of EUM data gained from deliveries and inventories of all EEUM-designated defense articles transferred through FMS, grant assistance, and other security cooperation programs. The SCIP-EUM database includes a Reconciliation Report of EEUM-designated defense articles by country that SCOs should use as the basis for establishing the baseline and all required inventories and reporting.
C8.4.1.2. SCOs are required to conduct EEUM through planned/coordinated visits to the host nation’s installations. SCOs must arrange with the partner nation to verify in-country receipt of EEUM defense articles by serial number within 90 days of delivery. Subsequent inventories require serial number verification and physical security checks of storage sites or other facilities where EEUM-designated defense articles are kept and verification that recipients are complying with the terms and conditions stated in the transfer agreements. SCOs must physically inventory 100 percent of in-country EEUM defense articles annually except for EEUM defense articles not available for observation (deployed, returned to the United States for repair, etc.), or stipulated otherwise in the SCIP-EUM database or by separate policy memo. The inventory must include review of the recipient’s records of verifications as required by the LOA or other arms transfer document note. Deployed equipment must be inventoried within 90 days after returning from operational use or deployment.
Figure C8.F1. Adding or Removing Defense Articles on the Enhanced EUM List
C8.4.1.3. EEUM must be performed using checklists developed by the MILDEPs and made available in the SCIP-EUM database. All EEUM checks must be recorded, and the physical security and accountability checklists will be attached to the inventory records. Inventory records must be maintained for five years. Missile containers without the original manufacturer’s anti-tamper seal must be opened and all items visually inspected. If the missiles are not needed in the near term, the SCO and host nation may agree to re-seal the container with the Golden Sentry Security Label or the Golden Sentry Security Cable, if required based on the container’s construction. To obtain either type of anti-tamper seal, SCOs should contact the EUM Help Desk or the DSCA Regional EUM Program Managers, provide a mailing address, and identify the quantity and type of seal requested.
C8.4.1.4. Recording in the SCIP-EUM database includes accountability of inventories and final disposition of all EEUM-designated defense articles, i.e., expended, lost, and destroyed. SCOs must ensure the host nation reports any losses, firings/expenditures, or disposal of any EEUM-designated defense article as required in the transfer agreement and enter the information in the SCIP-EUM database.
C8.4.2. Site Surveys/Certification of Storage Facilities. MILDEPs are responsible for conducting site surveys and certifying foreign countries’ weapons storage facilities in accordance with DoD 5100.76-M, "Physical Security of Sensitive Conventional Arms, Ammunition and Explosives," before EEUM-designated weapons systems are delivered or moved to a new or uncertified facility. MILDEPs should develop certification checklists using criteria from DoD 5100.76-M and submit them to DSCA for review to ensure standardization. MILDEPs will provide DSCA a current list of all security managers, by weapon type, responsible for performing site survey certifications. MILDEPs security managers will coordinate site survey certification visits with DSCA and the other MILDEPs in advance to prevent the need to conduct a new site survey, if another MILDEP has already certified the same facility for proper storage of the same weapon category.
C8.4.3. EEUM Cost Reporting Requirements. DSCA is responsible for submitting an annual report to Congress, as required by AECA section 40A (22 U.S.C. 2785), which includes the costs for executing the Golden Sentry program.
C8.4.3.1. At the end of each fiscal year, the CCMDs and SCOs are required to submit the actual annual costs and future two-year budget projections associated with conducting EEUM, including travel to perform physical security and accountability inventories of in-country equipment and future deliveries and to attend Regional EUM Forums. To maintain accurate cost data and reporting, EUM managers should ensure that upon completion of each EEUM visit the cost is documented and entered into the Security Assistance Automated Resource Management System (SAARMS) under the appropriate expense code for EEUM (Code 210EM). Each entry should include a brief description of the EEUM function performed, e.g., number of personnel, equipment inventoried, locations visited.
C8.4.3.2. On a case-by-case basis, SCOs may request through the CCMD funding to meet unexpected requirements to perform EEUM checks due to disposal verifications or other unforeseen EUM-related activities for which funding was not requested in the regular budget cycle. Unfunded requirements must be submitted to the appropriate CCMD for approval. When CCMD funds are not sufficient or available, CCMDs may request funding from DSCA (Business Operations Directorate) to meet unforeseen SCO requirements.
C8.4.3.3. SCO questions regarding entries for conducting EEUM functions in SAARMS or unfunded requirement requests should be submitted to the CCMD. CCMD questions should be sent to DSCA (Directorate for Business Operations).
C8.5.1. EUM Visit Guidance. The Golden Sentry EUM program includes in-country visits to assess EEUM compliance programs. There are three types of EUM visits:
|
Each visit is unique to the host nation and equipment being assessed.
C8.5.2. FAV Guidance. The purpose of an EUM FAV is to assist the host nation, the SCO (or equivalent organization/office), and the CCMD to develop an effective EUM compliance program. It also provides an opportunity for the DSCA EUM representative to determine the requirements for conducting a potential future EUM CAV. A FAV may be prompted by a request from the host nation, SCO, or the CCMD to validate EUM programs. A FAV can also be prompted by the introduction of specific equipment into the region/country. Figure C8.T5. presents the timeline and formal requirements for a well coordinated and documented EUM FAV. Informal correspondence may occur prior to these actions.
Table C8.T5. EUM Familiarization and Assistance Visit (FAV) Timeline and Requirements
Event No. | Timeframe | Description |
---|---|---|
1 |
Not later than 30 days prior to visit |
|
2 |
Upon receipt of Country/Theater clearance message |
|
3 |
15 days prior to visit |
|
4 |
Familiarization Visit |
|
5 |
No later than 15 days after return to CONUS |
|
C8.5.3. EUM Compliance Assessment Visit (CAV) Guidance. The purpose of a CAV is to review and evaluate the SCO’s (or equivalent organization/office) compliance with Golden Sentry EUM policy and the host nation’s compliance with specific physical security and accountability requirements and other terms of sale. Activities during a CAV may include facility visits, record reviews, review of Routine and EEUM policies and procedures, and inventories of U.S.-origin defense articles. EUM CAVs are coordinated well in advance with the CCMD, SCO, and host nation to ensure the success of the visit. To maximize resources and minimize disruptions, EUM site visits should be arranged to coincide with scheduled host nations inventory dates whenever possible. Figure C8.T6. presents the timeline and formal requirements to ensure a well-coordinated and documented EUM CAV. Informal correspondence may occur prior to these actions. Inability to obtain proper entry credentials for the CAV Team from the recipient country may result in unfavorable reports within the DoS and DoD and may result in mention in the annual report to Congress.
C8.5.3.1. Factors DSCA considers when determining countries to be scheduled for CAVs include, but are not limited to, the following:
|
C8.5.3.2. To assist in planning and coordination with the host nation, a two-year CAV plan has been institutionalized through formal message notifications to the CCMDs and SCOs. The two-year plan provides a quarterly CAV schedule by CCMD and country. DSCA may, in coordination with the appropriate CCMD, perform additional out-of-cycle CAVs as necessary to execute the EUM mission.
Table C8.T6. EUM Compliance Assessment Visit Timeline and Requirements
Event No. | Timeframe | Description |
---|---|---|
1 |
Initial Notification |
|
2 |
Upon receipt of the Advisory Message |
|
3 |
90 days prior to the visit |
|
4 |
70-89 days prior to visit |
|
5 |
70 days prior to visit |
|
6 |
60 days prior to visit |
|
7 |
Not later than 30 days prior to visit |
|
8 |
Upon receipt of Country/Theater Clearance Message |
|
9 |
15 days prior to visit |
|
10 |
EUM Compliance Assessment Visit (CAV) |
|
11 |
Immediately upon identification of problems that preclude successful completion of the CAV |
|
12 |
Immediately upon discovery of a potential
AECA Section 3 or
FAA Section 505 violation. |
|
13 |
Usually no later than 15 days after the visit |
|
14 |
Upon receipt of the Interim TAR (no later than 20 days after the visit) |
|
15 |
Upon receipt of comments (no later than 30 days after the visit) |
|
C8.5.3.3. CAV Rating Criteria. The CAV rating is based on the CAV team's assessment of:
C8.5.3.3.1. SCO compliance with the policies and procedures of the Golden Sentry program and SCO responsibilities stated in Table C8.T2. including:
|
C8.5.3.3.2. Country compliance with the conditions of the transfer agreements for U.S.-provided defense articles and services, including:
|
C8.6.1. Potential End-Use Violations. While making end-use checks, SCOs should be alert for unauthorized use of defense articles, defense services, or technical data, including information provided during CONUS or in-country training. The check should provide information for both the recipient country and the United States to determine whether a country’s generally sound processes failed due to unusual circumstances, because security and accountability procedures are not given sufficient priority, or because country interests are diverging from those of the United States. Information gained during the special checks that could be useful in correcting the immediate problem or improving future end-use controls should be shared with the DoS and DSCA (Programs Directorate).
C8.6.2. Reporting End-Use Violations. SCOs must report all potential unauthorized end-use, including unauthorized access, unauthorized transfers, or security violations to DoS (PM/RSAT), DSCA (Programs Directorate), and the CCMD. It is particularly important that SCOs are alert to, and report on, any indication that United States-origin defense articles are being used against anything other than a legitimate military target, are otherwise being used for unauthorized purposes, are being tampered with or reverse engineered, or are accessible by persons who are not officers, employees, or agents of the recipient government. Potential violations can be notified via email or message. SCOs must assess the sensitivity of the potential violation and other factors to determine the means of notification. The DoS investigates and reports potential violations and determines whether the AECA section 3 (22 U.S.C. 2753) , criteria require notification to Congress.
C8.6.3. EUM Investigation Visits and Special End-Use Monitoring Checks. The SCO may be required to provide additional information to assist with the investigation process, and special EUM checks may be required to determine the country’s compliance with the transfer agreements. The purpose of an EUM Investigation Visit is to examine possible violations of AECA section 3 (22 U.S.C. 2753) , and FAA, section 505 (22 U.S.C. 2314) and any applicable diplomatic notes or agreements regarding the defense articles. These visits may be prompted by intelligence reports and/or other sources that indicate a host nation may be using U.S.-origin defense articles and services in ways that do not comply with U.S. laws and policies. EUM Investigation Visits are conducted as expeditiously as possible within the required coordination for foreign travel. Due to the unique nature and political sensitivity associated with this type of visit, each EUM Investigation Visit is handled on a case-by-case basis in concert with DoS.
C8.7.1. In accordance with the FAA, section 505 (22 U.S.C. 2314); AECA section 3 (22 U.S.C. 2753); and LOA Standard Terms and Conditions, foreign governments may not transfer title to or possession of any defense articles or services to anyone not an officer, employee, or agent of that country or of the USG until the country receives prior written consent from the USG. Nor may the foreign government use or permit the use of such articles or services for purposes other than for which they were furnished unless the foreign government receives prior written consent from the USG. SCOs should be aware of the pertinent agreements with the recipient country including any special diplomatic notes or agreements that apply to the defense articles involved. SCOs should contact their country program director to ensure that they have all pertinent agreements.
C8.7.2. Third Party Transfer Responsibilities.
C8.7.2.1. Department of State. The DoS is responsible for authorizing third party transfers of U.S.-origin defense articles and/or services worldwide.
C8.7.2.1.1. Office of Regional Security and Arms Transfer Policy (PM/RSAT). DoS (PM/RSAT) is responsible for coordinating the DoS response requests for the transfer of defense articles to a third party, including all associated components, technical data, training, and services originally acquired via FMS or grant programs (e.g., FMF, P.L. 109-163, Section 1206 (as extended), Military Assistance Program (MAP), Excess Defense Articles (EDA), Drawdown) and requests for the demilitarization and disposal of the items. See the DoS web page at www.state.gov/t/pm/rsat/c14025.htm for additional information.
C8.7.2.1.2. Directorate of Defense Trade Controls (PM/DDTC). Pursuant to AECA, section 38 (22 U.S.C. 2738) and the International Traffic In Arms Regulation (ITAR) (22 C.F.R. 120-130),, DoS (PM/DDTC) is responsible for processing third party requests to transfer defense articles or services originally acquired under a commercial export license or other commercial authorization (such as manufacturing license or technical assistance agreements). DoS (PM/DDTC) also authorizes temporary imports of defense articles into the United States.
C8.7.2.2. Department of Justice (DoJ). The Department of Justice's Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) is responsible for control of the permanent import of U.S. Munitions List (USML) (22 C.F.R. 121.1) items into the United States. DoS approval of a retransfer request by a foreign government must precede and be separate from submission by the importer of an ATF Form 6 import license application to BATFE.
C8.7.2.3. Security Cooperation Organizations (SCOs). SCOs are directly involved only in actions related to retransfers of items received through DoD-administered programs. They do not process requests for retransfers of defense articles procured by commercial means. Owning countries make such requests directly to the Department of State's Directorate of Defense Trade Controls through their embassies in Washington, D.C.
C8.7.3. Third Party Transfers Requests: Government-To-Government. The USG may consent to a third party (government) transfer if the USG would directly transfer the articles to the proposed recipient. The divesting government or international organization submits a written third party Government transfer request to the USG for consideration. The request is sent to the SCO and/or Country Team, which in-turn sends the request to DoS (PM/RSAT) with information copies to DSCA and the SCO of the proposed third party recipient country. The divesting government or international organization may also send the request directly to DoS (PM/RSAT). All transfer requests must include a signed cover letter, a completed Standard Questionnaire, and end-use, retransfer, and security assurances from the proposed recipient unless a member of the Blanket End-Use Assurance Program (sections C8.7.2.2. and C8.7.2.3.) The information required for the Standard Questionnaire is provided in Table C8.T7. See www.state.gov/t/pm/rsat/c14031.htm for step-by-step instructions and an example of a completed questionnaire.
Table C8.T7. Required Information for Third Party Transfer Standard Questionnaire
# | Required Information |
---|---|
1 |
The name of the divesting government. |
2 |
A clear description of the articles, services, technical data, or training being transferred including quantity, model, any associated equipment, spare parts and/or classified components or data. Also, where possible, indicate whether equipment is Significant Military Equipment (SME) or non-SME and the category under which the article is listed in the USML. Serial numbers must be provided for SME. |
3 |
The original acquisition source of the defense articles, services, technical data, or training proposed for transfer (e.g., FMS, grant, pseudo case transfer, etc.). The case identifier must be provided for FMS or an explanation as to why it is unavailable. |
4 |
The year of original acquisition. |
5 |
The original acquisition cost or best estimate of that cost. |
6 |
The current value if available. |
7 |
The reason the government wants to divest itself of the articles, services, technical data, or training. If by demilitarization and disposal, describe how it will be accomplished. |
8 |
The proposed recipient. |
9 |
Indicate whether the transfer is temporary or permanent. |
10 |
If known, the proposed end-use of the articles, services, technical data, or training by the proposed recipient. |
11 |
Indicate whether the recipient has the defense article proposed for transfer in its inventory. |
12 |
Estimation of net proceeds. In accordance with FAA, section 505(f) and prerequisite bilateral agreements, if the defense articles were furnished to a country on a grant basis (e.g., MAP-grants, grant EDA), the net proceeds of the sale of the defense articles received by the grantee must be returned to the USG. The following factors relating to the defense articles should be considered in determining the net proceeds: the value of the defense articles when furnished by the USG as a percentage of the aggregate of the value of the defense articles when furnished by the USG added to the value of any capital investment incurred by the grantee in repairing, rehabilitating, or modifying the article (other than routine maintenance and repair expenses); depreciation of that value; and reasonable administrative costs of the sale or disposal. The party requesting the third party transfer of such defense articles must show it has employed a reasonable methodology in calculating the net proceeds [e.g., Net Proceeds = (Gross Sale Proceeds - Administrative Costs of Sale) x (Value at Transfer / (Value at Transfer + Value of Capital Investment))]. DoS may waive return of net proceeds in cases involving grant equipment delivered prior to 1985. There is no waiver authority for articles delivered after 1985. Requests for waiver consideration are included in written transfer requests and must include an estimate of the net proceeds expected, justification/rationale for the request to retain net proceeds, and how the funds will be used. |
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Indicate whether an intermediary is involved in the transfer. If so, provide a description of the role (broker, freight forwarder, etc.), the business address, and a point of contact. |
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Proposed timeframe or time constraints with regard to DoS processing of the request. If immediate action is required, provide explanation. |
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The name, title, and contact details for an official in the divesting and recipient countries with whom DoS (PM/RSAT) can discuss the transfer details and required end-use, retransfer, and assurances. |
C8.7.3.1. End-Use, Retransfer, and Security Assurances. The DoS requires end-use, retransfer, and security assurances from the proposed recipient's Ministry of Foreign Affairs (MFA) unless the proposed recipient is a member of the Blanket Assurance Program. See Section C8.7.5. The assurances must be obtained by the divesting government and submitted with the retransfer request. These assurances are mandatory, generally non-negotiable, and must be received by DoS before the transfer can be considered for approval. Assurances must be typed in English and signed by an official of the proposed recipient country who can legally bind the entire government (usually the MFA). If the government issues assurances signed by an official of a ministry other than the MFA, such as the Ministry of Defense, the U.S. Embassy in that country must confirm in writing that his or her signature is binding. When language is supplied that does not appear to meet U.S. requirements, it is submitted to the DoS Office of the Legal Adviser for review.
C8.7.3.2. Blanket Assurances. Governments may sign blanket end-use, retransfer, and security assurances to satisfy legislative requirements for future government-to-government retransfers. Governments that sign Blanket Assurances are not required to sign individual assurances to receive USG-origin defense articles from foreign governments. Blanket members under the Defense Trade Security Initiative (DTSI) program have the added benefit of limited advanced consent. Members can transfer between and among themselves when: the original acquisition value of all transferred articles does not exceed $7 million; classified defense articles (including classified technical information) are not being transferred; the defense articles to be transferred are already in the inventory of the proposed recipient (no first introduction); and the proposed recipient is either an approved DTSI country (NATO members, Japan, Australia, or Sweden) or a signatory to the standard blanket assurance program. DTSI assurances, like blanket assurances, apply only to government-to-government third-party transfers of USG-origin defense articles. They do not replace the DSP 83 currently used for the retransfer of defense articles originally acquired through Direct Commercial Sales (DCS). Requests for retransfer of these items continue to be reviewed on a case-by-case basis by the USG. Interested governments should contact DoS (PM/RSAT) for consideration.
C8.7.4. Third Party Transfer Requests Government-to-Non-States or Private Entities. As stated in the FAA and AECA, defense articles and defense services are transferred to foreign governments and international organizations to serve U.S. foreign policy objectives. Following the receipt of a request to transfer U.S.-origin defense articles and defense services from a foreign government or international organization, the DoS adjudicates all requests for transfer of U.S.-origin military equipment to non-states, including private entities, nongovernmental organizations, international organizations, and other non-state groups, on a case-by-case basis. In submitting a government-to-non-state transfer request, the divesting country and the SCO follow the same instructions as provided above in Section C8.7.3. and Table C8.T5. For retransfers to private entities, the request should include end use, retransfer, and security assurances from the proposed private entity recipient, as well as Country Over Private Entity (COPE) assurances from the government with legal jurisdiction over the private entity. The written transfer request should include contact details for a representative of the private entity. An exception occurs when a country transfers U.S. equipment to a U.S. contractor for the purpose of refurbishment or salvage, and the name of the contractor is specifically listed in an LOA note that has been coordinated with DSCA (Programs Directorate) and the DoS. Further transfers of the equipment to a different contractor or other party must also be approved by DSCA (Programs Directorate) and the DoS.
C8.7.5. Congressional Requirements for Third Party Transfers. As provided in the FAA and the AECA, certain third party transfers of defense articles, including all associated components, technical data, training, and services originally acquired via FMS or grant programs, are subject to congressional notification and reporting requirements.
C8.7.5.1. Congressional Notification. Third party transfers of defense articles and services originally acquired via FMS or grant programs are subject to requirements for congressional certification pursuant to AECA, section 3(d) (22 U.S.C. 2753 (d)) using certification thresholds similar to those for AECA, section 36(b) (22 U.S.C. 2776(b)) notifications. See Section C5.5. A 30-day prior congressional certification is required for third-party transfer requests that involve defense articles and services with original acquisition values that fall in one of the following categories: Major Defense Equipment (MDE) with an acquisition value equal to or greater than $14M for non-North Atlantic Treaty Organization (NATO) recipients and $25M if the recipient is a member of NATO, Australia, Israel, Japan, the Republic of Korea, or New Zealand; or any other defense article or related training or defense service with an acquisition value of $50M or more for non-NATO recipients and $100M or more if the recipient is a member of NATO, Australia, Israel, Japan, the Republic of Korea, and New Zealand. For all recipients, approval is granted after the 30-day calendar day period has expired unless Congress enacts a joint resolution of disapproval.
C8.7.5.2. Transfers pursuant to arrangements among NATO members, or between NATO and any of its member countries for lead-nation procurement are exempt from AECA, section 3(d) (22 U.S.C. 2753 (d)) certification requirements if the defense article to be transferred was originally purchased from the United States, and the transferee on whose behalf the lead-nation procurement was proposed identified to Congress in a notification pursuant to AECA, section 36(b) (22 U.S.C. 2776(b)). Information as to possible subsequent transfers by a NATO member country purchasing on behalf of a third NATO party shall be provided to DSCA for inclusion in AECA, section 36(b) (22 U.S.C. 2776(b)) notifications. The certification requirement of AECA, section 3(d) (22 U.S.C. 2753 (d)) also does not apply to the following:
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C8.7.5.3. Congressional Reporting. All approved third party transfers involving defense articles and services with an original acquisition value of $1 million or more are submitted in a quarterly report to Congress (AECA, section 36(a)(9)).
C8.8.1. Changes in End-Use. Requests to change the end-use of U.S.-origin defense articles follow the same process and require the same information as third party transfers. Changes in end-use may include transfers to non-defense uses by other agencies of the owning government, or demilitarization for museum display. Disposal also constitutes a change in end-use for which prior consent from DoS is required for non-consumable items. Cannibalization is viewed as disposal only if the parts being removed will no longer be under the control of the ministry or agency that owns them, or will be used for purposes other than for national defense
C8.8.2. EUM and the Disposal Process. EUM of demilitarization is a key aspect of disposal due to the potential for unauthorized disclosure of classified or sensitive information, safety concerns, and other factors. During disposal, items often move from operating units to holding areas, where personnel may not be aware of classified features, potential lethality, or other sensitivities. SCOs are to ensure that DoD demilitarization procedures are followed by the host nations unless DoS has specifically authorized or required some other disposition. SCOs will witness the demilitarization and disposal of all EEUM-designated defense articles, and will witness or otherwise verify the demilitarization and disposal of all other defense articles. SCOs should record DEMIL actions by uploading to SCIP a copy of the completed Sample Format of a DEMIL Certificate, found in DoD 4160.28-M, Volume 3, "Defense Demilitarization: Procedural Guidance."
Figure C8.F2. Sample Format of a DEMIL Certificate
C8.8.2.1. At the time the host nation requests DoS consent to dispose defense articles, the SCO should begin working with the host nation counterparts to develop a demilitarization plan to ensure compliance with DoD DEMIL requirements. The SCO determines DEMIL requirements by obtaining the National Stock Number (NSN) from the LOA, 1000 Report or host nation equipment manual; and going to (WebFLIS) to determine the assigned DEMIL code. If the item needs to be demilitarized, the proper procedures are described in DoD 4160.28-M, current version, "Defense Demilitarization Manual." Demil procedures are provided in Volume 3.
C8.8.2.2. DoD Demilitarization Program Office (DDPO). The DDPO manages the DoD DEMIL Program to ensure that policy, procedures, program implementation, and operational performance are consistent with U.S. Foreign Policy, National Security objectives and DoD interest. Demilitarization involves the destruction of an item’s military capability. This is required to prevent property from being used for its originally intended purpose, and thereby prevent unauthorized use, and to prevent the release of inherent design information that could be used against the U.S. and its allies. The methods and degree of DEMIL can range from removal and destruction of critical features to total destruction. Items to be displayed require minimum DEMIL to render such items unserviceable in the interest of public safety. This DEMIL will preserve the intrinsic, historical, or display value of the property, but it usually does not constitute complete DEMIL as required for final disposition.