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Do Foreign Military Sales shipments have to travel on U.S.-flag vessels?

Updated 26 September 2026Checked against the SAMM: 26 September 2026

By law, at least half of the grant-, credit- or guarantee-funded cargo that goes by sea must travel on privately owned U.S.-flag vessels. policy goes further for materiel bought with grant funding, including and articles on loan or lease: all of it must travel on U.S.-flag vessels unless , in coordination with the Maritime Administration, grants a Determination of Non-Availability. The term of sale and Type of Assistance code on the show when the rules apply. Air cargo of the same kind gives first preference to U.S. carriers.

Do Foreign Military Sales shipments have to travel on U.S.-flag vessels?

In accordance with the Merchant Marine Act of 1936, as amended by the Cargo Preference Act of 1954, defense articles purchased through the Foreign Military Financing Program (FMFP), or which have been granted to a country under the Foreign Assistance Act of 1961 or the National Defense Authorization Acts, and which will be shipped by ocean vessel, are to be transported in vessels of U.S. registry. This requirement applies to new articles and .

Freight forwarders must take note of the term of sale on the to determine if the Cargo Preference Act applies to their cargo. The “ Credit (Non-Repayable)” and “Excess () Grant” require transport by vessel to be made on a U.S.-registered carrier.

Type of Assistance codes A, M and N mark grant-funded materiel; Z ( Credit) and Y ( Guarantee) mark credit- and guarantee-funded materiel, which the statute also covers.

and the U.S. Maritime Administration () of the USDOT closely monitor credit/loan shipments. In general, -appropriated funds cannot be used to pay for any portion of the shipment that is not occurring on a U.S. Flagged-vessel, unless a Determination of Non-Availability (DNA) is granted or some other provision of U.S. law applies. DNA applications must demonstrate that a reasonable, timely, and bona fide effort to arrange P1 service has been made and such vessels are not available. Applications must also show all comparative rates. Partner countries should submit DNA requests to with a copy to .

References

Drawn exclusively from publicly available authorities.

SAMM

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