Do you need an export license for a Foreign Military Sale?

Government-to-government international transfers under FMS are authorized for export under the Letter of Offer and Acceptance (LOA) per the Arms Export Control Act (AECA) from the Department of State. This export authorization is limited to the United States Government’s activities that fall within the scope of the LOA.

Building Partner Capacity programs, whose authorities come from Title 10 or annual National Defense Authorization Acts, are executed on BPC Letters of Offer and Acceptance, also known as BPC cases.

U.S. industry requires separate export authorization. This authorization may be in the form of export licenses/agreements or exceptions/exemptions from the Department of State or the Department of Commerce, as appropriate.

The AECA governs the export of defense articles and defense services to foreign countries and international organizations and includes both commercial and government programs. It authorizes a list of controlled articles, the USML, which is contained in the ITAR published by the Department of State (DOS) and is available online via the DECCS Industry Service Portal. The AECA forms the legal basis for the security requirements in most DoW international programs. The AECA states that foreign sales (i.e., access) should be consistent with U.S. foreign policy interests, strengthen the security of the U.S., and contribute to world peace. The AECA also requires the President to provide Congress assurances that proposed recipient foreign countries or international organizations have agreed to certain security conditions regarding the protection of the articles or information. The three security-related conditions, which must be satisfied prior to the export of controlled defense articles and information to a foreign country or international organization, are as follows:

• Transfer: The recipient country or organization agrees not to transfer title or possession of the articles or related technical data to anyone who is not an officer, employee or agent of the country or organization without prior USG consent.
• Use: The recipient country or organization agrees not to use the articles or related technical data or permit their use for other than the purpose for which they were furnished without prior USG consent.
• Protection: The recipient country or organization agrees to maintain security of the articles or related technical information, and provide substantially the same degree of security to it as does the USG.

These security-related conditions are incorporated into the Foreign Military Sales (FMS) process via the standard terms and conditions of each Letter of Offer and Acceptance (LOA). Within any LOA, the standard terms and conditions will be listed at Section 2 “General Purchaser Agreements.” Transfer, use, and protection are specifically addressed in subsections 2.4-2.6 of any LOA. By stating these conditions of sale in the LOA, the international partner agrees to these conditions when they sign to accept the LOA.

Any release or disclosure of export controlled technology or technical data to any foreign person, whether it occurs in the United States or abroad, is deemed to be an export, requiring either an export license or an authorization for disclosure.

The Department of State and/or Department of Commerce provide export authorizations with export license/agreements for DCS exports under the International Traffic in Arms Regulations and Export Administration Regulations. Alternatively, U.S. exporters may utilize exceptions/exemptions under the respective regulations.