Guide
What is the difference between Foreign Military Sales and Foreign Military Financing?
is a purchase: a government-to-government sale the buyer pays for. Foreign Military Financing is a way to pay: appropriated U.S. grants and loans that let eligible partners buy U.S. defense articles, most often through .
What is the difference between Foreign Military Sales and Foreign Military Financing?
The program is a non-appropriated program administered by through which eligible foreign governments purchase defense articles, services, and training from the . The purchasing government pays all costs associated with a sale. There is a signed government- to-government agreement, normally documented in a , between the and a foreign government. Each is commonly referred to as a “case” and is assigned a unique for accounting purposes. Under , military articles and services, including training, may be provided from DoW stocks (Section 21, ) or new procurement (Section 22, ). If the source of supply is new procurement, based on an accepted by the foreign government, the agency or MILDEP assigned cognizance for this case is authorized to enter into a subsequent contractual arrangement with U.S. industry to provide the article or service requested.
The Foreign Military Financing Program (FMFP) is an appropriated program administered by that has undergone various substantive and terminological changes over the years. At present, the program consists of congressionally appropriated grants and loans, which enable eligible foreign governments to purchase U.S. defense articles, services, and training generally through or direct commercial sales () for select countries. credit (FMSCR) is authorized under the provisions of Sections 23 and 24, , and originally served to provide credit (loans) as an effective means for easing the transition of foreign governments from grant aid, e.g., and International Military Education and Training (), to cash purchases.
While previously authorized FMFP loans are still being repaid to the , the FMFP grant element (no repayment) has become the norm.
References
SAMM
- SAMM GLOSSARY/foreign-military-sales-fms — Foreign Military Sales (FMS)
- SAMM C9.7.2.1 — Foreign Military Sales Credits.
- SAMM C9.7.2.10.3 — Expenditure of Foreign Military Financing Funds.
- SAMM C1.1.2.2 — Security Assistance Programs.
Related
Foreign Military Sales (FMS)
A process, authorized by the Arms Export Control Act, through which eligible foreign governments and international organizations may purchase defense articles, services, and training from the United States Government.
SAMM Glossary, as of 12 September 2026
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Arms Export Control Act (AECA)
The basic U.S. law providing the authority and general rules for the conduct of Foreign Military Sales and commercial sales of defense articles, defense services, and training. The Arms Export Control Act (AECA) came into existence with the passage of the Foreign Military Sales Act (FMSA) of 1968. An amendment in the International Security Assistance and AECA of 1976 changed the name of FMSA to the AECA.
SAMM Glossary, as of 12 September 2026
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DSCA — Defense Security Cooperation Agency
SAMM Acronyms, as of 12 September 2026
Glossary entry →Defense Security Cooperation Agency (DSCA) →
Letter of Offer and Acceptance (LOA)
The legal instrument used by the USG to transfer itemized defense articles, defense services, and design and construction services to foreign partners.
When used under the authorities provided in the Arms Export Control Act for Foreign Military Sales, the LOA is a binding agreement signed by the USG and the foreign partner to transfer such articles and services.
When used under Building Partnership Capacity (BPC) authorities, the BPC LOA is not signed by the Benefitting Partner.
SAMM Glossary, as of 12 September 2026
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LOA — Letter of Offer and Acceptance
SAMM Acronyms, as of 12 September 2026
Case Identifier
A unique six-digit identifier assigned to an Foreign Military Sales case for the purpose of identification, accounting, and data processing of each Letter of Offer and Acceptance. The case identifier consists of the two-letter country code, a one-letter designator for the Implementing Agency, and a three-letter case designator.
SAMM Glossary, as of 12 September 2026
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FMS — Foreign Military Sale
SAMM Acronyms, as of 12 September 2026
AECA — Arms Export Control Act
SAMM Acronyms, as of 12 September 2026
DCS — Direct Commercial Sales
SAMM Acronyms, as of 12 September 2026
Military Assistance Program (MAP)
That portion of the United States Security Assistance program authorized by the Foreign Assistance Act of 1961, as amended, which once provided defense articles and services to recipients on a nonreimbursable (grant) basis. Funding for MAP was consolidated under the Foreign Military Financing program beginning in Fiscal Year 1990.
SAMM Glossary, as of 12 September 2026
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IMET — International Military Education and Training
SAMM Acronyms, as of 12 September 2026
Trust Fund
A type of account, designated by law as a “trust fund,” regardless of any other meaning of the term “trust fund.” A trust fund account is usually either a receipt, an expenditure, or a revolving fund account (trust revolving fund account).
SAMM Glossary, as of 12 September 2026
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Security Assistance (SA)
A group of programs authorized by federal statutes by which the United States provides defense articles, military training, and other defense-related services by grant, lease, loan, credit, or cash sales in furtherance of national policies and objectives, and those that are funded and authorized through the Department of State to be administered by Department of Defense/Defense Security Cooperation Agency, which are considered part of security cooperation.
SAMM Glossary, as of 12 September 2026
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Security Cooperation
Activities undertaken by the DoD to encourage and enable international partners to work with the United States to achieve strategic objectives. It includes all DoD interactions with foreign defense and security establishments, including all DoD-administered security assistance programs, that: build defense and security relationships that promote specific U.S. security interests, including all international armaments cooperation activities and security assistance activities; develop allied and friendly military capabilities for self-defense and multinational operations; and provide U.S. forces with peacetime and contingency access to host nations.
SAMM Glossary, as of 12 September 2026
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