https://crsreports.congress.gov
February 21, 2020
Transfer of Defense Articles: Foreign Military Sales (FMS)
The United States sells more than $55 billion worth of
defense articles and services annually to foreign
governments to advance U.S. security and economic
interests. Such purchases are managed primarily through
the Foreign Military Sales program (FMS), through which
the U.S. government procures defense articles as an
intermediary for foreign partners. This adds value for
customers by ensuring that they have the same contract
benefits and protections that apply to the U.S. military’s
acquisition of its own defense articles and services. In turn,
the U.S. benefits from a government-to-government
relationship in the sale intended to comply with U.S.
foreign and security policy, as well as to help ensure
militarily interoperable weapons systems among allies and
partners.
Congress authorized the FMS program in the Arms Export
Control Act (AECA) of 1976 (22 U.S.C. §2751 et seq.) and
provides active oversight of the program through annual
Department of State and Foreign Operations Appropriations
Acts and the National Defense Authorization Acts. Such
oversight is also seen in the congressional response to
executive branch notifications of foreign arms sales.
Through these mechanisms, Congress may limit or prohibit
FMS to certain countries, or encourage the use of FMS in
other cases.
The sale of defense articles to Taiwan is not formally
subject to the AECA. Rather, FMS-like transfers to Taiwan
are authorized pursuant to the Taiwan Relations Act of
1979, P.L. 96-8, 22 U.S.C. §3301 et seq.
The Department of Defense (DOD) uses the FMS
infrastructure for defense articles procured and transferred
to foreign partners through the Foreign Military Financing
(FMF) program. It also uses the infrastructure under other
Title 10 authorities (e.g., 10 U.S.C §333), though these are
not considered FMS cases.
Figure 1. Foreign Military Sales (FMS) Process
Source: Defense Security Cooperation Agency (DSCA), annotated by CRS.
Notes: LOR: Letter of Request. LOA: Letter of Offer and Acceptance. NSPM: CFM: Country Financial Management Division, DSCA.
FMS Process (Figure 1)
Pursuant to Title 22, United States Code, all security
assistance programs are subject to the continuous
supervision and general direction of the Secretary of State,
to serve U.S. foreign policy interests. The State
Department’s Bureau of Political-Military Affairs (PM)
administers FMS, and DOD is the implementing agency,
through the Defense Security Cooperation Agency (DSCA).
