https://crsreports.congress.gov
May 4, 2020
Modifying or Ending Sales of U.S.-Origin Defense Articles
The U.S. government has in law a number of mechanisms
by which it can alter or end the sales of U.S.-origin defense
articles when foreign countries misuse such items.
Arms Export Control Act and Foreign
Assistance Act of 1961
The Arms Export Control Act (AECA; P.L. 90-629, as
amended; 22 U.S.C. 2751 et seq.) and the Foreign
Assistance Act of 1961 (FAA; P.L. 87-195, as amended; 22
U.S.C. 2151 et seq.) establish the statutory foundations
governing Foreign Military Sales (FMS) and Direct
Commercial Sales (DCS) to foreign consumers, including
foreign governments. FMS refers to the sale of U.S.-origin
defense articles, equipment, services, and training
(hereinafter referred to as “defense articles”) on a
government-to-government basis. DCS refers to the sale of
U.S. government-licensed defense articles and services
directly from U.S. firms to eligible foreign governments
and international organizations.
These laws require that such sales be for specific authorized
military purposes and establish eligibility prerequisites for
potential foreign customers. Prospective recipients of FMS
must agree to refrain from transferring title or possession of
the articles to unauthorized persons, as well as from
diverting articles for unauthorized purposes or end-use.
Recipients must also agree to maintain security of U.S.-
origin defense articles (Section 3(a), AECA (22 U.S.C.
2753(a)). The International Traffic in Arms Regulations
(ITAR; 22 CFR Parts 120-130) contain comparable
provisions for DCS transfers.
The Department of State’s Office of Regional Security and
Arms Transfers, in the Bureau of Political-Military Affairs,
administers FMS transactions. The department’s
Directorate of Defense Trade Controls, also in the Political-
Military Affairs Bureau, administers licenses for
commercial sales. The ITAR implements the AECA and
state licensing policy for the export of defense articles.
The AECA and FAA also prohibit the sale or delivery of
U.S.-origin defense articles if either the President (by
determining such and reporting to Congress) or Congress
(by passing a joint resolution) finds that a recipient country
has used such articles “for a purpose not authorized” by
Section 4, AECA (22 U.S.C. 2754), Section 502, FAA (22
U.S.C. 2302), or in substantial violation of other limitations
contained in an agreement with the United States governing
the articles’ provision (Section 3(c)(1)(B), AECA (22
U.S.C. 2753(c)(1)(B), and Section 505(d), FAA (22 U.S.C.
2314(d)). Section 4, AECA, and Section 502, FAA, state
that defense articles may be sold only for certain purposes,
including internal security, legitimate self-defense,
impeding weapons of mass destruction proliferation, and
participation in collective measures requested by the United
Nations or comparable organizations.
Section 614, FAA (22 U.S.C. 2364), permits the President
to engage in FMS transactions up to a value of $750 million
in any fiscal year without regard to any AECA provisions,
“any Act authorizing or appropriating funds for use under”
the AECA, or “any law relating to receipts and credits
accruing to the United States.” Such transactions must be
“in furtherance of any” AECA purpose; the President must
also determine that engaging in a particular such transaction
“is vital to the national security interests of the United
States.” This section, which does not apply to export
licenses for DCS, requires the President to notify and
consult with Congress if and when the President chooses to
exercise this authority.
Other Defense Article Transfer
Mechanisms
The U.S. government transfers U.S.-origin defense articles
via other mechanisms. Section 516, FAA (22 U.S.C. 2321j),
for example, authorizes the President to transfer excess
defense articles to foreign governments. Executive Order
(E.O.) 12163 (September 29, 1979, 22 U.S.C. 2381 note)
delegates this function to the Secretary of State. In addition,
the U.S. government transfers U.S.-origin defense articles
pursuant to Defense Department-led programs that build
foreign partner government capacity. The U.S. government
may also transfer such articles as part of a covert action.
End-Use Monitoring
U.S.-origin defense articles are subject to end-use
monitoring (EUM) for the purpose of verifying that
recipients use such articles only for permitted purposes (see
Sections 38(g)(7) and 40A(a), AECA (22 U.S.C. 2778(g)(7)
and 2785(a)). EUM also applies to defense articles
retransferred to other parties. The standard terms and
conditions of a Letter of Offer and Acceptance (LOA),
which itemizes the defense articles offered by the U.S.
government for a particular FMS transfer, contain the
AECA-mandated restrictions described above, as well as
provisions permitting EUM; Section 3(g), AECA, requires
this language. According to State Department guidance, an
export license application must include written
confirmation from the proposed recipient “regarding the
specific end-user and end use.” Export licenses for U.S.-
origin defense articles specify that licensed transactions
may be subject to EUM.
Terminating or Prohibiting Transfers
The United States does not have the legal authority to
compel the return of items exported via either the FMS or
DCS processes. Both the executive branch and Congress
