All of us who have spent any time around the DOD, and especially anytime working on or around NATO bases, you know that there are a lot of aircraft, trucks, tanks, and whatever else made in the U.S. but wearing livery and badges from all over the world. It is so commonplace that we don’t really think about it all that much anymore. But how do these transactions happen?

Who allows them?

And what equipment is authorized for foreign sales?

Let’s look at these questions and open up the floor for discussion on this large and popular program.

Who Is In Charge Of Foreign Military Sales?

Obviously, the President is ultimately responsible for foreign military sales, but he is responsible for everything, so this is not an accurate answer. The Bureau of Political-Military Affairs via the U.S. Department of State is the office responsible for FMS transactions. It is more complex than this; an extensive legal and regulatory framework is involved. The process is allowed under the Arms Export Control Act (AECA). For the sake of context, it’s important to dig into the AECA a little more. After all, without it there is no FMS. The basic legal framework for the AECA and FMS is in U.S. Federal Code, specifically 22 USC Sec 2751. While nobody expects you to memorize this mountain of text, it is good to have it around for reference. The original FMS program came into existence in 1968 with the passing of the Foreign Military Sales Act. It would eventually change names to the current AECA with an amendment to the International Security Assistance in 1976. Obviously, the Vietnam war was in full swing in 1968, which certainly prompted the creation of the FMSA and, ultimately, the AECA. We were transferring thousands of pieces of military equipment off to our allies which had until then been an under-regulated venture. 

How Is It Decided What Equipment Is Sold?

Foremost, the potential country must be determined eligible first. The President is the only individual who can to determine which nations are eligible trade partners. This is an executive decision to be made by the president alone. According to the Defense Security Cooperation Agency, FMS eligibility is: 

  1. “The President finds that the furnishing of defense articles and defense services to such country or international organization will strengthen the security of the United States (U.S.) and promote world peace;”
  2. “The country or international organization has agreed not to transfer title to, or possession of, any defense article or related training or other defense service so furnished to it or produced in a cooperative project, to anyone not an officer, employee, or agent of that country or international organization, and not to use or permit the use of such an article or related training or other defense service for purposes other than those for which furnished, unless the consent of the President (Department of State) has first been obtained;”
  3. “The country or international organization has agreed that it shall maintain the security of such article or service and provide substantially the same degree of security protection afforded to such article by the U.S.; and”
  4. “The country or international organization is otherwise eligible to purchase or lease defense articles or defense services.”

The nation has to be in good standing with the U.S. and have the interest of the U.S. and the promotion of world peace as a goal. They also must keep the asset as secure as the U.S. would. The goal is to ensure our equipment ends up in something other than enemy combatant hands.

Can Only Old Surplus Equipment Be Sold As FMS?

Not at all. While they sell a significant amount of our excess equipment and aircraft as surplus, a significant amount of brand-new equipment is sold to foreign allies. This is true of our wealthier trade partners. Israel has bought late-model fighter aircraft for years from us. For example, they are buying brand new F-35 fighters to supplement their fleet of F-15 Eagles, F-16 Vipers, and other aircraft. But we also have trade agreements with smaller countries as well. For instance, Colombia is buying a fleet of Beechcraft T-6 Texan II trainers to replace their aging fleet of T-37 Tweets. One of the benefits of FMS sales to smaller allies of the U.S. is the ability to purchase tactical aircraft that we no longer use (older block fighters are popular, namely F-16s) and give them a second life in a smaller air force. Even our outdated fighters are well-received and technologically advanced aircraft by most standards. 

Who Are The Largest Trading Partners?

We have worked deals with dozens of countries, but some are much larger (and more consistent partners than others. It has been said that the U.S. has the largest military and is the largest supplier of military arms worldwide. According to the Stockholm International Peace Research Institute, the U.S. holds a 39% share of arms exportation, and beats out the closest competitor (Russia) by a solid 20%. After that, it’s not even close. 

So the real question is, who do we not trade with?

But we do conduct arms trades with the largest importers of arms in the world, which India leads (11%), Saudi Arabia (11%), Australia (5.4%), Qatar (406%, and South Korea (4.1%) to name just a few. 

What Are Our Highest-demand Assets In FMS Deals?

Combat aircraft will always be one of the highest-demand assets, and also one of the costliest. But it isn’t just about the cost to purchase; it takes billions of dollars in R&D to come up with a functional design, which is not attainable for a lot of our trade partners, or it’s just not worth the time and money when we already make the best products. Fighters, helicopters, cargo aircraft, and even aerial refuelers are hot commodities, and the market for aerial ISR aircraft is also on the move. 

Who Can We Not Trade With?

Again, this is the President’s decision, although it is commonly accepted that any foes and potential threats are out. So, it largely is based on what the State Department has determined. Anyone with embargoes or nations who ally with our enemies is likely out of the question.

The FMS is always changing and will never disappear, even as the market fluxes. As foreign nations upgrade and update their fleets, they need peace of mind in working with an agency that knows the landscape of aircraft logistics, parts, and supplies. Government Procurement, operated by Greenwood Aerospace, is that company! If you are involved in the FMS process and need to secure a reliable supply chain, look no further than Greenwood Aerospace. Give us a call about your operation, and we’ll see how we can help you! Already see what you need? You can start a quote and get the ball rolling. And check out our other services; we are here to help you every step of the way. 

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