Foreign Military Sales

Foreign Military Sales (FMS) is a security assistance program of the United States government to facilitate the purchase of U.S. arms, defense equipment, design and construction services, and military training to foreign governments.^[1] FMS is a government-to-government program where the United States Department of Defense through the Defense Security Cooperation Agency (DSCA) acquires defense articles on behalf of the foreign governments, protecting them from contract risks in negotiating with the arms industry and providing the contract benefits and protections that apply to U.S. military acquisitions.^[2][3] The FMS program was established through the 1976 Arms Export Control Act (AECA) and is overseen by the United States Department of State and the United States Congress through the annual Foreign Operations Appropriations Acts and National Defense Authorization Acts.^[2][4]

The DSCA describes FMS as "a fundamental tool of U.S. foreign policy."^[5] FMS was the primary channel for U.S. arms exports until the 1980s, when the limits on the size of permitted Direct Commercial Sales (SCS) was lifted.^[6] DCS was seen by buyers to be faster, more cost-effective and less-transparent than FMS. By 1989, DCS surpassed FMS in value. However, after the Gulf War reversed the decline in FMS and by FY 1992–93, DCS had dropped to one-fifth of U.S. arms sales.^[6]

In FY 2020, U.S. military-industry base sold $50.8 billion through FMS and $124.3 billion through Direct Commercial Sales.^[7][2] In 2023, the U.S. recorded the highest annual sales of U.S. military equipment to foreign governments, carried out under the FMS system, valued at $80.9 billion. This marked a 55.9% increase compared to the $51.9 billion recorded in 2022.^[8] FMS is carried out with countries that are authorized to participate and is subject to approval based on the mechanism to procure services, a deposit in a U.S. trust fund or appropriate credit, and approval to fund services. On any given day, DSCA is managing “14,000 open foreign military sales cases with 185 countries,” the DSCA director Lieutenant General Charles Hooper explained at the Brookings Institution in June 2019.^[1]