Foreign Military Sales (FMS) & Security Assistance

Foreign Military Sales (22 U.S.C. §§ 2761–2799aa-2) is the U.S. government's primary program for selling defense articles and services — fighter jets, missiles, ships, radar systems, training, maintenance support — to allied and partner nations. Unlike direct commercial sales under the Arms Export Control Act (where a foreign government buys from a U.S. manufacturer directly), FMS is a government-to-government transaction: the foreign government requests a purchase, the U.S. government negotiates the sale, and the Defense Security Cooperation Agency (DSCA) manages the contract on behalf of both parties, subject to export controls on dual-use technology. FMS is the cornerstone of U.S. security cooperation — it builds alliances, ensures interoperability between U.S. and allied forces, supports the U.S. defense industrial base, and advances American foreign policy objectives. In FY 2023, FMS agreements totaled approximately $80+ billion (a significant component of overall defense spending) — making the United States the world's largest arms exporter by a wide margin.

Current Law (2026)

Legal Authority

• 22 U.S.C. § 2761 — Sales from stocks (President may sell defense articles from DOD stocks to eligible foreign governments and international organizations)
• 22 U.S.C. § 2762 — Procurement for cash sales (the U.S. government may procure defense articles and services from U.S. manufacturers for sale to foreign governments)
• 22 U.S.C. § 2763 — Credit sales (President may finance FMS sales on credit terms for eligible countries)
• 22 U.S.C. § 2764 — Guaranties (President may guarantee FMS credit sales)
• 22 U.S.C. § 2767 — Authority to enter into cooperative projects (President may enter cooperative R&D and production projects with friendly foreign countries)
• 22 U.S.C. § 2776 — Reports and certifications to Congress (agency must notify Congress of proposed FMS sales above threshold amounts; Congress has 30 days to block the sale through a joint resolution of disapproval)

How It Works

FMS is a government-to-government transaction, not a commercial sale. A foreign government submits a Letter of Request (LOR) to DSCA, which coordinates with the military services, State Department, and industry to develop a Letter of Offer and Acceptance (LOA) — a binding agreement specifying items, services, price, and delivery schedule. The foreign government deposits funds into the FMS Trust Fund in advance, and the U.S. government contracts with American defense manufacturers to produce and deliver the equipment, assuming responsibility for contract management, quality assurance, and delivery. For sales above threshold amounts — $14M for major defense equipment to NATO allies, $50M+ for other defense articles, $200M+ for design/construction services — DSCA must submit a formal notification to the Senate Foreign Relations Committee and House Foreign Affairs Committee. Congress has 30 days to review and can block through a joint resolution of disapproval, though none has ever been enacted over a presidential objection. The U.S. provides approximately $6 billion annually in Foreign Military Financing (FMF) grants — essentially paying for allied FMS purchases with foreign aid dollars — with Israel receiving ~$3.3 billion and Egypt ~$1.3 billion under standing agreements.

FMS operates on full cost recovery: foreign governments pay not just the equipment price but administrative costs, R&D amortization, packing, handling, and a 3.5% administrative surcharge — ensuring FMS generates revenue rather than burdening U.S. taxpayers. The strategic logic runs deeper than revenue: equipping allies with American platforms creates interoperability, meaning allied forces can fight alongside U.S. forces using compatible equipment, communications, and logistics. Countries that buy American aircraft need American spare parts, training, and maintenance for decades — tying their defense establishments to the U.S. in ways that outlast any individual sale. FMS can also be restricted or denied as a diplomatic tool, refusing weapons to governments that violate human rights norms or destabilize their regions, making it simultaneously a commercial, strategic, and foreign policy instrument.

How It Affects You

If you represent a foreign government seeking U.S. defense equipment or services, FMS is your primary pathway for government-to-government acquisition. The process starts with a Letter of Request (LOR) submitted to your country's DSCA Security Cooperation Office (or the relevant U.S. military department's security cooperation organization). DSCA and the military services evaluate the request, develop pricing and availability data, and issue a Letter of Offer and Acceptance (LOA) — the binding government-to-government sales agreement. The LOA specifies articles, services, delivery schedule, and total cost including the 3.5% administrative surcharge. You deposit funds into the FMS Trust Fund in advance; the U.S. government then contracts with defense manufacturers. Key advantages over direct commercial sales: U.S. government manages contract oversight and quality control, and you benefit from the same favorable pricing the U.S. military negotiates. Foreign Military Financing (FMF) grants — approximately $6 billion/year — are available to eligible countries (primarily Israel at ~$3.3B and Egypt at ~$1.3B) and effectively pay for FMS purchases with U.S. foreign aid dollars. Contact DSCA at dsca.mil/programs for current eligible country lists and program guidance.

If you're a U.S. defense manufacturer or prime contractor, FMS represents a critical revenue and production volume driver. For major systems producers, FMS can account for 20–40% of total annual sales. The strategic value: FMS orders share non-recurring development costs across a larger production base, extend production runs that might otherwise close, and sustain specialized manufacturing capabilities the U.S. military needs. FMS orders are placed by the U.S. government (DSCA and the relevant military service act as the contracting authority), so you negotiate with the government just as you would for direct U.S. military procurement. Congressional notifications (for sales above $14M for major defense equipment, $50M for other defense articles) create a 30-day review window where sales can generate controversy — large FMS cases involving countries with contested human rights records (Saudi Arabia, UAE) have faced formal Congressional holds and resolutions of disapproval, though none has been successfully enacted over presidential objection. Track current Congressional notifications at dsca.mil/press-media/major-arms-sales.

If you're a U.S. taxpayer or citizen following U.S. arms policy, FMS has a mixed fiscal and strategic profile. On the positive side: FMS operates on full cost recovery — foreign governments pay every penny, including administrative overhead — so it doesn't burden taxpayers directly. It sustains the U.S. defense industrial base, keeping production lines running that the U.S. military also depends on. The $80+ billion in FMS agreements in FY 2023 represents the largest peacetime arms export volume in U.S. history, driven partly by post-Ukraine war demand from European and Asian allies rebuilding their militaries. On the strategic concern side: Foreign Military Financing (FMF) grants (~$6 billion/year) are taxpayer-funded foreign aid, and FMS weapons sold to unstable regimes can end up in adversaries' hands through capture or regime change. Leahy vetting — required under 22 U.S.C. § 2378d — prohibits FMS training or equipment to foreign military units credibly linked to gross human rights violations; critics argue enforcement is inconsistent.

If you work in human rights advocacy, journalism, or Congressional oversight, FMS is the primary lever for influencing the terms and conditions of U.S. arms exports. The 22 U.S.C. § 2776 Congressional notification process requires DSCA to formally notify Congress of all sales above threshold amounts; advocacy organizations monitor these at dsca.mil/press-media/major-arms-sales. Congress can block a sale through a joint resolution of disapproval (never successfully enacted over presidential veto) or through informal holds — Senators and Representatives can put informal holds on FMS packages, which don't legally block sales but create political friction. The End-Use Monitoring (EUM) program requires the U.S. government to verify that FMS equipment is being used for its intended purpose and not transferred to third parties — golden sentry (physical security) and blue lantern (end-use) programs conduct these checks. Organizations like the Friends Committee on National Legislation (fcnl.org) and Security Assistance Monitor (securityassistance.org) track FMS packages, FMF allocations, and Leahy vetting compliance.

State Variations

FMS is exclusively federal, but state economies are affected:

• Defense manufacturing jobs supported by FMS are concentrated in states with major defense contractors (Texas, Virginia, California, Connecticut, Missouri, Arizona)
• State economic development agencies may promote FMS-related manufacturing opportunities
• State export control awareness varies

Implementing Regulations

• 22 CFR Part 126 — ITAR general policies and provisions (Arms Export Control Act implementation — prohibited destinations, government-to-government transfers, Congressional notification thresholds)
• 22 CFR Part 129 — Registration and licensing of brokers (defense articles/services brokering requirements)
• DSCA Manual 5105.38-M — Security Assistance Management Manual (FMS case procedures, pricing, LOA administration, delivery, financial management)

Pending Legislation

FMS reform provisions appear in annual NDAA and foreign affairs legislation. See Arms Export Control and Defense Authorization (NDAA).

Recent Developments

FMS volume has surged since Russia's 2022 invasion of Ukraine, as NATO allies have accelerated orders for U.S. weapons systems (F-35 fighters, HIMARS, Patriot missile systems). The Middle East remains the largest FMS market, with Saudi Arabia, UAE, Qatar, and Israel as major purchasers. DSCA has worked to reduce FMS processing times (historically criticized as too slow — some sales took years to complete), implementing reforms to streamline the LOA process. Arms transfers to Ukraine have raised questions about the interaction of FMS with export controls on dual-use technology and the distinction between FMS, Presidential Drawdown Authority (providing articles from existing stocks), and Ukraine Security Assistance Initiative funding. Congressional notification and review of FMS sales has become more politically charged, with proposals to sell weapons to Taiwan, Saudi Arabia, and other sensitive partners generating significant debate.

• Trump arms sales to Gulf states: $142B Saudi deal (2025): The Trump administration notified Congress of an unprecedented $142 billion in arms sales to Saudi Arabia during Trump's May 2025 Riyadh visit — the largest single arms sale in U.S. history. The package included F-15 aircraft, Patriot air defense systems, Bradley fighting vehicles, and munitions. Congress has 30 days to pass a joint resolution blocking the sale; no blocking resolution passed. Human rights advocates objected given Saudi conduct in Yemen; Trump administration defended the sales as economic and strategic.
• Ukraine military aid pause and resumption (2025): Trump paused U.S. military assistance to Ukraine in February 2025 following the Oval Office confrontation between Trump and Zelensky, then resumed some intelligence sharing and munitions deliveries after Ukrainian concessions. The pause tested the legal limits of presidential authority to withhold congressionally appropriated security assistance — a question with direct parallels to the first Trump impeachment. A minerals deal between the U.S. and Ukraine was used as the vehicle for restoring some assistance.
• Taiwan arms backlog: Taiwan has over $20 billion in FMS orders awaiting delivery — a significant backlog driven by U.S. production bottlenecks and competing demand from NATO allies. DSCA and DoD have prioritized clearing the Taiwan backlog given PRC military pressure; deliveries of HIMARS, Stinger missiles, and F-16 components have accelerated. The Taiwan Policy Act proposed major increases in Taiwan arms sales authorities; some provisions were included in FY2025 NDAA.
• Gaza and arms sales controversy: Human rights organizations challenged U.S. arms transfers to Israel during the Gaza conflict — arguing the weapons were used in strikes killing civilians, triggering Leahy Law prohibitions on assistance to units committing gross human rights violations. The Biden administration completed a review finding no Leahy violations warranting aid cutoff; the Trump administration has been more supportive of Israeli operations. Congress has considered conditioning arms transfers to Israel; no conditioning legislation has passed.