October 9, 2018 – The Defense Security Cooperation Agency (DSCA) announces Foreign Military Sales (FMS) of $55.66 billion for Fiscal Year 2018. The total sales figure includes all sales executed through the FMS program to include: $3.52 billion for cases funded by the State Department’s Foreign Military Financing Program; $4.42 billion for cases funded under Defense Department authorities; and $47.71 billion funded by partner nations.
The Fiscal Year 2018 total is a 33 percent increase above total sales in Fiscal Year 2017. DSCA includes sales in the end-of-year total when a partner nation signs and makes the initial deposit on a Letter of Offer and Acceptance. Since it may only be a matter of days between a sale counting in Fiscal Year 2018 and Fiscal Year 2019. DSCA considers the three-year, rolling average a more accurate way to measure trends in sales. With the Fiscal Year 2018 totals included, the three-year, rolling average is $43.7 billion and demonstrates a continued upward trend.
The continuing trend coincides with policy reforms the Administration is spearheading to better align conventional arms transfers with national security and economic interests. On April 19, 2018, the Administration updated the Conventional Arms Transfer Policy which lays out a series of activities the Administration will take to ensure arms transfers support U.S. allies and foreign partners, expand opportunities for American industry, and create new American jobs.
As part of this effort, DSCA is working with offices across the interagency to improve the efficiency and efficacy of the FMS process. Recently, DSCA reduced the FMS Administrative Surcharge from 3.5 percent to 3.2 percent lowering the cost of doing business with the United States Government through FMS. DSCA also reduced the FMS Transportation Rate, providing partner nations with more cost-effective options to transfer U.S. defense articles and services using the Defense Transportation System.
“These policy changes advance U.S. national security and foreign policy because they make FMS more attractive in a very competitive market,” said DSCA Director LTG Charles W. Hooper. “The United States not only sells the world’s most state-of-the-art defense systems, but we also strengthen our alliances and attract new partners through enduring strategic and defense partnership.”
FMS is a security assistance program authorized by the Arms Export Control Act under the authority of the Secretary of State. The United States uses FMS to further U.S. foreign policy and national security objectives through sales of defense articles, defense services, and military training to foreign countries and international organizations.