NOTE: DSCA does not have the lead in export control nor technology transfer processes.

Export control (see Part A for The Major Players slide)

• State Department has the leading role in export control. Specifically, the State Department:
  • Determines which countries are eligible for programs.
  • Determines which major sales will be made, whether through direct commercial channels or the Foreign Military Sales (FMS) programs.
  • Issues munitions export licenses for commercial sales.\

   

• · DoD’s role:
  • We have extensive input on policy.
  • We determine what equipment is available for sale.
  • We implement Foreign Military Sales (FMS).

Technology transfer:

• Technology transfer decisions have many moving parts – 3 committees, 15 processes, 23 agencies involving 45 separate offices. Each functions under unique guidance and often with an agenda. No single office is responsible for the U.S. Government (USG) position. The process is generally reactive and slow. 
• DoD’s processes to evaluate the merits and impact of the international transfer of U.S. munitions and technology calls for the Joint Chiefs of Staff (JCS) to coordinate with the Geographic Combatant Commanders (GCCs) to represent the operational interest and perspectives of the warfighter in interagency processes.
• GCCs, either directly or through the JCS, participate in the different interagency export control and Technology transfer processes and here’s how: 

Foreign Military Sales Process

• Export release authority – State Department.
• DoD program lead – DSCA.
• GCC’s role, direct or through JCS.
  • Submission of the LOR. The GCC, Joint Staff, OSD, and the Military Departments may be involved in the development and/or submission of a LOR. If the CJCS does not want a country to obtain a weapon, the GCC can also be used to influence whether a LOR is ever submitted. 
  • LOR Advisories. DSCA (Regional Directorate) prepares and sends an LOR Advisory to the Chairman of the Joint Chiefs of Staff and USD(AT&L). The LOR Advisory will include a copy of the purchaser’s request as well as the Country Team Assessment (when required). This is the opportunity for the CJCS to show support for the sale or advise of his desire to halt further work on the LOR. The recipients have 10 working days from the date of the LOR Advisory to provide comments to DSCA for consideration. In the event of non-concurrence, disagreements are adjudicated. The LOR Advisory does not take the place of any Exception to National Disclosure Policy (ENDP) processes or releasability requirements that are worked by the Military Departments. (See Tab B for information paper “FMS approval process and how the Joint Staff influences the FMS process.” )
    
• The Direct Commercial Sales (DCS) Export Licensing process
  • Export release authority - State Department, Bureau of Political Military Affairs, Directorate of Defense Trade Controls (DDTC).
  • DoD process lead – Defense Technology Security Administration (DTSA).
  • DSCA’s role – Review DoS Export licenses referred by DTSA.
  • GCC’s role through JCS - Review DoS Export licenses referred by DTSA.

INTERAGENCY LICENSE REVIEW PROCESS FLOW

Military Departments Export Policy Processes and Exemption to National Disclosure Process (ENDP).

• Process lead – Heads of Departments and Agencies with jurisdiction over the information (i.e. Military Departments, NSA, etc.). If request exceeds the Service’s or agency’s delegated authority to disclose then they initiate the ENDP process, not the customer.
• Decision authority: National Disclosure Policy Committee (NDPC) or SecDef/DepSecDef if there’s an appeal.
• NDPC members include general members (DoS, Army, Navy Air Force, JCS) and special members (CIA, DoE, OUSD-P*,OUSD-AT&L, OUSD-I, OUSD-NII, DIA, MDA, NSA, NGA, OATSD-NCB).
• DSCA’s role – *As a member of the NDPC DSCA represents and votes for OSD-Policy.
• GCC’s role - Joint Staff represents the Geographic Combatant Commanders’ (GCC) position.
  • JCS resolve’s differences between the Unified Commands. Joint Staff forwards LOR advisories, munitions licenses or ENDPs to the appropriate Unified Commands and monitors their various release positions and adjudicates disparate positions (for example SOCOM’s position on a release may run counter to CENTCOM’s position). Resolution by the Joint Staff J5 on these types of differences is one of the most critical tasks in support of security assistance for which DSCA looks to the Joint Staff. This is common to LORs for Night Vision Devices (NVDs), Unmanned Aerial Vehicles (UAVs), etc.
  • ENDP The Joint Staff has a vote on all ENDPs. In responding to ENDPs that are heavily favored or not supported by the Joint Staff, they can provide strong rationale and justification and send their message to the other members of the National Disclosure Policy Committee (NDPC) to influence their votes. DSCA calls the Joint Staff J5 for their position on many of the ENDPs. (See Tab B for information paper “FMS approval process and how the Joint Staff influences the FMS process.” )

ENDP PROCESS FLOW

• Low Observable/Counter Low Observable Executive Committee (LO/CLO ExCOM)
  • Adjudicates requests or proposals to sell or transfer LO and CLO (i.e. sensors) technologies, capabilities, information to international governments and international organizations.
  • Tri-Service first level review within 45 days of request.
  • Refers issues to ExCom depending on sensitivity.
  • JCS is a committee member.
  • Recent examples: F/A-18E/F, JSF.
• Committee on National Security Systems (CNSS)
  • Adjudicates GCCs validated interoperability requirements for release of USG INFOSEC/ COMSEC/CRYPTO equipment and, or\services for C4ISR systems. 
  • GCCs issue interoperability requirement to JCS J6 (capabilities-based).
  • JCS J6 validates requirement through an interagency review.
  • NSA determines technical solution; CNSS Release Decision.
  • GCCs negotiate Communications Interoperability Security Memorandum of Agreement (CISMOA) with country prior to delivery.
  • Recent examples: C4ISR systems.

I would like to emphasize the value of Geographic Combatant Commanders’ (GCC) opinions in influencing decision to export sophisticated systems and technology.

• GCC opinion adds focus to the process.  Absent “why we should” or how fast it should happen, the decision to sell or transfer moves forward with the speed of the bureaucracy through which it is moving.

• An endorsement by the GCC, or for that matter, a recommendation for denial, each with accompanying justification provides one of the key underpinnings for debate within the review process.

• GCC position for should be included in testimony and correspondence to the Hill.  GCC opinion is key to ensuring the right decisions are made for the right reasons.

  • GCCs’ testimony before Congress on the importance of approvals for specific sales/grants of weapons or systems to specific countries, (or the importance that certain countries have certain capabilities) has proved to have a positive influence on the Congressional process.  During Javits Report briefs to the Hill it is common for the staffers to acknowledge to DSCA that they are aware of GCC support for certain FMS sales. (See Tab B for information paper “FMS approval process and how the Joint Staff influences the FMS process.”)

• Proactive involvement in the development of the decision - meaning establishing and validating the operational requirement for the system, sensor or technology - is critical to help expedite the interagency process. 

  • Recent example, Singapore ENDP change.
    

• Security Assistance Organizations (SAOs) need to work with GCC J4/J5’s to identify and plan approach to advocate their position on potentially contentious technology transfer issues and for SCG priority partnership countries and organizations.

• Technology release issues need to be addressed early in the process.

  • Identify disclosure requirements and determine the appropriate process and tools required to clear the proposed transaction.

  • Work with subject matters experts who can help identify issues and technology transfer ramifications of a customer’s request.

  • Plan early, plan ahead, allow time and ask experts.

  • Recent example MRCA competition for India

• Congressional notification process requirements under the Arms Export Control Act AECA for major sales surpassing notification thresholds can affect export release timelines regardless of where the Interagency stands on technology release. 

  • Delivery of AECA section 36b notifications normally takes place when Congress is in session. 

  • Scheduled non-legislative periods average around 130 working days restricting notification opportunities to an average of 130 working days.

  • Generally, the Hill discourages notifications prior to delivery and briefing of the Javits Report (due 1 February, usually delivered in March or April).

The presence of high technology in the majority of our weapon systems coupled with demands from our allies to access technology are the reality of our operating environment.

• Export and technology transfer decisions are and will remain subject to our laws and policies as they should.  USG stakeholders in Export Control and Technology Transfer need to fully understand the issues and their roles in the many processes.  

• In cases where priority countries and or important interoperability benefits are at stake, it behooves USG players to plan ahead and take proactive measures to help expedite decision processes.

Foreign Policy and Licensing	State Department Determines which countries have programs Determines which sales will be made Issues Munitions Export Licenses (Commercial) Determines Foreign Assistance Funding levels
Policy and Implementation	Defense Department Has extensive input on policy Determines what equipment is available for sale Recommends Foreign Assistance Funding levels Implements FMS Program Implements Grants & Credit (FMF) Programs Implements Military Education Program
	DSCA is DoD's Main Focal Point for Security Cooperation MILDEPS and CoComs Execute the Programs

State Department plays the leading role in export control. 

Specifically, the State Department:

• Determines which countries are eligible for programs.
• Determines which major sales will be made, whether through direct commercial channels or the Foreign Military Sales (FMS) programs.
• Issues munitions export licenses for commercial sales.
• Determines foreign assistance grant funding levels for grant programs such as FMF and IMET.

DoD’s role:

• We have extensive input on policy.
• We determine what equipment is available for sale.
• We recommend foreign assistance funding levels in accordance with priorities from the Combatant Commanders.
• We implement FMS, FMF and IMET programs.

DSCA is DoD’s focal point to implement the major programs so we have a very close relationship and daily interaction with the State Department.

• Country identifies a requirement and works with the Security Assistance Organization (SAO) to develop a Letter of Request (LOR)
• The LOR is submitted to the U.S. Government for action.
  • Significant Military Equipment (SME) requests that originate in-country are addressed to the cognizant Department of Defense (DoD) Component with information copies to the DoS (Bureau of Political-Military Affairs) (DoS(PM)), the Defense Security Cooperation Agency (DSCA), and the Combatant Command. The U.S. Embassy or SAO must provide a “country team assessment,” in the request transmission.
  • Non-SME requests that originate in-country are transmitted either by the purchaser's authorized representative or the DoD element of the U.S. country team to the appropriate DoD Component with information copies to the Combatant Command and DSCA.
• An LOR Advisory notifies USD(AT&L) and the Chairman of the Joint Chiefs of Staff that DSCA has received an LOR for items or services that meet one of the following criteria: 

1. First introduction of Major Defense Equipment (MDE);
2. MDE that is expected to result in a Congressional Notification under Arms Export Control Act (AECA), section 36(b);
3. Coproduction or licensing agreements for MDE.
4. Items and/or services of a sensitive nature. For example, NVDs are considered items of a sensitive nature.
5. MDE that has not yet completed OT&E. DSCA may not be aware that the requested item(s) has not satisfactorily completed OT&E until the Implementing Agency refers the LOR to DSCA.

• Upon completion of the LOR Advisory, the Military Department that owns the defense article or service prepares an Exception to National Disclosure Policy (ENDP), if required. The Joint Staff has a vote on all ENDPs.
• Following completion of the ENDP or if an ENDP is not required, the Military Department will determine if the sale requires Congressional Notification under Arms Export Control Act (AECA), section 36(b).
  • The AECA, section 36(b) package is coordinated with the OSD Regional Desk, DSCA Regional Directorate, DSCA Weapons Division, DSCA Business Operations/Comptroller, DSCA Legislative and Public Affairs, OSD Legislative Affairs, OSD Public Affairs, and OSD Policy for ENDPs.
  • Once DoD clears on the AECA, section 36(b) package it is sent to the Department of State (DoS) for its review. DoS coordinates the package within State and pre-clears the package with the Congressional Committees’ staff. This pre-consultation step may require DoD briefings.
  • Following the Congressional Committees’ staff approval, the Department of State approves the AECA, section 36(b) package and sends it to DSCA for submission of the Advance Notification (20 days for non-NATO countries excluding Australia, New Zealand, and Japan), if required, and the Formal Notification (15 days for NATO, Australia, New Zealand, and Japan and 30 days for all other countries).
• If an AECA, section 36(b) Congressional Notification is not required or while the AECA, section 36(b) package is being developed, coordinated, and notified, the Military Department develops a Letter of Offer and Acceptance (LOA) which serves as the government-to-government agreement between the U.S. and the foreign country.
• The Military Department submits the LOA to DSCA for review. Once the DSCA review of the LOA is complete, it is sent to DoS for its review. This final review allows DSCA and DoS to consider any political changes, etc. before approving the LOA. Once DoS coordinated on the LOA, DSCA will countersign the LOA and authorize the Military Department to offer the LOA to the foreign country. NOTE: If a Congressional Notification is required, the LOA cannot be countersigned until the Congressional Notification period expires.
• The Military Department provides a copy of the LOA to the purchaser for their review. If the purchaser accepts the LOA, they must submit a signed copy of the LOA along with an initial deposit to the U.S. Government. If the purchaser chooses not to accept the LOA or wants to refine the LOA, this will be communicated to the SAO or the Military Department.
• Upon receipt of the accepted LOA and initial deposit, the USG can implement the LOA and begin execution of the agreement.