DEFENSE TRADE AND ARMS TRANSFERS

FOREIGN MILITARY FINANCING

The Arms Export Control Act (AECA), as amended [22 U.S.C. 2751, et. seq.], authorizes the President to finance procurement of defense articles and services for foreign countries and international organizations. Foreign Military Financing (FMF) enables eligible partner nations to purchase U.S. defense articles, services, and training through either FMS or, for a limited number of countries, through the foreign military financing of direct commercial contracts (FMF/DCC) program (Also DCC Guidelines).

The Secretary of State determines which countries will receive FMF, along with respective FMF amounts. The Secretary of Defense executes FMF programs and issues grants and loans to eligible recipients in accordance with the AECA.

FMF is a source of financing and may be provided to a foreign country on either a grant (non-repayable) or a direct or guarantee loan basis.