DEFENSE SECURITY COOPERATION AGENCY
MEMORANDUM FOR :
DEPUTY UNDER SECRETARY OF THE AIR FORCE FOR INTERNATIONAL AFFAIRS
Policy Update Regarding Use of Foreign Military Financing (FMF) Funds - DSCA Policy 12-03 [SAMM E-Change 194]
Security Cooperation Organizations (SCOs) should initiate an early dialogue with STATE/PM and DSCA Country Program Directors and should generally discourage partner nations from using FMF funds for the following items:
When a partner nation proposes to use FMF for any of the above listed items, SCOs should submit a detailed justification and rationale for purchasing each to the DSCA Country Program Director and the STATE/PM Regional Officer. The justification should include the request item; the policy justification for providing with FMF funds vice host-nation funds; the estimated cost of procurement and delivery; and any other supporting information. In certain circumstances DOS may authorize the purchase of these items using FMF funds if it is determined providing such items is critical to the mission or relationship, or the defense articles or services are in direct support of coalition operations where U.S. forces are present.
The Security Assistance Management Manual (SAMM) E-Change clarifying the existing policy as it relates to restrictions on the use of FMF funds is attached. For any questions concerning this memorandum, please contact Mr. Chris Danielewski, DSCA-STR/POL, email@example.com, (703) 601-4368.
William E. Landay III
Change SAMM Chapter 9, C188.8.131.52, to read as follows:
C184.108.40.206. Restrictions on the Use of FMF. Expenditure of FMF funds is subject to legal and policy restrictions. Security Cooperation Organizations (SCOs) must ensure that the foreign government is aware of U.S. policies for the use of FMS credit financing. SCOs should generally discourage partner nations from using FMF funding for those items identified in Table C9.T6. However, in certain circumstances these items may be permitted to be purchased with FMF funds if the State Department determines that providing such items is critical to the mission, the bilateral relationship, or if the defense articles or services are in direct support of coalition operations where U.S. forces are present. SCOs should initiate an early discussion of requests to use FMF funds with DSCA (Operations Directorate) and State PM. To facilitate review of these requests, SCOs should submit a detailed justification and rationale for purchasing each item with FMF funds rather than host-nation funds and any other relevant facts in support of the request. This guidance applies to FMF used for standard Foreign Military Sales (FMS) cases and Direct Commercial Contracts (DCCs). The guidance does not affect DSCA management of FMF administrative accounts nor does it apply to Packing, Crating, Handling, and Transportation (PCH&T) costs associated with equipment transferred to partner nations via the Excess Defense Article (EDA) program.
Table C9.T6. Generally Restricted Items for Purchase with FMF