Essay, Pages 10 (2499 words)
United States department of defense on Foreign Military Sales (FMS) reports that US defense firms and their respective costly military equipments have increasingly experienced high demands from foreign countries “buyers” (Kathleen, 2007). However, the current dynamic and competitive environment in additional to economic crisis calls for change in transaction strategies to attain any reasonable chance of winning a sale (Cullin, 2006). Therefore, the central concept of worth to be examined is the FMS.
According to the United States department of defense, Foreign military sales refers to a program that seeks to underscore the entire scope and logistics involved in the sale of U.
S military arms, equipments, services such as radars, aircraft, firearms and other electronic systems to foreign countries (Kathleen 2007). It is in this regard that this paper seeks to explore the legislative factors that surround the foreign military sales, the importance of foreign military sales, as well as the possible dangers and implications surrounding programs that involve military equipments exchange with foreign countries.
An important insight into the Foreign Military Sales (FMS) undertaking is the fact that the purchases of military equipments, arms and services by foreign governments, are overseen by an agency specifically mandated to oversee the disposal of military services such as the cooperation of the defense security as opposed to involvement of a defense contractor (Cullin, 2006). The significant role of these agencies is to basically broker a deal by acting as intermediaries between the two countries and going further to handle procurement, logistic factors and issues relating to sales and delivery.
Foreign Military Sale Program
Essentially, the description of foreign military sales as a program deals with factors of agreement between the two governments and the agreements reached or to be reached are succinctly governed by law. To begin with, the whole program is mandated to manage country to country purchase of military weapons and military equipments and services of any kind . The mandate of the program extend to cover the facilitation of training in line with the usage of the weapons and animations bought or to be sold (Harvey et al., 2001).
As mentioned earlier, the government purchasing military arms is not involved directly. But instead, it uses its defense department as an intermediary to handle and provide any necessary military support that will be deemed fitting by the purchasing government. In foreign military sales program, it is clear that matters dealing with direct commercial sales, which ordinarily handled the sales of various products and services between countries, are not applicable.
The rationale applied in for this case is based on the fact that, US companies solicit funds from other sources unlike the military department which asks for funds from the military financing program to get grants and loans for facilitating foreign military sales (Harkin 2003). Additionally, there are military attaches located in every US embassy around the world whose chief role is to ensure and provide for security in the use of the purchased military arms. To attain this objective, the United States of America government designed the security assistance organizations, which, through the military attaches in all U. S embassies around the world, oversee the sale of the U. S based military items as well as giving necessary advise to foreign ministries of defense regarding their military needs, security needs and required purchases according to the security surveys done by the United Nations (UN) (Louscher, 2002).
Foreign military sale policy of any given country usually adheres to the request made by the foreign country undertaking to know the availability and price data (P and A data) from the U. S government. Upon receiving this request, the security assistance organization, requests the U. S bureau of political and military affairs, to approve the release of the availability and pricing information (P and A data) to the foreign country (Cullin 2006). Thereafter, the state department provides the approval which in essences, grants the purchasing country the freedom to buy the military equipments through the foreign military sale. The pentagon sets an agency such as the U. S army air force or navy that will implement the procurement and the delivery, in respect to the specifity and the sensitivity of the item that is being purchased (Harvey et al 2001).
The final logistical procedure involves the US government and the purchasing government signing an agreement that the sale has been effected. The agreement reached, is sealed in form of a letter called Letter of offer and acceptance that is important because it serves as contract certifying that the sales were done.
Pricing Policy of Foreign Military Sales
The process of establishing the cost of the military item in US is dependant on the nature of the weapons bought. For instance, complicated weapons the cost charged upon delivery may not reflect the price quoted on the letter of acceptance and offer.
As a result of this perceived variations, the state department of defense has stipulated clearly the factor to be considered in estimating the cost of the military items purchased or to be purchased by a foreign country. For instance, the attaches a charge an additional three percent (3%) on the total charges to cater for administrative cost reached by the military department, in the process of procurement and delivery ( Kathleen, 2007). In addition to 3 percent, there is an extra 3. 1 percent charge that is meant to cover costs incurred as a result of logistics.
These charges are applied to matters relating to spare parts of the purchased weapons and to some extent, military support that might have been offered to the purchasing government. These entire charges sum up to the final cost of the weapon and that is why there is the difference in the price of weapon quoted on the letter of offer and acceptance with the cost estimations upon the delivery of the military items (Cullin 2006). Moreover, the extra percentages of cost surcharged, translates to the salaries, wages and other costs of operation of the employees of both foreign military sales and military attaches in the US embassies.
Legal Regulations of Foreign Military Sales
Foreign military sale program is governed by set laws and regulations. In this regard, there are three laws coupled by two regulations that, per say, apply to the implementation. These laws largely govern the transfers of military articles from the US to another foreign country. The laws are in simple terms, under the custody of the Arms Export control Act of 1976 (Harvey et al. , 2001) and they are fundamentally established to check the influx of the exit of the military weapons from the US to other foreign government.
These laws control procedures involved in the transfers and sales of fire arms and other military services. This act was enacted by the reformers in the congress and what influenced the enactment were the experiences triggered by Vietnam War (Louscher 2002). It is noted in the law, elements of self defense as well as internal security of a nation and the United Nations security concerns, sum up the reasons for which military weapons can be transferred. Granted that, the law establishes the rationale whereby the US defense ministry must give the congress a prior notice before most important sales are effected ( Harkin 2003).
Similarly, the defense trade controls department, based in the ministry of political military affairs is also mandated to develop the international arms traffic regulations, a policy that traps and guides the activities of arm trade of certain governments or persons dealing in the sale of arms (Kathleen 2007). On the same note, the international arms traffic regulation has a stern directive that the ministry of defense should list all king of weapons regarded as munitions and are a question of concern to the control of export by the sates department.
However, this objectives faces serious hurdle in its implementation, because, several fire arms industries have defied it and have continually failed to list the categories of such arms. Consequently, the move has led a relaxed licensing logistics of fire arms (Cullin 2006). As a result, the international traffic in arms regulation has undertaken tough measures to name those countries which are barred from receiving armaments from the US. Moreover, there is also the foreign Arms assistance act that was established in 1961 to ideally look into the economic and military assistance of other governments.
In essence, the enactment of this act stipulates that the US government should always be ready to give grants to foreign government to help them to purchase the newly manufactured armaments from America (Louscher 2002). On the general terms, the united nation has always been providing such kind of help and aid, but only limited to governments that seem to be aligned to its security policies and conditioned and are ever ready to extend the support in dealing with security threats as well as concerns.
Example of this kind of military assistance is seen through peace keeping missions in war torn countries (Harvey et al, 2001). Governments that overtly show the willingness to fight crime, social and human injustices and on a larger scale are determined to promote peaceful coexistence among different countries in the world are perceived as friends to the American people. Therefore, they are given a leeway to recharge their military weapon by purchasing new arms at a discounted price from the US through foreign military sales (Harkin 2003).
According to United States congress committee on foreign relation, the pentagon reserves the right to advise the US government accordingly on its financial aid to developing countries, as partner members in the fight against terrorism, crime and insecurity in the world. In addition to the sale of military armament, the US government also endeavors to offer training support to military officers of governments committed to peace and security. However, there is a tight law that bars the purchase of military weapon or military aid of any kind to governments that promote “gross and consistent” patterns of human rights abuse.
Foreign Assistance act also has the provision of baring military weapon transfer and assistance to countries like Pakistan and Iran due to their continuous pursuit and search nuclear artilleries (Kathleen 2007). Other than Pakistan and Iran, 24 more governments have been blacklisted from engaging in any military partnership with the US. Under this move, The 24 countries are not legible to purchase or imports any armament from the American government.
Restrictions of this kind go in line with the UN Security Council that imposed an embargo on the military weapon due to chronic state of warfare and the easy formation terrorist groups on activities in their nations (Cullin 2006). According to the US state department, the countries below are on the list of the 24 countries that ca not get into military partnership with the US. They include: Afghanistan, Cuba, Nigeria, Vietnam, Cyprus, North Korea, Yemen, Armenia, Haiti, Rwanda, Yugoslavia (Serbia and Montenegro), Azerbaijan, Iran, Somalia, Zaire, Belarus, Iraq, Sudan, Burma, Liberia, Syria, China Libya and Tajikistan( Harvey et al 2001).
Most importantly, there is also the export administration act of 1979 which is vested with the imperative role of shipment of armaments, as well as, all the information and technological needs of military and civilians. Although the Export administration act expired in 1994, it is still useful given that, its recommendations are implemented but only on grounds that the president exercises its approval.
With these regard, the laws are amended annually and their implementation framework is also updated on yearly basis(Louscher 2002). any changes made in these laws are documented in the federal register and printed in the dailies and internet for easy accessibility by members of the public. The legal principles governing the export of military artilleries and other military services are linked to foreign military sales agencies like direct commercial sales and weaponry emergence department (Kathleen 2007).
In the survey carried out by pentagon, it was found out that it is significant if information regarding the exports of arsenals given to the whole world or specific governments only on condition that proper channels and procedures of transfer are thoroughly followed (Cullin 2006). As stated earlier the process of transfer of artilleries stars as a contract between the US government and the purchasing government under what is nowadays, known as the government initiated military sales.
Accordingly, foreign countries may purchase new weapons or old ones from the US government especially when the government sees the need to dispose off its excess military weapons or according to any other international policy as stipulated by the UN security council regarding the sale of military weapons (Harvey et al, 2001). In similar terms the purchasing country, when faced with the need to acquire more weapons, may request the possibilities of such like transactions from the US government. The cost of weapons sold is transacted in terms of US dollars, depending on the weight of the weapons transferred.
However, statistics on US armament and artillery transferred, regard only those items transferred through foreign military sales and disregard transfers made by other agencies. The implication remain that the only effective and approved program to undertake the sale of military items is solely vested under foreign military sales (Kathleen 2007). It is estimated that in the last 10 financial years the US government has profitably made $284 billion through the sale of military arms. In the same period of time, the US government similarly sold an approximate 5000 weapons to Israel. Therefore, the foreign military sale program is a boost to the revenue and budget of the United States (Harkin 2003).
In conclusion, the foreign military sale is a program that is concern with the transfer of military weapons, armaments and services in terms of sales to other countries. From this discussion, it’s evident that the foreign military sales activity follows a clearly stipulated process and governed by regulations. Depending on the approach, the purchasing country should make a requisition of the availability and costing of military weapons and services through the US embassies in the countries that wants to purchase.
The US government, later on, assists in the logistic, procurement and perhaps other training assistance that may be extended. A contract is then signed to specify costs. Finally, shipment to the buying country is made. In essence, the foreign military sales are economic benefit to the US government because it serves as a source of revenue. However, with the current dynamic and competitive environment in additional to economic crisis, it calls for change in transaction strategies like utilization of offsets to attain any reasonable chance of winning a sale.
- Cullin, W. (2006) How to conduct foreign military sales, Pennsylvania, Bna Books
- Harkin, T. (2003), U. S Foreign Military Sales, Tennessee, US General Accounting Office Harvey, G et al. , (2001) A guide in the Foreign Military Sales, Chicago, Federations Press
- Kathleen, C. (2007) Foreign procedural Disposals, Washington DC, Govt Press
- Louscher, D. (2002) Analysis of Foreign Affairs Undertaking, Wisconsin, University of Wisconsin Press