Arms Industry

Arms Export Control Act Controls Discounts for Arms Sales

Arms Export Control Act

The Pentagon’s arms-selling agency must clamp documented on discounts for arms sales to a particular countries under legislation proposed by way of a liberal California Democrat and the conservative head in the House Freedom Caucus.

The Arms Export Control Act requires the Pentagon to recoup one-time production, research and development costs for major equipment sold beneath the Foreign Military Sales process. But the Department of Defense can grant waivers for those fees when not doing this would endanger sales, among other reasons.

Since 2012, the Pentagon has granted such waivers 99 percent of that time period, letting go of $16 billion from 2012 to 2017, as outlined by a Government Accountability Office report.

“Wealthy nations” Saudi Arabia, Qatar, the United Arab Emirates and Kuwait were granted $8.5 billion in waivers, according to co-sponsors House Armed Services Committee member Rep. Jackie Speier, D-Calif., and House Freedom Caucus leader Rep. Mark Meadows, R-N.C.

“Our defense relationships with these countries are important, however, these nations possess the interest and power to pay these small added costs. At the very least, our negotiators shouldn’t be giving away billions of dollars without asking hard questions,” Speier said in a very statement Monday.

Saudi Arabia was granted a $3.5 billion waiver recently as part of a $15 billion sale for Lockheed Martin’s Terminal High Altitude Area Defense anti-missile system, Bloomberg News reported in March. Saudi Arabia reportedly won waivers totaling $4.82 billion, including the THAAD sale, while other waivers included $2.6 billion to Qatar.

Meadows, a fiscal conservative, said the check would make sure the FMS process” operates as responsibly as is possible along with the greatest respect for taxpayer funds.” The bill, he was quoted saying, doesn’t jeopardize military ties.

“Instead, it ensures that allies, particularly allies who are on the list of richest on earth, undergo a complete analysis of the power to reimburse the taxpayer for defense development costs before receiving any waiver of these responsibility to pay for,” he was quoted saying.

Among other measures, the proposed legislation would institute “speeding fines,” limiting countries’ eligibility for “loss-of-sale” waivers when those countries demonstrate consistent or high-value purchasing patterns.

Among other stiffened reporting requirements, Congress would need to be notified from the size and justification of any loss-of-sale waiver in any major defense equipment sale. The Defense Security Cooperation Agency would also need to improve foreign arms sale performance measures and tracking.

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