Third party transfer and retransfer consent

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1. The rule, and how wide it is

A partner government does not own United States provided defense equipment in the ordinary sense. It holds it subject to a written undertaking, and moving it on is what that undertaking most clearly restricts.

The manual states the rule in one sentence. Foreign governments "may not transfer title to or possession of any defense articles or services to anyone not an officer, employee, or agent (defined as freight forwarder only) of that country or of the USG until the country receives prior written consent from the USG" (SAMM C8.7.1). The same paragraph adds that the articles may not be used, or their use permitted, for purposes other than those for which they were furnished without prior written consent.

Those obligations come from statute and are reproduced in the standard terms of every case (22 U.S.C. 2753(a)(2), 22 U.S.C. 2314(a)(1)). Consent is required for a change of end use as well as for a change of holder, and disposal is treated as a change of end use.

2. Who gives consent

Authority sits in one department. "The Department of State (State) is responsible for authorizing all Third Party Transfers (TPTs) of U.S.-provided defense articles and/or services worldwide" (SAMM C8.7.3).

Within State the desk depends on how the equipment was originally acquired. Articles obtained through Foreign Military Sales or grant programs are handled by the Office of Regional Security and Arms Transfers (SAMM C8.7.4). Articles originally acquired under a commercial export license or other commercial authorization are handled by the Directorate of Defense Trade Controls (SAMM C8.7.4.1.1).

Embassy defense offices are involved only in the first route, and do not process retransfers of commercially procured articles (SAMM C8.7.6). A separate step applies where equipment is coming back into the United States. State approval of a retransfer request must precede any permanent import application to the Bureau of Alcohol, Tobacco, Firearms and Explosives, and remain separate from it (SAMM C8.7.5).

3. What the request has to contain

Requests are made on a standard questionnaire, and the required content is published (SAMM C8.7.7). The substantive items include:

• the divesting government, and a clear description of what is being transferred, including quantity, model, associated equipment, spare parts and any classified components;
• whether the equipment is significant military equipment, with serial numbers required where it is;
• the original acquisition source, with the case identifier where the source was Foreign Military Sales, the year of acquisition, the original cost and the current value;
• the reason for divesting, the proposed recipient, whether the transfer is temporary or permanent, and the proposed end use;
• whether an intermediary is involved, and in what role;
• an estimate of net proceeds where the equipment was originally granted.

Communications security equipment, and signals intelligence or electronic warfare systems, attract a further set of questions about how the technology will be protected and who will install it (SAMM C8.7.7).

4. Assurances from the receiving government

Consent depends on undertakings from the proposed recipient, not only from the government divesting the equipment. State requires end use, retransfer and security assurances from the recipient's ministry of foreign affairs, unless that recipient is covered by the blanket assurance arrangement (SAMM C8.7.7.1).

The divesting partner has to obtain them and submit them with the request. "These assurances are mandatory, generally non-negotiable, and must be received by State before the transfer can be considered for approval" (SAMM C8.7.7.2). They must be in English and signed by an official who can legally bind the whole government. Where another ministry signs, the American embassy in that country must confirm in writing that the signature binds (SAMM C8.7.7.2).

Partners may instead sign blanket assurances covering future government to government retransfers, which removes the need for individual assurances each time (SAMM C8.7.7.2). Transfers to non-state recipients, including private entities, are adjudicated case by case and require assurances from the entity itself as well as from the government with legal jurisdiction over it (SAMM C8.7.8).

5. Money from a sale of granted equipment

Where the equipment was originally furnished on a grant basis, the proceeds are not the seller's to keep. No defense article is furnished on a grant basis unless the recipient has agreed that the net proceeds of any sale of it "will be paid to the United States Government" (22 U.S.C. 2314(f)).

The waiver is narrow and closed. The requirement may be waived only for items delivered before 1985, and the manual records that there is no waiver authority for articles delivered after that year (SAMM C8.7.7). A request to retain proceeds must state the estimate, the justification and the intended use.

6. When Congress has to be told first

Above stated values, consent cannot be given until Congress has been certified and a waiting period has run. Two figures set the line, both measured by original acquisition cost. They are $14,000,000 for major defense equipment and $50,000,000 for any other defense article or service. At or above either figure, the President may not consent without first submitting a written certification (22 U.S.C. 2753(d)(1)).

Higher figures apply to a defined group. The group is the member countries of the North Atlantic Treaty Organization together with Australia, Japan, the Republic of Korea, Israel and New Zealand. Where a transfer to one of them does not open a new sales territory beyond those countries, the thresholds rise to $25,000,000 for major defense equipment and $100,000,000 for other articles and services (22 U.S.C. 2753(d)(5)).

The waiting period is 30 calendar days, or 15 for that same group of countries, and it can be waived only by a certified statement that an emergency requires consent to take effect immediately (22 U.S.C. 2753(d)(3)(A)).

Consent then takes effect after the period expires, and only if Congress does not enact a joint resolution prohibiting the transfer within it (SAMM C8.7.9.1). Some transfers are outside the certification requirement altogether. They include temporary transfers for the sole purpose of maintenance, repair or overhaul, and transfers of those services or of the parts used in them where military capability is not increased. Arrangements among alliance members for cooperative cross servicing are also excluded (SAMM C8.7.9.2).

Below the certification thresholds there is still a reporting trail. "All approved TPTs involving defense articles and services with an original acquisition value of $1 million or more are submitted in a quarterly report to Congress" (SAMM C8.7.10). The equivalent process for a new sale is described in congressional notification of arms sales.

7. Disposal is the last consent

Changing what equipment is used for requires State authorization in the same way a transfer does. That includes demilitarization for museum display, conversion to commercial applications and disposal, and articles kept for static display may still require demilitarization (SAMM C8.8.1).

Cannibalization counts as disposal where the parts removed will leave the control of the ministry that owns them (SAMM C8.8.1). Monitoring continues to the end. Embassy staff witness the demilitarization of designated and classified articles, and verify it for the rest through partner reports (SAMM C8.8.2).

Key terms

Third party transfer	Any transfer of title or possession of United States provided articles to anyone outside the recipient government. SAMM C8.7.1.
PM/RSAT	The State Bureau of Political-Military Affairs office handling transfers of articles acquired through government programs.
DDTC	Directorate of Defense Trade Controls, handling transfers of commercially acquired articles.
SME	Significant military equipment, for which serial numbers must be supplied with a transfer request.
Net proceeds	The amount from a sale of granted equipment that returns to the United States. 22 U.S.C. 2314(f).

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

A retransfer moves equipment between countries, and that movement still has to be arranged, protected and sustained. Sentfore provides secure movement, protective security, facilities and site support around defense programs in complex environments. Requirements can be sent through the contact page.