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Conventional Arms Transfer (CAT) Policy Implementation Plan Update

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In July the Secretary of State submitted to the President the Implementation Plan requested as part of the Conventional Arms Transfer (CAT) Policy (NSPM-10).

This plan supports the U.S. National Security Strategy through a whole-of-government approach to better align our conventional arms transfers with our national security and economic interests.

In developing the CAT Policy Implementation Plan, and in order to ensure that it is fully integrated the real-world challenges we face, the Administration collected inputs from Congress,

American industry and the non-governmental community. We are grateful for their cooperation in this process.

The Plan accounts for the increasingly competitive environment described in the National Security Strategy, and seeks to modernize the U.S. Government’s policies and processes regarding arms transfers.

It establishes three Lines of Effort (LOE) to implement our CAT Policy goals. Each LOE is supported by a number of tasks that will be undertaken by the relevant U.S. Government agencies.

Line of Effort 1 – Prioritize Strategic and Economic Competition

This LOE directly addresses the challenges of increasing strategic competition, and enables the U.S. Government to prioritize allocation of its resources to overcome those challenges.

It reorients the United States to a more proactive approach to arms transfers, and ensures these transfers reflect the priorities articulated in the National Security Strategy (NSS), the National Defense Strategy (NDS),

the recent Report on Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States that was mandated by Executive Order 13806, and other relevant strategic guidance.

Tasks within this line of effort include:

• Effectively compete with strategic competitors by providing allies and partners with alternatives to foreign defense articles in order to maintain U.S. influence in key regions;

• Identify critical partner capability requirements essential to achieving U.S. foreign policy and national security objectives;
• Prioritize and expedite critical transfers that reflect these partner capability requirements;

• Identify and revise outdated arms transfer policies that are legacies of past international security challenges; &
• Develop holistic policies in support of arms transfers by creating proactive, strategic policy guidance to prevent ad hoc decisions on individual transfers.

Line of Effort 2 – Organize for Success

This LOE ensures that the Executive Branch is organized, staffed, and resourced to best support efficient execution of the conventional arms transfer policy, and that its processes are similarly aligned.

Tasks under this LOE include:

• Streamline the International Traffic in Arms Regulations (ITAR), with the goal of reducing regulatory burdens for U.S. industry and barriers to the commercial defense trade;

• Revise the United States Munitions List (USML) to ensure that it clearly describes and adequately controls only those items that merit USML control;

• Update the Commerce Control List (CCL) to account for technological developments, practical application issues identified by exporters and re-exporters, and changes in the military and commercial non-military applications of controlled items;

• Facilitate exports for certain U.S. and cooperative programs so that the U.S. government has the needed flexibility to execute its mission;

• Establish objective milestones and standard timelines for Foreign Military Sales (FMS) to enable increased transparency, enhance the Defense acquisition system’s ability to meet critical FMS milestones and timelines, and to assist industry planning for FMS case execution;

• Increase the competiveness of high-demand American weapons systems by identifying and assessing challenges and developing potential solutions for those challenges;

• Build exportability, coalition interoperability, and configuration standardization into the Defense Department capability requirements development and approval processes;

• Improve contracting for FMS through innovative and pilot programs such as those made available in section 830(d) of the FY 2017 National Defense Authorization Act;

• Enhance U.S. Government advocacy so we can apply the full weight and influence of the United States in support of defense exports that are in our national interest;

• Expand support for Non-Programs of Record to broadenthe scope of American defense offerings in order to better address partner demand;

• Improve FMS Letter of Offer and Acceptance (LOA) processes and policies so that U.S. offerings will be more responsive and competitive in foreign competitions;

• Examine the U.S. Government policy on offsets to ensure that it is relevant and effective in promoting American exports and protecting American technologies and jobs; and
• Develop financing options to support foreign partner procurements of U.S. defense articles.

Line of Effort 3 – Create Conducive Environments

The intent of this line of effort is to ensure that Congressional, business, and international climates foster efficient operation of U.S. defense trade.

Tasks in this line of effort include:

• Improve the FMS requirements development approach to assist foreign partners in better identifying desired capabilities;
• Reduce costs associated with FMS such as surcharges and fees;

• Improve the funding flexibility associated with FMS to reduce prohibitive upfront costs for partners;

• Request from Congress, where needed, legislative changes regarding contracting requirements for FMS, in order to enhance the speed of the contracting processes and lower unit costs for U.S. military services;

• Establish an Offset Task Force to develop recommendations, in consultation with industry, on actions that could be taken to minimize the adverse impact of offsets in defense trade while not hindering the flexibility of U.S. industry as it competes in the global defense market;

• Modernize the Missile Technology Control Regime toreflect advances in technology while continuing to constrain the proliferation of systems that can deliver weapons of mass destruction;

• Improve trade promotion and expand U.S. Government engagement in support of American defense manufacturing; and

• Work with U.S. industry to incentivize increased production capacity and timely delivery, including by developing strong and stable market signals and by utilizing contracting approaches that reward faster delivery.

Progress and the Way Ahead

The Administration is assessing progress on a quarterly basis, and revising the plan where needed. We continue to solicit input from industry, non-governmental organizations, and Congress to improve the arms transfer process,

as well as feedback on the results of our efforts. To date, the Administration has made great progress in developing strategies to compete against strategic and economic rivals, has revised numerous policies to increase U.S. competitiveness,

has reduced costs, is on track to streamline regulations and improve processes, among other accomplishments.

For further information, please contact the Bureau of Political-Military Affairs, Office of Congressional and Public Affairs at [e-mail], and follow the Bureau of Political-Military Affairs on Twitter, @StateDeptPM.