Direct Commercial Sales Authorizations for Fiscal Year 2003

Article excerpt

The following is an except of the Report by the Department of State, pursuant to Section 655 of the Foreign Assistance Act. The complete report can be found at the following web site www.prndtc.org.

Overview

This report covers defense articles and defense services licensed for export during fiscal year 2003 under Section 38 of the Arms Export Control Act. It is provided pursuant to Section 655 of the Foreign Assistance Act and, as required by that Section, the report shows the aggregate dollar value and quantity of defense articles and defense services authorized to each foreign country. Sometimes the column for the quantity is blank or 0. The quantity on a license may not be a specified number because of instances where the applicant used the word "lot" or "various"; left the quantity blank; listed multiple commodities with different quantities; or did not quantify the commodity of technical data.

A separate portion reports just on authorizations for semi-automatic assault weapons.

In accordance with subsection (d) of Section 655, this report is also being made available to the public on the internet through the Department of State, Directorate of Defense Trade Controls at www.pmdtc.org.

In view of the growing role of manufacturing license agreements and technical assistance agreements, this year's report has a separate section that distinguishes more clearly between authorizations pertaining to defense articles and those associated with defense services. The overall number of permanent export license applications submitted under Section 38 in Fiscal Year 2003 was approximately 35,000. The number of manufacturing license agreements and technical assistance agreements submitted was 6,608. See Figure 1.

[FIGURE 1 OMITTED]

This trend appears to reflect the growing complexity of commercial defense trade as international joint ventures, co-production, licensed manufacturing and offset arrangements involving offshore assembly or procurement increasingly characterize major sales. provided under Section 38 for defense articles and defense services does not correlate to the value of articles actually transferred during this same time frame. Most munitions licenses issued for articles shown in Part 1 are valid for four years and may be used throughout their period of validity to carry out the authorized export transactions.

Similarly, manufacturing license and technical assistance agreements set forth in Part 2 of the report cover a wide range of programmatic activities for multi-year periods (generally exceeding the four-year validity period of defense article export licenses). Because the scope of the Department's regulatory authority over such agreements continues for as long as these multi-year agreements remain in effect, authorizations furnished in fiscal year 2003 also include certain activities occurring in prior years. …