What is the Foreign Military Sales Trust Fund?

A process, authorized by the Arms Export Control Act, through which eligible foreign governments and international organizations may purchase defense articles, services, and training from the United States Government.

A type of account, designated by law as a “trust fund,” regardless of any other meaning of the term “trust fund.” A trust fund account is usually either a receipt, an expenditure, or a revolving fund account (trust revolving fund account).

An account established for each Foreign Military Sales country/international organization for the purpose of recording and safeguarding unidentified and certain earmarked funds for future use

The basic U.S. law providing the authority and general rules for the conduct of Foreign Military Sales and commercial sales of defense articles, defense services, and training. The Arms Export Control Act (AECA) came into existence with the passage of the Foreign Military Sales Act (FMSA) of 1968. An amendment in the International Security Assistance and AECA of 1976 changed the name of FMSA to the AECA.

A single account that is authorized to be credited with receipts that may be obligated and expended in accordance with the Arms Export Control Act (AECA). Foreign Military Sales (FMS) Trust Fund receipts must be apportioned prior to obligation and expenditure; however, an official, designated under 31 U.S.C. 1513 (as per 31 U.S.C. 1516), may exempt trust funds from apportionment. The FMS Trust Fund is managed as a single cash entity, regardless of the source of the deposits. All FMS Trust Fund deposits are accounted for at purchaser and FMS case level by source of financing. Examples of funds include Foreign Military Financing (FMF) (FMS Credit and FMS Credit (nonrepayable)) and the Military Assistance Program (MAP) Merger. Examples of other types of funds are a purchaser's national funds, which include third-party funds, and other DoD appropriated funds.

That portion of the United States Security Assistance program authorized by the Foreign Assistance Act of 1961, as amended, which once provided defense articles and services to recipients on a nonreimbursable (grant) basis. Funding for MAP was consolidated under the Foreign Military Financing program beginning in Fiscal Year 1990.

Source of funding that is provided directly from the purchaser.

Activities undertaken by the DoD to encourage and enable international partners to work with the United States to achieve strategic objectives. It includes all DoD interactions with foreign defense and security establishments, including all DoD-administered security assistance programs, that: build defense and security relationships that promote specific U.S. security interests, including all international armaments cooperation activities and security assistance activities; develop allied and friendly military capabilities for self-defense and multinational operations; and provide U.S. forces with peacetime and contingency access to host nations.

The legal instrument used by the USG to transfer itemized defense articles, defense services, and design and construction services to foreign partners.

When used under the authorities provided in the Arms Export Control Act for Foreign Military Sales, the LOA is a binding agreement signed by the USG and the foreign partner to transfer such articles and services.

When used under Building Partnership Capacity (BPC) authorities, the BPC LOA is not signed by the Benefitting Partner.

The military department or defense agency responsible for the execution of military assistance programs. With respect to FMS, the military department or defense agency assigned responsibility by the Defense Security Cooperation Agency to prepare an LOA and to implement an FMS case. The implementing agency is responsible for the overall management of the actions that will result in delivery of the materials or services set forth in the LOA that was accepted by a foreign country or international organization.

Authority issued by Defense Finance and Accounting Service Security Cooperation Accounting to a certifying officer or a disbursing activity authorizing the subsequent disbursement of a Foreign Military Sales country’s funds when such funds are available.