DDTC Should Expedite Licenses for FMS-Related Marketing Demonstrations, DTAG Says
The State Department’s Directorate of Defense Trade Controls should publish guidance and take other steps to help expedite approvals for marketing demonstrations and other “pre-delivery activities” that occur before a foreign military sale, industry officials told the agency during its Defense Trade Advisory Group plenary last week. Officials also gave a host of other recommendations aimed at addressing issues plaguing the FMS program, including fixes that could help other agencies understand when a license isn’t required.
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Steve Casazza, a DTAG member and president of Defense Trade Solutions, said DDTC should look to expedite pre-delivery activities related to direct commercial sales “that are in support” of an FMS. Casazza presented the recommendation as part of a DTAG working group that examined how the agency can assist companies conducting marketing demonstrations and other activities that “really get our allies and partners to submit a FMS letter of request.”
The working group found that the State Department’s direct commercial sales licensing process “sometimes creates additional burdens” on both the U.S. government and defense companies in “those business development activities that will eventually be exported for FMS,” he said, adding that “it really hinders industry and the U.S. government's ability to be competitive” when trying to “be the provider of choice for foreign military sales.”
Casazza said “anticipatory marketing licenses” for FMS opportunities “really don't have a mechanism for expedited processing that's readily available.” To fix this, DDTC should create a mechanism to designate certain FMS cases for marketing licenses and “support licenses that will allow the U.S. government to effectively track and potentially, if there's particular interest there, be able to easily expedite the particular case.” He said this could include moving the case into a “fast lane compared to other more traditional export licenses for DCS.”
He also pointed to 22 CFR 125.4(b)(1), which allows for an export exemption for certain technical data, including classified information, at the written request of the Defense Department. This exemption often “requires validation from military department leads” and “takes time,” Casazza said, which can cause delays for a potential FMS case.
To address this, DDTC should issue new frequently asked questions or directly inform other military agencies that they have the option to “delegate the exemption validation down to U.S. government program office level as opposed to being consolidated only with the military departments.” The office level can then confirm that “U.S. government validation does not require a license to already be submitted in” DDTC’s Defense Export Control and Compliance System in order for the exemption to be validated, Casazza said.
“Oftentimes, military departments require a license to already be submitted in order to validate the exemption,” he said. “And if this is supporting an FMS effort and we're trying to decrease redundancies here, it might be good for both the military departments as well as industry to have that confirmation that having a license already in play is not necessarily required for the exemption to be validated.”
Casazza and others outlined a range of other suggestions to address defense export issues. DTAG member Mary Beran, director of research integrity at the Georgia Institute of Technology, said there are often “difficulties” and “misunderstandings” in convincing other agencies that a license isn’t required for a particular FMS case.
She called for new DDTC FAQs to provide examples of various FMS cases that don’t require other authorizations. FAQs can “make it easy for people to see and kind of remove that misunderstanding about what is or what is not happening. That would really be helpful for industry, for our foreign partners, for our troops in the field that are working with our foreign partners,” she said. “We can even point to [the FAQs] for other government agencies that maybe did not have confidence in what we were saying.
“We can point to them and say, ‘Look, the Department of State put this out here. We're good. Here's the information that you need.’”