Introduction

The Foreign Military Financing (FMF) programme provides grants and loans to help countries purchase weapons and defence equipment produced in the United States as well as acquiring defence services and military training.

Outline

FMF funds purchases are made through the Foreign Military Sales (FMS) programme, which manages government-to-government sales. On a much less frequent basis, FMF also funds purchases made through the Direct Commercial Sales (DCS) programme, which oversees sales between foreign governments and private US companies. FMF does not provide cash grants to other countries; it generally pays for sales of specific goods or services through FMS or DCS.

The State Department’s Bureau of Political-Military Affairs and the latter’s Office of Security Assistance set policy for the FMF programme, while the Defence Security Cooperation Agency (DSCA), within the Defence Department, manages it on a day-to-day basis. Security Assistance Organisations (SAOs), military personnel in US embassies overseas, play a key role in managing FMF within recipient countries. Some FMF pays for SAO salaries and operational costs. Congress appropriates funds for FMF through the yearly Foreign Operations Appropriations Act.

FMF exists primarily to fund arms transfers, as military training is normally granted through the International Military Education and Training (IMET) programme. However, FMF does support a good deal of training.

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