U.S. Arms Transfers Increased by 2.8 Percent in FY 2020 to $175.08 Billion

Over the last fiscal year, authorized arms exports (including both commercial and government-managed) rose by 2.8 percent from $170.09 billion to $175.08 billion, adding thousands of jobs to the U.S. economy and sustaining many thousands more.  This has coincided with efforts by the State Department’s Bureau of Political-Military Affairs and interagency partners under the Conventional Arms Transfer Policy to comprehensively reform and modernize the arms transfer process.

Arms sales and defense trade are tangible implements of foreign policy with potential long-term implications for regional security.  For this reason, the United States takes into account political, military, economic, arms control, and human rights conditions in determining the provision of military equipment and the licensing of direct commercial sales to any country.  Each proposed transfer we review is carefully assessed on a case-by-case basis, and approved if found to further U.S. foreign policy and national security interests.  In addition, major defense transfers and sales may be subject to Congressional notification.

Foreign Military Sales

The three-year rolling average of State Department-authorized government-to-government Foreign Military Sales (FMS) cases implemented¹ by the Defense Security Cooperation Agency rose to $54 billion in FY 20 from $51 billion in FY 19.  Major implemented cases in FY 20 include:  Japan – F-35 Joint Strike Fighter aircraft ($23.11B); Japan – F-15J Modernization ($4.5B); Morocco – AH-64E helicopters ($4.25B); Israel – Aviation, Diesel, and Unleaded Gasoline ($3.0B); Singapore – F-35B Short Take-Off And Vertical Landing (STOVL) aircraft ($2.75B); Israel – KC-46A Aerial Refueling aircraft ($2.4B); Egypt – Refurbished AH-64E Apache Attack helicopters ($2.3B); France – E-2D Advanced Hawkeye aircraft ($2.0B); Indonesia – MV-22 Osprey aircraft ($2.0B).

Direct Commercial Sales

The value of Department-authorized commercial export licenses via Direct Commercial Sales (DCS) totaled $124.3 billion in FY 20, up from $114.7 billion in FY 19, representing an 8.4 percent increase.  The total value covers authorizations of hardware, defense services, and technical data.  At the end of FY 20, 13,753 entities were registered with the Directorate of Defense Trade Controls to conduct defense trade activities.  

The top 5 major Congressional Notifications (CNs) in FY 20 include: Australia – Spare Parts for the P-8 Aircraft ($3.25 billion); Italy – Manufacture of F-35 Joint Strike Fighter Wing Assembly for the Italian Ministry of Defense and United States ($1.12 billion); Australia and UK – E-7 Airborne Early Warning and Control (AEW&C) aircraft for the UK Ministry of Defense ($2.48 billion); Australia, Austria, Finland Germany, Norway, Qatar, UK,– Qatar National Advanced Surface to Air Missile System (NASAMS) for the Qatari Ministry of Defense ($1.80 billion); Australia, Canada, Denmark, Italy, Japan, and UK – Manufacture of F-35 Joint Strike Fighter aft fuselage, empennage, and airframe components for Australia, Canada, Denmark, Italy, Japan and the United States ($8.39 billion).

Current year numbers are not predictive of future year sales, which may increase or decrease due to several factors, including COVID-19 impacts, fluctuating foreign defense budgets, and regional security issues.

For further information, please contact the Bureau of Political-Military Affairs, Office of Congressional and Public Affairs at PM-CPA@state.gov, and follow the Bureau of Political-Military Affairs on Twitter, @StateDeptPM.

¹This includes new FMS cases and changes to existing ones, representing when a partner nation signs and makes the initial deposit on a Letter of Offer and Acceptance.