PERU July 2009

1. PERU July 2009

2. The Sales Process State Defense MILDEPs President Congress Foreign Purchaser Needs Supplies and Services SAM-I, 5/1/2009

3. A government to government agreement to transfer defense articles & services is a: Letter of Offer & Acceptance =LOA = FMS Case =Case “BN-D-YCY” =Case YCY FMS Terminology What’s a FMS Case?

4. International Sales ProcessFMS Case lifecycle phases (DISAM Text Page 5-2) Preliminary, Definition and Request Offer and Acceptance (SAMM C-5) Case Development Implementation, Execution, and Closure (SAMM C-6) Case Execution

5. Security Assistance Policy Documents • Security Assistance Management Manual (SAMM) DoD 5105.38-M • DSCA Policy Memoranda • Financial Management Regulation 7000.14-R, Vol. 15, Security Assistance Policy and Procedures • Reconciliation and Closure ManualDoD 5105.65-M (RCM) • MILDEP Specific Policy Manuals

6. Customer Decisions Non-U.S. Sources Where Cost What Kind U.S. Munitions List When U.S. Commercial Export Needs How Many = Arms Export Control Act FMS Letter Of Request (LOR) Minister of Defense Bandaria

7. Support Equipment Facilities Follow on Support Publications Services FMS Case Reviews Training DOD/Contractor Services Site Survey Financial Considerations Funding Source Payment Schedule/Initial deposit Financial Waivers Special Considerations Memorandum of Understanding (MOU) Offsets Commercial Negotiations Special Reports Interoperability Identification Information Purpose: P&A- Price & Availability LOA-Letter of Offer & Acceptance Lease Purchaser Pre-negotiations Transparency Acceptance Time Frame International Solicitation Major Item Considerations Standard Model Quantity Unique Configuration Delivery Timeframe Transportation Warranties Sole Source Support Considerations Operations Concept Maintenance Concept Supply Concept Initial Spares Letter of Request Checklist Total Package Approach LOR Writing Guide

8. Need LOR preparation help? • DISAM’s LOR Writing Guide • USASAC’S Commodity Specific Checklists (Int’l Customers tab) • AFSAC On-line • Implementing Agency (IA)- Country Program Director (CPD) USASAC-U.S. Army Security Assistance Center AFSAC-Air Force Security Assistance Center

9. Selecting LOR ApplicationsLOR Submissions

10. LOR ApplicationsLOR Submissions--Screen 1 Selecting The customer may submit a ‘New LOR’ or ‘View/Modify’ an existing LOR. For new LORs, the user must select the type of LOR required (Purpose of Request) and establish a ‘unique’ Country Reference Number. For existing LORs, the user may query by the Country Reference Number OR the AFSAC Reference Number. The user can view any existing LOR; however, only ‘open or pending’ LORs can be modified.

11. Selecting LOR ApplicationsLOR Submissions--Screen 2 The user enters applicable LOR data on this screen, then clicks ‘Continue’ to proceed to the next screen. Edits will ensure user completes all required fields. Note that the user requested P&A data in this LOR Submission example. Multi-line phase allows the user to select one or more materiel/services.

12. Channels of Request State DSCA Letter Of Request LOR Combatant Command U.S. Embassy Implementing Agency PROCEED Bandaria Prepare LOA Congress

13. International Traffic in Arms Regulations (ITAR) • Provides registration / licensing requirements for the commercial export of defense articles, services, and related technical data. • Includes the United States Munitions List (USML) • Identifies “Significant Military Equipment” (SME) • SME requires special considerations because of “Their capacity for substantial military utility or capability” • SME also defined in §47(9), AECA • Identified by an Asterisk (*) on the Munitions List [22 CFR 120-130]

14. Major Defense Equipment List Approved Charge $147,604 $326,461 $897,452 $1,045,566 $1,328,033 $144,279 $663,082 $607,149 $761.197 Effective Date 11 May 89 18 Jun 90 28 Nov 01 30 Dec 83 23 Feb 00 7 Aug 91 10 Aug 93 3 Jun 91 28 Nov 01 Helicopters AH-1S Cobra (with T-53-L-703 Engine) System without C-Nite AH-1W Super Cobra (with 2 T-700-GE-401 Engines)(N) AH-1Z (H1 Helicopter upgrade) with two T700-GE-410 Engines AH-64 Apache Helicopter System (with 2 T-700 Engines) (A) AH-64 (New) Apache Helicopter System with 2 T-700 Engines CH-47D Chinook (without T-55 Engines) (A) OH-58D Kiowa with one T-703 engine (with Mast Mtd Sights) (A) SH-2G (with 2T-700-GE-401 Engines) (N) UH-1Y (H-1 Helicopter Upgrade) with two T700-GE-401C Engines MDE List- SAMM Appendix-1

15. “Country Team Assessment” for SME/MDE LOR’s (SAMM C5.T1) • U.S. Embassy/SCO Must Address: • Reason nation desires articles/services • Effect on recipient's force structure • Reaction of neighboring nations • Purchaser's ability to maintain, operate and support • Economic impact and source of financing • Human rights considerations • Should USG approve purchase SME=Significant Military EquipmentMDE=Major Defense Equipment

16. Charter-Administer FMS Policy (SAMM) Congressional Input FMS Country Program & Financial Management FMS Administrative Budget Credit Program (FMFP) Training Program (IMET) FMS Trust Fund Mgt Waiver Authorities Memoranda of Understanding Security Cooperation Office Mgt. Computer System Development & Management Security Assistance Metrics Payment Schedules/Special Bills Case Closure Lean Six Sigma (LSS) Teams Security Cooperation Non-FMS Functions Defense Security Cooperation Agency Responsibilities

17. Department of StateArms Transfer Points of Contact Under Secretary for Arms Control & International Security Bureau of Political-Military Affairs: Regional Security and Arms Transfers (RSAT) Director for Defense Trade Controls (DDTC)

18. Channels of Request State DSCA Letter Of Request LOR Combatant Command U.S. Embassy Implementing Agency PROCEED Bandaria Prepare LOA Congress

19. PreliminaryDefinition &Request

20. Optional slides