Foreign Military Financing

Foreign Military Financing At A Glance

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The Foreign Military Financing program provides grants and loans to help countries purchase U.S.-made defense articles and defense services on the U.S. Munitions List.

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First enacted in 1961, the Foreign Military Financing (FMF) program provides grants and loans to help countries purchase U.S.-made defense articles and defense services on the U.S. Munitons List for their military and government official in order to support coalition operations as well as stabilization, counterterrorism and counternarcotics purposes. FMF funds purchases made through the Foreign Military Sales (FMS) program, which manages government-to-government sales. On a much less frequent basis, FMF also funds purchases made through the Direct Commercial Sales (DCS) program, which oversees sales between foreign governments and private U.S. 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 sets policy for the FMF program, while the Defense Security Cooperation Agency (DSCA), within the Defense Department, manages it on a day-to-day basis. Security Assistance Organizations (SAOs) and military personnel in U.S. 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.   

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