1. 1 COMDEF 8 September 2010 Report from the International Customer Community Ronald Genemans, M.A. Chair Defense MOU Attachés’ Group (Ronald.Genemans@minbuza.mil)Ronald.Genemans@minbuza.mil (202) 274-2692 Jennifer Stewart, Ph.D. Chair Foreign Procurement Group (Jennifer.Stewart@pwgsc.gc.ca)Jennifer.Stewart@pwgsc.gc.ca (202) 682-7604

2. 22  International customers are important to doing more with less  Overall customer perspectives  The international networks and their priorities  Successes and future challenges Topics

3. 3 International Customers are Important to Doing More with Less  Defense trade creates U.S. jobs  Foreign Military Sales (FMS) contributes to prosperity and national security  International involvement in U.S. military programs reduces costs, contributes to excellence and innovation  Foreign technologies enhance U.S. capabilities

4. 44 “The good”  Department of Defense and industry associations’ support of global defense cooperation and trade  Accelerated process for coalition requirements  Partnership and progress in FMS improvements  The Administration's Export Control reform initiative Overall International Customer Perspectives

5. 55 “The bad and the ugly”  Protectionist thinking and “Buy American” legislation  The “unintended consequences” of U.S. export controls, in particular the International Traffic in Arms Regulations (ITAR) Overall Perspectives (cont’d)

6. 6 Navy ILCO, PA Major FMS Customers MoU/DoP Countries Defense MoU Attachés’ Group Foreign Procurement Group International Customers’ User Group The International Customer Environment

7. 77 Defense MOU Attachés Group  21 countries with reciprocal defense procurement agreements with the US  Founded in 1986  “Parent” of the Foreign Procurement Group

8. 88 DMAG Member Nations France Germany Greece Israel Italy Luxemburg Netherlands Australia Austria Belgium Canada Denmark Egypt Finland Norway Portugal Spain Sweden Switzerland Turkey United Kingdom

9. 99 DMAG Priorities  Enhanced defense trade and cooperation  Advocacy against protectionist thinking and legislation  Identifying and suggesting solutions to problems with U.S. export controls

10. 10 The Foreign Procurement Group  Washington DC-based group of countries that participate in Security Assistance and/or buy from U.S. suppliers  Mix of uniformed & civilian Defense Cooperation/Logistics/Procurement officials  Founded Feb 1999 as a result of ‘FMS Reinvention’ (‘Hamre’ Memo 1999)  Provides the international customer viewpoint to FMS re-engineering and reform

11. 11 FPG Member Nations 1999 - 17 members 2009 - 33 members Argentina Australia Austria Belgium Brazil Canada Chile Denmark Egypt Finland France Germany Greece Indonesia Israel Italy Japan Korea Netherlands New Zealand Norway Pakistan Peru Poland Portugal Saudi Arabia Singapore Spain Sweden Switzerland Taiwan Turkey UK

12. 12 FPG Top 10 Priorities 1.Standard Level of Service 2.Access to DoD websites 3.Transportation 4.Processing Times 5.Third Party Transfers 6.Blanket Authorizations  DSCA/MILDEPs  DSCA/DoD CIO  DSCA/Customs/Dept of Transportation/State  DSCA/MILDEPs/FPG Metrics WG  State (5 and 6) Stakeholders Priority

13. 13 7.FMS as a commercial alternative/quantify and define the value- added of FMS 8.Country specific cost and schedule performance measures 9.Access to contracting documentation 10.Improvements to delivery listings  Foreign Commercial Procurement WG  DSCA/MILDEPs/FPG Metrics WG  DSCA/DPAP  DSCA Priority Stakeholders FPG Top 10 Priorities

14. 14 Work of the International Networks  The DMAG and FPG have developed a number of presentations and white papers as input to initiatives to promote international defense trade and modernize export controls  These include:  Conference on Myths and Facts of Global Defense Trade and Cooperation – co- organized with CSIS (April 2005)

15. 15  Briefings to Departments of Defense and State, Government Accountability Office, National Security Council, Defense Industry Associations, Heritage Foundation, etc.  Letters to Congress advocating against “Buy American” provisions in defense legislation (starting in 2004)  “Buy American” provisions removed or mitigated  Greater use of ITAR exemptions (2006) Work of the International Networks (cont’d)

16. 16  Redefining “agent” for FMS Retransfers (2006)  An Integrated International Export Controls Regime (Sept 2009)  Examples of allies’ issues with U.S. Export Controls (August 2009, July 2010)  A paper of proposals on the 2009 Defense Trade Controls Performance Improvement Act (June 2009) Work of the International Networks (cont’d)

17. 17  Exchanges with AIA on the Coalition’s export control reform proposals (starting in 2006)  Participated in the Center for Strategic and International Studies’ 2007 Export Control Project and the Defense Business Board’s 2008 Task Group on Best Practices for Export Controls  Provided input to the National Academies of Science 2009 study of export controls: “Beyond Fortress America”  Applied for membership for the DMAG and FPG Chairs in the Defense Trade Advisory Group (2010-12 term) – unfortunately denied Work of the International Networks (cont’d)

18. 18 Many Successes  A decade of cooperation on FMS reform  Security Cooperation Business Forum/DSCA and Services’ participation in FPG meetings  FPG guest lecturers at DISAM courses  Progress on FPG priorities:  Increased transparency and customer participation  Resolution of transportation issues  Resolution of case closure problems  FMS as a commercial alternative  Redefinition of what constitutes an agent in FMS third party transfers (well, almost…)

19. 19 Many Successes (cont’d)  Significant reductions in processing times for licenses since 2007  A year of unprecedented progress on export control reform – from August 2009 to August 2010  Proposed new regulation for treatment of dual nationals (ITAR 126.18), posted for comment 11 August 2010  Other new regulations being drafted:  ITAR 123.28, exemption for the export of components and spare parts in support of previously exported US origin items, and  ITAR 120.9, narrowed definition of defense service

20. 20 In Summary  Many success stories  Export control reform very much on the radar screen, with highest and widest level of support ever  Continuing challenges to combat protectionist thinking/legislation, support export control reform and advance the FPG priorities

21. 21 In Summary (cont’d)  Excellent partnership with Departments of Defense, State and the National Security Council will be instrumental in addressing the challenges  The international networks have a wealth of ideas and experience to offer  Greater international involvement and cooperation would add value to the way forward

22. Questions? For more information, please contact: Jennifer Stewart, Ph.D. Chair Foreign Procurement Group (Jennifer.Stewart@pwgsc.gc.ca)Jennifer.Stewart@pwgsc.gc.ca (202) 682-7604 Ronald Genemans, M.A. Chair Defense MOU Attachés’ Group (Ronald.Genemans@minbuza.mil)Ronald.Genemans@minbuza.mil (202) 274-2692 Isabelle Corriveau Secretary Defense MOU Attachés’ Group (Isabelle.Corriveau@pwgsc.gc.ca)Isabelle.Corriveau@pwgsc.gc.ca (202) 448.6232 or visit our new website www.thedmag.com