Updated 1/25/19 1:35 PM EST — Late Thursday evening, the State Department announced it would be re-open processing of export licences for Direct Commercial Sales of defense items and services.
“We will prioritize the review and adjudication of licenses in the system at the time of implementation of lapse of funding operations on December 22, 2018,” a department official told Defense News. “While new license applications will be accepted and processed under standard procedures, we expect longer than normal processing times due to the high volume of licenses DDTC expects to receive. Cases requiring extensive interagency coordination or Congressional Notification may also be subject to longer than normal processing times.”
WASHINGTON — A top U.S. State Department official acknowledged Thursday that the government shutdown will have an impact on U.S. weapon sales, with potential long-term ramifications on sales totals for the year.
“Truth be told, the last couple of weeks have set us back,” Andrea Thompson, undersecretary of state for arms control and international security, said of the Foreign Military Sales process.
“There will be a bit of a bump — a gap, if you will — just because we haven’t had the engagement with [Capitol] Hill” normally seen in the process, she said. “We’ll be able to make up some ground, but I am a realist. We have to work harder if we are going to have the numbers we had last year.”
The FMS process requires the State Department to verify a sale before clearing the potential deal and passing it along to the Senate. However, department employees have been furloughed for several weeks, only returning to work en masse recently when the department was able to recalibrate funding.
The Trump administration has made increasing American arms sales abroad a key part of both its national security and economic strategies; that coincided with a major reform package of the FMS process, with the explicit goal of making it easier for friendly nations to procure American military goods.
That policy change, known as the Conventional Arms Transfer policy, or CAT, includes loosening International Traffic in Arms Regulations restrictions on exports and pushing more sales through the Direct Commercial Sales process, which is less labor intensive. Other policies targeted at encouraging partners to buy American goods, including dropping surcharges on products and lowering the cost of transportation for weapons, are also underway, with the head of Defense Security Cooperation Agency, Lt. Gen. Charles Hooper, leading the charge.
Late Thursday evening,
In September, Thompson predicted that 2019’s numbers would eclipse 2018’s $55.6 billion in foreign weapons sales. However, there have been no notifications to Congress of new arms sales since the shutdown began, and her comments Thursday put the brakes on such a prediction. Still, she did indicate a belief that the FMS reforms mean her team can make up lost time more easily than in past years.
“It will be a bit of a backlog, but we’ve got the efficiencies in place to make the ground up again,” she said, specifically citing the changes through the CAT policy.
Eric Fanning, the head of the Aerospace Industries Association trade group, warned in a recent statement that export licenses can no longer be processed during the shutdown, which will delay the delivery of products to foreign customers. Meanwhile, meetings with key stakeholders are being canceled, leaving foreign partners who want to talk about buying American goods unable to move forward.
“Every day the shutdown lasts, the impacts grow and become more difficult and more expensive to fix,” Fanning said. “It’s time to get these dedicated public servants back to work.”