Foreign Military Sales Reform Act of 2025
The Foreign Military Sales Reform Act of 2025 would change the dollar thresholds that trigger congressional notification and review under the Arms Export Control Act (AECA), effectively raising many levels at which defense articles and defense services transfers require extra oversight. It also adds new accountability measures: a requirement for the State Department Inspector General to report on efforts to structure payments to bypass these thresholds, a prohibition on federal employees from doing so, and penalties for State Department employees who knowingly engage in structuring. In short, the bill aims to expand oversight by increasing the size of deals that must be reported and reviewed, while strengthening anti-evasion rules and penalties. If enacted, larger defense sales would move into the higher-threshold categories, potentially delaying certain transactions while increasing congressional and inspector-general scrutiny. The added penalties and reporting requirements are intended to deter attempts to circumvent the notification process.
Key Points
- 1Raises key AECA thresholds for transfers of defense articles and defense services, altering when congressional notification and review are triggered (sections 3(d), 36(b), and 36(c)).
- 2- Example changes include moving certain trigger amounts from about $14 million to $23 million; from about $50 million to about $83 million; and higher thresholds up to hundreds of millions for larger transfer categories (e.g., $332 million, $166 million, $500 million in various subsections).
- 3- Note: The bill text shows some apparent typographical oddities (e.g., “$50,000,0000”), which appear to be extra zeros; the intended thresholds are the numbers listed next to them (e.g., $83,000,000, $332,000,000, etc.).
- 4Adds a reporting requirement: The Office of the Inspector General (OIG) of the Department of State must report to Congress on any activity that structures payments to evade the threshold-based reporting and review under AECA.
- 5Prohibits federal employees from knowingly structuring or assisting in structuring transfers to circumvent congressional reporting thresholds (Sec. 4).
- 6Imposes penalties on State Department employees found to knowingly structure payments to defeat AECA reporting requirements: bar from federal service and civil penalties of $100,000 (Sec. 5).
- 7Short title: The bill is titled the “Foreign Military Sales Reform Act of 2025,” and it is introduced in the House to modify thresholds and add oversight and penalties related to defense articles and defense services transfers.