Mandatory for Foreign Military Sales (FMS) Letters of Offer and Acceptance (LOAs), Amendments, and Modifications when the term of sale is FMS Credit (Non-Repayable) or FMS Credit (Repayable) on materiel and services lines and/or that transfer Grant Excess Defense Articles (EDA) unless the latest version of the note is on the Implemented Version.
"All items transferred under Section 516 of the Foreign Assistance Act (FAA) (22 U.S.C. 2321j) or purchased with Foreign Military Sales (FMS) Credit (Non-Repayable) or FMS Credit (Repayable) that are transported by ocean carriers must comply with the U.S. Cargo Preference Act (46 CFR 381). Recipient partners must use U.S. flag vessels for the shipment of all FAA Section 516 materiel or materiel purchased with FMS Credit (Non-Repayable) or FMS Credit (Repayable) unless the Maritime Administration (MARAD) grants a non-availability waiver or the Defense Security Cooperation Agency (DSCA) grants a general or security waiver. MARAD will assist in working with the recipient Purchaser to determine availability of U.S. vessels from the port of shipment to the delivery port in the recipient Purchaser. Shipment options, utilizing U.S. flag exclusively, or in conjunction with a foreign flag carrier for a portion of the route, may be proposed by MARAD. In addition, MARAD will assist in monitoring compliance with the U.S. Cargo Preference Act."