Security Assistance Management Manual E-Change 773
Foreign Military Sales Buy Back Guidance

1. Update Section C6.4.9. as shown:

   Current:

   C6.4.9. Returns. Returns may be accepted if the defense article was previously provided under the AECA, is not Significant Military Equipment (SME), and is in fully functioning condition without need of repair or rehabilitation. In addition, there must be either a DoD or FMS funded requirement for the defense article. For FMS-funded requirements, sensitive defense articles that require export controls and release determinations are not provided to other FMS partners through the return process. See Appendix 8 - Section 21(m) on the Return of Defense Articles for additional guidance.

   Revised:

   C6.4.9. Returns and Buy Backs. The DoD may accept returns of defense articles through the Worldwide Warehouse Redistribution Services (WWRS) program under Section 21(m) of the AECA and may utilize U.S. procurement authorities to purchase (i.e., buy back) defense articles previously sold to partners under the AECA. For any returns or buy backs, the partner must submit a request for a change of end use to the Department of State (PM/RSAT), per Section C8.7.3., and notify the relevant Security Cooperation Organization to ensure adherence to End Use Monitoring requirements.

   C6.4.9.1. Returns under Worldwide Warehouse Redistribution Services. The Worldwide Warehouse Redistribution Services (WWRS) program provides a mechanism for FMS partners to sell and return defense articles to the DoD that were purchased under FMS. Returns may be accepted if the defense article was previously provided under the AECA, is not Significant Military Equipment (SME), and is in fully functioning condition without need of repair or rehabilitation. In addition, there must be either a DoD or FMS-funded requirement for the defense article. For FMS-funded requirements, sensitive defense articles that require export controls and release determinations may not be provided to other FMS partners through the return process. The WWRS return program should primarily be used for instances where an FMS partner initiates a request for the DoD to accept the return of non-SME defense articles that it previously purchased through FMS on a partner-funded LOA. Subsequent transfers to a foreign partner remain subject to the applicable policies, regulations, and agreements governing its sale, transfer, and use. See Appendix 8 - Section 21(m) on the Return of Defense Articles for additional guidance.

2. Add the following sub sections to Sections to C6.4.9:

   C6.4.9.2. Buy Back. DoD organizations may also purchase (i.e., buy back) defense articles, SME or non-SME, previously sold under the FMS program to a partner. These defense articles may be purchased either for DoD use or for follow-on sale or transfer to another partner under available U.S. legal authorities. Any subsequent sale, transfer, or use of a buy back defense article is subject to the applicable policies, regulations, and agreements governing its sale, transfer, and use. The buy back of defense articles does not constitute a new FMS case. These foreign procurements are conducted under a Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulations Supplement (DFARS)-covered contract by the cognizant DoD purchasing organization.

   C6.4.9.2.1. Buy Back Acquisition and Financial Guidance. Any DoD organization that buys back defense articles previously sold under the FMS program on a partner-funded LOA must comply with procurement rules involving the obligation of DoD appropriations. Refer to DFARS 225.70 (Authorization Acts, Appropriations Acts, and Other Statutory Restrictions on Foreign Acquisitions) to review exceptions and restrictions imposed on the acquisition of foreign products and services by DoD appropriations, authorization acts, and other statutes. Any funds due to the partner resulting from the buy back shall be transferred from the procuring organization to the partner's FMS Trust Fund account. Refer to the DoD Financial Management Regulation (DoD FMR) 7000-14.R, Volume 15, Chapter 7 for financial guidance on buying back defense articles previously sold under FMS. These buy backs are funded through standard DoD procurement appropriations rather than FMS funds and are managed by the cognizant DoD purchasing component.

   C6.4.9.2.2. Foreign Military Sales Case Management Recordkeeping and Reporting Requirements involving Buy Backs. Buy backs by DoD that leverage existing open cases, not Supply Service Complete, that transferred the defense article to the FMS partner will be reconciled on that FMS case once the buy back contract requirements are met and fully executed. The SCO must be made aware to ensure accountability requirements related to End Use Monitoring are met. The active FMS case shall follow case reconciliation and closure guidance outlined in Appendix 7. The Implementing Agency (IA) for the active FMS case maintains a central record showing the defense articles transferred to the DoD under a reconciled buy back. This record identifies the original purchasing FMS partner, the defense articles originally purchased under FMS, the recipient of the newly acquired defense articles that were bought back (either from another foreign partner or the DoD), and the legal authority relied upon for any subsequent retransfer. This record is provided to DSCA upon request. A buy back indicator in DSAMS and case remarks may serve as the central record.

   C6.4.9.2.3. Transportation - Solicited by the United States Government. When the DoD initiates a request to buy back defenses articles that the partner previously purchased through FMS on a partner-funded LOA, the DoD purchaser will coordinate transportation requirements pursuant to the terms of the buy back contract between the DoD purchaser and the partner.

   C6.4.9.2.4. Transportation - Solicited by the Partner. When a partner initiates a request for the DoD to buy back defense articles that the partner previously purchased through FMS on a partner-funded LOA, the partner shall coordinate transportation requirements with the DoD purchaser pursuant to the terms of the buy back contract.