Security Assistance Management Manual E-Change 791 
Update to Dependable Undertaking Grandfather Status and Monitoring

1. Update SAMM Section C9.8.3.3.2.:

   From:

   Grandfathered Dependable Undertaking. Allows Partners with ICRAS ratings that have fallen below the eligibility threshold to maintain DU eligibility so long as they are making payments as required and maintaining an active FMS program that demonstrates an ability to pay. Should a grandfathered Partner's program fall into a period of inactivity, then DU will be ceased. For this purpose, a period of inactivity means no record of national fund payments for seven consecutive years.

   To:

   C9.8.3.3.2. Grandfathered Dependable Undertaking Payment Timeliness. Allows Foreign Military Sales (FMS) partners approved for DU must make complete and timely payments to remain in good standing with DU policy and to retain the use of the term of sale. Partners with ICRAS ratings that have fallen below the eligibility requisite threshold for to maintaining DU eligibility so long as they are making payments as required and maintaining an active FMS program that demonstrates an ability to pay may continue to utilize the DU term of sale as long as they continue to demonstrate an ability to pay by making timely payments and maintaining active FMS programs. Should a grandfathered Partner's program fall into a period of inactivity, Repeated missed payments, consistent partial payments, or inactive programs will result in the loss of then DU eligibility will for future LOAs with the partner be ceased (refer to Section C9.8.3.6. for additional guidance on termination of DU). For this purpose, a period of inactivity means no record of national fund payments for seven consecutive years. If the partner meets the eligibility requirements specified in Section C9.8.3.2., their term of sale can be reviewed by DSCA (OBO/FPRE) upon request of an approved organization such as DSCA, the Security Cooperation Organization (SCO), or the partner itself.

2. Update SAMM Section C9.8.3.3.2.1.:

   From:

   C9.8.3.3.2.1. Monitoring Grandfathered Status. DSCA (OBO/FPRE) will review and evaluate grandfathered countries and organizations every seven years to ensure the appropriateness of continuing the grandfathered DU status. DSCA (OBO/FPRE) will review the ICRAS rating changes over the course of the seven-year period and the DSCA (OBO/FPRE) Country Finance Director (CFD) will advise of any issues with timely payments. DSCA (OBO/FPRE) will consult with State on its recommendations for any DU status changes. The final recommendations will be sent to the DSCA CFO for a decision on whether it is appropriate to continue the grandfathered country or organization's DU status. The monitoring period ends December 31 every seventh year.

   To:

   C9.8.3.3.2.1. Monitoring Grandfathered Payment Status. The DSCA (OBO/FPRE) Country Finance Director (CFD) will, on a quarterly basis and not less than once annually, review and evaluate grandfathered the partner's payment timeliness countries and organizations every seven years to ensure the appropriateness financial viability of maintaining the grandfathered DU status any term of sale that provides a payment schedule (i.e. DU, RAPS, CAPS). The DSCA CFD will coordinate with the appropriate IA, if needed, to further discuss missing or late payments for cases specific to the IA. DSCA (OBO/FPRE) will review the ICRAS rating changes over the course of the within the last seven-years period and the DSCA (OBO/FPRE) Country Finance Director (CFD) will advise of identify any issues with timely and complete payments or a change in eligibility as outlined in Section C9.8.3.2. DSCA (OBO/FPRE) will consult with State and the IAs on its recommendations for any DU status changes. The final recommendations will be sent to the DSCA CFO for a decision on whether it is appropriate to maintain the grandfathered country or organization's partner's DU status from a financial risk perspective. The monitoring period ends December 31 every seventh year.