Direct Commercial Sales
The Direct Commercial Sales program regulates U.S. companies' sales of U.S. defense articles and defense services on the U.S. Munitions List abroad.
The State Department's Direct Commercial Sales (DCS) program regulates U.S. companies' sales of U.S. defense articles and defense services on the U.S. Munitions List abroad. Authorized under Sec. 2778 of U.S. Code, DCS is distinguished from the Foreign Military Sales (FMS) program, which manages government-to-government sales or transfers. Unlike FMS, direct commercial sales are negotiated directly between the foreign government and a U.S. company. In the overwhelming majority of cases, a U.S. company wanting to export U.S. defense articles or defense services to a foreign country will require an export license or approval from the State Department. Importantly, Security Assistance Monitor data shows approved license agreements instead of actual deliveries of defense articles or services to a foreign country each year. The license agreements often last a few years. Direct commercial sales are subject to the same notification requirements as FMS. Foreign governments that have more experience in military procurement, and do not feel a need to have the U.S. government negotiate sales on their behalf, tend to choose DCS. DCS is usually a quicker way to transfer arms abroad and has less government oversight than FMS. Each year, the State Department's Directorate for Defense Trade Controls releases a report detailing approved licenses and deliveries of defense articles and defense services under DCS for the previous year.