(MENAFN) The United States has notified South Korea of its decision to terminate a critical waiver that exempted certain development expenses from American weapons purchases, South Korean media reported Sunday, according to insider sources.

Washington allegedly informed Seoul in August that it would discontinue waiving "non-recurring" costs (NCs)—single-payment charges connected to research, development, or manufacturing of specific military hardware.

The U.S. Arms Export Control Act mandates that the Pentagon recuperate NCs for armaments sold via the Foreign Military Sales (FMS) program, given that American taxpayers initially finance the development and production of these weapons systems.

The legislation permits cost exemptions under particular circumstances, including scenarios that advance American strategic interests by standardizing military equipment among allied nations such as South Korea, Japan, and Australia, or preventing situations where imposed charges might jeopardize weapons transactions.

Historically, South Korea benefited from the NC waiver, but its elimination will significantly inflate procurement expenses as Seoul intends to allocate $25 billion toward U.S. military equipment acquisitions through 2030.

Japan, Australia, and additional partner nations have similarly received notification regarding the waiver's termination, according to reports.

The Pentagon refused to provide commentary on the matter.

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