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Washington to not provide waiver for costs on arms purchases to Seoul
(MENAFN) According to reports, Washington has informed Seoul that it will no longer provide a waiver for development costs on certain US weapons purchases.
Sources indicate that the US communicated in August that it would end the exemption for "non-recurring" costs (NCs), which are one-time expenses associated with the research, development, or production of specific defense equipment.
Under the US Arms Export Control Act, the Pentagon is required to recover NCs for weapons sold through the Foreign Military Sales (FMS) program, as these initial development costs are covered by US taxpayers. The law allows these charges to be waived in select cases, such as promoting interoperability with allies like South Korea, Japan, and Australia, or preventing the potential loss of a weapons sale.
South Korea has previously benefited from this waiver, but its removal is expected to increase costs, particularly as Seoul plans to spend $25 billion on US military equipment by 2030. Reports suggest that Japan, Australia, and other allies have also been informed about the end of the waiver.
The Pentagon has declined to provide a comment on the decision.
Sources indicate that the US communicated in August that it would end the exemption for "non-recurring" costs (NCs), which are one-time expenses associated with the research, development, or production of specific defense equipment.
Under the US Arms Export Control Act, the Pentagon is required to recover NCs for weapons sold through the Foreign Military Sales (FMS) program, as these initial development costs are covered by US taxpayers. The law allows these charges to be waived in select cases, such as promoting interoperability with allies like South Korea, Japan, and Australia, or preventing the potential loss of a weapons sale.
South Korea has previously benefited from this waiver, but its removal is expected to increase costs, particularly as Seoul plans to spend $25 billion on US military equipment by 2030. Reports suggest that Japan, Australia, and other allies have also been informed about the end of the waiver.
The Pentagon has declined to provide a comment on the decision.
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