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REPORT BY THE DEPARTMENT OF STATE UNCLASSIFIED
REPORT BY THE DEPARTMENT OF STATE
PURSUANT TO SECTION 655 OF THE FOREIGN ASSISTANCE
ACT OF 1961, AS AMENDED


Direct Commercial Sales Authorizations for Fiscal Year 2006

Overview

This report covers defense articles and defense services licensed for permanent export
during Fiscal Year 2006 under Section 38 of the Arms Export Control Act, as amended. It is
provided pursuant to Section 655 of the Foreign Assistance Act of 1961, as amended. The report
shows the aggregate dollar value and quantity of defense articles and defense services authorized
to each foreign country, including any international organizations operating in each country.
Sometimes the column for the quantity is blank or 0. The quantity on a license may not be a
specified number because of instances where the applicant used the word lot or various or
the item is not quantifiable (e.g., technical data). An exporters shipments are tracked by both
quantity and dollar value; therefore, in instances where a definitive quantity of items is not
specified, the license is only valid until the dollar value is reached.

In accordance with subsection (c) of Section 655, this report is also being made available
to the public on the Internet through the Department of State, Directorate of Defense Trade
Controls, at
www.pmddtc.state.gov
.

The overall number of permanent export license applications authorized under Section 38
in Fiscal Year 2006 was 35,991. The number of authorizations for manufacturing license
agreements, technical assistance agreements, and amendments was 5,656.

Part 1 of the report details approximately $19.8 billion in licenses authorizing the
permanent export of defense articles, while Part 2 provides aggregate information by country,
including any international organizations operating in that country, on authorizations for defense
services (i.e., agreements) totaling $46.8 billion. Authorizations applicable to multiple countries
are included under the designation Various in Parts 1 and 2. Importantly, the value of
authorizations provided under Section 38 for defense articles and defense services does not
precisely correlate to the value of articles actually transferred during this same time frame. Most
munitions licenses issued for articles shown in Part 1 are valid for four years and may be used
throughout their period of validity to carry out the authorized export transactions.

Similarly, manufacturing license and technical assistance agreements set forth in Part 2 of
the report cover a wide range of programmatic activities for multi-year periods (generally
exceeding the four-year validity period of defense article export licenses). Because the scope of
the Departments regulatory authority over such agreements continues for as long as these multi-
year agreements remain in effect, authorizations furnished in Fiscal Year 2006 also include
certain activities occurring in prior years. Such post hoc reporting generally is due to instances
where the State Department directed an audit of an agreement (including the value of articles
produced) in order to ensure compliance with the Arms Export Control Act and, in particular, the
UNCLASSIFIED
1 of 180 oversight by Congress mandated in Section 36 of the Act
1
with respect to major sales and
manufacturing abroad of significant military equipment.

The results of such audits frequently disclose higher values than previously reported or
initially projected by U.S. defense firms owing to a variety of factors, including extensions in the
validity of agreements well beyond the original time frame envisaged.

Authorizations under Section 38 in Fiscal Year 2006 continued to center principally on a
relatively small number of friends and allies of the United States. During this period defense
trade with two major allies, the United Kingdom and Japan, reflect a large portion of the dollar
value of all authorizations furnished under Section 38 (i.e., the overall direct commercial sales
program). In past years, the United Kingdom and Japan have been the largest cooperative
partners of the United States in relation to defense trade carried out under Section 38 (Table 1).

Table 1

DEFENSE
ARTICLES
FY2002
FY2003 FY2004 FY
2005 FY2006

Japan


$3.0B
$3.6B
$2.8B
$2.9B
$3.3B

United Kingdom
$2.6B
$2.8B
$1.7B
$2.2B
$1.9B


1
Sales of major defense equipment valued at $14 million or more, or other defense articles and defense services
valued at $50 million or more, or in the case of a defense article that is a firearm controlled under category 1 of the
United States Munitions List, $1,000,000 or more, require notification to Congress before an export license may be
issued. In the case of a member country of the North Atlantic Treaty Organization (NATO) or Australia, Japan, or
New Zealand, sales of major defense equipment valued at $25 million or more or other defense articles and defense
services valued at $100 million or more require notification to Congress before an export license may be issued.
Approval of technical assistance and manufacturing license agreements involving the manufacture abroad of
significant military equipment requires advance notification to Congress.
2 of 180 U.S. Munitions List Categories


The categories of the U.S. Munitions List referenced throughout this report are as
follows:


Category I

Firearms, Close Assault Weapons, and Combat Shotguns

Category II

Guns and Armament
Category
III
Ammunition/Ordnance

Category IV
Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets,
Torpedoes, Bombs, and Mines
Category V

Explosives and Energetic Materials, Propellants, Incendiary
Agents, and Their Constituents
Category VI
Vessels of War and Special Naval Equipment
Category VII
Tanks and Military Vehicles
Category VIII
Aircraft and Associated Equipment
Category IX
Military Training Equipment and Training
Category X

Protective Personnel Equipment and Shelters
Category XI
Military Electronics
Category XII
Fire Control, Range Finder, Optical and Guidance and Control
Equipment
Category XIII
Auxiliary Military Equipment
Category XIV
Toxicological Agents, Including Chemical Agents, Biological
Agents, and Associated Equipment
Category XV
Spacecraft Systems and Associated Equipment
Category XVI
Nuclear Weapons, Design, and Testing Related Items
Category XVII
Classified Articles, Technical Data, and Defense Services Not
Otherwise Enumerated
Category XVIII
Directed Energy Weapons
Category XIX
[Reserved]
Category XX
Submersible Vessels, Oceanographic, and Associated Equipment
Category XXI
Miscellaneous Articles
__________

3 of 180 FY 06 Authorized Defense Articles Under Section 38 AECA

October 1, 2005 - September 30, 2006


Country Name

Commodity

Quantity

License Value

AFGHANISTAN


ANTENNAS (RADIO & COMMUNICATIONS TYPES)
31
75,163

ARMOR PLATE
2
2,900
ARMORED
CARS
2 326,400

ARMORED VESTS (PERSONNEL)
1,270
1,229,912

CARTRIDGES, EXPLOSIVE
1,775,254
1,537,146

COMMUNICATIONS EQUIPMENT & COMPONENTS
23
8,257

COMPUTER COMPONENTS AND SPARE PARTS
6
15,400

CRYPTO MACHINES
5,240

ELECTRONIC WARFARE SYSTEMS (ALL MODELS)
19,008,000

ELECTRONICS COMPONENTS & SPARE PARTS
3,244,300

FIRE CONTROL SYSTEM PARTS & COMPONENTS
3,706,403

GRENADES HAND & WEAPON TYPES
192
5,760

GUN MOUNTS (ALL TYPES & MODELS)
14
1,764

HELICOPTER HH-1 SERIES
10
26,000,000

LASERS (ALL MODELS)
12
11,244

MACHINE GUN (ALL TYPES)
36
316,583

MINE COMPONENTS AND SPARE PARTS
50
53,660

MISCELLANEOUS NIGHT VISION
17
7,154

MISSILE SPARE PARTS (NON-SPECIFIC TYPE)
5,000,000

MNFO (MISC MILITARY EQUIPMENT)
216
172,306

NIGHT VISION
45
145,550

NIGHT VISION SCOPES SPARES & COMPONENTS
4
6,956

NIGHT VISION, AN/PVS-7A/B GOGGLES
39
200,728

PISTOLS & REVOLVERS
728
1,370,091

PISTOLS & REVOLVERS SPARE PARTS
45
700

PROTECTIVE EQUIP (SUITS, GLOVES, ETC)
1,175
11,392,375

RADAR SYSTEMS COMPONENTS & SPARE PARTS
588,958

RADIO SET (COMPONENTS & SPARE PARTS)
8
402,205

RADIO SETS (AN/PR C, R, T SERIES)
20
75,000

RIFLE (NON-MILITARY, ALL TYPES)
147
225,647

4 of 180
Country Name

Commodity

Quantity

License Value


AFGHANISTAN (Continued)


RIFLE, M-16 (ALL MODELS)
78
113,197

RIFLE, M-16, SPARE PARTS & COMPONENTS
1,686
26,108

RIFLE, M-4
15
40,706

SMALL ARMS SPARE PARTS (RIFLE & CARBINE)
395
407,023

TECHNICAL DATA CATEGORY I

700,000

TECHNICAL DATA CATEGORY VIII

2,500

TRAINING EQUIPMENT & SPARES
1
92,600

TRUCKS MILITARY COMPONENTS & SPARES

22,685,050

VEHICLE MILITARY COMPONENTS & SPARES
50
25,900

Country Total
$99,228,886

ALBANIA