Foreign Military Sales Act Overhaul: Dollar Thresholds for Arms Deals Jump, New Oversight Rules Kick In

The "Foreign Military Sales Reform Act of 2025" is set to change how the U.S. government handles the sale of military equipment and services to other nations. This legislation directly amends the long-standing Arms Export Control Act by significantly increasing the dollar value of these sales that can occur before Congress must be formally notified. The core idea is to update these financial triggers for congressional review while also adding new measures to ensure accountability in the process.

Bigger Deals, Less Automatic Scrutiny?

The most significant change in this bill, outlined in Section 2, is the upward revision of various financial thresholds that trigger mandatory congressional notification. For instance, under section 3(d)(1)(i) of the Arms Export Control Act, the threshold for certain defense article transfers jumps from $14,000,000 to $23,000,000, and another from $50,000,000 to $83,000,000. Similar increases ripple through other key parts of the Act, such as section 36(b), which governs overall sales notifications. For example, one threshold there moves from $200,000,000 to $332,000,000, and another for specific equipment categories in paragraph (6)(i) shifts from $300,000,000 to $500,000,000. What this means in practical terms is that more arms sales, and larger ones at that, can proceed without an automatic, formal review by Congress. Think of it like your company's internal approval limits: if the cap for requiring board approval for an expenditure goes up, more spending happens without that top-level check-in.

New Guardrails: Reporting and Prohibitions

While the financial thresholds are rising, the bill also introduces measures apparently aimed at preventing abuse of these new limits. Section 3 mandates that the Inspector General of the State Department must report to Congress on any efforts to what's called "structure" payments. Structuring is essentially breaking down a large transaction into smaller pieces to deliberately fall below a reporting threshold – like making multiple small bank deposits to avoid a single large one that gets flagged. Section 4 directly prohibits federal employees from engaging in, or assisting with, any such structuring of defense article or service transfers to dodge these congressional reporting requirements.

Putting Teeth into the Rules

To back up these prohibitions, Section 5 lays out clear penalties for Department of State employees who are found to have knowingly structured payments to bypass congressional notification. The consequences are stiff: individuals can be barred from Federal service entirely and face a civil penalty of $100,000. This isn't just a slap on the wrist; it's a career-ending and financially significant punishment designed to deter intentional efforts to circumvent the updated oversight mechanisms.

The Bottom Line on Arms Sales

Ultimately, the Foreign Military Sales Reform Act of 2025 reshapes the landscape for U.S. arms exports. By raising the dollar values that trigger review, it could streamline the process for a larger volume of sales, potentially allowing allies to receive U.S. defense articles and services more quickly. However, this efficiency comes with a trade-off: Congress will have less automatic oversight over a broader range of these international transactions. The new anti-structuring rules and penalties are intended to ensure that the spirit of accountability remains, even as the specific financial triggers for that accountability are adjusted upwards. This Act directly modifies the Arms Export Control Act, which is the foundational law governing how the United States sells and transfers military hardware and expertise around the globe.