This Act reforms foreign military sales by raising dollar thresholds for required reporting, prohibiting federal employees from structuring sales to avoid notification, and imposing severe penalties on State Department employees who violate these rules.
Warren Davidson
Representative
OH-8
The Foreign Military Sales Reform Act of 2025 modifies dollar thresholds under the Arms Export Control Act, raising the value limits that trigger specific reporting and review requirements for U.S. defense transfers overseas. It also mandates that the State Department Inspector General investigate and report on any attempts to structure sales to evade these notification rules. Furthermore, the bill prohibits federal employees from intentionally structuring sales to avoid congressional oversight and imposes severe penalties, including termination and a $100,000 fine, on State Department employees who violate this provision.
Arms Sales Oversight Thresholds Jump to $500M: What It Means for Congressional Review
The Foreign Military Sales Reform Act of 2025 is basically changing the rules on how the U.S. sells weapons and defense services to other countries. The big takeaway is that the dollar amounts that trigger mandatory congressional notification and review are going way up. For example, some caps that were previously at $14 million are now $23 million, and the highest threshold jumps from $300 million to a massive $500 million (SEC. 2). Essentially, the Executive Branch—the State Department and the Pentagon—will now have the green light to approve much larger arms deals without Congress having to formally sign off or even be notified beforehand. This is a significant streamlining effort, meaning a lot more transactions will move faster without legislative review.
The Trade-Off: Efficiency vs. Oversight
For the Executive Branch, this is a win for efficiency. If you’re trying to quickly arm an ally, not having to wait for a mandatory 30-day or 15-day congressional review period on every mid-sized deal saves crucial time. However, this speed comes at the expense of oversight. Congressional review is the public’s main check on foreign policy decisions, especially those involving arms transfers that can escalate conflicts or raise human rights concerns. By raising the reporting threshold to $500 million, the bill effectively removes the mandatory review requirement for a huge range of sales that used to require it. This means the public loses visibility and input on potentially controversial arms deals that fall between the old $300 million cap and the new half-billion-dollar limit.
Cracking Down on the Fine Print Evasion
While the bill reduces oversight on the front end, it gets extremely tough on employees who try to cheat the system. The bill is laser-focused on stopping “structuring”—the practice of breaking up one large arms sale into several smaller contracts, specifically to keep them below the congressional reporting thresholds. Section 3 mandates the State Department Inspector General to investigate any past or future attempts to structure payments to avoid reporting. This is the government essentially saying, “We know this happens, and we’re checking the books.”
Career-Ending Penalties for State Department Staff
This is where the bill gets real for federal employees. Section 4 explicitly bans any federal employee from intentionally structuring defense transfers to duck congressional notification. But Section 5 reserves the harshest penalties for State Department employees. If a State Department employee is caught knowingly structuring payments to bypass Congress, they face two immediate, severe consequences: they are permanently barred from any federal employment, and they are hit with a $100,000 civil penalty. This is a massive hammer designed to ensure compliance. While it’s good to have accountability for bad actors, this severe penalty could create a chilling effect, making employees overly cautious about legitimate, complex contracting practices for fear of having their actions misinterpreted as intentional evasion.