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Chapter 7

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Chapter 7, Transportation, describes transportation responsibilities, requirements, and procedures for delivering security cooperation shipments, including those involve classified, hazardous, or otherwise controlled materials.

Section Title
C7.1. General
C7.2. Transportation Responsibilities
C7.3. Title Transfer
C7.4. Delivery Term Codes
C7.5. FMS Freight Forwarders
C7.6. Defense Transportation System (DTS)
C7.7. Military Assistance Programs Address Directory (MAPAD)
C7.8. Packaging And Marking
C7.9. Cargo Preference
C7.10. Insurance
C7.11. Offer Release Codes And Notices Of Availability
C7.12. Transportation Costs
C7.13. Transportation Plan
C7.14. Transportation of Classified Items
C7.15. Transportation of Arms, Ammunition and Explosives (AA&E) and Sensitive Materiel
C7.16. Movements Of Explosive Materiel By Commercial Conveyance
C7.17. Shipment Documentation Requirements
C7.18. Transportation Of Controlled Substances
C7.19. Transportation Of Offshore Procurement Materiel
C7.20. Transportation Of Returned Items
C7.21. Transportation Discrepancies

C7.1.1. The United States Government and the purchaser's advanced planning for transportation of materiel is critical for case development and execution. It is Department of Defense (DoD) policy that the purchaser is responsible for transportation and delivery of its purchased materiel. DoD encourages purchasers to be self-sufficient by making informed decisions regarding transportation arrangements. Purchasers can use DoD distribution capabilities on a reimbursable basis at DoD reimbursable rates via the Defense Transportation System (DTS), or employ an agent, known as a Foreign Military Sales freight forwarder, to manage transportation and delivery from the point of origin (typically CONUS) to the purchaser's desired destination. The transportation procedures in this chapter generally apply to all Security Cooperation materiel, but any requirements specific to Building Partner Capacity programs are identified in Chapter 15.

Table C7.T1. Transportation Responsibilities

Organization Responsibility

Under Secretary of Defense for Acquisition, Technology, and Logistics, Assistant Secretary of Defense for Logistics and Materiel Readiness, Deputy Assistant Secretary for Transportation Policy

  • Sets policy for the movement of materiel.

Defense Security Cooperation Agency (DSCA)

  • Ensures that Foreign Military Sales (FMS) transportation policies are kept current; issues revised policy as needed.

  • Interprets transportation policy as requested; requests clarification as needed from source agency.

  • Reviews general transportation waivers, which allow 50 percent on grant-origin cargo to be transported on non-U.S. flag carriers.

  • Coordinates with the Maritime Administration (MARAD) on customer requests to use non-U.S. flag ocean vessels due to non-availability.

  • Reviews or approves security waivers to Cargo Preference (Ocean).

  • Reviews FMS purchaser Delivery Term Codes waiver requests to pick up sensitive cargo in the United States; prepares forwarding request to Under Secretary of Defense for Intelligence.

  • Chairs the Inter-Service Transportation Working Group.

  • Provides technical assistance and guidance as appropriate.

Defense Security Service (DSS)

  • Oversees compliance with Transportation Plans by cleared U.S. commercial entities.

  • Notifies DSCA and Defense Technology Security Administration International Security Directorate, of problems with security aspects of transfers that cannot be resolved with commercial entities or the Implementing Agencies (IA).

  • Provides facility security clearance to and inspection of commercial FMS freight forwarder facilities for the receipt, storage, and handling of appropriate classified materiel. Note: freight forwarders do not require a facility clearance if they do not take custody of classified materiel. When cleared industry is involved, DSS will review and coordinate the Transportation Plan. Both the U.S. Government and foreign government must concur with the Transportation Plan.

U.S. Transportation Command (TRANSCOM)

  • Incorporates Security Cooperation transportation procedures into the Defense Transportation Regulation (DTR) DoD 4500.9-R Part II.

  • Manages movement of Security Cooperation materiel within DTS in accordance with the DTR.

  • For all channels, ensures that:

    • New channels are formally coordinated with the Service HQ through the Geographical Combatant Command (CCMD) as the requester of the channel.

    • Changes in existing channels are formally coordinated with the CCMD.

    • Ensures other modes of transportation are available or recommended.

Geographical Combatant Commands

  • Develop forecasts with theater Security Cooperation Offices, IAs, and DSCA for future transportation requirements.

  • Coordinate with TRANSCOM with intra-theater distribution of Security Cooperation materiel.

Implementing Agencies

  • FMS Case Management team act as points of contact for purchasers’ representatives.

  • Ensures that the supporting Security Office oversees the prescribed security arrangements in coordination with DSS when commercial entities are involved.

  • Coordinates with purchaser and ensures that a comprehensive Transportation Plan is in place for Classified, Sensitive, and/or Arms, Ammunition, & Explosive materiel with Security Risk Categories I-IV (DoD 5100.76M).

Defense Logistics Agency

  • Operates as the Military Assistance Program Address Directory (MAPAD) Program Administrator, which contains information and addresses required for shipment of materiel and distribution of documentation.

  • Distributes release and shipment documentation according to current Department of Defense (DoD) regulations.

Defense Contract Management Agency (DCMA)

  • Provides vendors with specific shipping instructions at the time the contracted items are ready to ship based on the contract’s transportation terms and conditions, transportation priority, and specific commodity requirements on DCMA-administered contracts.

  • Distributes release and shipment documentation according to current DoD regulations.

MARAD

  • Monitors compliance with cargo preference requirements.

  • Reviews and/or approves purchaser country non-availability waivers.

  • Review and/or coordinate on purchaser country calendar year waivers to 100 percent compliance policy with the cargo preference requirements.

Purchaser

  • Sends a letter to the Department of State’s Defense Trade Controls Directorate(PM/DDTC) designating a company as its freight forwarder before that company will be permitted to export security assistance-related materiel on the purchaser's behalf. Provides copy of correspondence to applicable IA.

  • Performs export requirements if taking possession of purchases in CONUS or, contracts with a registered freight forwarder to perform these functions.

  • Provides freight forwarder with copies of Letters of Offer and Acceptance (LOA) and other LOA-related documentation needed to export.

  • Secures appropriate authorizations, referred to as EX-Numbers from the Department of Transportation prior to moving Hazard Class 1 explosive in CONUS by commercial conveyance.

  • Maintains accurate MAPAD addresses.

  • Obtains insurance on shipments (if desired).

  • Handles all import customs actions and pays all customs charges for entry of materiel into purchaser's country.

  • Participates in the preparation of a Transportation Plan, effects coordination with security and customs authorities within its territory, and identifies points of contact.

  • Handles all Customs actions of materiel returning to the United States.

Freight forwarder
(If involved)

  • Registers with the PM/DDTC, and is responsible for compliance with all International Traffic in Arms Regulation (ITAR) and U.S. Customs and Border Protection requirements.

  • Receives, consolidates, and stages materiel and arranges for its onward movement.

  • In some cases, coordinates export of sensitive arms, ammunition, and explosives items.

  • Enters the electronic export information into the Automated Export System (AES).

  • Maintains appropriate and current registration with PM/DDTC.

  • Obtains insurance on shipments (if desired by customer).

Title to Foreign Military Sales (FMS) materiel is transferred to the purchaser upon release from a Department of Defense (DoD) supply activity (point of origin) unless otherwise specified in the Letter of Offer and Acceptance (LOA). A supply activity can be either a DoD storage depot or a commercial vendor that furnishes materiel under a DoD-administered contract. However, U.S. Government (USG) security responsibility does not cease until the recipient’s Designated Government Representative assumes control of the consignment.

C7.3.1. Procurement Items. When items are procured directly from a vendor, title passes at the vendor's loading facility. FMS transactions are government-to-government sales and the terms of any DoD-administered contract for FMS materiel should be Free-On-Board (FOB) origin, consistent with Section 225.7301(c) of the Defense Federal Acquisition Regulation Supplement. FOB specifies which party pays for which shipment and loading costs, and where responsibility for the goods is transferred. FOB-origin means the price for goods includes delivery at the seller’s expense to a specified point and means that the purchaser assumes liability for lost or damaged cargo and pays all shipping costs, whether through a FMS freight forwarder or the Defense Transportation System. For more information, reference: Subpart 47.3—Transportation in Supply Contracts, section 47.303-1 F.o.b. Origin.

C7.3.2. Stock Items. If items are supplied from a DoD depot, title passes at the depot's loading facility.

C7.3.3. Excess Defense Articles (EDA). Title to EDA items transfers at the point of origin except for items located in Germany. For EDA items located in Germany, unless Germany is the recipient, title transfers at the nearest Port of Debarkation outside of Germany.

C7.3.4. Postal Service Deliveries. Title to defense articles transported via parcel post passes to the purchaser on the date of shipment. Title passage is at the postal facility at a DoD depot or at the nearest post office if depot personnel take the materiel to the post office in depot-furnished transportation.

C7.3.5. Retention of Title. The USG may retain title for shipments of FMS materiel if required by operational circumstances. Designation of a point of title transfer other than the point of origin must be specified in the LOA. Title retention by the USG is not a standard practice, but may provide an option to allow materiel to transit through nations with restrictive Customs requirements. Requests for use of this limited exception should be directed by the Implementing Agency (IA) to DSCA (Strategy Directorate) for approval in advance of case development. A specific LOA note for these circumstances is included in Appendix 6.

C7.3.5.1. Controlled Cryptographic Items (CCI). CCI procured through FMS transfers to NATO members, Australia and New Zealand become titled to those nations. In accordance with bilateral agreements and release authorizations for Communications Security equipment, the USG continues to retain title to the materiel for all other nations.

C7.3.6. Ferrying of Aircraft. When ferrying aircraft, the USG may accept title to the aircraft from the contractor. In this case, title will remain with the USG until arrival at the point of delivery. The LOA contains a prescribed indemnification and assumption of risk clause, See Appendix 6, for the applicable LOA note. The FMS purchaser must advise whether the aircraft will be delivered by commercial ferry service (arranged by the purchaser), DoD ferry, or surface transportation.

C7.4.1. Delivery Term Code (DTC). The Delivery Term Code (DTC) is a logistical code that indicates how far, from the source of supply to the final destination, that the Department of Defense (DoD) is responsible to transport a shipment. The DTC does not determine the mode of transportation or how it is financed. A purchaser may specify a preferred DTC in the Letter of Request (LOR). See Table C9.T4a. for a complete list of DTCs and their assigned points of delivery. The DTC is also used to determine transportation costs. If a DoD contract has been accepted and awarded to a contractor at a CONUS location and the contractor further subcontracts the work to an OCONUS party, the original DoD contractor is still responsible for movement of the materiel from the OCONUS location to the CONUS location so it can be properly exported from the United States.

C7.4.2. During case development, the Implementation Agency’s (IA) role in determining and assigning the proper DTC to each line on the Letter of Offer and Acceptance (LOA) is critical to successful materiel shipment. In cases when sensitive or classified materials are being transported, IAs should conduct a pre-case transportation assessment to determine transportation and distribution requirements following receipt of a LOR and before issuance of a LOA. Coordination with TRANSCOM’s Enterprise Readiness Center at transcom.scott.tcerc.mbx.loa@mail.mil may be necessary. Each DTC must be feasible and actionable. Following case implementation assigned DTCs should be updated through an Amendment as required in coordination with the purchaser.

C7.5.1. Definition. A Foreign Military Sales (FMS) freight forwarder is a private company under contract to the FMS purchaser to coordinate, receive, consolidate, stage materiel, and arrange for onward movement to a final destination. The contract should describe the specific functions to be performed by the freight forwarder. A FMS freight forwarder’s responsibilities may vary under the terms of the contract with the purchaser, but in all cases, a FMS freight forwarder acts as an agent of the purchaser, but cannot act on behalf of the government as a Designated Government Representative.

C7.5.2. Selection of a FMS Freight Forwarder. Selection of a FMS freight forwarder must be made by the FMS purchaser. Department of Defense personnel must remain impartial and cannot recommend a FMS freight forwarder to a purchaser or direct a FMS freight forwarder how to conduct operations.

C7.5.3. Requirements for FMS Freight Forwarders.

C7.5.3.1. FMS freight forwarders must maintain a valid registration as an exporter with the Department of State’s Directorate of Defense Trade Controls (PM/DDTC) consistent with the International Traffic in Arms Regulations (ITAR).

C7.5.3.2. A FMS freight forwarder must be identified to PM/DDTC in writing by the purchaser’s U.S.-based embassy as its authorized FMS freight forwarder.

C7.5.3.3. If the FMS freight forwarder is expected to handle classified materials, it must maintain appropriate security clearances and facility authorizations with the Defense Security Service. Only FMS freight forwarders that have a valid facility clearance and approved storage capabilities at the appropriate level are eligible to take custody of classified material for delivery as freight. FMS freight forwarders that only process unclassified paperwork and make arrangements for the delivery of classified material do not require a facility clearance.

C7.6.1. Definition. DTS is the portion of the worldwide transportation infrastructure that supports Department of Defense (DoD) transportation needs in peace and war DoD Directive 4500.9E. DTS consists of two major elements: military (organic) and commercial resources. These resources include assets, services, and systems organic to, contracted for, or controlled by DoD. The DTS infrastructure, including ports, airlift, sealift, railway, highway, in-transit visibility systems, information management systems, Customs, and traffic management that DoD maintains is a vital element of DoD's capability to project power worldwide. DTS shipments must comply with the Defense Transportation Regulation (DTR) 4500.9-R. Use of the DTS may offer purchasers transportation alternatives to freight forwarders.

C7.6.2. Methods of DTS use in Security Cooperation.

C7.6.2.1. Military (Organic). DoD-owned or operated assets, such as trucks, rail cars, ships, aircraft, or other modes of transportation. These assets are under the control of the Service Components of TRANSCOM: Air Mobility Command (AMC), Surface Deployment and Distribution Command (SDDC), or Military Sealift Command (MSC).

C7.6.2.1.1. AMC Channel. AMC Channel airlift provides regularly scheduled movement of cargo over validated routes depending on volume of materiel. Shipping activities must clear air shipments with Service's Airlift Clearance Authority prior to movement in accordance with the DTR. Unless the channel is supporting a location with little or no commercial business options, 25 short tons is the minimum monthly volume required.

C7.6.2.1.2. Special Assigned Airlift Mission (SAAM) Flights. A SAAM is an assigned airlift requirement for special pickup or delivery by AMC. Costs are billed by the hour from the time the aircraft leaves its home station until it returns to its home station. It is billed as a line item on the Letter of Offer and Acceptance (LOA). If a SAAM is not routed back to its home station on the return leg, charges will be incurred only up to the point the mission was changed. SAAMs may be used for cargo that requires special considerations because of its weight or size, the urgency or sensitivity of movement, or other special factors, See DTR Chapter 202 for procedures.

C7.6.2.1.3. U.S. Navy vessels and charter vessels. Use of U.S. Navy or vessels chartered by SDDC are considered part of DTS.

C7.6.2.2. DoD-contracted commercial. DTS is not limited to organic assets and includes commercial carriers under contract to DoD that move materiel via trucks, rail cars, ships, aircraft or other modes of transportation.

C7.6.2.3. Ocean liner service. Liner service is regularly scheduled ocean transportation service where DoD pays on a piece-by-piece basis. Containerized and non-containerized cargo (break bulk cargo) are charged different rates. Ocean liner service is provided through two contracts administered by TRANSCOM: 1) Universal Services Contract, and 2) Regional Domestic Contract. It also includes the use of trucks, railroads, barges, convoys, and/or pipelines for overland movement.

C7.6.2.4. Small Parcel Shipments. Small parcel releases use commercial small parcel carriers, U.S. Postal Service, or methods that allow for shipments to be traced and tracked. Overseas movement via the Military Postal Service (Army or Air Force Post Office (APO) or Fleet Post Office (FPO)) is used if certain conditions are met. First, use of an APO or FPO must be specifically authorized in an LOA. Second, the APO or FPO addressees must give written approval that they accept responsibility for receiving SC shipments. An APO or FPO might be recommended if a shipment is classified and the purchaser does not have approved facilities to receive classified items in the United States, though not all Military Postal Service addresses handle classified materiel. An APO or FPO may not have the capacity or manpower to handle a large volume of SC shipments and may require above-the-line charges for the increased volume over an extended period of time. The purchaser must bear the cost of such shipments. For transmission outside of the United States. and its territorial areas, SECRET and CONFIDENTIAL materiel may only be transmitted by cleared U.S. contractors in accordance with National Industrial Security Program Operating Manual, paragraph 5-405b, or by DoD entities in accordance with DoD 5200.1, Volume 3, enclosure 4. TOP SECRET material may only be transmitted by Defense Courier Service, Department of State Courier System, or the written authorization of the Government Contracting Authority.

C7.6.2.5. Shipments by the U.S. Government (USG) to a Freight Forwarder or Embassy (DTC 5). USG Shipments to U.S.-located Foreign Military Sales (FMS) freight forwarders or country representatives located at embassies in the United States are DTS shipments until the consignee unloads the materiel from the carrier.

C7.6.2.6. Delivery on Board a Purchaser-Controlled Ship or Aircraft at a DoD Port of Embarkation (POE) (DTC 8). Shipments to a DoD-controlled POE in the United States are DTS shipments until the materiel is loaded into a purchaser's ship or aircraft. The purchaser is responsible for all onward movement and documentation.

C7.6.3. DTS Documentation Requirements. The following paragraphs outline general and mode-specific documentation requirements.

C7.6.3.1. If a shipment is released from a depot, an Issue Release Receipt Document (DD Form 1348-1A) identifies materiel as DoD-supplied and provides the details (document number, case designator, National Stock Number, etc.) that link the materiel to a case. If a shipment is released from a vendor under a DoD contract, a WAWF Receiving Report serves the same purposes and provides the same data. MIL-STD-129 requires that shippers attach at least one copy of these documents to the exterior of the shipment units in waterproof envelopes. One copy must be inside the container. Commercial invoices and certificates of origin may be required for in-country customs clearance.

C7.6.3.2. Bills of Lading (BL). The BL is a contract document between the USG and the carrier, and provides a means to pay the carrier for the service performed and should be delivered before arrival of the cargo. If a commercial BL is used, copies must be forwarded to the Security Cooperation Office (SCO). Original Ocean BLs are used by foreign Customs officials to clear cargo and should be forwarded to the SCO by expedited delivery service. SDDC Operations ensures that these notices and documentation are transmitted by carriers within time standards established in the DTR.

C7.6.3.3. Annotation of Transportation Documents When DoD Retains Custody. When DoD retains custody and transportation responsibility of FMS shipments its arrival at the POD in the destination country, the BLs for these DTS shipments are annotated with statements to comply with U.S. Customs requirements. See Section C7.6.3.3.1. and Section C7.6.3.3.2. The signature of the issuing officer on the BL serves as certification of these statements. Neither of these statements is annotated on BL for FMS materiel moved to a purchaser's U.S. located facilities, commercial agent, or FMS freight forwarder.

C7.6.3.3.1. An additional statement must be placed with the shipping documentation that will accompany the shipment to the port. Information must be presented to the Customs and Border Protection officers by the transportation provider as follows: "This shipment is being exported under the authority of DoS Form DSP-94. It covers FMS Case [insert case identification], expiration [insert date]. 22 CFR 126.6 applicable. The USG point of contact is ____, telephone number ____." The USG point of contact is someone who has knowledge of the materiel included in the shipment, such as the Case Manager at the IA.

C7.6.3.3.2. The following must be annotated in BLs, Commercial Invoices, and other transportation documents: "(Applicable Military Department)-Sponsored Foreign Military Sales Shipment--No Export License Required. 22 CFR 126.6(a) applicable."

C7.6.3.4. Ocean Cargo. If the ocean delivery is moving by SDDC or MSC arranged shipments, the SCO or Defense Attaché will arrange for a husbanding agent, a contractor who serves as the USG agent in making all official logistics arrangements prior to and during a ship's visit, to meet the vessel at the designated port.

C7.6.3.4.1. Addressing of Documentation. SCOs should receive documentation as much in advance of a ship's arrival as possible. SDDC uses the applicable Type Address Code (TAC) address for the manifest information and BLs. TAC addresses are identified in the Military Assistance Program Address Directory (MAPAD). SCOs should contact SDDC whenever DTS ocean delivery of cargo is anticipated. SDDC can be reached at the SDDC 24-Hour Operations Center at DSN 770-4262, Commercial 618-220-4262, or via email at usarmy.scott.sddc.mbx.hqcoc@mail.mil. At a minimum the following information should be provided: name, email address, telephone number, Transportation Control Number (TCN), and any other information the SCO might have about the shipment. Documentation Addresses are reflected by the TAC 5 and 6 addresses in the MAPAD, depending on the mode of shipment delivery selected, See Section C7.7. The MAPAD should also include an email address to expedite delivery of the advanced shipment documentation so that receipt is made prior to the freight’s delivery. In addition, shippers must enter Advance Transportation Control and Movement Documents in the designated shipper systems in advance of the freight’s arrival at the designated ports.

C7.6.3.4.2. Ocean Manifests. A manifest is a detailed listing of all Shipment Units picked up by a ship and identified by a TCN. The lead TCN may not identify all articles if more than one has been packed in the Shipment Unit at the point of origin. Shipping activities attach two packing lists to each Shipment Unit to identify the exact contents. Packing lists, normally in the form of a 1348-1A for depot releases or WAWF Receiving Reports for vendor supplied shipments serve as certificates of origin. If an ocean carrier splits a shipment for convenience, the original documentation becomes invalid and the ocean carrier must inform the SDDC Booking Office of these changes for proper In-Transit Visibility. The ocean carrier should also revise the documentation to reflect such changes.

C7.6.3.5. Air Cargo Documentation.

C7.6.3.5.1. Air Manifests. For SAAMs and channels, manifests are prepared by the aerial POE for each aircraft involved in a mission and include all materiel loaded in the aircraft. The manifest travels with the aircraft. The SCO should maintain contact with the aerial POD that services the country or Geographical Combatant Command to remain aware of upcoming missions. TRANSCOM’s Integrated Data Environment/Global Transportation Network Convergence (IGC) and the Enhanced Freight Tracking System (See Section C13.6.3.2.3.) can be used to extract an itemized list of the cargo being shipped.

C7.6.3.5.2. Air Waybill. For commercial deliveries, an Air waybill is prepared by the air carrier for shipments received from USG shipping activities and describes the cargo. The Air Waybill contains a listing of the Shipment Units, which are identified by TCN, received for delivery. For tracer or tracking requests, the TCN should be referenced.

C7.6.4. Reception of DTS Cargo at Overseas Locations.

C7.6.4.1. Preparing for Purchaser Receipt. SCOs ensure successful transfer of DTS-routed shipments to the purchaser's Designated Government Representative. Receiving procedures are the responsibility of the purchaser and SCOs should ensure that the purchaser is prepared to receive its materiel. Receiving procedures include: checking the materiel against manifests and shipping documents; signing receipts for ocean or air carriers; clearing the shipments through the purchaser's Customs (and if necessary clearing a third country’s Customs); reporting discrepancies as appropriate; and having the proper equipment in-place/on-contract to handle the cargo as may be required. Any delays in moving the materiel from the Port of Debarkation to the purchaser's storage facility could result in storage fees and/or unsecure cargo. The purchaser pays all Customs charges. SCOs should not be involved in overseas Customs matters for FMS shipments, to include payment for release of cargo.

C7.6.4.2. U.S. Military Terminal Units or Support Activities. If U.S. Military Forces are positioned or deployed in the area receiving the FMS materiel, these forces may be supported by U.S. Military Terminal Units or Support Activities. SCOs may request to SDDC that these units perform all or some of the transportation functions on a not-to-interfere basis normally performed by the SCO.

C7.7.1. Definition. The MAPAD, DLM 4000.25-8-M, contains information and addresses required for shipment of materiel and distribution of related documentation under Foreign Military Sales (FMS) or grant aid programs. It includes addresses of FMS freight forwarders, country representatives, and purchasers. The MAPAD is available for use by DoD activities, the General Services Administration, commercial firms, foreign governments, and international organizations participating in FMS or grant aid programs. The MAPAD can also include CONUS locations.

C7.7.2. MAPAD Contents. The MAPAD includes:

  • ship-to addresses for materiel;

  • addresses for receipt of Notices of Availability;

  • addresses for forwarding shipping documentation;

  • addresses for supply and shipment status;

  • and mark-for addresses for in-country destinations or ultimate consignees.

C7.7.2.1. Type Address Code (TAC). The TAC is a one-position alpha or numeric code designating the use of the address; See Table C7.T2. for explanation of the TAC in the MAPAD.

C7.7.2.2. Special Instructions. Each purchaser has Special Instructions in the MAPAD that identify customer preferences such as clear-text addresses and shipping instructions. Special instructions may identify the name and location of commercial airports to be used for commercial Defense Transportation System air freight, a preference for specific surface carriers, or restrictions for certain types of freight. TAC M addresses must be used as the shipping address on all documentation. Organizational emails and Point of Contact information should be included for the addresses.

C7.7.3. MAPAD Address Changes. Correct MAPAD addresses are essential for accurate routing of cargo and documentation and will also ensure the FMS purchasers are charged the correct transportation rate. Purchasers are responsible for ensuring MAPAD addresses are current and maintaining accurate contact information. It is strongly recommended each Geographic Combatant Command ensure that assigned Security Cooperation Offices meet on an established basis, not less than annually, with the respective FMS purchaser country MAPAD Point of Contact to conduct a review of all MAPAD addresses. The MAPAD review should validate each existing MAPAD address and content, and determine which MAPAD addresses are no longer valid. The MAPAD review findings need to be passed to each Implementing Agency to delete MAPAD addresses that are no longer required and to update existing MAPAD addresses as required. If there is a change in FMS freight forwarder, the purchaser is responsible for adjusting its MAPAD listing through the IA focal point and reconciling shipments received by its former FMS freight forwarder. A failure to update the MAPAD may result in storage charges for the purchaser at the former FMS freight forwarder’s facility or at a DoD vendor’s facility.

C7.7.4. Electronic Distribution. A Communication Routing Identifier code can be used for electronic transmission of supply and shipping status to the TAC 4 MAPAD address. A Communication Routing Identifier is a seven-character code that uniquely identifies an International Logistics Communication System (ILCS) account, established with the DLA Transaction Services, to electronically transmit and receive supply and shipment status (TAC 4) data between the FMS purchaser and DoD supply systems. There is a subscription fee for an ILCS account. There may be other hardware, software, training, and installation costs associated with initial establishment of ILCS connectivity. These costs can be paid through a FMS case. For more information, contact the Defense Logistics Agency Transaction Services helpdesk at 937-656-3247 or daashelp@dla.mil.

Table C7.T2. Type of Address Codes

  Purpose Explanation

1

Materiel

UNCLASSIFIED materiel moving by small parcel carrier.

A

Materiel

Materiel classified SECRET or CONFIDENTIAL moving by small parcel carrier.

C

Materiel

Materiel classified CONFIDENTIAL moving by small parcel.

2

Materiel

UNCLASSIFIED materiel moving by surface or air freight.

B

Materiel

Materiel classified SECRET or CONFIDENTIAL moving by surface or air freight.

D

Materiel

Materiel classified CONFIDENTIAL moving by surface or air freight.

3

Materiel

Sending a NOA for UNCLASSIFIED shipments only.

4

Status

For sending supply and shipment status.

5

Materiel

For sending copies of the FMS release documents on TAC 1 shipments. No entry in the MAPAD if identical to the TAC 1 address.

6

Materiel

For sending copies of the FMS release documents on TAC 2 shipments. No entry in the MAPAD if identical to the TAC 2 address.

7

Other

Identifies address to receive billing from carrier if other than from ship-to addressee upon delivery of materiel. Used only for shipments that qualify for collect delivery.

9

Other

Identifies deleted MAPAD and cross-references to the MAPAD to be used in its place.

M

Mark-for

Used to identify a clear text mark-for address for freight shipments. Identifies ultimate consignee on shipping papers and bills of lading. This is also the default ship-to address for DTC 7 shipments.

C7.8.1. Packaging. Packaging includes packing, preservation, and other procedures designed to protect materiel from damage or deterioration while in transit or in storage. Foreign Military Sales (FMS) shipments are packed to not less than Military Level A/B as defined in MILSTD-129 or in accordance with best commercial practices based on the mode of shipment selected for the purchased items (i.e. water, air, motor, rail). The Department of Defense contractor is responsible to package the freight in accordance with the mode of shipment selected to its ultimate destination.

C7.8.1.1. Wood Packaging Materiel. DoD 4140.65-M, “Compliance for Defense Packaging: Phytosanitary Requirements for Wood Packaging Materiel (WPM)” describes DoD’s procedures and standards for compliance with International Standards for Phytosanitary Measures: Guidelines for Regulating Wood Packaging Materiel in International Trade (ISPM 15).

C7.8.1.1.1. Exports. International requirements are enforced by individual ISPM 15 member countries. If the member nation inspection procedures are published or documented, these should be included in the appropriate section (by theater or individual country) of the Defense Transportation Regulations. In exceptional circumstances when old, noncompliant wood was used to pack an item being shipped under a FMS case to an ISPM 15 participating country and it cannot be remediated or repacked without additional cost (e.g. ammunition containers), the purchaser should be given the option to wait for a new procurement packed in ISPM 15 compliant WPM, to waive the ISPM 15 requirement for that case only, or to pay for remediation or repacking costs. Shipments to non-ISPM 15 participating countries will be certified using the “DoD Pest Free” certification as directed in Enclosure 3 in DoD 4140.65-M.

C7.8.2. Marking. Marking identifies the contents along with the shipper and consignee. FMS shipments are marked and labeled with a military shipping label in accordance with MIL-STD-129. As a minimum, these publications require the data shown in Table C7.T3. on a FMS shipment.

Table C7.T3. FMS Shipment Marking

# FMS Shipment Marking Requirements
1

FMS case identifier

2

Transportation Control Number (TCN)

3

Transportation Priority

4

Project Code, if applicable

5

Consignor’s Name and Ship From Address, Phone Number

6

Consignee’s Ship To Address, Phone Number

7

Ultimate consignee/Mark For Address (MAPAD address code and clear text address, if applicable)

8

Military Shipping Labels for each piece of equipment. All boxes containing multiple items (whether related or unrelated) will be marked as “multipacks.”

C7.9.1. Cargo Preference (Ocean). Section 901(a) of the Merchant Marine Act of 1936 as amended by the Cargo Preference Act of 1954 and as now codified under Chapter 553 Subchapter I of 46 USC 55305 (2007), and further amended by Public Law 110-417, Section 3511 National Defense Appropriations Act for Fiscal Year 2009, requires at least 50% of the gross tonnage (computed separately for dry bulk carriers, dry cargo liners, and tankers) of grant, credit, or guarantee-funded cargo be transported in privately-owned U.S. flag vessels to the extent such vessels are available at fair and reasonable rates as determined by the Maritime Administration (MARAD). DSCA, in support of the U.S. maritime industry, requires 100% of applicable cargoes to be carried by U.S. flag vessels unless a general or security waiver is granted by DSCA or a non-availability waiver is granted by MARAD. These rules apply to Foreign Assistance Act (FAA) shipments and loan or lease shipments discussed in Chapter 11 and Building Partnership Capacity programs identified in Chapter 15. See DoD 4500.09E, paragraph 4.2.2. for further detail regarding the use of foreign-flag shipping and Department of Defense policy.

C7.9.1.1. Cargo Preference (Ocean) Waivers. General, non-availability, or security waiver requests must be submitted at least 21 days before the shipping date.

C7.9.1.1.1. General Waivers. A general waiver allows up to 50% of cargo to be carried on vessels flagged in the waiver recipient country. General waiver applications are considered if the recipient country does not discriminate against U.S. flag vessels. Approvals normally cover one full calendar year (1 January - 31 December). Processing includes verification of the treatment accorded vessels of U.S. registry. The waiver application is submitted to Director, DSCA, Attention: DSCA (Strategy Directorate) with a copy to MARAD (Administrator, Maritime Administration, Attn: Office of Cargo Preference and Domestic Trade, 1200 New Jersey Avenue S.E., MAR 730 Mail Stop W23-444, Washington, DC 20590-0001). It is important to maintain a positive U.S. flag balance during the general waiver period. If non-availability or security waivers recognize requirements for specific use of non-U.S. vessels that create an imbalance in the general waiver, U.S. vessels are given preference in cargo assignment during the waiver period until the balance is corrected.

C7.9.1.1.2. Non-Availability Waivers. Waiver applications on the basis of non-availability of vessels of U.S. registry must show that the recipient nation has made a reasonable, timely, and bona fide effort to arrange shipment on vessels of U.S. registry and such vessels are not available. Applications on the basis of non-availability must show all comparative rates. Applications should be submitted to MARAD with a copy to DSCA (Strategy Directorate). Waiver applications, submitted on a shipment-by-shipment basis, should include the information shown in Table C7.T4. Countries with general waivers may count cargo weight shipped when U.S. flag privately-owned vessels are not available or not available at reasonable rates against the general waiver, avoiding the need for individual non-availability waivers.

Table C7.T4. Non-Availability Waiver Application Contents

# Non-Availability Waiver Application Contents
1

Foreign Military Sales (FMS) Letter of Offer and Acceptance (LOA) identifier if Foreign Military Financing (FMF) (including lease), FAA program name, or Building Partner Capacity-case LOA

2

Description of commodities to be shipped

3

Port of loading and port of unloading

4

Estimated shipping date

5

Name of proposed vessel and flag of registry

6

Weight of shipment in pounds

7

Estimated ocean freight cost

C7.9.1.1.3. Security Waivers. A security waiver may be requested for shipments where a state of emergency exists or to avoid unsafe conditions. Applications must provide specific requirements and show how the waiver meets the requirements. The waiver request should be forwarded to DSCA (Strategy Directorate) with a copy to MARAD. Countries with general waivers count shipments against their non-U.S. tonnage when security dictates a non-U.S. vessel, superseding the need for security waivers for those recipients.

C7.9.1.2. Report to MARAD. The recipient country is responsible for maintaining a positive U.S. flag weight shipping posture for grant, credit, or guarantee-funded cargo. Recipients should forward the necessary information to MARAD within 20 working days following the date of loading in CONUS or within 30 working days following the date of loading for shipments originating OCONUS. The exporting activity (the Implementing Agency (IA) for Defense Transportation System shipments or the FMS freight forwarder for non-DTS shipments) must report the information in Table C7.T5.

Table C7.T5. MARAD Report Information

# MARAD Report Information
1

FMS LOA identifier if FMF (including lease), FAA program name, or Building Partner Capacity-case LOA

2

Commodity description

3

Port of loading and port of unloading

4

Recipient country

5

Date of loading

6

Type of vessel (dry cargo, dry bulk, or tanker)

7

Name of vessel and flag of registry

8

Reference to any document granting a non-U.S. flag vessel waiver for the shipment

9

FMS freight forwarder (not required for DTS)

10

Weight of shipment in pounds

11

Ocean freight cost

C7.9.2. Cargo Preference (Air). The Fly America Act (49 U.S.C. 40118) requires first preference for airlift of grant, credit, or guarantee-funded cargo be given to U.S. flag air carriers. Before using a foreign-flag carrier, a shipper or exporter must provide a written explanation to the IA as to why a U.S. carrier should not be used. If a U.S. carrier codeshares with a foreign carrier to deliver a shipment to an overseas airport, it is still considered carriage by a U.S. flagged carrier. Guidance in Section C9.7.2.7.3. applies to offshore procurements.

C7.10.1. Title of Foreign Military Sales (FMS) shipments transfers to the purchaser at the point of origin unless otherwise specified in the Letter of Offer and Acceptance (LOA). The Department of Defense is not responsible for any loss or damage that occurs in transit or after passage of title. If a purchaser does not want to self-insure a shipment, the purchaser should obtain commercial insurance. Commercial insurance is highly encouraged for large dollar value items. The FMS freight forwarder should arrange commercial insurance as part of its contract with the FMS purchaser. In exceptional situations, an Implementing Agency may obtain insurance and the cost of the insurance will be billed as a separate line item on the Letter of Offer and Acceptance.

C7.11.1. Notice of Availability (NOA). A NOA (DD-1348-5) is sent by Shipping Activities to the appropriate Military Assistance Program Address Directory (MAPAD), DLM 4000.25-8-M, address to notify a purchaser or Foreign Military Sales (FMS) freight forwarder that an item is ready for shipment. The purpose of the NOA is to coordinate release of materiel requiring special receipt, export processing, or special storage procedures, to allow sufficient time to prepare for its receipt and/or processing. Storage or staging charges may accrue when an NOA response (or failure to respond) requires the items to be held for more than 30 calendar days. Any storage costs are charged to the FMS case.

C7.11.1.1. Unclassified Materiel. Purchasers can request NOAs only when special materiel is involved. Shipping activities send NOAs for unclassified shipments to the Type Address Code 3 address found in the appropriate MAPAD address.

C7.11.1.2. Classified Shipments. Shipping activities send NOAs for classified shipments to the country representative listed in the Special Instructions of the appropriate MAPAD address and not to a FMS freight forwarder.

C7.11.2. Offer Release Code (ORC). ORCs are included in LOAs and identify how materiel should be released and whether an NOA is required. These codes are transferred from LOAs into FMS MILSTRIP numbers and supplementary addresses for proper cargo and document release. The three ORCs and their use are shown in Table C7.T6.

Table C7.T6. Offer Release Codes

Code Explanation
A

Shipments are to be released automatically by the shipping activity without advance notice. Note that this code is not to be used if the materiel is oversize, overweight, hazardous, perishable, pilferable, classified, or requires any special handling.

X

Materiel with an ORC X must have a corresponding X in MILSTRIP record position 47 to identify that the materiel will be moved via the Defense Transportation System; or there must be a W in MILSTRIP record position 47 to indicate special shipping instructions for this materiel. If special shipping instructions are indicated, the shipping office must contact the program office to determine the correct location to transport the materiel.

Y

Send an NOA before releasing shipment. If no response is received within 15 calendar days, release automatically. Note that this code is not to be used if the materiel is oversize, overweight, hazardous, perishable, pilferable, classified, or requires any special handling.

Z

Send an NOA before releasing shipment. Shipment cannot be released until a response is received from the NOA addressee. ORC Z procedures must be followed if materiel is oversize, overweight, hazardous, perishable, pilferable, classified, requires any special handling, or is Delivery Term Code 8. When the shipment is unclassified and is to be accomplished by parcel post/small parcel delivery service, the shipment will be released automatically without an NOA and should be either insured, certified, or registered.

C7.11.2.1. Offer Release Codes for the Government of Canada. Because transportation can be arranged directly from a depot or vendor without the use of a FMS freight forwarder for Canada, ORCs are not used to identify how materiel should be released and whether an NOA is required. The requirement of an NOA is based on the materiel classification (Classified, Hazardous, Sensitive, Pilferable, Overweight or Oversized).

C7.12.1. Defense Transportation System (DTS) Costs. When preparing a Letter of Offer and Acceptance (LOA), standard transportation percentages are normally applied based on the Delivery Term Code (DTC). The Transportation Cost Look-up Table (See Appendix 2) is used to compute estimated actual transportation costs for the items listed. When estimated actual costs are used, a note is included in the LOA that identifies the amount, by line item, for each DTS transportation element; (e.g., CONUS inland, port loading, ocean transportation). Estimated actual costs are, similar to standard percentages, placed below-the-line (vice as a separate line item) in an LOA, and the funds are placed in the Foreign Military Sales (FMS) Trust Fund Transportation Cost Clearing Account. When a Special Assigned Airlift Mission or some other form of dedicated premium transportation (e.g., One Time Only vessel charter) must be used to move materiel purchased under an LOA, a separate transportation service line is included in the LOA. When expenditures are made for actual transportation, this line is adjusted to meet the full cost of the special transportation and a Type Address Code needs to be supplied to be transferred to the Department of Defense service contract for movement of the freight. When shipments require containerization, storage in-transit, escorts, or has any other special transportation accessorial requirements; these special transportation accessorials are not included in the standard transportation percentages nor in the cost provided in the transportation cost look-up table. These charges are to be placed above-the-line and adjusted as needed to capture actual cost.

C7.12.2. Non-DTS Transportation Costs.

C7.12.2.1. Commercial Bill of Lading (CBL). The CBL is an industry-wide form used by transportation carriers. This document will be used for the receipt of goods, as proof of title and delivery. The use of the CBL is the initial step in satisfying General Services Administration's initiative regarding electronic processing of transportation documents. In lieu of Collect movement, Delivery Term Code 4 and E shipments of non-Working Capital Fund materiel require account numbers to bypass the "pre-paid" process. Air Waybills or Bills of Lading are used to convey carriage within CONUS. A purchaser or its Freight Forwarder may be involved in the carrier selection process only if a collect shipment requires a Notice of Availability or if special instructions in the Military Assistance Program Address Directory (MAPAD) apply. Since most FMS shipments to Freight Forwarders are Working Capital Fund pre-paid shipments, Special Instructions in the MAPAD are inadvisable since they do not apply to pre-paid shipments and would delay their release.

C7.12.2.2. Pre-Paid Arrangements. Small parcel shipments are shipped prepaid via a small parcel carrier to reduce costs. The shipping activity follows pre-pay and add procedures so that the materiel manager recovers transportation charges from a purchaser’s account. Pre-pay and add procedures are not recommended for FMS due to a lack of in-transit visibility.

C7.13.1. General. A Transportation Plan is required for each Letter of Offer and Acceptance (LOA) containing Classified (CONFIDENTIAL and SECRET), Sensitive, including Controlled Cryptographic Items (CCI), or Arms, Ammunition, & Explosives (Security Risk Categories I - IV). The plan covers all movement including final receipt by the Designated Government Representative (DGR) or other designated representative acting for the DGR. The Transportation Plan format, Figure C7.F2., is based on standards agreed to by the Multinational Industrial Security Working Group and NATO. TOP SECRET materiel must always be transferred via government courier.

C7.13.2. Transportation Plan Preparation. The Transportation Plan is developed by the Implementing Agency (IA) that prepares the LOA in coordination with the purchaser. It is to be submitted to, and approved by, the applicable Department of Defense Component authority and accepted by the purchaser, in writing, prior to the movement of the materiel. If classified Repair and Return items are involved, the Transportation Plan must address all aspects concerning the return of items, including functions to be performed by the sending and receiving entities and notification requirements.

C7.13.3. Transportation Plan Review. Regardless of where custody transfers, the IA ensures that its component Designated Disclosure Authority reviews and approves/disapproves the Transportation Plan if it includes classified materiel. An information copy of the Transportation Plan should be provided to DSCA (Operations Directorate).

C7.13.3.1. Classified Requirements. If a FMS freight forwarder or commercial carrier is involved in the transfer of classified materiel, or if classified consignments emanate from a cleared contractor facility, the appropriate Defense Security Service (DSS) Field Activity is provided a copy of the Transportation Plan. The Defense Industrial Security Clearance Office or DSS Field Operations Branch verifies the security clearances of FMS freight forwarders, as well as any courier or escort. DSS is provided the Transportation Plan and oversees and enforces all security measures implemented by cleared contractors in safeguarding classified information pursuant to the National Industrial Security Program Operating Manual (NISPOM), regardless of the manner through which contractors have taken possession of the classified materiel. If the Transportation Plan results in inconsistencies with the requirements of the NISPOM or with previous agreement between the implementing governments concerning security procedures, the IA, with assistance and guidance from DSS, will make necessary changes and resolve the inconsistencies with the Designated Security Authorities of the implementing governments. DSCA (Strategy Directorate), and Defense Technology Security Administration (Director, International Security Programs) will be notified by DSS if the IA and DSS are not able to resolve matters satisfactorily. Only cleared carriers qualified by Surface Deployment and Distribution Command or Protective Security Service will be utilized for shipments internationally. International transfer of classified material should be made using only ships, aircraft or other carriers that are:

  1. Only owned or chartered by the USG or under U.S. Registry;

  2. Owned or chartered by or under the registry of the recipient government or

  3. Carriers other than those described that are expressly authorized to perform this function in writing by DTSA (Director, International Security Programs), and the security authorities of the foreign government involved.

For classified materiel, the FMS Case Manager and supporting security office should coordinate with DSS and other government security and Customs authorities to ensure that the proper security arrangements are made to facilitate transfers through port and carrier security.

C7.13.3.2. Sensitive, including CCI, and AA&E Requirements. Reviews of Transportation Plans for unclassified shipments that are Sensitive, including CCI, or AA&E are conducted by the IA. DSS does not require copies.

C7.13.4. Transportation Plan Usage. Once approved, a Transportation Plan becomes an integral part of the LOA and is available for review by U.S. Customs and security officials when exported. Purchasers are responsible for ensuring that their FMS freight forwarders have copies when involved with exports. When possible, the details of the Transportation Plan should be included in the DoD Service Contract for appropriate movement of the cargo to its ultimate destination. Contracts should also include Security Risk Category and National Stock Number so that the shipments are marked and labeled and utilize the necessary protective services needed.

Figure C7.F1. Transportation Plan Requirements

Figure C7.F2. Sample Transportation Plan

Figure C7.F3. Sample Transportation Plan for the Transfer of Classified Materiel – Annex

C7.14.1. Transfer of Classified Information or Materiel. Classified information or materiel approved for release to a foreign government or international organization will be executed as a government-to-government transfer.

C7.14.1.1. At the outset of negotiations or during the pre-Letter of Request phase, the Implementing Agency (IA) will consult with Department of Defense (DoD) Transportation authorities to determine whether secure shipment from the CONUS point of origin to the ultimate foreign destination is feasible. The IA security staff also will be consulted to assist in assuring that the security aspects of the transportation meet prescribed standards. Since DoD security regulations require a Transportation Plan covering the movement of classified material from point-of-origin to final destination, the IA that prepares the LOA for this materiel will ensure it addresses all Defense Transportation System (DTS) security procedures that are to be followed while the materiel is within the DTS.

C7.14.1.2. The transfer of classified materiel occurs through official government channels between authorized representatives of each government or pursuant to other methods agreed to in writing by the Designated Security Authorities of the sending and receiving government (Defense Technology Security Administration (DTSA), Director, International Security Programs). Classified consignments shipped as freight must be accompanied by a DoD or purchasing government escort possessing a personnel security clearance at the level of the materiel to be shipped internationally. Exceptions to this policy are shipments by DTS, shipments by military transportation of the purchasing government after acceptance by the purchaser government’s Designated Government Representative, shipments by cleared freight forwarders which provide an escort possessing the requisite clearance approved by the Defense Security Service, and as approved by DTSA, Director, International Security Programs, on a case-by-case basis.

AA&E and Sensitive materiel include items such as small arms, various types of ammunition, explosives, and special items, such as night vision devices and Controlled Cryptographic Items (CCI), that pose special concern if they fall into the wrong hands. AA&E materiel is broken down into four Security Risk Categories (SRC). Sensitive materiel, to include CCI, may not have a SRC, but still require special handling. The different categories are outlined below along with the transportation procedures that apply to them. AA&E and Sensitive items may not be shipped to a purchaser's Foreign Military Sales (FMS) freight forwarder or to a purchaser’s facility in the United States (e.g., Embassy, buying agency, etc.) and require Transportation Plans. Any exceptions to this policy are noted below. Case Managers are required to notate in the LOA if any items contain hazardous materials, AA&E, and/or are classified or sensitive materiel. These items must also be identified in the Department of Defense (DoD) contract along with specific shipping requirements. AA&E and sensitive materiel moving via the Defense Transportation System (DTS) must comply with Chapter 205 of the Defense Transportation Regulations.

C7.15.1. SRC I. This category is primarily Man Portable Air Defense Systems, rockets, and ammunition in a ready-to-fire configuration, including components. These items must be moved by DTS to at least the overseas Port of Debarkation. If a purchaser wants to pick up the articles at a DoD-controlled port for overseas movement under its own control, the purchaser must request a waiver from the Under Secretary of Defense for Intelligence (USD (I)), through DSCA (Strategy Directorate). The waiver request must demonstrate that the purchaser will provide security for movement of the items that is at least equal to DoD standards. A sample is provided in DoD 5100.76-M. DSCA coordinates the review of the waiver request with USD(I), and returns the final determination to the purchaser when the review is complete. Purchasers should forward waiver requests to DSCA (Strategy Directorate) through the IA. If the waiver is granted, the waiver information must be included as a note on the applicable Letter of Offer and Acceptance.

C7.15.2. SRC II through IV. Collectively, these categories include everything from light automatic weapons and ammunition to non-automatic weapons and ammunition. These items must be exported and moved under Delivery Term Code (DTC) 7, 8, or 9 procedures through a DoD-controlled Port of Embarkation. This requirement cannot be waived.

C7.15.3. Non-Sensitive AA&E. Not all ammunition and weapons-related items are Sensitive AA&E. Only items identified by DoD item managers as Sensitive in accordance with DoD 5100.76-M require special release and movement processing.

C7.15.4. Controlled Cryptographic Items (CCI). CCI are unclassified, but controlled secure telecommunications equipment and associated cryptographic assemblies, components or other hardware or firmware items that perform a critical Communications Security (COMSEC) function. All deliveries of CCI require the transfer of the item from the appropriate COMSEC Custodian in the United States Government (USG) to the purchaser’s COMSEC Custodian. This transfer is documented via the SF-153 COMSEC Material Report, which requires the receiving COMSEC Custodian to notify the shipping COMSEC Custodian of receipt of the item. As there are special processes for release and transfer of CCI to partners and allies, recipients of CCI are divided into two groups with different transportation requirements for each.

C7.15.4.1. NATO Member States, Australia, and New Zealand. CCI procured through FMS to NATO members, Australia, and New Zealand becomes titled to those nations. These countries are permitted to move the articles through FMS freight forwarders, provided that in-transit visibility and accountability can be maintained at all times. The purchaser may impose more stringent controls on shipment of CCI when transporting outside the United States.

C7.15.4.2. All Other Recipients. In accordance with bilateral agreements with and release authorizations for COMSEC equipment to Non-NATO (excluding Australia and New Zealand) partners, the USG continues to retain title to the materiel. Accordingly, CCI must be transported to the recipient through DTS or by DTC 8 procedures. These procedures are valid for both the initial shipment and any required return of CCI to the U.S. Any exception must be approved by DSCA (Strategy Directorate).

C7.15.4.2.1. Defense Transportation System. Shipment of CCI by DTS ensures in-country delivery and receipt of the materiel to the receiving COMSEC custodian. Besides standard channel deliveries, other options for DTS movements are below.

C7.15.4.2.1.1. Total Delivery Services (TDS). TDS may be used by the USG to move Controlled Cryptographic Items for OCONUS FMS customers. TDS provides international commercial express package (Letter to 300 lbs) time-definite, door-to-door pick-up and delivery, with accurate in-transit visibility service for DOD and USG Civil agencies. USG shippers must establish an account and arrange individual shipments. If CCI is shipped by TDS, external markings on the packaging must not identify the contents as CCI. For additional guidance on the use of TDS, see Chapter 202 of the DTR. AMC's Commercial Services provides details about establishing a TDS account and procedures at: http://www.amc.af.mil.

C7.15.4.2.1.2. Defense Courier Service (DCS). DCS exists to provide secure, timely, and efficient end-to-end global distribution of classified and sensitive material for the United States and its allies. DCS provides an established courier network to transport qualified materiel. For additional information on the use of DCS, contact TRANSCOM’s Defense Courier Division and Chapter 205 of the DTR.

C7.15.4.2.2. Delivery Term Code 8 Procedures. Shipment of CCI may occur by DTC 8 procedures if the recipient uses organic military assets and not contracted aircraft or vessels. For details on DTC 8 procedures, see DTR Part II, Appendix E.

C7.15.5. AA&E and Sensitive to Canada. Canada may have shipments of all categories of AA&E and Sensitive items moved directly to locations in Canada. Canada has no freight forwarders and arranges shipments directly with North American carriers.

Shipments of hazardous materials (HAZMAT) must comply with the applicable provisions of 49 CFR, Subchapter C, U.S. Hazardous Materials Regulations (HMR), and international transportation standards. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (DOT/PHMSA) regulates commercial conveyance of HAZMAT in the U.S. DOT/PMHSA issues authorizations, known as EX-Numbers, which are required for commercial conveyance of all HAZMAT containing Hazard Class 1 (HC1) Explosives, such as rockets, missiles, torpedoes, and explosives. Any article containing HC1 materiel requires an EX-Number, regardless of overall Hazard Classification.

C7.16.1. Use of EX-Numbers. A unique DOT/PHMSA-issued EX-Number is associated with every HC1 article and must be assigned before the article can be moved by commercial conveyance in the United States. As required by the HMR, each EX-Number provides an article’s assigned Hazard Class and Division, proper shipping name, and United Nations (UN) identification number. An EX-Number can be filed for each HC1 article, or groups of articles that have the same UN identification number, hazard classification, and packaging instructions, rather than on a per-shipment basis. Most EX-Numbers also have the specific packaging/container requirements for the identified HC1 material. If alternative packaging arrangements are used, then a specific EX-number for packaging must be obtained from DOT/PHMSA. Small arms cartridges for rifles, pistols, and shotguns with inert projectiles or blank ammunition not exceeding .50 caliber or 8 gauges do not require EX-Numbers if the manufacturer has assigned a hazardous classification code of 1.4S. Cartridges, small arms meeting the criteria of 49 CFR173.56(h) may be assigned a classification code of 1.4S by the manufacturer.

C7.16.2. Use of Department of Defense (DoD) EX-Numbers for export of Foreign Military Sales (FMS)-origin articles from the United States. DOT/PHMSA issues DoD-specific EX-Numbers for movement of DoD HC1 articles. The DoD EX-Number may be used for the initial export of FMS-origin HC1 articles from the United States if the materiel is moving through the DTS to the destination. Otherwise, FMS purchasers are responsible for obtaining appropriate EX Numbers.

C7.16.2.1. FMS-origin HC1 articles being moved by the Defense Transportation System to the purchaser’s country (Delivery Term Code (DTC) 7 and 9) may use the DoD EX-Number. Once custody of the materiel is transferred to the purchaser, the DoD EX-Number is no longer valid for the movement of FMS-origin HC1 articles.

C7.16.2.2. The DoD EX-Number may be used for the FMS purchaser pick-up of HC1 at a DoD-controlled Port of Embarkation (DTC 8). The use of the DoD EX-Number by the purchaser is valid only while the materiel remains in U.S. territorial jurisdiction. DoD EX Numbers cannot be used for any subsequent movement outside of the United States.

C7.16.3. EX-Numbers issued to FMS Purchasers. Any commercial movement by the purchaser or its FMS freight forwarder of FMS HC1 materiel within the United States or the return of any HC1 materiel to the United States for any reason, such as repair, modification, upgrade, testing, or training exercises, requires that the purchaser first apply to DOT/PHMSA for an EX-Number following the process detailed under Section C7.16.4. DoD will provide needed documents. Any exemption to the EX-Number application process, known as a Special Permit, must be secured from DOT/PHMSA.

C7.16.4. Securing EX-Numbers from the U.S. Department of Transportation. Purchasers must apply for a DOT/PMHSA-issued EX-Number for each HC1 article if the materiel is expected to return to the United States for any reason. An application should be filed for each HC1 article, or groups of articles that have the same UN identification number, hazard classification, and packaging instructions, rather than on a per-shipment basis. The length of time an EX-Number is valid varies depending on the type of application filed. EX-Numbers must be obtained for FMS articles that remain in the original configurations and for FMS articles that have been modified from their originally-purchased configuration, including packaging.

C7.16.4.1. Applications.

Table C7.T7. Application Delivery Addresses

Method Address

Application documentation for obtaining DOT/PMHSA-issued EX-Numbers must be addressed and mailed to:

U.S. Department of Transportation
Pipeline Hazardous Materials Safety Administration
Office of Hazardous Materials Safety
Approvals and Permits Division
1200 New Jersey Avenue, SE
East Building, 2nd Floor, PHH-32
Washington, DC 20590-0001

Electronic submittal of completed applications in pdf format can be emailed to:

explo@DOT.gov

Applications may be completed and submitted online at:

http://phmsa.DOT.gov/hazmat/regs/sp-a.

An application submitted through the online system should receive an email confirmation containing a tracking number within 48 hours.

C7.16.4.1.1. Unmodified FMS Articles. A new EX-Number must be obtained by the FMS purchaser prior to any commercial transport in the United States of FMS articles containing HC1 that remain in the original configuration with no modifications. The following documentation, all in English, is required to be submitted to DOT/PMHSA by an official of the purchaser’s government:

Figure C7.F4. HC1 EX-Number Documentation

C7.16.4.1.2. Modified FMS Articles. Modified articles are considered to be “new explosives” under 49 CFR 173.56(a). Prior to movement of such assets in the United States, a purchaser’s Competent Authority, as the “manufacturer” of the new explosive, must apply for and obtain a new EX-Number. The following set of informational documentation, all in English, is required to be submitted to DOT/PMHSA as an EX-Number application for modified FMS articles:

Figure C7.F5. EX-Number Request Letter Information

The ITAR provides guidance regarding what types of documentation are required for SA related shipments. There are many Security Cooperation related shipment scenarios. Table C7.T8. provides information relating to four of these shipment scenarios and the documentation requirements for each. The scenarios identified involve exports utilizing organic DTS assets, commercial DTS assets, FMS freight forwarders, and the varying combinations. Table C7.T9. shows the unique DSP-94 Form completion requirements for these scenarios and Table C7.T10. provides an explanation for how this form’s instructions should be interpreted for Security Assistance related shipments. These tables will be expanded as guidance is developed for additional scenarios. Questions regarding these tables should be directed to DSCA (Strategy Directorate).

Table C7.T8. Export Documentation Requirements

Scenario 1 – FMS Shipments by DTS - Organic

Exporter Type of Transfer Classification of Items Document that Authorizes the Transfer Transportation Method

United States Government (USG)

Foreign Military Sale (FMS)

Unclassified or Classified

Letter of Offer and Acceptance (LOA) OA and subsequent LOA Amendments and LOA Modifications

Defense Transportation System (DTS) for all shipments under the LOA using USG-owned (organic) assets only

 

LOA/Case-Level Requirements for Export Individual Shipment-Level Requirements for Export ITAR Reference
  1. IA files the complete LOA at primary port. Customs and Border Protection (CBP) cannot clear shipments if LOA is not furnished so the LOA should be lodged as soon as possible after implementation.

  2. IA prepares a DSP-94 at the LOA level and sends it to the primary port (same place where it sent the LOA). This should be done at the same time as the LOA is lodged. See Table C7.T9. for instructions on completing this form. For classified shipments, a copy of the Transportation Plan must also be filed with the DSP-94 and LOA.

  3. The DSP-94 is valid for 2 years or until the stated value is shipped, whichever comes first.

    1. Prior to expiration of the DSP-94, the IA must determine if additional shipments will be made. If so, a new DSP-94 must be prepared and lodged to replace the expiring DSP-94. This should be done in advance of the DSP-94 expiration date to avoid export problems.
    2. If the estimated export values change prior to the DSP-94 expiration, even if the LOA has not been amended or modified, a new DSP-94 must be prepared and submitted to replace the outdated version at the primary port.
  4. IA lodges a copy of any LOA Amendment or LOA Modification at the primary port (same place where it sent the basic LOA). This should be done as soon as possible after implementation of each document.

  5. IA prepares a new (revised) DSP-94 for any LOA Amendment or LOA Modification that changes the value and/or quantity of defense articles (including technical data). This should be done at the same time the LOA Amendment or LOA Modification is lodged.

  6. Upon completion of all authorized shipments or upon expiration of the DSP-94, whichever occurs first, Customs authorities will contact the Case Manager identified in Block 4 of the DSP-94 form to confirm that there will be no more shipments against this case. Upon confirmation, Customs authorities will forward the LOA, any LOA Amendments and LOA Modifications, and the DSP-94 to PM/DDTC for archival. If the Case Manager indicates additional shipments will be made, a new DSP-94 will be prepared and lodged as indicated in paragraph 3.

  1. The DoD entity that is arranging DTS transportation must report export information on each shipment of hardware to CBP using the Automated Export System (AES). After completing the AES entries, the DoD entity must send this data electronically to the U.S. port before the export can be made (in accordance with Section 123.22 of the ITAR). Shipments of technical data or services must comply with ITAR Section 123.22(b)(3).

    Note 1: All shipments must use AES. These transactions take the place of the hardcopy Shipper’s Export Declaration (SED) form, which is no longer accepted.

    Note 2: Section “g” of the “Instructions for DSP-94” form regarding copies of the SED no longer applies.

    Note 3: If items from multiple FMS cases are included in the same shipment, the DoD entity must file a separate AES entry for each individual FMS case being used.

  2. The DoD entity prints out the AES Electronic Export Information (EEI) and annotates as follows. This annotated printout must accompany the shipment.

    1. "This shipment for Organic DTS is being exported pursuant to an LOA authorizing such transfer which meets the criteria of 22 CFR 126.6(a). It covers FMS Case [insert case identification]. The USG point of contact is [insert name], commercial telephone number [insert commercial telephone number].”
    2. “The Letter of Offer and Acceptance (LOA) authorizing this transfer is lodged at [insert name of primary port where LOA was lodged].
      Note: If multiple AES EEI pages accompany the shipment (because multiple FMS cases are being cited), these statements must appear on each AES EEI page citing the applicable FMS case and port.
  3. Customs will only decrement a shipment after export information has been filed correctly using AES. As part of the AES filing the DoD entity must provide the XTN (external control number) to Customs

  4. An export may be made through a port other than the primary port where the LOA was lodged. The AES EEI must clearly indicate the name of the primary port where the LOA was lodged.

  5. Export information for all shipments must be electronically filed in AES in accordance with the timelines established in 22 CFR 123.22(b).

    1. By air and truck, at least 8 hours prior to departure from the U.S.
    2. By sea and rail, at least 24 hours prior to loading aboard ship at the port of exit.

126.6(a)

Note: FMS shipments by DTS Organic do not require a license when all conditions of 126.6(a) can be met.

Scenario 2 – FMS Shipments by DTS - Commercial

Exporter Type of Transfer Classification of Items Document that Authorizes the Transfer Transportation Method

United States Government (USG)

Foreign Military Sale (FMS)

Unclassified or Classified

LOA and subsequent LOA Amendments and LOA Modifications

DTS for all shipments under the LOA using commercial resources only

 

LOA/Case-Level Requirements for Export Individual Shipment-Level Requirements for Export ITAR Reference
  1. IA files the complete LOA at primary port. CBP cannot clear shipments if LOA is not furnished so the LOA should be lodged as soon as possible after implementation.

  2. IA prepares a DSP-94 at the LOA level and sends it to the primary port (same place where it sent the LOA). This should be done at the same time as the LOA is lodged. See Table C7.T9. for instructions on completing this form. For classified shipments, a copy of the Transportation Plan must also be filed with the DSP-94 and LOA.

  3. The DSP-94 is valid for 2 years or until the stated value is shipped, whichever comes first.

    1. Prior to expiration of the DSP-94, the IA must determine if additional shipments will be made. If so, a new DSP-94 must be prepared and lodged to replace the expiring DSP-94. This should be done in advance of the DSP-94 expiration date to avoid export problems.
    2. If the estimated export values change prior to the DSP-94 expiration, even if the LOA has not been amended or modified, a new DSP-94 must be prepared and submitted to replace the outdated version at the primary port.
  4. IA lodges a copy of any LOA Amendment or LOA Modification at the primary port (same place where it sent the basic LOA). This should be done as soon as possible after implementation of each document.

  5. IA prepares a new (revised) DSP-94 for any LOA Amendment or LOA Modification that changes the value and/or quantity of defense articles (including technical data). This should be done at the same time the LOA Amendment or LOA Modification is lodged.

  6. Upon completion of all authorized shipments or upon expiration of the DSP-94, whichever occurs first, Customs authorities will contact the Case Manager identified in Block 4 of the DSP-94 form to confirm that there will be no more shipments against this case. Upon confirmation, Customs authorities will forward the LOA, any LOA Amendments and LOA Modifications, and the DSP-94 to PM/DDTC for archival. If the Case Manager indicates additional shipments will be made, a new DSP-94 will be prepared and lodged as indicated in paragraph 3.

  1. The DoD entity that is arranging DTS transportation must report export information on each shipment of hardware to Customs CBP using AES. After completing the AES entries, the DoD entity must send this data electronically to the U.S. port before the export can be made (in accordance with Section 123.22 of the ITAR). Shipments of technical data or services must comply with ITAR Section 123.22(b)(3).

    Note 1: All shipments must use the AES transactions. These transactions take the place of the hardcopy SE) form, which is no longer accepted.

    Note 2: Section “g” of the “Instructions for DSP-94” form regarding copies of the SED no longer applies.

    Note 3: If items from multiple FMS cases are included in the same shipment, the DoD entity must file a separate AES entry for each individual FMS case being used.

  2. The DoD entity prints out the AES EEI and annotates as follows. This annotated printout must accompany the shipment.

    1. “This shipment for Commercial DTS is being exported pursuant to an LOA authorizing such transfer which meets the criteria of 22 CFR 126.6(a). It covers FMS Case [insert case identification]. The USG point of contact is [insert name], commercial telephone number [insert commercial telephone number].”
    2. “The Letter of Offer and Acceptance (LOA) authorizing this transfer is lodged at [insert name of primary port where LOA was lodged].”
      Note: If multiple AES EEI pages accompany the shipment (because multiple FMS cases are being cited), these statements must appear on each document citing the applicable FMS case and port.
  3. Customs will only decrement a shipment after export information has been filed correctly using AES. As part of the AES filing the DoD entity must provide the XTN (external control number) to Customs.

  4. An export may be made through a port other than the primary port where the LOA was lodged. The AES EEI must clearly indicate the name of the primary port where the LOA was lodged.

  5. Export information for all shipments must be electronically filed in AES in accordance with the timelines established in 22 CFR 123.22(b).

    1. By air and truck, at least 8 hours prior to departure from the U.S.
    2. By sea and rail, at least 24 hours prior to loading aboard ship at the port of exit.

126.6(a)

Note: FMS DTS commercial-contracted shipments do not require a license when all conditions of 126.6(a) can be met.

Scenario 3 – FMS Shipments by FMS Freight Forwarder

Exporter Type of Transfer Classification of Items Document that Authorizes the Transfer Transportation Method

FMS Freight Forwarder

FMS

Unclassified or Classified

LOA and subsequent LOA Amendments and LOA Modifications

FMS Freight Forwarder*

*A FMS freight forwarder is an entity under contract agreement with the foreign government to handle the movement of the foreign government’s USG-provided materiel. Freight forwarders are generally contracted to handle receipt, consolidation, and staging within the United States and arrangement for onward movement from the United States to the foreign country. Freight forwarders must be registered with the Department of State (Directorate of Defense Trade Controls) and are responsible for compliance with all International Traffic in Arms Regulation (ITAR) and Customs and Border Patrol requirements. A foreign government’s embassy must send a letter to PM/DDTC designating a company as its freight forwarder before that company will be permitted to export security assistance-related materiel on that government’s behalf.

 

LOA/Case-Level Requirements for Export Individual Shipment-Level Requirements for Export ITAR Reference
  1. IA files the complete LOA at primary port. Customs cannot clear shipments if the LOA is not furnished so the LOA should be lodged as soon as possible after implementation.

  2. Foreign customer provides a copy of the LOA to its designated FMS freight forwarder(s).

  3. FMS freight forwarder prepares a DSP-94 at the LOA level and submits it to the IA (through the Purchasing country, as required) for review. This should be done as soon as possible after the FMS freight forwarder receives a copy of the LOA. See Table C7.T9. for instructions on completing this form. For classified shipments, a copy of the Transportation Plan must also be filed with the DSP-94 and LOA.

  4. The DSP-94 is valid for 2 years or until the stated value is shipped, whichever comes first.

    1. Prior to expiration of the DSP-94, the FMS freight forwarder must determine if additional shipments will be made. If so, a new DSP-94 must be prepared by the FMS freight forwarder, reviewed by the IA, and lodged by the FMS freight forwarder to replace the expiring DSP-94. This should be done in advance of the DSP-94 expiration to avoid export problems.
    2. If the estimated export values change prior to the DSP-94 expiration, even if the LOA has not been amended or modified, a new DSP-94 must be prepared by the FMS freight forwarder, reviewed by the IA, and lodged by the FMS freight forwarder to replace the outdated version at the primary port.
  5. IA reviews the DSP-94 and any subsequent revisions/updates/ amendments to the DSP-94.

    1. If the DSP-94 appears accurate, the IA sends the DSP-94 to the primary port (same place where it sent the LOA) and sends an information copy back to the FMS freight forwarder.
    2. If the DSP-94 appears to contain errors, the IA sends the DSP-94 back to the FMS freight forwarder with necessary changes annotated and sends an information copy to PM/DDTC.
  6. IA lodges a copy of any LOA Amendment or Modification at the primary port (same place where it sent the basic LOA). This should be done as soon as possible after implementation of each document.

  7. Foreign customer provides a copy of implemented LOA Amendments and Modifications to its designated FMS freight forwarder(s).

  8. FMS freight forwarder prepares a new (revised) DSP-94 for any LOA Amendment or Modification that changes the value and/or quantity of defense articles (including technical data) and submits the new (revised) form to the IA for review. This should be done as soon as possible after the FMS freight forwarder receives a copy of the Amendment or Modification.

  9. The IA reviews the revised DSP-94 forms in accordance with procedures in paragraph 5 above.

  10. Upon completion of all authorized shipments or upon expiration of the DSP-94, whichever occurs first, Customs authorities will contact the FMS freight forwarder identified in Block 4 of the DSP-94 form to confirm that there will be no more shipments against this case. Upon confirmation, Customs authorities will forward the LOA, any LOA Amendments and LOA Modifications, and the DSP-94 to PM/DDTC for archival. If the FMS freight forwarder indicates additional shipments will be made, a new DSP-94 will be prepared, reviewed, and lodged as indicated in paragraph 5.

  1. The FMS freight forwarder must report export information on each shipment of hardware to CBP using AES. After completing the AES entries, the FMS freight forwarder must send this data electronically to the U.S. port before the export can be made (in accordance with Section 123.22 of the ITAR). Shipments of technical data or services must comply with ITAR Section 123.22(b)(3).

    Note 1: All shipments must use the AES transactions. These transactions take the place of the hardcopy SED form, which is no longer accepted.

    Note 2: Section “g” of the “Instructions for DSP-94” form regarding copies of the SED no longer applies.

    Note 3: If items from multiple FMS cases are included in the same shipment, the FMS freight forwarder must file a separate AES entry for each individual FMS case being used.

  2. Prior to AES filing and after the FMS freight forwarder prints out the AES EEI page, the FMS freight forwarder must obtain an IA certifying signature prior to submission to AES. Copies of all related documents must be presented to CBP at the time of shipment and maintained in the FMS freight forwarder’s records in accordance with 22 CFR 123.26 and annotates it on, if authorized, the outbound manifest as follows.

    1. “This shipment is being exported pursuant to an LOA authorizing such transfer which meets the criteria of 22 CFR 126.6(c). It covers FMS Case [insert case identification]. The USG point of contact is [insert name], commercial telephone number [insert commercial telephone number].”
    2. “The Letter of Offer and Acceptance (LOA) authorizing this transfer is lodged at [insert name of primary port where LOA was lodged].”
      Note: If multiple AES EEI pages or outbound manifests accompany the shipment (because multiple FMS cases are being cited), these statements must appear on each AES EEI or outbound manifest citing the applicable FMS case and port.
  3. Customs will only decrement a shipment after export information has been filed correctly using AES. As part of the AES filing the FMS freight forwarder must provide the XTN (external control number) to Customs.

  4. An export may be made through a port other than the primary port where the LOA was lodged. The AES EEI must clearly indicate the name of the primary port where the LOA was lodged.

  5. Export information for all shipments must be electronically filed in AES in accordance with the timelines established in 22 CFR 123.22(b).

    1. By air and truck, at least 8 hours prior to departure from the U.S.
    2. By sea and rail, at least 24 hours prior to loading aboard ship at the port of exit.

126.6(c)

Note: FMS shipments do not require a license when all conditions of 126.6(c) can be met.

Scenario 4 - FMS Shipments by Combination of Methods

Exporter Type of Transfer Classification of Items Document that Authorizes the Transfer Transportation Method
  • USG for some shipments
  • FMS Freight Forwarder for some shipments

FMS

Unclassified or Classified

LOA and subsequent LOA Amendments and LOA Modifications

  • DTS for some shipments under the LOA using USG-owned (organic) resources.
  • DTS for some shipments under the LOA using commercial resources.
  • FMS freight forwarder* for some shipments.

 

LOA/Case-Level Requirements for Export Individual Shipment-Level Requirements for Export ITAR Reference
  1. IA lodges the complete LOA at primary port. Customs cannot clear shipments if LOA is not furnished so the LOA should be lodged as soon as possible after implementation.

  2. Foreign customer provides a copy of the LOA to its designated FMS freight forwarder(s).

  3. IA prepares a DSP-94 at the LOA level and sends it to the primary port (same place where it sent the LOA). This should be done at the same time as the LOA is lodged. The IA will send a copy to the purchaser to provide to the FMS freight forwarder. See Table C7.T9. for instructions on completing this form. For classified shipments, a copy of the Transportation Plan must also be filed with the DSP-94 and LOA.

  4. The DSP-94 is valid for 2 years or until the stated value is shipped, whichever comes first.

    1. Prior to expiration of the DSP-94, the IA must determine if additional shipments will be made. If so, a new DSP-94 must be prepared and lodged to replace the expiring DSP-94. The IA will send a copy of the DSP-94 to the purchaser to provide to the FMS freight forwarder. This should be done in advance of the DSP-94 expiration date to avoid export problems.
    2. If the estimated export values change prior to the DSP-94 expiration, even if the LOA has not been amended or modified, a new DSP-94 must be prepared and submitted to replace the outdated version at the primary port.
  5. IA lodges a copy of any LOA Amendment or LOA Modification at the primary port (same place where it sent the basic LOA). This should be done as soon as possible after implementation of each document.

  6. Foreign customer provides a copy of implemented LOA Amendments and LOA Modifications to its designated FMS freight forwarder(s).

  7. IA prepares a new (revised) DSP-94 for any LOA Amendment or LOA Modification that changes the value and/or quantity of defense articles (including technical data). The IA will send a copy to the purchaser to provide to the FMS freight forwarder. This should be done at the same time the LOA Amendment or LOA Modification is lodged.

  8. Upon completion of all authorized shipments or upon expiration of the DSP-94, whichever occurs first, Customs authorities will contact the Case Manager identified in Block 4 of the DSP-94 form to confirm that there will be no more shipments against this case. Upon confirmation, Customs authorities will forward the LOA, any LOA Amendments and LOA Modifications, and the DSP-94 to PM/DDTC for archival. If the Case Manager indicates additional shipments will be made, a new DSP-94 will be prepared and lodged as indicated in paragraph 4.

  1. For the DTS shipments using USG-owned (organic) resources follow procedures detailed in Scenario Number 1.

  2. For the DTS shipments using commercial resources follow procedures detailed in Scenario Number 2.

  3. For FMS freight forwarder shipments, follow procedures detailed in Scenario Number 3.

126.6(a) (DTS Organic)

126.6(a) (DTS Commercial)

126.6(c) FMS freight forwarder

Table C7.T9. DSP-94 Form Preparation Instructions

Block 1 – PM/DDTC Applicant Code

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

PM/DDTC has issued a registration to facilitate FMS DTS shipments. This constitutes registration with PM/DDTC as an exporter (as required by Section 122 of the ITAR). Enter G-7010 in this block to indicate that shipments will be made under DTS using USG-owned (organic) resources.

PM/DDTC has issued a registration to facilitate FMS DTS shipments. This constitutes registration with PM/DDTC as an exporter (as required by Section 122 of the ITAR). Enter G-7011 in this block to indicate that shipments will be made under DTS using DoD contracted commercial resources.

PM/ DDTC registration code provided by U.S. Department of State. Shipment by DSP-94 may only be made by a PM/DDTC registered exporter and who has been designated by the foreign government to act as their agent for FMS exports (by letter from the foreign government on file at PM/DDTC).

Enter “Multiple Sources"

Block 2 – Country of Ultimate Destination/Purchaser

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Enter country name.

Enter country name.

Enter country name.

Enter country name.

Block 3 – Port of Exit from U.S.

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Enter the name of the port most likely to be used for exports under this LOA. This should be the port where the LOA is lodged. You may enter more than one port name in this block if you know that multiple ports will be used to export items from this LOA.

Enter the name of the port most likely to be used for exports under this LOA. This should be the port where the LOA is lodged. You may enter more than one port name in this block if you know that multiple ports will be used to export items from this LOA.

Enter the name of the port most likely to be used for exports under this LOA. This should be the port where the LOA is lodged. You may enter more than one port name in this block if you know that multiple ports will be used to export items from this LOA.

Enter the name of the port most likely to be used for exports under this LOA. This should be the port where the LOA is lodged. You may enter more than one port name in this block if you know that multiple ports will be used to export items from this LOA.

Block 4 – Applicant (Name, Address, Zip Code, Tel No.)

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Enter the IA’s name, address, zip code, and the commercial telephone number of the Case Manager.

Enter the IA’s name, address, zip code, and the commercial telephone number of the Case Manager. Also enter the name, address, zip code, and telephone number of the DoD-contracted commercial resource, if known.

Enter the FMS freight forwarder’s name, address, zip code, and commercial telephone number.

Enter the IA’s name, address, zip code, and the commercial telephone number of the Case Manager. Enter the FMS freight forwarder’s name, address, zip code, and commercial telephone number.

Block 5 – Foreign Military Sales Case Identifier

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Enter the FMS case identifier (e.g., BN-D-ABC). Also enter the latest implemented document (e.g., LOA Amendment 1, LOA Modification 5)

Enter the FMS case identifier (e.g., BN-D-ABC). Also enter the latest implemented document (e.g., Amendment 1, Modification 5)

Enter the FMS case identifier (e.g., BN-D-ABC). Also enter the latest implemented document (e.g., Amendment 1, Modification 5)

Enter the FMS case identifier (e.g., BN-D-ABC).

Block 6 – Date of FMS Case Implementation

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Enter the date the basic FMS LOA listed in Block (5) was implemented. Implementation date from the Defense Security Assistance Management System (DSAMS) should be used.

Enter the date the basic FMS LOA listed in Block (5) was implemented. Implementation date from the Defense Security Assistance Management System (DSAMS) should be used.

Enter the date the basic FMS LOA listed in Block (5) was implemented. Implementation date from the Defense Security Assistance Management System (DSAMS) should be used.

Enter the date the basic FMS LOA listed in Block (5) was implemented. Implementation date from the Defense Security Assistance Management System (DSAMS) should be used.

Block 7 – Total Value of Defense Articles of Original FMS Case

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Enter the total “exportable” value of defense articles. This is the value that Customs will decrement against as they clear each shipment. This may not be the total case value since not all of the FMS case value is for export. When preparing amended DSP-94s (either because the FMS case exportable value has changed or because the DSP-94 has expired and needs to be renewed for an additional 2 years), enter the current exportable value on the FMS case.

Enter the total “exportable” value of defense articles. This is the value that Customs will decrement against as they clear each shipment. This may not be the total case value since not all of the FMS case value is for export. When preparing amended DSP-94s (either because the FMS case exportable value has changed or because the DSP-94 has expired and needs to be renewed for an additional 2 years), enter the current exportable value on the FMS case.

Enter the total “exportable” value of defense articles. This is the value that Customs will decrement against as they clear each shipment. This may not be the total case value since not all of the FMS case value is for export. When preparing amended DSP-94s (either because the FMS case exportable value has changed or because the DSP-94 has expired and needs to be renewed for an additional 2 years), enter the current exportable value on the FMS case.

Enter the total “exportable” value of defense articles separated as follows:

  1. DTS (using USG-owned [organic] resources):
  2. DTS (using commercial resources):
  3. FMS freight forwarder:

These values when added together must equal the total exportable value of the case. This is the value that Customs will decrement as they review/approve each shipment.

Block 8

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Only the unshipped balance, valued at ________, of this FMS case is covered by this DSP-94. Previous shipments of this FMS case were covered by a form DSP-94 dated __________ and/or U.S. Department of State License No. ___________.

For initial DSP-94, enter “Not applicable.”

When amending the DSP-94, enter only the remaining “exportable” value per the latest implemented LOA document.

For initial DSP-94, enter “Not applicable.”

When amending the DSP-94, enter only the remaining “exportable” value per the latest implemented LOA document.

For initial DSP-94, enter “Not applicable.”

When amending the DSP-94 enter only the remaining “exportable” value per the latest implemented LOA document.

Enter remaining “exportable” values of defense articles separated as follows:

  1. DTS (using USG-owned [organic] resources):
  2. DTS (using commercial resources):
  3. FMS freight forwarder:

These values when added together must equal the total exportable value of the case. This is the value that Customs will decrement as they review/approve each shipment.

Block 9

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Form DSP-94 constitutes an amendment to the value and/or quantity of defense articles authorized under this FMS case as shown in the attached amended Letter of Offer and Acceptance. Yes No

Enter “Yes” or “No” as appropriate. (Amended LOA need not be attached as CBP has been furnished a copy of the amended LOA already.)

Enter “Yes” or “No” as appropriate (Amended LOA need not be attached as CBP has been furnished a copy of the amended LOA already.)

Enter “Yes” or “No” as appropriate. (Amended LOA must be attached/ furnished to CBP at time of export.)

Enter “Yes” or “No” as appropriate

Block 10

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

If exporter is a FMS freight forwarder acting on behalf of a foreign government or diplomatic mission, provide the name, address, and telephone number of the foreign official in the U.S. familiar with the FMS case.

Enter “Not applicable.”

Enter “Not applicable.”

FMS freight forwarder fills in foreign government official knowledgeable about the details of the FMS transaction.

Enter U.S. Military Department (Case Manager) & Service Transportation Office Points of Contact (Include Name, Title, Commercial Phone and Fax Number and unclassified email for each POC)

Fill in FMS freight forwarder portion name as provided by the FMS customer.

Fill in foreign government official knowledgeable about the details of the FMS transaction (provided by the FMS customer).

Block 11 – Munitions List Categories

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

U.S. Munitions List Categories (see Section 121.1 of the ITAR). Please check the appropriate categories to indicate the types of defense articles included on this FMS case.

Check one or more USML Categories to be shipped via the listed LOA.

Check one or more USML Categories to be shipped via the listed LOA.

Check one or more USML Categories to be shipped via the listed LOA.

Check one or more USML Categories to be shipped via the listed LOA.

Block 12 – Exporters Statement

DTS USG-Owned (Organic) Shipments DTS Commercial (Non-Organic) Shipments FMS Forwarder Shipments Multiple Shipment Methods*

Exporter’s Statement: I, __________, hereby exercise the authority to effect the export described above; warrant the truth of all statements made herein; and acknowledge, understand, and will comply with the provisions of Title 22 CFR parts 120-130 and any conditions and limitations imposed.

Signature ______________ (Authority valid for 24 months from above date)

Date (MM-DD-YYYY) _____________________

Includes name and signature of the empowered USG individual occupying an IA position, which has been designated by the IA as authorized to sign FMS cases on behalf of the USG and date signed.

Includes name and signature of the empowered USG individual occupying an IA position, which has been designated by the IA, as authorized to sign FMS cases on behalf of the USG and date signed.

Enter name and signature of empowered FMS freight forwarder official and date signed.

IA review and sign DSP-94 in the comments section.

Enter the IA’s name, address, zip code, and the commercial telephone number of the Case Manager. Includes signature of listed USG individual and date signed (MM-DD-YYYY)

Also enter the FMS freight forwarder’s name and POC for this DSP-94.

The IA and the FMS freight forwarder must provide an original signed and dated DSP-94 to CBP prior to the first shipment.

*For use when an LOA includes more than one transportation/shipment method.

 

DEFINITIONS
  • IA: The Military Department or Defense Agency responsible for preparing and executing security assistance programs. The IA is responsible for the overall management of the actions, which will result in delivery of the materials or services set forth in the Letter of Offer and Acceptance which was accepted by a foreign country or international organization. The Implementing Agencies are: Army, Navy, Air Force, Defense Contract Management Agency (DCMA), Defense Information Service Agency (DISA) Defense Logistics Agency (DLA), Defense Security Cooperation Agency (DSCA), Defense Threat Reduction Agency (DTRA), National Geospatial-Intelligence Agency (NGA) and the National Security Agency (NSA).

  • Exportable Value of Defense Articles: Equals Net LOA case value (Block 8 of the current implemented version of the FMS case) minus any FMS case value that is not for export (e.g., training, services, etc.).

  • FMS LOA Amendment: A change to an FMS case documented by an LOA Amendment that constitutes a scope change to an existing FMS case. FMS case Amendments require customer acceptance. Requires revised DSP-94 to be lodged before items can be shipped.

  • FMS LOA Modification: A change to an FMS case documented by an LOA Modification that constitutes an administrative or minor change to an existing FMS case, without revising the scope or the FMS case. FMS case Modifications do not require customer acceptance. Requires revised DSP-94 to be lodged before items can be shipped.

  • Defense Transportation System: That portion of the Nation’s transportation infrastructure that supports DoD common-user transportation needs across the range of military operations. It consists of those common-user military and commercial assets, services, and systems organic to, contracted for, or controlled by the DoD, except for those that are Service-unique or theater-assigned. DTS Organic includes not only USG-owned assets but also those instances where DoD charters the entire transportation asset. DTS Commercial-contracted covers those instances where DoD only has some of the cargo on the asset and has not chartered the entire transportation asset.

  • Empowered USG Official: Person within DoD authorized to sign Letters of Offer and Acceptance documents, DSP-94 and other related documents.

Table C7.T10. Instructions for DSP-94 – Explanation for FMS-related Shipments

Legal Authority and Use of This Form

  Instructions on the DSP-94 Form Explanation for FMS-related Shipments

a

“Pursuant to 22 CFR 126.6(c), District Directors of Customs are authorized to permit the export of unclassified defense articles, and technical data without a license if they were sold by the Department of Defense directly to foreign governments or international organizations under the Foreign Military Sales (FMS) program of the Arms Export Control Act. This procedure may be used only if a proposed export is (1) pursuant to an executed Letter of Offer and Acceptance, and (2) accompanied by a properly executed DSP-94 and Shipper’s Export Declaration (Form 7525-V).”

Form 7525-V (SED) has been replaced by the Automated Export System (AES) Electronic Export Information (EEI). All shipments must use the AES to prepare the EEI. These transactions take the place of the hardcopy SED form, which is no longer accepted by CBP.

Note: State/PM/DDTC has issued an advisory indicating the DSP-94 can be used for classified exports so long as the criteria under ITAR Section 126.6(c)(iii) is met.

b

“Only foreign diplomatic missions or their authorized agents or FMS freight forwarders who are registered with the Directorate of Defense Trade Controls, U.S. Department of State, may export FMS material under this authority.”

For FMS-related shipments made through DTS, (PMDDTC) has issued two registration codes to facilitate FMS DTS shipments when using a DSP-94. This constitutes registration with DDTC as an exporter (as required by the International Traffic in Arms Regulation - ITAR - 22 CFR 122). See Table C7.T9. for instructions on using these codes.

c

FMS freight forwarders must for reasons of legal accountability:

  1. Register with the Directorate of Defense Trade Controls pursuant to 22 CFR 122; Have on file at the Directorate of Defense Trade Controls a letter from the foreign embassy or government appointing them as forwarding agent; and

  2. Have on file at the Directorate of Defense Trade Controls a statement signed by a responsible representative of the firm, certifying that the articles shown on all Forms DSP-94 they submit are, from their personal knowledge, in fact the articles by quantity, type, and value to be exported, and assuming full responsibility for compliance with the International Traffic in Arms Regulation (22 CFR 120-130).”

FMS-related shipments using DTS will not have a FMS freight forwarder. The DSP-94 form is used for DTS shipments. PM/DDTC has issued registration codes for use on DTS shipments. See Table C7.T9. for instructions on using these codes.

General Instructions

  Instructions on the DSP-94 Form Explanation for FMS-related Shipments

a

“A separate Form DSP-94 must be completed for each FMS case for which defense articles are to be exported under this authority.”

Form 7525-V (SED) has been replaced by the Automated Export System (AES) Shipper’s Electronic Export Information (EEI). All shipments must use AES to prepare the EEI. These transactions take the place of the hardcopy Shippers Export Declaration, which is no longer accepted by Customs.

AES printout of the EEI is prepared for each shipment made against the DSP-94.

If all shipments have not been made during the 2 year validity period, a new DSP-94 form must be completed and filed with the District Director of Customs. See Table C7.T9. for instructions on who completes the DSP-94 form, timeframes for completion, and submission channels.

Table C7.T9. provides block-by-block instructions for completing the DSP-94 form including information on how to compute the values in Block 8.

b

“Form DSP-94 should be typewritten. All copies must be legible. Complete all items. Sign and date all three copies.”

NOTE: A fillable version is available at: http://www.pmddtc.state.gov/licensing/documents/DSP_94.pdf

c

“Form DSP-94 shall be valid for 2 years from the date on which it is executed (see item 12). The DSP-94 must be completed and filed with the District Director of Customs along with a copy of the Letter of Offer and Acceptance, and annotated Shipper’s Export Declaration. Item 8 must be completed to reflect all FMS cases for which a DSP-94 has previously been filed with the District Director of Customs for shipments under the same FMS case (If Block 8 is not applicable, insert “N/A/”).”

d

“Copy 1 of completed Form DSP-94, together with one copy of the corresponding authenticated Letter of Offer and Acceptance, and three copies of the annotated Form No.7525-V (Shipper’s Export Declaration), must be filed with the District Director of Customs at the port of export prior to actual shipment.”

Form 7525-V (SED) has been replaced by the AES EEI. All shipments must use AES to prepare the EEI. These transactions take the place of the hardcopy SED form, which is no longer accepted by Customs.

The DSP-94 form is filed at the LOA level and is not provided with each individual shipment. Instead, information on where the DSP-94 form is lodged must be annotated on the AES EEI page printout submitted with each shipment. See Table C7.T9. for complete instructions on what documents must be submitted at the LOA-level and what documents must be submitted with each individual shipment.

e

“An authenticated Letter of Offer and Acceptance is one on which:

1. The offer is signed by an authorized Department of Defense representative and countersigned by the Comptroller, Defense Security Cooperation Agency (DSCA);”

NOTE: The form has not been updated. Comptroller, Defense Security Assistance Agency (DSAA) is the old name for the Business Operations Directorate, DSCA.

Not all LOAs and LOA Amendments require DSCA countersignature. Documents which do not require countersignature include a statement on the signature line indicating the exception.

 

2. The acceptance is signed by an authorized representative of the foreign government.

Only copies of the first page of the Letter of Offer and Acceptance and those pages listing defense articles to be exported need to be provided to Customs.”

The LOA (and any subsequent LOA Amendments or LOA Modifications) are lodged at the primary port and are not provided with each individual shipment. The complete LOA must be lodged-not just those pages listing articles/services to be provided.

f

“Form No. 7525-V (Shipper’s Export Declaration) must be annotated by the exporter as follows:

‘This shipment is being exported under the authority of U.S. Department of State Form DSP-94. It covers FMS case (insert FMS case identification), 22 CFR 126.6 applicable.’”

See Table C7.T9. for instructions on what must be annotated on the AES EEI page that is printed and included with each shipment

g

“Customs authorities will authenticate the Shipper’s Export Declaration and forward it to the Directorate of Defense Trade Controls. Three copies of an annotated Shipper’s Export Declaration must be filed for each subsequent shipment. Customs authorities will annotate the back of Copy 1 of DSP-94 to show the shipments made. Upon completion of all authorized shipments or upon expiration of the Form DSP-94, whichever occurs first, Custom (sic) authorities will forward it with the attached Letter of Offer and Acceptance to the Directorate of Defense Trade Controls.”

Only one (1) copy of the annotated AES EEI page is required to accompany the shipment.

h

“Copy 2 of the completed DSP-94 should be removed by the exporter and sent at the time of the first shipment, together with a copy of the applicable authenticated Letter of Offer and Acceptance to: Directorate of Defense Trade Controls, PM/DDTC, Suite H1200, SA-1, U.S. Department of State, Washington, DC 20522-0112”

If the applicable FMS case is amended to increase (or decrease) either the quantity of defense articles sold or to increase (or decrease) the total estimated exportable value, a new DSP-94 must be completed and filed with the District Director of Customs at the same primary port where the initial DSP-94 was sent.

If the estimated export values change, even if the LOA has not been amended or modified, a new DSP-94 must be prepared (by the appropriate party) and submitted to the District Director of Customs at same primary port where the initial DSP-94 was sent.

See Table C7.T9. for guidance on DSP-94 revisions.

i

“Copy 3 of DSP-94 is for the shipper’s files and should be removed before submission. A copy of applicable Letter of Offer and Acceptance should also be retained by the shipper for reference and record keeping purposes (22 CFR 122.5).”

j

“A new DSP-94 must be completed and filed with the District Director of Customs if the applicable FMS case is amended to increase the total estimated exportable value by more than 10 percent. (Note: 22 CFR 123.23 authorized District Directors of Customs to permit the shipment of defense articles when the total value of the ex port does not exceed the aggregate monetary value stated on a license by more than 10 percent). Amendments which decrease the quantity or value of an FMS case do not require a new Form DSP-94.”

k

“Additional copies of this form may be obtained by mail or telephone request to the Directorate of Defense Trade Controls.”

The DSP-94 form is not available in electronic format. Implementing Agencies must contact PM/DDTC to obtain hard copies for completion.

General Information:

  • Office Hours: 8:15 AM - 5:00 PM
  • Receptionist: (202) 663-2980
  • Response Team (for general inquiries about and guidance on licensing and compliance matters): (202) 663-1282
  • E-mail: DDTCResponseTeam@state.gov
  • Case Status: (202) 663-2700

Additional information may be found at: http://www.pmddtc.state.gov

C7.18.1. Transportation of controlled substances, such as morphine and other drugs, must be handled in accordance with the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq). Prior to export, the Implementing Agency obtains import authorizations from the purchaser (21 U.S.C. 953(a)(3) and (e)(1)) and submits the documentation to the Department of Justice’s Drug Enforcement Administration and requests export permits for the controlled substance. Once approved, the export permit number, the expiration date, and the port of export should be furnished to the Defense Logistics Agency Troop Support (formerly Defense Supply Center Philadelphia).

C7.19.1. The Procurement Agency will notify the Implementing Agency (IA) of any materiel procured offshore and the IA notifies the purchaser of articles to be supplied from offshore sources within three weeks after source identification. The purchaser may, for logistics reasons, request that the procurement be made from a CONUS source. The IA will notify the Procurement Agency of the purchaser’s decision. If procurement is from an offshore vendor, the Department of Defense (DoD) Contract Administrator must send a Notice of Availability (NOA) to either the Offshore NOA address identified for the purchaser in the applicable Military Assistance Program Address Directory (MAPAD) or, if none is listed, to the appropriate NOA address listed for the applicable MAPAD. Based on the NOA, the purchaser or its Foreign Military Sales (FMS) freight forwarder may direct movement of the materiel to an offshore facility in the same region as the materiel's origin or to the FMS freight forwarder's facility in CONUS. The purchaser is responsible for the cost of movement to the CONUS FMS freight forwarder and for all export and/or import licenses and Customs clearance requirements imposed by the materiel’s country of origin and the United States Government (USG). Regardless of what procedure is followed, title passes to the purchaser at the shipment's point of origin, See Chapter 15. for certain exceptions, and Chapter 9 for further information on Offshore Procurement. The DoD CONUS contractor who was awarded the original FMS contract is responsible if they purchase the items offshore at an OCONUS subcontractor’s facility since this will change the original plans for transportation and DoD contract that was awarded. The primary DoD contractor then becomes responsible to move the freight from the subcontractor’s facility to the ultimate destination at no cost to the USG or the FMS customer.

C7.20.1. If possible, items returned to the United States for servicing should be moved by a purchaser or a purchaser’s Foreign Military Sales (FMS) freight forwarder. The details of the transfer are included in a Transportation Plan, if applicable, in accordance with Section C7.13. Arms, Ammunition, & Explosives or Sensitive items are returned through a DoD-controlled ocean or aerial port as indicated by the Security Risk Category. The purchaser and FMS freight forwarder are responsible for clearance through U.S. Customs and any other necessary documentation, as well as the purchaser’s Customs. Onward movement to the designated CONUS repair facility depends on the Delivery Term Code used. The purchaser and FMS freight forwarder should ensure that these shipments are accompanied by appropriate shipping documents and that import and/or export documents are done correctly when the items enter and exit CONUS. Under special circumstances, the Defense Transportation System can be used to return items to CONUS for service and return. All HC 1 articles returning to CONUS must have a country-specific EX-Number, See Section C7.16.

When a discrepancy occurs in-transit, Security Cooperation Offices (SCO) must submit a Transportation Discrepancy Report (TDR) for Defense Transportation System (DTS)-routed Foreign Military Sales (FMS) and grant aid deliveries. The purchaser cannot submit a TDR. TDR procedures are found in Defense Transportation Regulation Chapter 210. A TDR documents lost shipments and establishes an official record for future claims against a carrier for loss or damage. Limited liability prevents the purchaser from receiving full value from a carrier, but if the purchaser obtains commercial insurance for its purchases, the official record may help the purchaser when submitting insurance claims. Whether shipments move via DTS under collect or third-party billing terms to FMS freight forwarders or are shipped prepaid to FMS freight forwarders, the most that the purchaser might collect for loss or damage is the limited liability applicable to the commercial ocean, air, or inland carrier.

C7.21.1. Claims That Cannot Be Submitted By the United States Government (USG). Claims against carriers or third-party billing shipments and FMS freight forwarder-contracted carriers must be filed by purchasers or their FMS freight forwarders directly with the carriers.

C7.21.2. Claims That Can Be Submitted By the USG. For Department of Defense (DoD)-furnished or contracted transportation, DoD is responsible for submitting claims against carriers. Surface Deployment and Distribution Command (SDDC) processes claims against ocean carriers, Air Mobility Command processes claims against air carriers, and DoD shipping activities submit claims against inland CONUS carriers. The SDDC initiates its claims in response to TDR packages submitted by SCOs in the purchaser’s country. CONUS shipping activities submit claims against inland CONUS carriers in response to requests from purchaser representatives or FMS freight forwarders. Any proceeds from these claims are forwarded by the Implementing Agency (IA) to purchaser accounts held by Defense Financial Accounting Services Indianapolis.

Table C7.T11. Transportation Discrepancy Report Contact Information

Method Address

Location:

Surface Deployment and Distribution Command G9
Cost and Billing Section AMSSD-SBI-CB
1 Soldier Way, Room 3034
Scott AFB, IL 92225

Phone:

618-220-6798, DSN 770-6798

Telefax:

618-220-6055, DSN 770-6055

Email:

usarmy.scott.sddc.mbx.hq-loss-damage-reporting@mail.mil

C7.21.3. Tracers. When an IA has furnished shipment status showing item pickup by an inland carrier, but materiel has not been received, the purchaser is responsible for initiating a tracer action. Whether the materiel moved prepaid, collect, small parcel or a freight shipment, DoD shipping activities assist with the tracer action by providing constructive proof of delivery or pertinent information obtained from shipping documents or from carriers.

C7.21.3.1. For all shipments processed through FMS freight forwarders, purchasers should direct tracer requests to their FMS freight forwarders before addressing any inquiries to DoD.

C7.21.3.2. If a FMS freight forwarder claims non-receipt, it may contact the shipping activity directly for assistance, especially if the shipment is less than 30 days old. Alternately, upon request from purchaser country representatives, the IA may obtain shipping documents and data from the shipping activity. If constructive proof of delivery is provided, the purchaser must follow-up with the FMS freight forwarder to determine if the item has been received.

C7.21.3.3. If the FMS freight forwarder's records still show non-receipt, the purchaser directs the FMS freight forwarder to start a formal tracer action with the inland carrier if the shipment was released under a Commercial Bill of Lading or third-party billing procedures. The carrier should provide proof of delivery, or the FMS freight forwarder must make a claim against the carrier on behalf of the purchaser. If the shipment was released to the inland carrier under some method of pre-paid transportation, the FMS freight forwarder should submit a formal request to the shipping activity so that the shipping activity can obtain proof of delivery from the carrier or submit a claim against the carrier for lost or damaged goods. If materiel has been misdirected, the IA may be contacted for assistance with redirecting materiel to its correct destination.

C7.21.4. Claims Documentation. To resolve claims of non-receipt, the USG provides evidence of shipment. This constitutes as "constructive proof of delivery" since title passes at the point of origin regardless of who furnishes the transportation. Any movement document, bill of lading, or receipt (signed by a carrier representative) that shows that a DoD shipping activity (including vendors filling DoD contracts for the FMS program) has released materiel to a carrier for shipment constitutes evidence of shipment. This evidence applies equally to shipments released to a purchaser's FMS freight forwarder or country representative, or for movement overseas via the DTS. Examples of these documents are Bills of Lading (BL), U.S. Postal Service receipts (insured, certified, express or registered mail), or small parcel carrier pickup documents.

C7.21.4.1. Key Supporting Documentation. In order to strengthen the claim against the carrier for lost or damaged material, the SCO in representing the purchaser should provide as much supporting documentation as possible, in addition to providing all requested information on the TDR. This supporting documentation includes BLs, delivery receipt, photographs, carrier’s inspection report, government inspection report, actual repair cost estimate, signed and dated statements from personnel discovering damage, etc.