The Department of Commerce’s Bureau of Industry and Security is reminding the public that U.S. companies are required to report annually information on contracts for the sale of defense articles or defense services to foreign countries or foreign firms that are subject to offsets agreements exceeding $5 million in value. U.S. companies are also required to report annually information on offsets transactions completed in performance of existing offsets commitments for which an offsets credit of $250,000 or more has been claimed from the foreign representative. Such reports from calendar year 2017 must be submitted no later than June 15.
Offsets are compensation practices required as a condition of purchase in either government-to-government or commercial sales of defense articles and/or defense services, as defined by the Arms Export Control Act and the International Traffic in Arms Regulations. Offsets are also applicable to certain items controlled on the Commerce Control list and with an Export Control Classification Number including the numeral “6” as its third character.
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