U.S. to End Development Cost Waiver on Arms Sales to South Korea
U.S. President Donald Trump’s administration has notified South Korea of its decision to abolish a development cost waiver for certain U.S. arms purchases, Yonhap news agency reported on Sunday, citing multiple sources.
The U.S. administration told the Seoul government in August that it will end the waiver of “non-recurring” costs (NCs) — one-time expenses associated with the research, development or production of certain defense equipment, according to the informed sources.
The United States’ Arms Export Control Act requires the Pentagon to recover NCs for certain weapons sold through the government-to-government Foreign Military Sales (FMS) program, as the U.S. government covers the costs with taxpayer money to develop or produce weapons, particularly for the U.S. military.
The law permits the costs to be waived in certain cases, such as advancing U.S. interests in standardizing equipment with allies, and avoiding a situation in which the charge would result in the loss of the weapons sale.
In past FMS cases, South Korea was granted the NC waiver. But the abolition would increase the cost South Korea has to pay to import U.S. weapons at a time when it has committed to spending US$25 billion on U.S. military equipment purchases by 2030, according to Yonhap.
Besides, Japan, Australia and other countries have also been notified of the waiver abolition, the source said.
The Pentagon did not comment when asked by Yonhap News Agency to confirm the suspension of the waiver.
