US approves interim AUKUS Trade Authorization Mechanism

The US State Department has approved an interim AUKUS Trade Authorization Mechanism pending legislative changes to both Foreign Military Sales (FMS) and Direct Commercial Sales (DCS). The mechanism will allow DCS transfers of some items typically transferred only under FMS.

It offers an immediate solution to expedite and secure defence transfers of US items for AUKUS projects, leveraging existing authorities to allow seamless and speedy defence trade, says the Department.

“The AUKUS Trade Authorization Mechanism, or ATAM, is designed to facilitate trade of U.S. defense articles and defense services between the United States, the UK, and Australia in support of AUKUS programs, for both Pillar I (providing Australia with a conventionally armed, nuclear-powered submarine capability) and Pillar II (advanced capabilities),” states the State department. “This is an interim measure to streamline defense trade of U.S. origin items while we pursue bold legislative changes.”

The US State Department hasn’t disclosed a timeline as yet for the legislative changes.

The ATAM relies on existing authorities, both to increase the speed and efficiency of defence trade while doing so in a way that is familiar, and therefore easier, for U.S. exporters, says the State Department. It adds, “This approach was adopted to address concerns regarding how the speed and efficiency of the Foreign Military Sales (FMS) and Direct Commercial Sales (DCS) processes would be inadequate for the expected increase in volume of AUKUS-related defense trade.”

The US Government will take three steps to implement ATAM:

1. Identify the scope of AUKUS programs. This will optimize operations and compliance, as both government and industry will have a clear understanding of which uses/programs are authorized under this Mechanism.
2. Identify what technologies are not eligible under this Mechanism.
3. Identify which communities in each country would be approved for access to the technology, which includes an obligation to record what is transferred and to secure and protect the technology. This will help reduce the likelihood of unauthorized diversion of sensitive defense technologies and, if necessary, help to investigate any potential diversion.