Public Contract Law Journal

JCPOA: Implications & Effects on Our Foreign Military Sales Program

by Ariel Bachar

Ariel Bachar (abachar@law.gwu.edu) is a 2017 graduate of the George Washington University Law School and a member of the Public Contract Law Journal.

I.  Introduction

Despite its small size, Israel withstands the variety of threats it faces in the volatile Middle East region. Since the creation of the Jewish state in 1948, Israel has been involved with a near constant number of wars, armed conflicts, and skirmishes with its Arab enemies.1 Today, Israel faces threats from those enemies as well as from members of its own population who oppose the existence of a Jewish state.2 To combat these threats, Israel often looks for help from the United States — generally considered Israel’s strongest ally.3

Some argue Israel might not exist in its current form if not for its long- standing relationship with the United States.4 Since World War II, Israel is “the largest cumulative recipient of U.S. foreign assistance,” — the majority being military aid.5 The origins of the majority of Israel’s military equipment traces back to the U.S. Foreign Military Sales (FMS) program.6 Under the FMS program, Israel can obtain U.S. military equipment as long as it uses  the goods, among other ends, for “legitimate self-defense” purposes.7

The two nations maintained a strong bilateral relationship for decades, with the United States providing Israel with over $127.4 billion of assistance to date.8 The United States recently made plans to appropriate a record $38 billion in foreign assistance to Israel over the next decade.9

However, current political events revealed problems caused by the United States’ relationship with Israel. The United States’ recent agreement with Iran, called the Joint Comprehensive Plan of Action (JCPOA), permits Iran to pursue a nuclear program limited to “peaceful” purposes.10 Israel, considered “one of the most vocal opponents of the [JCPOA],” remains apprehensive over Iran’s newfound nuclear capabilities.11

In the past, Israeli officials considered strikes against the Iranian nuclear program to neutralize a perceived threat to Israel’s existence.12 Although most Israeli analysts believe that JCPOA takes a deliberate attack on Iran’s nuclear facilities off the table, future military conflict remains a possibility.13An Israeli attack on Iran could involve U.S. equipment or technology, given the large amount Israel acquires through the FMS program.14 The United States might then be faced with determining: (1) whether the attack violates the conditions of the FMS program; and (2) if so, whether to suspend or terminate Israel’s participation in the program.15

A restriction on Israel’s participation in the FMS program may contradict current legislation committing the United States to annually provide Israel with aid, thus helping Israel to maintain a qualitative military edge in the Middle East.16 Additionally, it might negatively impact the U.S. defense industry, costing defense contractors one of their largest consumers and creating long-term profit loss.17 Conversely, failing to take action against Israel for its potential questionable conduct can lead to both public scrutiny and litigation against the U.S. government and defense contractors.

To correct these issues, the United States should amend the Arms Export Control Act (AECA). The amendments proposed in this Note create a clear framework to punish foreign purchasers for their acts of aggression using U.S. goods. The increased transparency would allow defense contractors   to more easily assess potential AECA violations, helping to determine their desired future course of conduct. Additionally, modifying the target of AECA sanctions might reduce the inadvertent harms of the Act on U.S. companies for the transgressions of other foreign nations.

Part I of this Note provides a description and background of the United States – Israel and Iran – Israel relationships, including their origins, the reasoning behind them, and the current statuses resulting from JCPOA. Part II outlines JCPOA and examines the problems it brings to light, specifically with legislation that guides our defense trade with Israel. Part III suggests solutions to those problems, concluding that the United States should amend certain provisions of the AECA to increase transparency and balance.

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