FEDERAL · 10 U.S.C. · Chapter SUBCHAPTER I—DEFENSE TRADE RECIPROCITY AND OFFSET POLICY
Offset policy; notification
10 U.S.C. § 4852
Title10 — Armed Forces
ChapterSUBCHAPTER I—DEFENSE TRADE RECIPROCITY AND OFFSET POLICY
This text of 10 U.S.C. § 4852 (Offset policy; notification) is published on Counsel Stack Legal Research, covering United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Bluebook
10 U.S.C. § 4852.
Text
(a)Establishment of Offset Policy.—The President shall establish, consistent with the requirements of this section, a comprehensive policy with respect to contractual offset arrangements in connection with the purchase of defense equipment or supplies which addresses the following:
(1)Transfer of technology in connection with offset arrangements.
(2)Application of offset arrangements, including cases in which United States funds are used to finance the purchase by a foreign government.
(3)Effects of offset arrangements on specific subsectors of the industrial base of the United States and for preventing or ameliorating any serious adverse effects on such subsectors.
(b)Technology Transfer.—
(1)No official of the United States may enter into a memorandum of understanding or other agree
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History
(Added Pub. L. 100–456, div. A, title VIII, §825(b), Sept. 29, 1988, 102 Stat. 2020, §2505; renumbered §2532, Pub. L. 102–484, div. D, title XLII, §4202(a), Oct. 23, 1992, 106 Stat. 2659; renumbered §4852, Pub. L. 116–283, div. A, title XVIII, §1870(b), Jan. 1, 2021, 134 Stat. 4284.)
Editorial Notes
Editorial Notes
Amendments
2021—Pub. L. 116–283 renumbered section 2532 of this title as this section.
1992—Pub. L. 102–484 renumbered section 2505 of this title as section 2532.
Statutory Notes and Related Subsidiaries
Effective Date of 2021 Amendment
Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.
Contractual Offset Arrangements; Congressional Statement of Findings
Pub. L. 100–456, div. A, title VIII, §825(a), Sept. 29, 1988, 102 Stat. 2019, provided that: "Congress makes the following findings:
"(1) Many contracts entered into by United States firms for the supply of weapon systems or defense-related items to foreign countries and foreign firms are subject to contractual arrangements under which United States firms must agree—
"(A) to have a specified percentage of work under, or monetary amount of, the contract performed by one or more foreign firms;
"(B) to purchase a specified amount or quantity of unrelated goods or services from domestic sources of such foreign countries; or
"(C) to invest a specified amount in domestic businesses of such foreign countries.
Such contractual arrangements, known as 'offsets', are a component of international trade and could have an impact on United States defense industry opportunities in domestic and foreign markets.
"(2) Some United States contractors and subcontractors may be adversely affected by such contractual arrangements.
"(3) Many contracts which provide for or are subject to offset arrangements require, in connection with such arrangements, the transfer of United States technology to foreign firms.
"(4) The use of such transferred technology by foreign firms in conjunction with foreign trade practices permitted under the trade policies of the countries of such firms can give foreign firms a competitive advantage against United States firms in world markets for products using such technology.
"(5) A purchase of defense equipment pursuant to an offset arrangement may increase the cost of the defense equipment to the purchasing country and may reduce the amount of defense equipment that a country may purchase.
"(6) The exporting of defense equipment produced in the United States is important to maintain the defense industrial base of the United States, lower the unit cost of such equipment to the Department of Defense, and encourage the standardized utilization of United States equipment by the allies of the United States."
Negotiations With Countries Requiring Offset Arrangements
Pub. L. 100–456, div. A, title VIII, §825(c), Sept. 29, 1988, 102 Stat. 2021, as amended by Pub. L. 101–189, div. A, title VIII, §816, Nov. 29, 1989, 103 Stat. 1501, provided that:
"(1) The President shall enter into negotiations with foreign countries that have a policy of requiring an offset arrangement in connection with the purchase of defense equipment or supplies from the United States. The negotiations should be conducted with a view to achieving an agreement with the countries concerned that would limit the adverse effects that such arrangements have on the defense industrial base of each such country. Every effort shall be made to achieve such agreements within two years after September 29, 1988.
"(2) In the negotiation or renegotiation of any memorandum of understanding between the United States and one or more foreign countries relating to the reciprocal procurement of defense equipment and supplies or research and development, the President shall make every effort to achieve an agreement with the country or countries concerned that would limit the adverse effects that offset arrangements have on the defense industrial base of the United States."
[For delegation of functions of President under section 825(c) of Pub. L. 100–456 to Secretary of Defense and United States Trade Representative, see section 5–201 of Ex. Ord. No. 12661, 54 F.R. 779, set out as a note under section 2901 of Title 19, Customs Duties.]
Editorial Notes
Amendments
2025—Pub. L. 119–60, div. A, title VIII, §842(a), Dec. 18, 2025, 139 Stat. 973, added item 4865. Amendment was made pursuant to operation of section 102 of this title.
Voluntary Registration of Compliance With Covered Sourcing Requirements for Covered Products
Pub. L. 119–60, div. A, title VIII, §836, Dec. 18, 2025, 139 Stat. 966, provided that:
"(a) In General.—Not later than January 1, 2027, the Secretary of Defense shall establish and maintain a publicly available online repository of information provided by an offeror related to the compliance of a covered product with covered sourcing requirements.
"(b) Registration and Attestation Process.—In carrying out subsection (a), the Secretary of Defense shall establish a process under which an offeror may voluntarily submit to the Secretary an attestation relating to the compliance of a covered product with a covered sourcing requirement. Such attestation shall—
"(1) require an offeror to acknowledge liability for making a false attestation in accordance with section 3729 of title 31, United States Code; and
"(2) enable an offeror to register a covered product with the Secretary of Defense by providing—
"(A) a unique product identifier sufficient to distinguish the covered product to be registered from a similar covered product;
"(B) a national stock number (if available), a description of the covered product, or other information related to the form, fit, or function of the covered product; and
"(C) an attestation, including relevant documentation, of the compliance of a covered product with one or more covered sourcing requirements.
"(c) Proof of Registration.—The Secretary of Defense shall issue to an offeror that registers a covered product in accordance with the process established under subsection (b) a proof of registration associated with a unique product identifier of the covered product.
"(d) Availability of Information.—
"(1) Compliance information.—The Secretary of Defense shall make available the information necessary to enable offerors to assess the compliance of a covered product with a covered sourcing requirement.
"(2) Resources.—The Secretary shall ensure that an eligible entity has adequate resources to train offerors about the requirements of this section and to assist an offeror with the registration and attestation process established under subsection (b).
"(e) Encouraging Registration of Products.—The Secretary of Defense shall establish policies and procedures to encourage offerors to register covered products. These policies and procedures shall ensure that—
"(1) offerors are incentivized to disclose any noncompliance with the requirements of this section, with the goal of expanding the number of vendors with products qualified for use by the Department of Defense;
"(2) with respect to any disclosure made under paragraph (1), that such offeror is provided with information and assistance to determine the actions required to remedy such noncompliance in order to meet the criteria to register the product concerned; and
"(3) an offeror making such a disclosure will receive a referral to the appropriate programs or offices of the Department of Defense that are responsible for strengthening the defense industrial base, promoting domestic industry, and accelerating private investment in supply chain technologies that are critical for national security.
"(f) Briefings.—
"(1) Initial briefing.—Not later than May 1, 2026, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and House of Representatives a briefing on—
"(A) the process established under subsection (b) to allow an offeror to voluntarily submit an attestation of compliance of a covered product in the repository; and
"(B) the progress made in establishing the repository required by subsection (a).
"(2) Interim briefing.—
"(A) In general.—Not later than May 1, 2027, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and House of Representatives an interim briefing on the establishment of the repository required by subsection (a), the number and types of the contractors seeking to register covered products in such repository and volunteering to submit attestations for compliance with sourcing requirements under the process established under subsection (b).
"(B) Contents.—The briefing required by subparagraph (A) shall include an assessment of the feasibility of using the repository required by subsection (a) to also serve as a common platform for information routinely required for supplier onboarding, qualification, or due diligence review by the Department of Defense or a prime contractor of the Department, including—
"(i) business registration, Data Universal Numbering System number, Commercial and Government Entity code and federal tax identification number;
"(ii) ownership and corporate structure, including any parent company or subsidiaries;
"(iii) country of ownership;
"(iv) small business size classification and North American Industry Classification System code, if applicable; and
"(v) compliance certifications, including certifications for cybersecurity, trade and export controls, anti-corruption policy, and traceability practices.
"(3) Final briefing.—Not later than April 1, 2029, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and House of Representatives a final briefing on the success of the repository required under subsection (a) and the process established under subsection (b), including participation statistics and whether or not the Secretary will continue to maintain the repository.
"(g) Definitions.—In this section:
"(1) The term 'covered product' means a good offered for purchase to the Secretary of Defense or as an item of supply for a contractor performing on a contract with the Department of Defense—
"(A) by—
"(i) a small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632)); or
"(ii) a manufacturer of critical readiness items of supply (as defined in section 1733 of title 10, United States Code); and
"(B) that is subject to a covered sourcing requirement.
"(2) The term 'covered sourcing requirement' means a requirement under any of the following:
"(A) Section 4863 of title 10, United States Code.
"(B) Section 4862 of title 10, United States Code.
"(C) Section 4864 of title 10, United States Code.
"(D) Chapter 83 of title 41, United States Code.
"(3) The term 'eligible entity' means an eligible entity carrying out activities pursuant to a procurement technical assistance program funded under chapter 388 of title 10, United States Code.
"(4) The term 'item of supply' has the meaning given such term in section 108 of title 41, United States Code."
Amendments
2021—Pub. L. 116–283 renumbered section 2532 of this title as this section.
1992—Pub. L. 102–484 renumbered section 2505 of this title as section 2532.
Statutory Notes and Related Subsidiaries
Effective Date of 2021 Amendment
Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.
Contractual Offset Arrangements; Congressional Statement of Findings
Pub. L. 100–456, div. A, title VIII, §825(a), Sept. 29, 1988, 102 Stat. 2019, provided that: "Congress makes the following findings:
"(1) Many contracts entered into by United States firms for the supply of weapon systems or defense-related items to foreign countries and foreign firms are subject to contractual arrangements under which United States firms must agree—
"(A) to have a specified percentage of work under, or monetary amount of, the contract performed by one or more foreign firms;
"(B) to purchase a specified amount or quantity of unrelated goods or services from domestic sources of such foreign countries; or
"(C) to invest a specified amount in domestic businesses of such foreign countries.
Such contractual arrangements, known as 'offsets', are a component of international trade and could have an impact on United States defense industry opportunities in domestic and foreign markets.
"(2) Some United States contractors and subcontractors may be adversely affected by such contractual arrangements.
"(3) Many contracts which provide for or are subject to offset arrangements require, in connection with such arrangements, the transfer of United States technology to foreign firms.
"(4) The use of such transferred technology by foreign firms in conjunction with foreign trade practices permitted under the trade policies of the countries of such firms can give foreign firms a competitive advantage against United States firms in world markets for products using such technology.
"(5) A purchase of defense equipment pursuant to an offset arrangement may increase the cost of the defense equipment to the purchasing country and may reduce the amount of defense equipment that a country may purchase.
"(6) The exporting of defense equipment produced in the United States is important to maintain the defense industrial base of the United States, lower the unit cost of such equipment to the Department of Defense, and encourage the standardized utilization of United States equipment by the allies of the United States."
Negotiations With Countries Requiring Offset Arrangements
Pub. L. 100–456, div. A, title VIII, §825(c), Sept. 29, 1988, 102 Stat. 2021, as amended by Pub. L. 101–189, div. A, title VIII, §816, Nov. 29, 1989, 103 Stat. 1501, provided that:
"(1) The President shall enter into negotiations with foreign countries that have a policy of requiring an offset arrangement in connection with the purchase of defense equipment or supplies from the United States. The negotiations should be conducted with a view to achieving an agreement with the countries concerned that would limit the adverse effects that such arrangements have on the defense industrial base of each such country. Every effort shall be made to achieve such agreements within two years after September 29, 1988.
"(2) In the negotiation or renegotiation of any memorandum of understanding between the United States and one or more foreign countries relating to the reciprocal procurement of defense equipment and supplies or research and development, the President shall make every effort to achieve an agreement with the country or countries concerned that would limit the adverse effects that offset arrangements have on the defense industrial base of the United States."
[For delegation of functions of President under section 825(c) of Pub. L. 100–456 to Secretary of Defense and United States Trade Representative, see section 5–201 of Ex. Ord. No. 12661, 54 F.R. 779, set out as a note under section 2901 of Title 19, Customs Duties.]
Editorial Notes
Amendments
2025—Pub. L. 119–60, div. A, title VIII, §842(a), Dec. 18, 2025, 139 Stat. 973, added item 4865. Amendment was made pursuant to operation of section 102 of this title.
Voluntary Registration of Compliance With Covered Sourcing Requirements for Covered Products
Pub. L. 119–60, div. A, title VIII, §836, Dec. 18, 2025, 139 Stat. 966, provided that:
"(a) In General.—Not later than January 1, 2027, the Secretary of Defense shall establish and maintain a publicly available online repository of information provided by an offeror related to the compliance of a covered product with covered sourcing requirements.
"(b) Registration and Attestation Process.—In carrying out subsection (a), the Secretary of Defense shall establish a process under which an offeror may voluntarily submit to the Secretary an attestation relating to the compliance of a covered product with a covered sourcing requirement. Such attestation shall—
"(1) require an offeror to acknowledge liability for making a false attestation in accordance with section 3729 of title 31, United States Code; and
"(2) enable an offeror to register a covered product with the Secretary of Defense by providing—
"(A) a unique product identifier sufficient to distinguish the covered product to be registered from a similar covered product;
"(B) a national stock number (if available), a description of the covered product, or other information related to the form, fit, or function of the covered product; and
"(C) an attestation, including relevant documentation, of the compliance of a covered product with one or more covered sourcing requirements.
"(c) Proof of Registration.—The Secretary of Defense shall issue to an offeror that registers a covered product in accordance with the process established under subsection (b) a proof of registration associated with a unique product identifier of the covered product.
"(d) Availability of Information.—
"(1) Compliance information.—The Secretary of Defense shall make available the information necessary to enable offerors to assess the compliance of a covered product with a covered sourcing requirement.
"(2) Resources.—The Secretary shall ensure that an eligible entity has adequate resources to train offerors about the requirements of this section and to assist an offeror with the registration and attestation process established under subsection (b).
"(e) Encouraging Registration of Products.—The Secretary of Defense shall establish policies and procedures to encourage offerors to register covered products. These policies and procedures shall ensure that—
"(1) offerors are incentivized to disclose any noncompliance with the requirements of this section, with the goal of expanding the number of vendors with products qualified for use by the Department of Defense;
"(2) with respect to any disclosure made under paragraph (1), that such offeror is provided with information and assistance to determine the actions required to remedy such noncompliance in order to meet the criteria to register the product concerned; and
"(3) an offeror making such a disclosure will receive a referral to the appropriate programs or offices of the Department of Defense that are responsible for strengthening the defense industrial base, promoting domestic industry, and accelerating private investment in supply chain technologies that are critical for national security.
"(f) Briefings.—
"(1) Initial briefing.—Not later than May 1, 2026, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and House of Representatives a briefing on—
"(A) the process established under subsection (b) to allow an offeror to voluntarily submit an attestation of compliance of a covered product in the repository; and
"(B) the progress made in establishing the repository required by subsection (a).
"(2) Interim briefing.—
"(A) In general.—Not later than May 1, 2027, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and House of Representatives an interim briefing on the establishment of the repository required by subsection (a), the number and types of the contractors seeking to register covered products in such repository and volunteering to submit attestations for compliance with sourcing requirements under the process established under subsection (b).
"(B) Contents.—The briefing required by subparagraph (A) shall include an assessment of the feasibility of using the repository required by subsection (a) to also serve as a common platform for information routinely required for supplier onboarding, qualification, or due diligence review by the Department of Defense or a prime contractor of the Department, including—
"(i) business registration, Data Universal Numbering System number, Commercial and Government Entity code and federal tax identification number;
"(ii) ownership and corporate structure, including any parent company or subsidiaries;
"(iii) country of ownership;
"(iv) small business size classification and North American Industry Classification System code, if applicable; and
"(v) compliance certifications, including certifications for cybersecurity, trade and export controls, anti-corruption policy, and traceability practices.
"(3) Final briefing.—Not later than April 1, 2029, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and House of Representatives a final briefing on the success of the repository required under subsection (a) and the process established under subsection (b), including participation statistics and whether or not the Secretary will continue to maintain the repository.
"(g) Definitions.—In this section:
"(1) The term 'covered product' means a good offered for purchase to the Secretary of Defense or as an item of supply for a contractor performing on a contract with the Department of Defense—
"(A) by—
"(i) a small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632)); or
"(ii) a manufacturer of critical readiness items of supply (as defined in section 1733 of title 10, United States Code); and
"(B) that is subject to a covered sourcing requirement.
"(2) The term 'covered sourcing requirement' means a requirement under any of the following:
"(A) Section 4863 of title 10, United States Code.
"(B) Section 4862 of title 10, United States Code.
"(C) Section 4864 of title 10, United States Code.
"(D) Chapter 83 of title 41, United States Code.
"(3) The term 'eligible entity' means an eligible entity carrying out activities pursuant to a procurement technical assistance program funded under chapter 388 of title 10, United States Code.
"(4) The term 'item of supply' has the meaning given such term in section 108 of title 41, United States Code."
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10 U.S.C. § 4852, Counsel Stack Legal Research, https://law.counselstack.com/usc/10/4852.