The United States exports weapons, technology, and military services under strict control. Here’s how FMS, DCS, and new “as a service” contracts work.
In summary
US defense companies do not freely export their weapons or technologies. Every sale, service, and transfer of know-how is governed by a complex legal framework that aims to preserve US technological sovereignty while maximizing its global influence.
Two main frameworks dominate: Foreign Military Sales (FMS), where the US government sells directly to a third country, and Direct Commercial Sales (DCS), where the company exports under license. But in recent years, a third avenue has been developing: operational service contracts. In this model, the US company retains ownership of the system—drones, sensors, software, AI—and directly operates the mission on foreign territory.
This development, exemplified by companies such as Shield AI, Anduril Industries, and Palantir, is transforming the very nature of the arms trade. Europe, meanwhile, is lagging behind: its companies are still selling products where the US is selling effects, data flows, and strategic dependence.
The US legal framework: a regulatory arsenal at the service of power
In the United States, the export of military equipment or dual-use technology is never an industrial decision. It is a political act, controlled by the White House, the State Department, and the Pentagon.
Two pieces of legislation form the backbone of this system:
- the Arms Export Control Act (AECA), passed in 1976, which defines the legal conditions for the transfer of arms abroad;
- the International Traffic in Arms Regulations (ITAR), a set of regulations codifying authorizations, licenses, and restrictions on use.
These texts establish that any product listed on the U.S. Munitions List (missiles, drones, targeting software, radars, electronic warfare algorithms) is subject to prior authorization before any export, transfer, or maintenance abroad.
An American manufacturer—whether it be Lockheed Martin, Raytheon, General Atomics, or Shield AI—cannot decide on its own to sell or operate a system. It must obtain approval from the State Department, and sometimes from Congress, and comply with restrictive clauses that accompany the product until the end of its life.
These rules also cover technical information: simply transmitting a diagram, algorithm, or software to a foreign partner is considered an “export” and must be authorized. This is why companies such as Frontex or the European Defense Agency cannot directly “purchase” an American drone without Washington validating the technical parameters of the contract.
This architecture creates a unique situation: even when a customer pays in full for a system, they never become its owner. They must use it under US conditions and, often, with ongoing US support.
The FMS model: state-to-state sales under Pentagon supervision
The oldest and most secure channel for Washington is Foreign Military Sales (FMS).
In this case, it is not a commercial contract between a company and a country, but an intergovernmental agreement. The customer signs with the US government, represented by the Defense Security Cooperation Agency (DSCA).
The Pentagon then orders the equipment from the US manufacturer, receives it, and delivers it to the third country.
This model allows Washington to maintain control at all levels:
- Political control. Congress must approve major sales, particularly those exceeding $14 million for sensitive systems.
- Choice of versions. The United States can deliver a downgraded version of the product (e.g., a radar with reduced range or software without certain listening functions).
- Use restrictions. The contract often includes usage monitoring, inspections, and reporting requirements.
- Long-term support. FMS almost always includes training, maintenance, and spare parts, which prolongs the customer’s dependence.
In 2023, the value of FMS reached $80.9 billion (approximately €76 billion), up from $51 billion the previous year.
This jump illustrates the growing global demand for American technology, but also the political confidence that this mechanism inspires: buying through FMS means buying a partnership with Washington.
The example of F-16s delivered to Poland, Morocco, and Romania shows that these contracts are not just about equipment. They also include simulators, air base infrastructure, and sometimes access to satellite intelligence.
The DCS model: direct sales under ITAR license
The other major route is Direct Commercial Sales (DCS).
Here, the American company signs directly with the foreign customer. However, the State Department must issue a specific export license, specifying:
- the authorized equipment and its subsystems;
- the country of destination;
- the approved end users;
- the conditions of resale, maintenance, and storage.
DCS are theoretically more flexible, but just as controlled as FMS.
A prime example is the MQ-9 Reaper drone produced by General Atomics. The configuration changes depending on the customer:
- The United States sold Italy and the United Kingdom armed versions, but these were limited by access codes that remained in the hands of the Pentagon.
- The same drone sold to France via DCS was initially delivered without the ability to carry weapons, before being authorized to carry GBU-12 bombs.
- Countries such as the United Arab Emirates had to wait years to obtain Washington’s authorization to acquire an armed version.
DCS also allows for industrial arrangements: partial local assembly, integration of national equipment, or creation of maintenance centers.
But at every stage, US supervision remains mandatory.
No DCS contract can be signed without a license, and any unauthorized technology sharing exposes the manufacturer to severe penalties—fines, license suspension, or even temporary exclusion from the federal market.
Post-sale control: prolonged dependence
One of the distinctive features of the US system is the persistence of post-delivery control.
Washington not only authorizes the sale of equipment, it also monitors its use, often for several decades.
FMS and DCS contracts include “Third Party Transfer” clauses: the customer is not allowed to transfer, lend, or entrust the equipment to another country without authorization. Even partial access by foreign personnel can be considered an export violation.
In addition, many systems remain dependent on American software and updates.
F-35 aircraft, for example, require software updates via the ODIN (Operational Data Integrated Network) network.
AESA radars, electronic warfare systems, and drones also depend on periodic software monitoring, which only the US supplier can provide.
In short, purchasing a US system is not a definitive acquisition but a politically controlled lease.
The client country benefits from the promised performance as long as its diplomatic relations with Washington remain stable.
This has led several analysts to say that the United States has invented a form of “licensed sovereignty.”
Contracted capabilities: operating without selling
Since the early 2020s, a new form of contract has further blurred the boundaries between industry and public authority: operational service contracts.
This model, known in the United States as “Contracted Capability” or “Defense as a Service,” is based on a simple idea: not to transfer technology, but to have it operated by the American company itself.
In concrete terms, the company retains ownership of the system (drone, sensor, software, AI platform) and sells the military or security effect to the customer:
- 24-hour maritime or border surveillance;
- ISR (Intelligence, Surveillance, Reconnaissance) data collection and analysis;
- protection of strategic infrastructure;
- management of autonomous systems.
This approach allows the ITAR regime to be circumvented, since there is no export of weapons, but simply provision of services.
Shield AI and Frontex: drones under service contract
A prime example is Shield AI, an American company specializing in autonomous drones.
Its V-BAT and Nova models have been used in Europe for border surveillance missions for Frontex.
The devices remain American property, flights are carried out by American personnel or under American supervision, and the data processed is transferred via secure servers.
Frontex receives video feeds, detection reports, and event summaries, but does not own the drones, algorithms, or processing codes.
The operation completely bypasses ITAR, as Washington does not deliver anything. Shield AI provides outsourced operational capacity that is legally civilian.
Other companies are following this logic: Anduril Industries offers turnkey maritime and underwater surveillance services, Palantir Technologies sells intelligence analysis as a software service, and General Atomics operates ISR missions for Mediterranean states under security contracts.
This model is a win-win for Washington:
- No sensitive exports to approve;
- Full control of equipment and data;
- Indirect geopolitical influence in Europe.
The strategic advantages of the American model
These contracted services offer both flexibility and technological dominance.
For the United States, they combine several major advantages:
- Permanent control of technology.
The systems remain under US jurisdiction. Industrial, algorithmic, and cryptographic secrets do not leave US territory. - Extension of presence without troops.
The United States can “operate” in Europe, Africa, or Asia through its private companies, without official military deployment. - Economic and political returns.
These contracts span 3 to 7 years, generate recurring payments, and ensure customer loyalty. - Strategic data collection.
Sensors and software operated by US companies also feed, directly or indirectly, into US intelligence analysis networks.
According to figures from the U.S. Department of Commerce, the annual value of U.S. military services abroad exceeds $20 billion, in addition to $80 billion in traditional FMS sales.
In other words, the United States is selling less and less equipment and more and more operational capacity as a service.
Europe faces structural lag
Despite the quality of its defense industry (Airbus, Dassault, Leonardo, Thales, Safran), the European Union does not have an equivalent system.
European companies sell equipment, but rarely complete operational services.
Airbus has launched “drone as a service” programs for maritime surveillance, but these initiatives remain marginal.
No European company currently has the legal right to operate a complete military surveillance system on the territory of a third country, especially under the banner of an intergovernmental agency such as Frontex.
There are many reasons for this:
- lack of centralized authority to validate such contracts;
- regulatory fragmentation among member states;
- political reluctance to let a private company carry out a national security mission;
- lack of sovereign digital infrastructure to protect the data generated by these systems.
Europe therefore remains a customer rather than an operator.
In the case of Frontex, the decision to use Shield AI rather than a European supplier highlights the asymmetry: the Americans export capabilities; the Europeans export products.
This model creates long-term dependency: Europe buys an effective service but reinforces American control over autonomy, AI, and surveillance technologies.
Economic and geopolitical consequences
The figures illustrate the disproportion.
The US defense budget exceeds $830 billion (approximately €775 billion), which is more than the combined spending of all European countries.
The United States can invest heavily in R&D, finance its exports through public mechanisms (Ex-Im Bank, DFC), and maintain a diplomatic network to support its manufacturers.
Each FMS contract or service provided creates a relationship of dependency.
Foreign customers adopt US standards, train their crews with US instructors, and integrate their systems into architectures compatible with those of the Pentagon.
They effectively become technical allies and strategic satellites.
Europe, despite its efforts to establish a “strategic compass,” remains divided on its export policies and does not impose a common vision.
The SCAF and GCAP programs (6th generation aircraft) aim to restore European autonomy, but their completion is still a long way off.
Meanwhile, Washington is consolidating its lead through private services: armament is becoming a global security infrastructure made in the USA.
The risks and dilemmas of the “Defense as a Service” model
However, this American model raises some major questions:
- Data sovereignty. Data captured by American systems operating in Europe often passes through American servers. Its processing is partially beyond European control.
- Legal responsibility. In the event of an incident, espionage, or misinterpretation of a signal, who is responsible? The company? The customer? The US government?
- Erosion of strategic autonomy. Every service contract signed with an American company delays the rise of a European alternative.
- Political pressure. A country or agency dependent on American data loses some of its freedom of decision, as Washington can cut off access at any time.
These risks are known, but often downplayed in the name of operational efficiency.
Frontex, for example, justifies its use of Shield AI on the grounds of rapid deployment and sensor quality. But this efficiency comes at a price: the silent transfer of technological control.
Towards a new era of strategic dependence
Arms exports have always been an instrument of power.
But through these new contracts, the United States has invented a form of peaceful technological imperialism.
It no longer needs to impose its bases: it deploys its companies.
These private companies, under strict political supervision, become extensions of American diplomacy.
They collect, operate, analyze, and transmit data that feeds both their profits and the informational superiority of their country of origin.
Europe, for its part, must choose:
- either continue to depend on these “turnkey” capabilities;
- or invest heavily in its own operational services, based on sovereign digital and legal infrastructures.
Because modern warfare is no longer won with planes and missiles alone.
It is won by controlling the flow of information, algorithms, and the means to exploit them.
And in this area, the United States no longer exports weapons. It exports dependence.
Sources:
U.S. Department of State – Directorate of Defense Trade Controls (ITAR, AECA, Part 124).
Defense Security Cooperation Agency – FMS Reports 2023-2025.
U.S. Department of Commerce – Defense Services Export Regulations.
Federal Register – Section 120.9 “Defense Service.”
General Atomics, Shield AI, Anduril Industries, Palantir Technologies – ISR Contracts 2023-2025.
Frontex – Annual Report 2024, section “Aerial Surveillance Services”.
CSIS – Contracted Capabilities and the Privatization of ISR, 2023.
European Defense Agency – Defense Industrial Gaps Report, 2024.
War Wings Daily is an independant magazine.