[Federal Register Volume 91, Number 101 (Wednesday, May 27, 2026)] [Notices] [Page 31406] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 2026-10521] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE Bureau of Industry and Security [Docket No. 260521-0133] XRIN: 0694-XC146 Reporting for Calendar Year 2025 on Offsets Agreements Related to Sales of Defense Articles or Defense Services to Foreign Countries or Foreign Firms AGENCY: Bureau of Industry and Security, Department of Commerce. ACTION: Notice; annual reporting requirements. ----------------------------------------------------------------------- SUMMARY: This notice is to remind the public that U.S. firms are required to report annually to the Department of Commerce (Commerce) information on contracts for the sale of defense articles or defense services to foreign countries or foreign firms that are subject to offsets agreements exceeding $5,000,000 in value. U.S. firms are also required to report annually to Commerce information on offsets transactions completed in performance of existing offsets commitments for which an offsets credit of $250,000 or more has been claimed from the foreign representative. This year, such reports must include relevant information from calendar year 2025 and must be submitted to Commerce no later than June 15, 2026. ADDRESSES: Submit reports in both hard copy and electronically. Address the hard copy to ``Offsets Program Manager, U.S. Department of Commerce, Office of Strategic Industries and Economic Security, Bureau of Industry and Security (BIS), 1401 Constitution Ave NW Washington, DC 20230, Room 3876, Washington, DC 20230.'' Submit electronic copies to [email protected]. DATES: Reports must include relevant information from calendar year 2025 and must be submitted to Commerce no later than June 15, 2026. FOR FURTHER INFORMATION CONTACT: Stephen Astle, Office of Strategic Industries and Economic Security, Bureau of Industry and Security, U.S. Department of Commerce, telephone: 202-482-4506; email: [email protected]. SUPPLEMENTARY INFORMATION: Background Section 723(a)(1) of the Defense Production Act of 1950, as amended (DPA) (50 U.S.C. 4568), requires the President to submit an annual report to Congress on the impact of offsets on the U.S. defense industrial base. Section 723(a)(2) of the DPA directs the Secretary of Commerce (Secretary) to prepare the President's report and to develop and administer the regulations necessary to collect offsets data from U.S. defense exporters. The authorities of the Secretary regarding offsets have been delegated to the Under Secretary of Commerce for Industry and Security. The regulations associated with offsets reporting are set forth in 15 CFR part 701 (Offsets Regulations). Offsets are compensation practices required as a condition of purchase in either government-to-government or commercial sales of defense articles and/or defense services, as defined by the Arms Export Control Act (22 U.S.C. 2778) and the International Traffic in Arms Regulations (22 CFR 120-130). Offsets are also applicable to certain items controlled on the Commerce Control list (CCL) and with an Export Control Classification Number (ECCN) including the numeral ``6'' as its third character. The CCL is found in supplement no. 1 to part 774 of the Export Administration Regulations (EAR). An example of an offset is as follows: a company that is selling a fleet of military aircraft to a foreign government may agree to offset the cost of the aircraft by providing training assistance to plant managers in the purchasing country. Although this distorts the true price of the aircraft, the foreign government may require this sort of extra compensation as a condition of awarding the contract to purchase the aircraft. As described in the Offsets Regulations, U.S. firms are required to report information on contracts for the sale of defense articles or defense services to foreign countries or foreign firms that are subject to offsets agreements exceeding $5,000,000 in value. U.S. firms are also required to report annually information on offsets transactions completed in performance of existing offsets commitments for which an offsets credit of $250,000 or more has been claimed from the foreign representative. Commerce's annual report to Congress includes an aggregated summary of the data reported by industry in accordance with the Offsets Regulations and the DPA (50 U.S.C. 4568). As provided by section 723(c) of the DPA, BIS will not publicly disclose individual firm information it receives through offsets reporting unless the firm furnishing the information specifically authorizes public disclosure. The information collected is sorted and organized into an aggregate report of national offsets data and therefore does not identify company-specific information. To enable BIS to prepare the next annual offsets report reflecting calendar year 2025 data, affected U.S. firms must submit required information on offsets agreements and offsets transactions from calendar year 2025 to BIS no later than June 15, 2026. Jessica Curyto, Deputy Assistant Secretary for Technology Security. [FR Doc. 2026-10521 Filed 5-26-26; 8:45 am] BILLING CODE 3510-33-P