15 C.F.R. § 701.2 Definitions.
Title 15 - Commerce and Foreign Trade
(a) Offsets—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 and the International Traffic in Arms Regulations. (b) Military Export Sales—Exports that are either Foreign Military Sales (FMS) or commercial (direct) sales of defense articles and/or defense services as defined by the Arms Export Control Act and International Traffic in Arms Regulations. (c) Prime Contractor—A firm that has a sales contract with a foreign entity or with the U.S. Government for military export sales. (d) United States—Includes the 50 states, the District of Columbia, Puerto Rico, and U.S. territories. (e) Offset Agreement—Any offset as defined above that the U.S. firm agrees to in order to conclude a military export sales contract. This includes all offsets, whether they are “best effort” agreements or are subject to penalty clauses. (f) Offset Transaction—Any activity for which the U.S. firm claims credit for full or partial fulfillment of the offset agreement. Activities to implement offset agreements may include, but are not limited to, coproduction, licensed production, subcontractor production, overseas investment, technology transfer countertrade, barter, counterpurchase, and buy back. (g) Direct Offset—Contractual arrangements that involve defense articles and services referenced in the sales agreement for military exports. (h) Indirect Offset—Contractual arrangements that involve defense goods and services unrelated to the exports referenced in the sales agreement.
Title 15: Commerce and Foreign Trade
PART 701—REPORTING OF OFFSETS AGREEMENTS IN SALES OF WEAPON SYSTEMS OR DEFENSE-RELATED ITEMS TO FOREIGN COUNTRIES OR FOREIGN FIRMS
§ 701.2 Definitions.
