1. The purpose of this Annex to the Declaration
of Principles (Declaration) is to indicate the areas in which
the US DoD and the UK MoD ("the Participants") intend
to find common solutions to the problems identified; to define
the principles on which appropriate follow-on arrangements or
agreements, or amendments to existing arrangements or agreements,
will be based; and to establish a process and intended timescale
for the negotiation of follow-on arrangements or agreements, or
amendments to existing arrangements or agreements, to implement
2. This Declaration is intended to establish
principles for future arrangements or agreements, or amendments
to existing arrangements or agreements, which may cover the industrial,
investment, and export sectors of defence in both countries.
3. The Participants have the firm intention
to pursue the objectives of this Declaration and to adopt, where
appropriate, specific arrangements or agreements, or amendments
to existing arrangements or agreements between them, to underpin
the effective application of the principles specified in this
1. The Participants will seek better means
to harmonise the military requirements of their armed forces.
To this end, and proceeding from identified capabilities of common
interest, the Participants will identify areas in which better
harmonisation is considered possible. In doing so, they will seek
to make use of existing fora, wherever practicable.
2. The Participants will identify projects
at an early stage for cooperative research, development, production,
and procurement. (See Research and Development, below.)
3. The Participants will examine the possibility
of harmonising the procedures applicable to armaments acquisition,
so as to remove impediments to effective cooperation.
1. Each Participant will require assurance
that the other Participant will facilitate the supply of certain
specified defence articles and defence services necessary to discharge
their national security and foreign policy commitments. The Participants
acknowledge that this assurance of supply is as important for
industry as it is for governments, if industry is to adapt to
the process of globalisation.
2. The Participants recognise the potential
for a degree of interdependence of supplies needed for national
security. In order to achieve acceptance of this concept, the
Participants will explore solutions for achieving assurance of
supply for both Participants. These solutions may include obtaining
assurances, some of which may be legally binding, relating to
the supply of defence articles and defence services, including
technical data, agreed upon by the Participants.
3. To further enhance this assurance, and
with due consideration for the right of each Participant's government
to control the disclosure and use of technical information, arrangements
will be considered to enable the other Participant to reconstitute,
in exceptional circumstances to be defined, an indigenous supply
of a particular defence article or defence service.
1. The Participants confirm their desire
to maintain a strong defence industrial capability as part of
their industrial bases and the ability to export defence articles
and defence services. Consistent with the intent of this Declaration,
they will explore possible approaches to achieving greater transparency
and efficiency in their national procedures for exports of defence
articles and defence services.
2. The Participants will explore means of
simplifying the procedures for export of defence articles and
defence services between themselves for their own use.
3. The Participants desire to see an improvement
in the efficiency of the procedures for exports of jointly produced
military goods to third parties. They will therefore examine the
scope for establishing a procedure based on mutually agreed lists
of acceptable export destinations for jointly developed and produced
military goods and technologies on a project by project basis.
These lists would be updated on a continuing basis.
4. The Participants will seek to ensure
that their national laws and regulations for defence exports to
third parties are implemented in a spirit of cooperation and with
maximum efficiency. They will reinforce their cooperation and
promote convergence in the field of conventional arms exports.
They will pursue necessary measures to harmonise their conventional
arms export policies as far as possible and examine means of establishing
common standards of implementation.
5. The Participants will establish a high-level
council on export control and coordination measures, with a view
towards accomplishing the preceding measures.
6. Pending agreements reached pursuant to
paragraph 5, above, re-transfers by a Participant of defence articles
and services, including technical information, originating in
the territory of the other Participant will be made in accordance
with existing agreements, arrangements, contracts and procedures
between the Participants.
1. The Participants recognise the need to
ensure that adequate and appropriate security provisions for the
protection of classified information are in force in any relevant
US or UK company, regardless of any multinational aspects of a
company's ownership or management structure. The Participants
will endeavour to avoid placing unnecessary restrictions on the
movement of staff, information, or material between the Participants
or their industry.
2. The Participants will examine means to
expedite the transmission of classified information between themselves
or between their industries while maintaining the requisite degree
of security protection.
3. In doing so, consistent with the General
Security Agreement of 1961 between the Governments of the United
States of America and the United Kingdom of Great Britain and
Northern Ireland, the Participants will ensure that no classified
information is passed to companies or persons not suitably cleared
or needing to receive it; that no classified information originated
by one Participant is passed to a third country national without
the consent of the originating Participant; and no information
carrying national caveats is passed to foreign nationals.
4. Consistent with the preceding paragraphs,
the Participants will use their best efforts, both individually
and working together, to lessen the administrative burdens placed
on their industry in the establishment and oversight of industrial
5. The Participants intend to develop procedures
to streamline the process for approving visits to government or
contractor facilities by employees of the government or contractors
of the other Participant that may involve access to classified
6. The Participants will jointly address
security vulnerabilities posed by new technologies.
7. The Participants will endeavour to harmonise
and streamline their security regulations.
1. The Participants believe that the ownership
of defence companies sited in the United States and the United
Kingdom is a matter for the companies to determine, subject to
the application of the relevant national merger control, anti-trust
and other relevant laws. They wish to encourage the freest possible
cross-border investment in defence-related industry.
2. While considering the implications for
national security of any proposed international merger or acquisition,
the Participants will not place unreasonable or unnecessary security
restrictions on corporate governance.
3. The Participants will seek to establish
arrangements or agreements whereby, on a reciprocal basis, each
Participant will apply substantially the same standards in the
granting of facility security clearances to companies that are
organised and incorporated within its territory but are owned
or controlled by entities within the territory of the other Participant,
considering, among other factors, any connection with entities
owned, controlled, or influenced by entities of any third country.
These arrangements or agreements will include measures to address
issues of corporate governance as well as security of information
held by companies and compliance with national export control
1. The Participants recognise that technology,
research and development are indispensable for maintaining an
effective defence industrial base and therefore recognise the
need to use the limited resources available for defence-related
research and development in an efficient and effective manner.
2. In the context of this Declaration, the
Participants intend to establish arrangements or agreements and
make use of existing fora to:
(a) harmonise research and development programmes
and exchange information about national research activities where
there are common interests with a view towards setting common
objectives for research and development, avoiding unnecessary
duplication of effort or major gaps in technology and technical
capability, and making the most effective use of dual-use and
commercial off-the-shelf (COTS) technology;
(b) increase cooperation in programmes that
follow-on from research activity, in particular by undertaking
technological developments with each other; and
(c ) ensure the adequate funding, and efficient
cost sharing, of cooperative research and development.
1. The Participants confirm their desire
to maximise the flow of technologies and technical information
between themselves and between their defence-related industries.
Accordingly, they will explore methods that could facilitate the
flow of technologies and technical information between them and
between their defence-related industries, while ensuring that
the further flow of these technologies and technical information
is strictly regulated by the governments. (See Export Procedures,
2. These methods could include, where appropriate,
the removal of unnecessary controls on the flow of technology
and technical information, different ways to authorise the flow
of technology, and different ways to optimise the exploitation
for defence of technology investments.
3. The Participants will seek the establishment
of arrangements relating to the disclosure, transfer, and use
of technical information which will facilitate the efficient operation
of US and UK defence companies, consistent with proper safeguards.
The Participants recognise that technical information received
from the other Participant shall not be further disclosed without
the authority of the owner and, in the case of classified or export
controlled unclassified information, without the authority of
that Participant under whose authority the information was created.
4. The Participants will encourage the harmonisation
of their laws, regulations, and procedures for controlling disclosure
and use of technical information in the field of defence.
1. The Participants will, on a reciprocal
basis, endeavour to diminish legislative and regulatory impediments
to optimising market competition.
2. The Participants will endeavour to revise
their acquisition practices to remove impediments to efficient
global market operations and to support reciprocity of international
market access for each other's companies.
3. The Participants will give full consideration
to all qualified sources in each other's country in accordance
with the policies and criteria of the purchasing government.
4. Each Participant will explore means to
eliminate laws, regulations, practices and policies that require
or favour national industrial participation in its defence acquisitions.
1. Policy-level discussions concerning the
principles underlying this Declaration and its Annex and the intended
US-UK cooperation and collaboration in facilitating the restructuring
of their defence industry will be carried out by appropriate national
2. Working-level discussions will be held
by working groups of subject matter experts, which may include
representatives from other government agencies. These working
groups may consult with the Participants' defence industries,
3. It is the intent of the Participants
that the agreements and arrangements, or amendments to existing
agreements or arrangements, envisioned by this Declaration and
its Annex be put in place as expeditiously as possible. Accordingly,
they will endeavour to develop such agreements and arrangements
so that they can be presented to the Secretary of Defence and
the Secretary of State for Defence within one year after signature
of this Declaration and its Annex. In addition, they will make
periodic reports to the Secretary of Defence and the Secretary
of State for Defence on the progress that is being made on achieving
the goals of this Declaration and its Annex.