§ 194.3 - Concept.

(a) The term co-production as used herein encompasses any program wherein the U.S. Government, under the aegis of an international diplomatic level or Ministry of Defense-to-Department of Defense agreement, either directly through the FMS program, or indirectly through specific licensing arrangements by designated commercial firms, enables an eligible foreign government, international organization or designated commercial producer to acquire the “know-how” to manufacture or assemble, repair, maintain and operate, in whole or in part, a specific weapon, communication or support system, or an individual military item. The “know-how” furnished may include research, development production data and/or manufacturing machinery or tools, raw or finished materiel, components or major subassemblies, managerial skills, procurement assistance or quality-control procedures. Third country sales limitations and licensing agreements are also included as required.

(b) Co-production may be limited to the assembly of a few end-items with a small input of local country parts, or it may extend to a major manufacturing effort requiring the build-up of capital industries.