This policy broadens the range of financing options available for the U.S. Foreign Military Sales (FMS) program by allowing customers to use a letter of credit for their FMS cases.
BLOC follows the Credit Assured Payment Schedules (CAPS) policy, codified in January 2023, and is part of a broader effort by the United States to furnish greater financing options to its allies and partner nations.
Under the new BLOC policy, DSCA provides for three ways a letter of credit may be used:
1. To replace national funds held in the FMS Trust Fund to make routine payments,
2. To supplement national funds on one or more Letters of Offer and Acceptance, and
3.To secure payment schedules under the CAPS term of sale.
BLOC eligibility and requirements may be found in Chapter 9 of the Security Assistance Management Manual (https://samm.dsca.mil/chapter/chapter-9).
To aid in implementing this policy, DSCA is compiling a non-exclusive database of eligible banks interested in participating in BLOC. Inclusion of an eligible bank in the DSCA database does not constitute an endorsement by DSCA, the Department of Defense (DoD), or the U.S. government. The list of banks will be provided to allies and partner nations upon request as a convenience to assist in their efforts to select a financial institution from which they could secure a letter of credit. Consistent with DoD policy, an eligible bank is either a U.S. bank with a minimum “A” credit rating or a foreign bank located in the United States with a license from the Office of the Comptroller of the Currency, an independent bureau of the U.S. Department of the Treasury, that also has a minimum “A” credit rating. Final determination of eligibility is at the discretion of DSCA’s Financial Policy and Regional Execution Division under the Office of Business Operations.
