H.R. 4335, Abraham Accords Defense Against Terror Act

H.R. 4335 would require the Department of State to identify countries that have improved diplomatic relations with Israel and are cooperating to address threats from Iran. Under the bill, those countries would be eligible for expedited consideration of applications for the sale, lease, or license of defense articles or services. The bill would require the Administration to certify that certain sales to those eligible countries will protect U.S. citizens from Iranian threats, and prevent the acquisition of transferred items by the People’s Republic of China and the Russian Federation. Lastly, it would require the Department of State to report to the Congress on its implementation of the bill.

The Department of State and Department of Defense share responsibility for the Foreign Military Sales (FMS) program, which is administered by the Defense Security Cooperation Agency (DSCA). U.S. defense articles and services are transferred to foreign countries through the FMS program. Those countries pay all costs associated with such sales, and the amounts received in the FMS trust fund are available for obligation without further appropriation. Cash flows to and from that trust fund are classified as direct spending. Enacting H.R. 4335 would affect the timing of transfers that would be eligible for expedited processing under the bill, which could speed up the receipt and spending of those amounts. Those agreements would also be subject to the new certification requirements, which could delay receipts and spending associated with the transaction. CBO estimates the net effect on direct spending from those timing shifts would be less than $500,000.

DSCA charges an administrative fee on sales to cover the operating costs of the FMS program. On the basis of information from DSCA, CBO anticipates that the agency would increase that fee to cover the costs of the certification and reporting requirements of H.R. 4335. DSCA can accept and spend those fees without further appropriation, therefore CBO estimates that the net effect on direct spending would be less than $500,000. (Alternatively, if the agency does not increase its fees, it could instead fund the additional costs from existing fee balances. In that scenario, enacting H.R. 4335 would increase direct spending by more than $500,000.)

The Department of State manages the Direct Commercial Sales program and requires defense manufacturers, exporters, and brokers of defense articles and services to register with its Directorate of Defense Trade Controls. The directorate charges registration fees and can spend those fees without further appropriation. To the extent that implementing the bill would affect the collection and subsequent spending of registration fees, CBO estimates that the net effect on direct spending would be less than $500,000 over time.

On the basis of information about reports similar to those required by H.R. 4335, CBO estimates that implementing those requirements would cost less than $500,000 over the 2026-2031 period. Such spending would be subject to the availability of appropriated funds.

The CBO staff contacts for this estimate are Caroline Dorminey and Sunita D’Monte. The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.