Offset agreement

Offsets can be defined as provisions to an import agreement, between an exporting foreign company, or possibly a government acting as intermediary, and an importing public entity, that oblige the exporter to undertake activities in order to satisfy a second objective of the importing entity, distinct from the acquisition of the goods and/or services that form the core transaction. The incentive for the exporter results from the conditioning of the core transaction to the acceptance of the offset obligation.Offset agreements often involve trade in military goods and services and are alternatively called: industrial compensations, industrial cooperation, offsets, industrial and regional benefits, balances, juste retour or equilibrium, to define mechanisms more complex than counter-trade.Counter-trade can also be considered one of the many forms of defense offset, to compensate a purchasing country.There are three main categories of corruption risk from offsets:For decades, countries that buy weapons have imposed 'offset' requirements on their suppliers that keep some of the economic benefits of the deal at home. Now, defense contractors are moving toward more exotic plans to satisfy their growing offset obligations. Many deals have no relationship to the weapons being sold, and a few have only a tenuous connection to the country that is buying.This language seems to imply that U.S. Government, as the broker for the FMS case, has special insight into the transaction and is almost certifying that there are, in fact, no offsets. Nothing could be further from the truth.1. The provisions of this Treaty shall not preclude the application of the following rules: Offsets can be defined as provisions to an import agreement, between an exporting foreign company, or possibly a government acting as intermediary, and an importing public entity, that oblige the exporter to undertake activities in order to satisfy a second objective of the importing entity, distinct from the acquisition of the goods and/or services that form the core transaction. The incentive for the exporter results from the conditioning of the core transaction to the acceptance of the offset obligation.Offset agreements often involve trade in military goods and services and are alternatively called: industrial compensations, industrial cooperation, offsets, industrial and regional benefits, balances, juste retour or equilibrium, to define mechanisms more complex than counter-trade.Counter-trade can also be considered one of the many forms of defense offset, to compensate a purchasing country.