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Analysis

BICOM Briefing | New ten-year US-Israel Memorandum of Understanding

Following the signing of the new Memorandum of Understanding between the US and Israel on future military  aid funding on Wednesday 14th September, BICOM’s Research team has produced a briefing on the deal.

Key points:

  • On Wednesday September 14, US Undersecretary of State Thomas Shannon and Jacob Nagel, acting head of Israel’s National Security Council signed a US$38bn, ten year memorandum of understanding (MOU), which was described by the US State Department as the single largest pledge of bilateral military assistance in US history. It reflects an approximately 23 per cent increase in the previous MOU between the sides.
  • The agreement maintains Israel’s Qualitative Military Edge (QME) and advances joint programmes such as Iron Dome, the new anti-tunnel initiative near the Gaza border, and a host of other pre-agreed joint Israeli-American programmes which had previously been allocated on an ad hoc basis by Congress.
  • The agreement also requires Israel to forego additional funding via Congress and involves the gradual phasing out the Off-shore Procurement Policy, which had allowed Israel to spend some of the aid on its own, rather than the American defence industry.
  • Critics have argued that taking into account inflation and the absence of supplementary funding from Congress, the US$38bn sum is similar to the previous MOU and could have been higher had Prime Minister Netanyahu not so vigorously opposed the nuclear deal the Obama Administration forged with Iran. Others point to the fact that in light of the general downturn in the US economy and increasing ambivalence towards foreign aid, the MOU agreement is a great achievement.
  • Concluding the agreement before the end of the Obama administration reaffirms the importance of the US-Israel relationship for both countries and prevents the issue from becoming a political football. It also politically benefits Prime Minister Netanyahu and President Obama both of whom have been criticised domestically for mismanaging the US-Israel relationship.

The full briefing is available as a PDF below.

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