South Korea's F-35 offset programme under fire

22 May 2019

South Korea’s Board of Audit and Inspection has said the country’s offset regulations were not adhered to properly in the acquisition of Lockheed Martin F-35 fighter aircraft (pictured) from the US. Source: DAPA

South Korea's Board of Audit and Inspection (BAI) has criticised the administration of defence offsets linked with the country's acquisition of Lockheed Martin F-35A Lightning II Joint Strike Fighters from the United States.

The BIA said on 21 May that in an audit carried out into the F-35 offset programme it found that South Korea's military procurement agency, the Defense Acquisition Program Administration (DAPA), did not comply with relevant laws and regulations in negotiating the offset programme.

"[DAPA] failed to abide by some relevant regulations over the course of negotiations," said the BAI. However, the board did not disclose any details or examples citing confidentiality. The BAI also said that it had approached DAPA requesting improvements in the negotiation and administration of offset contracts.

DAPA spokesman Park Jeong-eun said in comments reported by the Yonhap news agency that DAPA would make revisions to the way offsets are pursued and implemented, reflecting BAI's concerns, if required. "We have been working to improve relevant systems and to revamp our regulations and will make continued efforts," he said. "We will strive further to push for procurement deals in a transparent manner."

In September 2014 South Korea announced a deal to procure 40 F-35 fighters in a Foreign Military Sale (FMS) deal worth about KRW7.3 trillion (USD6.1 billion). The first two of these aircraft arrived in South Korea in late March.

US and DAPA officials have previously confirmed to Jane's that a central part of the offset deal linked to the F-35 acquisition is the transfer of more than 20 suites of advanced aerospace technologies, many of which are geared towards supporting South Korea's programme to develop its Korean Fighter Experimental (KFX) 4.5-generation fighter aircraft.

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