TREATIES AND OTHER INTERNATIONAL ACTS SERIES 14-1112

________________________________________________________________________

DEFENSE

Research and Development

Memorandum of Understanding Between the 

UNITED STATES OF AMERICA

and OTHER GOVERNMENTS

Signed at Brussels, The Hague, Lisbon, Koblenz, Madrid, 

Washington, Athens, Ankara, Canberra, Bergen, Copenhagen, 

and Ottawa October 28 and December 5, 2013, January 9 and 

15, April 1, 10, and 16, May 27, July 22 and 30, September 19, 

and November 12, 2014 

with

Annexes
 

NOTE BY THE DEPARTMENT OF STATE

 Pursuant to Public Law 89—497, approved July 8, 1966

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent

evidence . . . of the treaties, international agreements other than

treaties, and proclamations by the President of such treaties and

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime

jurisdiction, and in all the tribunals and public offices of the

United States, and of the several States, without any further proof

or authentication thereof.”
 

 MULTILATERAL

 Defense: Research and Development

 Memorandum of understanding signed at 

 Brussels, The Hague, Lisbon, Koblenz, Madrid,

 Washington, Athens, Ankara, Canberra, Bergen, 

 Copenhagen, and Ottawa October 28, and

 and December 5, 2013, January 9 and 15, 

 April 1, 10, and 16, May 27, July 22 and 30, 

 September 19, and November 12, 2014;

 Entered into force November 12, 2014.

 With annexes.

 

 
MEMORANDUM OF UNDERSTANDING 

FOR THE COOPERATIVE ENGINEERING & 

MANUFACTURING DEVELOPMENT OF THE 

EVOLVED SEASPARROW MISSILE 

BLOCK2 

"ESSM BLOCK 2 _E&MD MOU" 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF THE 

EVOLVED SEASPARROW MISSILE BLOCK 2 

AMONG: 

THE MINISTER FOR DEFENCE ON BEHALF OF THE DEPARTMENT OF DEFENCE OF 

AUSTRALIA 

AND 

THE MINISTER OF DEFENCE OF THE KINGDOM OF BELGIUM 

AND 

THE DEPARTMENT OF NATIONAL DEFENCE OF CANADA 

AND 

THE MINISTER OF DEFENCE OF THE KINGDOM OF DENMARK 

AND 

THE FEDERAL MINISTRY OF DEFENCE OF THE FEDERAL REPUBLIC OF GERMANY 

AND 

THE MINISTRY OF NATIONAL DEFENCE OF THE HELLENIC REPUBLIC 

AND 

THE MINISTER OF DEFENCE OF THE KINGDOM OF THE NETHERLANDS 

AND 

THE MINISTER OF DEFENCE OF THE KINGDOM OF NORWAY 

AND 

THE MINISTER OF DEFENCE OF PORTUGAL 

AND 

THE MINISTRY OF DEFENCE OF THE KINGDOM OF SPAIN 

AND 

THE MINISTRY OF NATIONAL DEFENCE OF TURKIYE 

AND 

THE DEPARTMENT OF DEFENSE OF THE UNITED STATES OF AMERICA 

11 
TABLE OF CONTENTS 

PAGE 

INTRODUCTION 1 

SECTION 1 DEFINITIONS 3 

SECTION2 OBJECTIVES 8 

SECTION 3 SCOPE OF WORK 10 

SECTION 4 MANAGEMENT (ORGANIZATION AND RESPONSIBILITY) 12 

SECTION 5 FINANCIAL PROVISIONS 18 

SECTION6 CONTRACTUAL PROVISIONS . 22 

SECTION 7 AUDITS 25 

SECTION 8 WORK SHARING 27 

SECTION9 ESSM BLOCK 2 E&MD PHASE EQUIPMENT 28 

SECTION 10 DISCLOSURE AND USE OF ESSM BLOCK 2 E&MD PHASE 30 

INFORMATION 

SECTION 11 CONTROLLED UNCLASSIFIED INFORMATION 39 

SECTION 12 VISITS TO ESTABLISHMENTS 40 

SECTION 13 SECURITY 41 

SECTION 14 SALES AND TRANSFERS 44 

SECTION 15 LIABILITY AND CLAIMS 46 

SECTION 16 CUSTOMS DUTIES, IMPORT AND EXPORT TAXES, AND 48 

SIMILAR CHARGES 

SECTION 17 ACCESSION OF NON-CONTRIBUTING PARTICIPANTS 49 

SECTION 18 ACCESSION OF POTENTIAL PARTICIPANTS 50 

SECTION 19 SETTLEMENT OF DISPUTES 51 

SECTION20 AMENDMENTS 52 

SECTION 21 GENERAL PROVISIONS, WITHDRAWAL, TERMINATION, 53 

ENTRY INTO EFFECT, AND DURATION 

ANNEXA ESSM BLOCK 2 E&MD PHASE PLAN 67 

ANNEXB NSPO ESSM BLOCK 2 E&MD PHASE STAFFING 68 

REQUIREMENTS 

ANNEXC COOPERATIVE PROJECT PERSONNEL (CPP) 69 

lll 
INTRODUCTION 

The Minister for Defence on behalf of the Department of Defence of Australia 

(Australian DOD), the Department ofNational Defence of Canada (Canadian DND), the 

Minister of Defence of the Kingdom of Denmark (Danish MOD), the Minister of Defence ofthe 

Kingdom of The Netherlands (Netherlands MOD), the Minister of Defence ofthe Kingdom of 

Norway (Norwegian MOD), the Ministry ofNational Defence ofTurkiye (MoND ofTurkiye), 

and the Department of Defense ofthe United States of America (U.S. DoD), hereinafter referred 

to as the "Contributing Participants", and the Minister of Defence of the Kingdom of Belgium 

(Belgian MOD), the Federal Ministry of Defence of the Federal Republic of Germany (German 

FMoD), the Ministry of National Defence ofthe Hellenic Republic (Hellenic MND), the 

Minister of Defence of Portugal (Portuguese MOD), and the Ministry of Defence ofthe 

Kingdom of Spain (Spanish MOD), hereinafter referred to as the "Non-contributing 

Participants", and collectively referred to as the "Participants": 

Having a common interest in ship defense; 

Recognizing the Memorandum of Understanding (MOU) for the International 

Development ofthe NATO SEASPARROW Surface Missile System dated June 10, 1968 

(Development MOU), and the MOU for the Cooperative Support of the NATO 

SEASPARROW Surface Missile System dated May 31, 1977 (Support MOU); 

Recognizing the Addendum to the Memorandum of Understanding for the Cooperative 

Support oftheNATO SEASPARROW Surface Missile System Concerning the 

Cooperative Engineering and Manufacturing Development ofthe Evolved SEASPARROW 

Missile dated June 16, 1995 (ESSM E&MD Addendum); the Memorandum of 

Understanding for the Cooperative Production of the Evolved SEASPARROW Missile 

dated December 26, 1997 (ESSM Production MOU); and the Memorandum of 

Understanding for the Cooperative In-Service Support ofthe Evolved SEASPARROW 

Missile dated October 25, 2001 (ESSM Support MOU); 

Recognizing the benefits to be derived from the standardization, rationalization, 

interoperability of military equipment among the Participants' navies, the benefits to be 

obtained from cooperative programs, and the advantages to be gained from the use of their 

combined national capabilities in order to support systems and equipment operational in the 

Participants' navies in the most efficient and cost effective manner possible; 

Recognizing that the Participants have a requirement to enhance the performance, 

effectiveness and reliability ofthe Evolved SEASPARROW Missile (ESSM) and related 

elements; 

Recognizing that work to be conducted under this MOU will build upon the results of 

missile improvement studies and risk reduction efforts related to an upgraded ESSM which 

have been performed under subparagraph 3 .1.9 of Section 3 (Scope of Work) of the ESSM 

Support MOU; 

1 
Desiring to expand the current scope of cooperation, this MOU marks the beginning of a 

new cycle of cooperation among the Participants that may, if mutually determined among 

the Participants, lead to cooperative production and in-service support for the ESSM Block 

2; and 

Desiring to conduct the ESSM Block 2 Engineering & Manufacturing Development 

(E&MD) Phase as an expansion of the current North Atlantic Treaty Organization (NATO) 

SEASP ARROW project; 

Now, therefore, the undersigned Participants have reached the following understandings: 

2 
SECTION 1. DEFINITIONS 

The Participants have jointly decided upon the following definitions of terms used in this MOU: 

Classified Information Official Information that requires protection in the interests of 

national security and is so designated by the application of a 

security classification marking. This Information may be in oral, 

visual, magnetic, or documentary form or in the form of 

equipment or technology. 

Contract Any mutually binding legal relationship under national laws that 

obligates a Contractor to furnish supplies or services, and 

obligates one or more Contributing Participants to pay for them. 

Contracting The obtaining of supplies or services by Contract from sources 

outside the governmental organizations of the Participants that 

includes a description (but not determination) of supplies and 

services required, solicitation and selection of sources, preparation 

and award of Contracts, and all phases of Contract administration. 

Contracting Agency The entity within the governmental organization of a Contributing 

Participant that has the authority to enter into, administer, or 

terminate Contracts. 

Contracting Officer A person representing a Contracting Agency who has the authority 

to enter into, administer, or terminate Contracts. 

Contractor Any entity awarded a Contract by a Contracting Agency. 

Contractor Support Personnel Persons specifically identified as providing administrative, 

managerial, scientific, or technical support services to one or more 

Participants under a support Contract. 

Contributing Participant A Participant who is sharing in the costs associated with this 

ESSM Block 2 E&MD Phase. 

3 
Controlled Unclassified 

Information 

Cooperative Project Personnel 

(CPP) 

Defense Purposes 

Designated Security Authority 

(DSA) 

ESSM 

ESSMBlock2 

ESSM Block 2 E&MD Phase 

ESSM Block 2 E&MD Phase 

Background Information 

ESSM Block 2 E&MD Phase 

Equipment 

ESSM Block 2 E&MD Phase 

Foreground Information 

ESSM Block 2 E&MD Phase 

Information 

Unclassified Information to which access or distribution 

limitations have been applied in accordance with applicable 

national laws or regulations; this could include Information that 

has been declassified but remains controlled. 

Military members or civilian employees of a Parent Participant, 

assigned to the NATO SEASPARROW Project Office (NSPO), 

performing managerial, engineering, technical, administrative, 

Contracting, logistics, financial, planning, or other NSPO staff 

duties in furtherance of the ESSM Block 2 E&MD Phase. 

Manufacture or other use in any part of the world by or for the 

armed forces of any Contributing Participant. 

The security authority or authorities designated by national 

authorities to be responsible for the coordination and 

implementation of security aspects of this MOU. 

The Evolved SEASPARROW Missile cooperatively developed, 

produced, and supported under the ESSM E&MD Addendum, the 

ESSM Production MOU, and the ESSM Support MOU. 

An upgraded ESSM that meets the requirements specified in the 

ESSM Block 2 Requirements Document or any revisions thereto. 

The cooperative efforts under this ESSM Block 2 E&MD MOU to 

achieve the objectives in Section 2 (Objectives) and accomplish 

the work in Section 3 (Scope of Work) ofthis MOU. 

Any Information not generated in the performance of the ESSM 

Block 2 E&MD Phase. 

Any material, equipment, end item, subsystem, component, 

special tooling, or test equipment cooperatively acquired by the 

Contributing Participants or provided by a Participant for use in 

the ESSM Block 2 E&MD Phase. 

Any Information generated in the performance of the ESSM Block 

2 E&MD Phase. 

Any Information provided to, generated in, or used in the ESSM 

Block 2 E&MD Phase. 

4 
ESSM Block 2 E&MD Phase 

Invention 

ESSM Block 2 E&MD Phase 

Plan 

Host Participant 

Information 

Information and Evaluation 

Purposes 

Any product, process or other solution in any field of technology, 

provided it is new, involves an inventive step, is capable of 

industrial application, and is formulated or made (conceived or 

"first actually reduced to practice") in the course of work 

performed under the ESSM Block 2 E&MD Phase. The term "first 

actually reduced to practice" means the first demonstration, 

sufficient to establish to one skilled in the art to which the 

invention pertains, of the operability of an invention for its 

intended purpose and in its intended environment. 

The acquisition baseline documents identified in Annex A (ESSM 

Block 2 E&MD Phase Plan) to this MOU. 

A Participant in whose country the NATO SEASPARROW 

Project Office or a division thereof is physically located. 

Any knowledge provided, generated, or used regardless of form or 

type, including, but not limited to, that of a scientific, technical, 

business, or financial nature, and also including equipment, 

technology, photographs, correspondence, reports, manuals, threat 

data, experimental data, test data, computer software, designs, 

specifications, processes, techniques, inventions, drawings, 

technical writings, sound recordings, pictorial representations, and 

other graphical presentations, whether in magnetic tape or 

computer memory, whether or not subject to Intellectual Property 

rights or other legal protection. 

Review, analysis, or consideration to facilitate a Non-contributing 

Participant's decision to become a Contributing Participant or for 

the purpose of voting on or complying with NSPSC decisions, and 

does not include the use ofESSM Block 2 E&MD Phase 

Information in the performance of research, development, 

production, or application of the ESSM Block 2 E&MD Phase 

Information to any program, plan, or project. 

5 
Intellectual Property 

National Deputy 

Non-contributing Participant 

Parent Participant 

Participant 

In accordance with the World Trade Organization Agreement on 

Trade-related Aspects ofintellectual Property Rights of April 15, 

1994, all copyright and related rights, all rights in relation to 

inventions (including Patent rights), all rights in registered and 

unregistered trademarks (including service marks), registered and 

unregistered designs, undisclosed Information (including trade 

secrets and know-how), layout designs of integrated circuits, 

geographical indications, and any other rights resulting from 

creative activity in the industrial, scientific, literary, and artistic 

fields. 

A military member or civilian employee of a Participant assigned 

to the NATO SEASPARROW Project Office (NSPO) who 

performs NSPO staff duties assigned by the NSPO PM and 

additional duties, which may or may not be related to the NSPO, 

on behalf of that Participant's Government. When performing 

these NSPO staff duties as assigned by the NSPO PM, a Parent 

Participant's National Deputy will be considered a CPP. When 

performing additional duties related to the NSPO assigned by a 

Parent Participant, a National Deputy will be considered a CPP. 

When a National Deputy performs additional duties unrelated to 

the NSPO, and performed outside NSPO facilities, the National 

Deputy will not be considered a CPP, and the status with regard to 

the assignment in the Host Participant's country will be 

determined under other applicable written arrangements between 

the Host Participant and the Parent Participant or between their 

respective Governments. 

A Participant who is not sharing in the costs associated with this 

ESSM Block 2 E&MD Phase. 

A Participant, other than the Host Participant, that assigns a 

military member or civilian employee to the NATO 

SEASPARROW Project Office or a division thereof. 

A signatory to this MOU, which includes both Contributing 

Participants and Non-contributing Participants. Contractors and 

Contractor Support Personnel will not be representatives of a 

Participant under this MOU. 

6 
Patent Grant by any Government or a regional office acting for more than 

one Government of the right to exclude others from making, 

using, importing, selling, or offering to sell an invention. The term 

refers to any and all patents including, but not limited to, patents 

of implementation, improvement or addition, petty patents, utility 

models, appearance design patents, registered designs, and 

inventor certificates or like statutory protection, as well as 

divisions, reissues, continuations, renewals, and extensions of any 

of these. 

Prospective Contractor Any entity that seeks to enter into a Contract to be awarded by a 

Participant's Contracting Agency and that, in the case of a 

solicitation involving the release of export-controlled ESSM 

Block 2 E&MD Phase Information, is eligible to receive such 

Information. 

Third Party A government other than the Government of a Participant and any 

person or other entity whose government is not the Government of 

a Participant. 

Total Cost Ceiling The maximum amount to which the Total Cost Target may move. 

Total Cost Target The estimated planning figure ofthe total costs of performance of 

Section 3 (Scope of Work) ofthis MOU plus the costs of 

performance of the ESSM Block 2 risk reduction efforts. 

U.S.-Restricted ESSM Block 2 Those items with regard to which U.S. national disclosure policy 

Item prohibits dissemination of design and manufacturing Information 

to the other Participants. ESSM Block 2 items in this category are: 

portions of the guidance section, including all non-releasable 

hardware, software, and firmware (e.g. the Target Detection 

Device); AEGIS S-hand uplink/downlink module, S-bandassociated software and firmware; and the U.S. National Security 

Agency cryptographic device and associated interface design 

standards located in the warhead-compatible telemeter or 

telemetry data transmitter set and encryption support module . 

. 7 
SECTION 2. OBJECTIVES 

2.1 The overall objective ofthe ESSM Block 2 E&MD Phase is to conduct the cooperative 

efforts required to provide an improved ship defense capability that will meet the 

operational requirements as defined in the ESSM Block 2 Requirements Document, as 

identified in Annex A (ESSM Block 2 E&MD Phase Plan) to this MOU. This MOU sets 

out the arrangements that will govern the ESSM Block 2 E&MD Phase. 

2.2 The specific objectives ofthe Contributing Participants in the ESSM Block 2 E&MD 

Phase are to: 

2.2.1 Cooperatively design, develop, test and evaluate an upgraded ESSM that 

employs a dual mode X-band active and semi-active guidance capability, 

leveraging existing technology to the maximum extent practicable. 

2.2.2 Utilize the baseline ESSM propulsion stack. 

2.2.3 Support the baseline ESSM semi-active guidance modes and link systems. 

2.2.4 Maximize backward compatibility with the baseline ESSM, such that the ESSM 

Block 2 will be capable of being loaded in existing launching systems that host 

the baseline ESSM (Mk29, Mk41, Mk48, Mk56, and Mk57), and capable of 

being launched and intercepting targets at least as effectively as the baseline 

ESSM with only minimal modifications to the associated combat systems. 

2.2.5 Optimize the design to minimize life cycle costs. 

2.2.6 Share the work undertaken among the Contributing Participants in proportion to 

their contributions and promote the involvement of their industries. 

2.2. 7 Plan and execute the transition to production of ESSM Block 2. 

2.3 Participation under this MOU will provide the Participants with the opportunity for future 

cooperation in ESSM Block 2 production and support. Such future cooperation will be 

the subject of separate written arrangements by the Participants or amendments tothis 

MOU. 

2.3.1 Prior to commencement of any future phases of cooperation, the Participants 

will meet to consider the development of such arrangements. A proposed ESSM 

Block 2 production MOU will be negotiated to allow for signature immediately 

following a decision by the Contributing Participants to proceed to production 

ofESSM Block 2. If a decision to proceed to production is made by the 

Contributing Participants, cooperation relating to in-service support will be 

negotiated to allow for signature of an ESSM Block 2 support MOU prior to the 

first delivery of low rate initial production missiles. 

8 
2.3.2 The Participants recognize that Contributing Participant(s) deciding not to 

participate in follow-on production will not be entitled to any reimbursement of 

their ESSM Block 2 E&MD Phase and risk reduction contributions from the 

Contributing Participants. The Participants recognize that Participant(s) 

deciding not to participate in follow-on production will not assert Intellectual 

Property rights restrictions, other than those provided in Section 10 (Disclosure 

and Use ofESSM Block 2 E&MD Phase Information), except that: 

2.3.2.1 Should the U.S. DoD not participate, the U.S. DoD will use its best 

efforts to furnish U.S.-Restricted ESSM Block 2 Items in 

accordance with Foreign Military Sales arrangements to ESSM 

Block 2 production phase Participants.· 

9 
SECTION 3. SCOPE OF WORK 

3.1 The ESSM Block 2 E&MD Phase encompasses the cooperative design, development, 

fabrication (oftest articles), test and evaluation of an upgraded ESSM as set out in Annex 

A (ESSM Block 2 E&MD Phase Plan) to this MOU. The scope of work includes, but is 

not limited to, the following: 

3 .1.1 Design and engineering. 

3 .1.2 Conduct of studies to ensure design optimization. 

3 .1.3 Incorporation of design margins for accommodating future performance 

improvements. 

3 .1.4 Development, building and testing of sections, systems, subsystems, and 

functional elements to demonstrate compliance with performance requirements. 

3 .1.5 Design, redesign, and modification of test and simulation equipment and test 

environments to accommodate ESSM Block 2 capabilities. 

3.1.6 Generation ofESSM Block 2 missile interface control documents, handbooks, 

and technical notes to allow Contributing Participants to integrate ESSM Block 

2 with existing or future national platforms and combat system elements. 

3.1.7 Conduct of flight tests and associated analysis and reporting. 

3.1.8 Modeling and simulation to support ESSM Block 2 system and subsystem 

performance. 

3 .1. 9 Development of acquisition and systems engineering documentation required 

for ESSM Block 2 E&MD Phase execution and milestone approvals. 

3 .1.1 0 Demonstration of manufacturing readiness to support the development of 

production-representative all-up-rounds. 

3 .1.11 Development and implementation of a plan for successful transition from 

E&MD to low-rate initial production. 

3 .1.12 Initial planning for in-service support and training. 

3.1.13 Delivery of a technical data package suitable for production of an ESSM 

Block 2. 

3.1.14 Administration ofthe ESSM Block 2 E&MD Phase. 

10 
3.2 The ESSM Block 2 will be designed to be launched from Mk29, Mk41, Mk48, Mk56, 

and Mk57launching systems. Other than the development of the interface control 

documents as set out in subparagraph 3.1.6 of this Section, the scope ofthis MOU will 

not include integration efforts in NATO SEASPARROW Surface Missile System 

(NSSMS) elements or other combat system elements. The integration efforts in NSSMS 

elements will be accomplished under the provisions of the Support MOU, including 

system modifications to fire control systems under the cognizance of the NATO 

SEASPARROW Project Steering Committee (NSPSC). 

3.3 In order to facilitate a Non-contributing Participant's decision to become a Contributing 

Participant, the Contributing Participants will make summary-level Information available 

to the Non-contributing Participants for Information and Evaluation Purposes only, in 

accordance with subparagraph 4.5.1 of Section 4 (Management (Organization and 

Responsibility)) and subparagraph 10.1.2 of Section 10 (Disclosure and Use ofESSM 

Block 2 E&MD Phase Information) of this MOU. 

3.4 The activities listed in paragraphs 3.1 and 3.2 of this Section will be conducted primarily 

as efforts common to all Contributing Participants; however, additional activities may be 

conducted to satisfy a national requirement or national requirements. 

11 
SECTION 4. MANAGEMENT (ORGANIZATION AND RESPONSIBILITY) 

4.1 Executive oversight of the ESSM Block 2 E&MD Phase will be exercised by the existing 

NSPSC. The NSPSC will oversee the ESSM Block 2 E&MD Phase in accordance with 

the principles and procedures set forth herein. The ESSM Block 2 E&MD Phase will be 

administered by the existing NSPO, which is headed by a Project Manager (NSPO PM). 

4.1.1 These organizations were established by the Development MOU, reestablished 

by the Support MOU, used for the ESSM E&MD Addendum, and given 

additional responsibilities for the ESSM Production Phase by the ESSM 

Production MOU and for the ESSM In-Service Support Phase by the ESSM 

Support MOU. 

4.1.2 This MOU assigns additional responsibilities to the NSPSC and the NSPO PM, 

who will perform these additional responsibilities on a cooperative basis in 

conjunction with their responsibilities under the cited Support MOU, the ESSM 

Production MOU, and the ESSM Support MOU. 

4.2 The NSPSC responsibilities under this MOU will include: 

4.2.1 Conducting executive-level oversight ofthis MOU. 

4.2.2 Approving budgets, financial schedules, and the fmancial management 

procedures document (FMPD) (and any revisions thereto) prepared by the 

NSPO PM, and reviewing the financial status of the ESSM Block 2 E&MD 

Phase to ensure compliance with the provisions of Section 5 (Financial 

Provisions) of this MOU. 

4.2.3 Approving and revising the acquisition baseline documents shown in Annex A 

(ESSM Block 2 E&MD Phase Plan) to this MOU. 

4.2.4 Resolving issues brought forth by the NSPO PM. 

4.2.5 Approving acquisition/contracting strategies and identifying those acquisitions 

that require NSPSC endorsement prior to award. 

4.2.6 Reviewing the NSPO PM's recommendations and advising the Participants to 

commence negotiation of amendments to this MOU in accordance with Section 

20 (Amendments) of this MOU. 

4.2.7 Reviewing and forwarding recommendations to the Contributing Participants 

concerning requests for sales or transfers in accordance with Section 14 (Sales 

and Transfers) of this MOU. 

12 
4.2.8 Approving plans to manage and control the transfer ofESSM Block 2 E&MD 

Phase Equipment provided by any Participant to support the execution of the 

ESSM Block 2 E&MD Phase in accordance with Section 9 (ESSM Block 2 

E&MD Phase Equipment) of this MOU. 

4.2.9 Approving plans for the disposition of cooperatively acquired ESSM Block 2 

E&MD Phase Equipment in accordance with Section 9 (ESSM Block 2 E&MD 

Phase Equipment) of this MOU. 

4.2.10 Maintaining oversight ofthe security aspects ofthe ESSM Block 2 E&MD 

Phase, including the NSPO PM's preparation of an ESSM Block 2 E&MD 

Phase project security instruction (PSI) and classification guide (CG), and 

obtaining approval from the respective Participants' Designated Security 

Authorities (DSAs) of a PSI and CG prior to the transfer of Classified 

Information or Controlled Unclassified Information (including export-controlled 

Information). 

4.2.11 Upon request of a Non-contributing Participant, providing recommendations to 

the Participants for the accession of the Non-contributing Participant to 

Contributing Participant status in accordance with Section 17 (Accession of 

Non-contributing Participants) of this MOU. 

4.2.12 Providing recommendations to the Participants for the addition of new 

Participants in accordance with Section 18 (Accession of Potential Participants) 

of this MOU. 

4.2.13 Maintain oversight of work share requirements as set forth in Section 8 

(Work Sharing) of this MOU. 

4.2.14 Approving requests and budget changes for equipment, parts, technical support 

and related services outside normal budgeted requirements, as requested by a 

Contributing Participant(s) or the NSPO PM, for conduct ofthe ESSM Block 2 

E&MD Phase, in accordance with Section 5 (Financial Provisions) of this 

MOU. 

4.2.15 Coordinating approval oflevies and the procedures for assessing and 

distributing levies to the Contributing Participants in accordance with Section 

14 (Sales and Transfers) of this MOU. 

4.2.16 Approving changes to Annex B (NSPO ESSM Block 2 E&MD Phase Staffing 

Requirements) to this MOU after consideration of changes recommended by the 

NSPOPM. 

13 
4.2.17 Approving the comprehensive fmal report on the ESSM Block 2 E&MD Phase 

prior to expiration or termination of this MOU in accordance with Section 21 

(General Provisions, Withdrawal, Termination, Entry into Effect, and Duration) 

ofthis MOU. 

4.2.18 Employing its best efforts to resolve, in consultation with the export control 

authorities of the Participant concerned, any export control issues raised by the 

NSPO PM in accordance with subparagraph 4.7.16 of this Section or raised by a 

Participant's NSPSC member in accordance with subparagraph 10.1.4.4 of 

Section 10 (Disclosure and Use ofESSM Block 2 E&MD Phase Information) of 

this MOU. 

4.3 Decisions on the following topics will be made by unanimous vote ofthe NSPSC 

members: 

4.3.1 Approval ofthe annual budget for the ESSM Block 2 E&MD Phase and any 

revisions thereto. 

4.3.2 Issues concerning ESSM Block 2 E&MD Phase work share allocation among 

the Contributing Participants. 

4.3.3 Approval of the acquisition baseline documents shown in Annex A (ESSM 

Block 2 E&MD Phase Plan) to this MOU. 

4.3.4 Approval of acquisition/contracting strategies. 

4.3.5 Approval ofthe comprehensive final report on the ESSM Block 2 E&MD 

Phase. 

4.3.6 Approval of any increases to the Total Cost Target up to the Total Cost Ceiling. 

4.3.7 Approval of the FMPD and any revisions thereto. 

4.4 All other decisions related solely to the ESSM Block 2 E&MD Phase will be made by a 

majority vote of the NSPSC members, all votes being equally weighted. The Chairman or 

the Vice Chairman, in the absence of the Chairman, will have one additional vote solely 

for the purpose of resolving any tied vote of the NSPSC. 

4.5 The following principles will apply to the voting process: 

4.5.1 Selected summary-level ESSM Block 2 E&MD Phase Information will be 

released to the Non-contributing Participants in order to support the decisionmaking process of the Non-contributing Participants' NSPSC members. The 

Contributing Participants' NSPSC members will determine the range and depth 

of this ESSM Block 2 E&MD Phase Information in accordance with paragraph 

14 
3.3 of Section 3 (Scope ofWork) and subparagraph 10.1.2 ofSection 10 

(Disclosure and Use ofESSM Block 2 E&MD Phase Information) of this 

MOU. 

4.5.2 All Participants' NSPSC members will have the opportunity to vote on all 

NSPSC decisions. 

4.5.3 Any NSPSC member representing a Non-contributing Participant will not 

dissent to the wishes of all the representatives of the Contributing Participants in 

the case of decisions requiring unanimous vote nor to the majority of the 

representatives of the Contributing Participants in the case of decisions 

requiring majority vote. 

4.5.4 If a decision clearly interferes with or adds costs to programs under the 

cognizance of the NSPSC other than the ESSM Block 2 E&MD Phase, a 

Non-contributing Participant may raise concerns prior to a vote taking place, 

recognizing that it has the ability to avoid incurring additional costs under the 

Support MOU, the ESSM Production MOU, and the ESSM Support MOU. 

4.5.5 In the event that one or more Non-contributing Participants' NSPSC members 

abstain from voting, they will be considered to have voted with the Contributing 

Participants' NSPSC members in the case of a unanimous decision, or with the 

majority ofthe Contributing Participants' NSPSC members in the case of a 

majority vote decision, as applicable. 

4.5.6 In the event that the NSPSC is unable to reach a timely decision on an issue 

related to the ESSM Block 2 E&MD Phase, each Participant's NSPSC member 

will, as soon as possible, refer the issue to their appropriate national authorities 

for resolution. In the meantime, approved ESSM Block 2 E&MD Phase 

activities will continue to be implemented while the issue is being resolved by 

those authorities. 

4.6 The NSPSC will have overall authority over the NSPO PM who will be appointed by the 

U.S. DoD. The NSPO PM will have responsibility and authority for execution of the 

ESSM Block 2 E&MD Phase in accordance with this MOU and will report to and be 

accountable to the NSPSC for effective implementation, efficient management, and 

timely execution of the ESSM Block 2 E&MD Phase. The Contributing Participants will 

provide personnel, including Cooperative Project Personnel (CPP), to fill functional 

billets within the NSPO in accordance with Annex B (NSPO ESSM Block 2 E&MD 

Phase Staffing Requirements) and Annex C (Cooperative Project Personnel (CPP)) to this 

MOU. The NSPO staff will be the minimum size recommended by the NSPO PM and 

approved by the NSPSC to be necessary for the successful administration and operation 

of the ESSM Block 2 E&MD Phase. 

15 
4.7 The NSPO PM responsibilities under this MOU include: 

4.7.1 Managing the cost, schedule, performance requirements, technical, security, 

work share allocation, and financial aspects of the ESSM Block 2 E&MD Phase 

in accordance with the provisions of this MOU. 

4.7.2 Preparing budget and financial schedules for NSPSC approval in accordance 

with Section 5 (Financial Provisions) of this MOU, and developing and 

submitting the FMPD, and any revisions thereto, to the NSPSC for approval. 

4.7.3 Consolidating national requirements, as applicable, preparing procurement 

requests, and providing administrative and technical support to the Contracting 

Agency in the placing of Contracts for material, supplies, and services under 

this MOU. 

4.7.4 Referring issues to the NSPSC that cannot be resolved by the NSPO PM. 

4.7.5 Recommending amendments to this MOU to the NSPSC. 

4.7.6 Preparing and implementing plans approved by the NSPSC to manage and 

control the transfer of ESSM Block 2 E&MD Phase Equipment provided by any 

Participant to support the execution of the ESSM Block 2 E&MD Phase in 

accordance with Section 9 (ESSM Block 2 E&MD Phase Equipment) of this 

MOU. 

4.7.7 Preparing and implementing plans approved by the NSPSC for the disposition 

of cooperatively acquired ESSM Block 2 E&MD Phase Equipment in 

accordance with Section 9 (ESSM Block 2 E&MD Phase Equipment) of this 

MOU. 

4.7.8 Forwarding recommendations to the NSPSC for the change of status of 

Non-contributing Participants in accordance with Section 17 (Accession of 

Non-contributing Participants) ofthis MOU and the addition of new 

Participants in accordance with Section 18 (Accession of Potential Participants) 

ofthis MOU. 

4.7.9 Providing technical and procurement support for the ESSM Block 2 E&MD 

Phase related equipment, services, and supplies, as requested by the 

Contributing Participants and as approved by the NSPSC. 

4.7.10 Developing and forwarding a PSI and CG for the ESSM Block 2 E&MD Phase 

to the NSPSC within two (2) weeks after the effective date of this MOU, for 

approval by the respective Participants' DSAs prior to the transfer of Classified 

Information or Controlled Unclassified Information, and updates to the PSI and 

CG, as necessary. 

16 
4. 7.11 Providing an ESSM Block 2 E&MD Phase status report at each NSPSC 

meeting. 

4. 7.12 Providing the comprehensive final report on the ESSM Block 2 E&MD Phase 

prior to expiration or termination of this MOU in accordance with Section 21 

(General Provisions, Withdrawal, Termination, Entry into Effect, and Duration) 

of this MOU for approval by the NSPSC. 

4.7.13 Developing and recommending acquisition/contracting strategies to the NSPSC. 

4.7.14 Proposing changes to Annex B (NSPO ESSM Block 2 E&MD Phase Staffing 

Requirements) to this MOU. 

4.7.15 Supporting Contributing Participants' reasonable and appropriate ESSM Block 

2 E&MD Phase governance requirements in accordance with this MOU, 

including, but not limited to: 

4.7.15.1 Making ESSM Block 2 E&MD Phase financial records available 

for national audits; 

4.7.15.2 Providing copies of signed Contracts upon request; and 

4. 7.15 .3 Providing access to technical documentation and Contract 

documentation prior to signature. 

4.7.16 Monitoring export control arrangements required to implement this MOU and, 

if applicable, referring immediately to the NSPSC any export control issues that 

could adversely affect the implementation of this MOU. 

4. 7.17 Appointing an ESSM Block 2 E&MD Phase security officer. 

4.7.18 Supporting audit requirements and distributing audit reports to the Contributing 

Participants in accordance with Section 7 (Audits) of this MOU. 

17 
SECTION 5. FINANCIAL PROVISIONS 

5.1 The Total Cost Ceiling and Total Cost Target will be met with monetary contributions. 

Each Contributing Participant will contribute its equitable share of the Total Cost Ceiling 

and the Total Cost Target, which includes overhead costs and administrative costs, and 

will receive equitable benefits as specified in this MOU. The Contributing Participants 

acknowledge that the costs of claims under this MOU, including the costs of Contract 

claims, may be over and above their share of the Total Cost Ceiling, and will be shared 

on an equitable basis in accordance with the applicable provisions of this MOU. 

5.2 The cost of performing, or having performed, the cooperative efforts to achieve Section 3 

(Scope of Work) of this MOU and the cost of the ESSM Block 2 risk reduction efforts 

will not exceed the Total Cost Ceiling of935.00 million fiscal year (FY) 2011 constantyear U.S. dollars. The U.S. dollar will be the reference currency for the ESSM Block 2 

E&MD Phase, and the FY will be the U.S. FY. The Total Cost Ceiling may be changed 

only through an amendment to this MOU. 

5.3 The Contributing Participants will use their best efforts to perform, or to have performed, 

these cooperative efforts within a Total Cost Target of 883.00 million FY 2011 constantyear U.S. dollars. 

5.4 The Total Cost Target will be shared by the Contributing Participants as follows: 

Contributions to Total Cost 

Target in millions ofFY 2011 

· Contributing Participant Percentage constant-year U.S. dollars 

Australian DOD 22 194.26 

Canadian DND 18 158.94 

Danish MOD 5 44.15 

Netherlands MOD 5 44.15 

Norwegian MOD 5 44.15 

MoND ofTurkiye 5 44.15 

U.S. DoD 40 353.20 

Total 100 883.00 

5.5 The Contributing Participants acknowledge that the contributions made by them for 

ESSM Block 2 risk reduction efforts will be recognized as contributions towards their 

share of the Total Cost Target, as specified in paragraph 5.4 of this Section. The 

contributions as of June 30, 2013 were 72.48 million FY 2011 constant-year U.S. dollars, 

as specified in subparagraph 5.5.1 ofthis Section. Accordingly, the Contributing 

Participants' remaining contributions required for the Total Cost Target will be 810.52 

million FY 2011 constant-year U.S. dollars. 

18 
5.5.1 As of June 30, 2013, the following contributions were allocated to risk 

reduction efforts by the Contributing Participants within the Total Cost Target: 

Contributions in millions of FY 

Contributing Participant 2011 constant-year U.S. dollars 

Australian DOD 20.82 

Canadian DND 20.05 

Danish MOD 4.00 

Netherlands MOD 4.02 

Norwegian MOD 4.90 

MoND of Turkiye 0.13 

U.S. DoD 18.56 

Total 72.48 

5.5.2 The remainder of the contributions to the Total Cost Target will be shared by 

the Contributing Participants as follows: 

Contributions in millions of FY 

Contributing Participant 2011 constant-year U.S. dollars 

Australian DOD 173.44 

Canadian DND 138.89 

Danish MOD 40.15 

Netherlands MOD 40.13 

Norwegian MOD 39.25 

MoND of Turkiye 44.02 

U.S. DoD 334.64 

Total 810.52 

5.6 The difference between the Total Cost Target and the Total Cost Ceiling will be managed 

by the NSPSC. If at any time the NSPO PM has reason to believe that the Total Cost 

Target will be exceeded, the NSPO PM will promptly notify the NSPSC and will set forth 

a new estimate of the Total Cost Target, together with supporting documentation. The 

NSPSC will direct the NSPO PM as to what action should be taken. 

5.6.1 If an increase to the Total Cost Target is approved by the NSPSC, the 

Contributing Participants will share this increase up to the Total Cost Ceiling 

according to the percentages set out in paragraph 5.4 of this Section, or as set 

forth in an NSPSC decision based on the affected Contributing Participants' 

benefitting assets, available funds and relevance to other programs under 

cognizance of the NSPSC. 

5.7 The Total Cost Target and the Total Cost Ceiling will include costs related to 

administration of the ESSM Block 2 E&MD Phase as referenced in subparagraph 3.1.14 

of Section 3 (Scope of Work) ofthis MOU, which consistofNSPO costs oftravel, NSPO 

training costs, Contract award, Contract administration, office space, office equipment, 

19 
office operation costs, building expenses, security services, information technology 

services, communications services, administrative support, meeting support, and supplies. 

5.8 Except as otherwise provided in this Section, the costs of personnel assigned to the NSPO 

will be included in the costs allocated to the operation of the NSPO in the annual budget 

for this ESSM Block 2 E&MD Phase, as applicable. Such costs will include the salary at 

the equivalent U.S. pay scale and equivalent U.S. expenses and relevant allowances of 

cooperative travel as approved by the NSPO PM. Contributing Participants will be 

compensated or have their share of the costs under paragraph 5.4 of this Section adjusted 

to account for the provisions of such personnel under arrangements developed by the 

NSPO PM and approved by the NSPSC. 

5.9 The payment of personnel costs in the NSPO will be handled as follows: 

5.9.1 The Host Participant will make initial payment for salary, relevant allowances, 

and travel of Host Participant personnel. 

5.9.2 The Parent Participant will make initial payment for salary, relevant allowances, 

and travel for their CPP, in accordance with their national laws and regulations. 

5.9.3 Any subsequent compensation or adjustment of costs for the Contributing 

Participants to account for these personnel costs will be made in accordance 

with paragraph 5.8 of this Section. 

5.10 The following costs will be borne entirely by the Participant incurring the costs or on 

whose behalf the costs are incurred: 

5.10.1 Costs associated with national representation at meetings by non-NSPO 

personnel. 

5.10.2 Costs associated with the National Deputy assigned to the NSPO unless 

otherwise determined by the NSPO PM in accordance with policy direction by 

the NSPSC that efforts associated with such costs are of benefit to the ESSM 

Block 2 E&MD Phase. 

5.10.3 Costs associated with any national requirements identified by a Participant. 

5.10.4 Cos.ts associated with posting accommodation, relocation to and from the Host 

Participant's country, medical services, insurance, allowances not covered by 

paragraph 5.8 of this Section, and other expenses specific to CPP and their 

dependents, in accordance with their national laws, regulations and policies. 

5.10.5 Any other costs not expressly stated as shared costs. 

20 
5.11 The NSPO PM will be responsible for establishing the detailed fmancial management 

procedures in an FMPD under which the ESSM Block 2 E&MD Phase will operate. The 

FMPD will be subject to approval by the NSPSC in accordance with subparagraph 4.2.2 

of Section 4 (Management (Organization and Responsibility)) of this MOU. The FMPD 

will meet the requirements of Section 7 (Audits) of this MOU. Each Contributing 

Participant will fund the ESSM Block 2 E&MD Phase in accordance with the estimated 

schedule of contributions contained in the FMPp, which will be consistent with 

paragraph 5.12 ofthis Section. 

5.12 The Contributing Participants recognize that it may become necessary for one 

Contributing Participant to incur contractual or other obligations for the benefit of one or 

more of the other Contributing Participants prior to receipt of the other Contributing 

Participants' funds. In the event that one Contributing Participant incurs such contractual 

or other obligations, the other Contributing Participants will pay their equitable share of 

the Contract or other obligation, and will make such funds available in such amounts and 

at such times as may be required by the Contract or other obligation and will pay their 

equitable share of any damages and costs that may accrue from the performance of or 

cancellation of the Contract or other obligation in advance ofthe time such payments, 

damages, or costs are due. 

5.13 A Contributing Participant will promptly notify the other Contributing Participants if 

available funds are not adequate to fulfill its responsibilities under this MOU. If a 

Contributing Participant notifies the other Contributing Participants that it is ceasing or 

reducing its funding for the ESSM Block 2 E&MD Phase, all Participants will 

immediately consult with a view toward continuation on a modified basis. If 

consultations among the Contributing Participants do not result in a mutual determination 

to continue on a modified basis, the notifying Contributing Participant will withdraw in 

accordance with the provisions of paragraph 21.5 of Section 21 (General Provisions, 

Withdrawal, Termination, Entry into Effect, and Duration) of this MOU. 

21 
SECTION 6. CONTRACTUAL PROVISIONS 

6.1 The U.S. DoD, acting through the Department of the Navy, will be primarily responsible 

for Contracting for the benefit of the Contributing Participants throughout the ESSM 

Block 2 E&MD Phase in accordance with U.S. Contracting laws, regulations, and 

procedures. However, if it is determined by the NSPSC, a Contributing Participant other 

than the U.S. DoD may issue Contracts for the benefit of the Contributing Participants 

throughout the ESSM Block 2 E&MD Phase in accordance with that Participant's 

established national Contracting laws, regulations, and procedures. The Contracting 

Officer will, when it facilitates satisfying the objectives of this MOU, seek applicable 

waivers of the Contracting Participant's national regulations, procurement procedures, 

and practices. The Contracting Officer for each Contract will be the exclusive source for 

providing contractual direction and instructions to Contractors. 

6.2 Upon determination of the NSPSC, consistent with Section 2 (Objectives) of this MOU, a 

Contributing Participant may perform Contracting for the national requirements of 

another Contributing Participant. 

6.3 In developing the acquisition/contracting strategies for the ESSM Block 2 E&MD Phase, 

the NSPO PM in conjunction with the Contracting Officer will consider all relevant 

acquisition/contracting methods to achieve the objectives of this MOU. The NSPO PM, 

in consultation with the Contributing Participants, will review statements of work and 

procurement requests prior to issuance of solicitations to ensure that they are in 

accordance with this ESSM Block 2 E&MD MOU and that they include the national 

requirements of a Contributing Participant, if any. The Contracting Officer will keep the 

NSPO PM informed of all significant developments associated with the negotiation, 

award, and performance of Contracts. Upon being informed of any significant 

developments, the NSPO PM will immediately inform the Contributing Participants. 

6.4 The Contracting Officer will negotiate with the Prospective Contractor(s) to obtain the 

rights to disclose and use ESSM Block 2 E&MD Phase Information required by Section 

10 (Disclosure and Use ofESSM Block E&MD Phase Information) of this MOU. The 

Contracting Officer will insert into prospective Contracts (and require its Contractors to 

insert into subcontracts) suitable provisions to satisfy the requirements of this MOU, 

including Section 7 (Audits), Section 8 (Work Sharing), Section 10 (Disclosure and Use 

ofESSM Block 2 E&MD Phase Information), Section 11 (Controlled Unclassified 

Information), Section 13 (Security), Section 14 (Sales and Transfers), and Section 21 

(General Provisions, Withdrawal, Termination, Entry into Effect, and Duration) ofthis 

MOU, including the export control provisions of this MOU, in particular paragraphs 6.5 

and 6.6 of this Section. During the Contracting process, the Contracting Officer will 

advise Prospective Contractors of their responsibility to immediately notify the 

Contracting Agency, before Contract award, if they are subject to any license or 

agreement that will restrict their freedom to disclose Information or permit its use. The 

22 
Contracting Officer will also require Prospective Contractors to employ their best efforts 

not to enter into any new license or agreement that will result in such restrictions. 

6.5 Each Contributing Participant will legally bind its Contractors to a requirement that the 

Contractor will not retransfer or otherwise use export-controlled Information furnished by 

another Participant for any purpose other than the purposes authorized under this MOU. 

The Contractor will also be legally bound not to retransfer the export-controlled 

Information to another Contractor or subcontractor unless that Contractor or 

subcontractor has been legally bound to limit use of the Information to the purposes 

authorized under this MOU. Export-controlled Information furnished by one Participant 

under this MOU may only be retransferred by another Participant to its Contractors if the 

legal arrangements required by this paragraph have been established. 

6.6 Each Contributing Participant will legally bind its Prospective Contractors to a 

requirement that the Prospective Contractor will not retransfer or otherwise use exportcontrolled Information furnished by another Participant for any purpose other than 

responding to a solicitation issued in furtherance of the purposes authorized under this 

MOU. Prospective Contractors will not be authorized use for any other purpose if they 

are not awarded a Contract. The Prospective Contractors will also be legally bound not to 

retransfer the export-controlled Information to a prospective subcontractor unless that 

prospective subcontractor has been legally bound to limit use of the export-controlled 

Information for the purpose of responding to the solicitation. Export-controlled 

Information furnished by one Participant under this MOU may only be retransferred by 

another Participant to its Prospective Contractors if the legal arrangements required by 

this paragraph have been established. Upon request by the furnishing Participant, the 

receiving Participant will identify its Prospective Contractors and prospective 

subcontractors receiving such export-controlled Information. 

6. 7 In the event the Contracting Officer is unable to secure adequate rights to use and 

disclose ESSM Block 2 E&MD Phase Information, as required by Section 10 (Disclosure 

and Use ofESSM Block 2 E&MD Phase Information) ofthis MOU, or is notified by 

Contractors or Prospective Contractors of any restrictions on the disclosure and use of 

Information, the matter will be referred to the NSPSC for resolution. 

6.8 When Contracting on behalf of the other Contributing Participant(s), a Contracting 

Participant will protect the interests of the other Contributing Participant(s). The 

Contracting Participant will investigate, in a timely manner, concerns that a Contractor 

has not met, or may not meet, contractual requirements and, upon verification of the 

validity of such concerns, will pursue contractual remedies and use Contract disputes 

processes to the same extent as that Contracting Participant would in protecting its own 

interests. The Contracting Participant will keep the affected Contributing Participant(s) 

informed during this process and will take their views into full consideration. 

23 
6.9 The Contracting Officer will promptly advise the NSPO PM of any anticipated or actual 

cost growth, schedule change, or performance problems of any Contract for which that 

Contracting Officer is responsible. Upon being informed of any cost growth, schedule 

change, or performance problems, the NSPO PM will promptly inform the Contributing 

Participants. 

6.10 Upon request of the Contracting Agency and in accordance with any applicable bilateral 

or multilateral agreements or arrangements, Participants will provide support in 

connection with the placement and administration of Contracts and subcontracts in their 

countries. 

6.11 The Contracting Officer will insert into prospective Contracts (and require its Contractors 

to insert into subcontracts) suitable provisions to satisfy the hazardous materials laws and 

regulations requirements of each of the Contributing Participants, as identified in writing 

by the Contributing Participants to the NSPO PM prior to submission of the procurement 

request to the Contracting Officer. In the event the Prospective Contractor will not be 

able to meet the hazardous material requirements or there will be an additional cost 

associated with meeting these requirements, the Contracting Officer will immediately 

advise the NSPO PM, who will similarly advise the NSPSC, so that the Contributing 

Participants may consult and review their status under this MOU. 

24 
SECTION 7. AUDITS 

7.1 The Participants acknowledge the need to comply with the audit requirements of their 

respective Governments, which among others may include requirements for financial 

audits, audits of Contract price and performance, and quality assurance. Accordingly, 

each Participant will, to the maximum extent permissible within its national laws, 

regulations and disclosure policies, provide to the other Participants or the national audit 

authorities of the other Participants, as applicable, the Information and assistance 

described in this Section. 

7.2 The final audit regarding administration and execution of the ESSM Block 2 E&MD 

Phase will be performed by the U.S. DoD on behalf of the Contributing Participa.."'1ts, at 

the conclusion of the ESSM Block 2 E&MD Phase. Reports of this audit will be released 

to the maximum extent permissible and in a timely manner to all the Contributing 

Participants. The Participants will assist the U.S. DoD on any audit elements required to 

satisfactorily perform the audit. 

7.3 Any audit may be initiated either by a Contributing Participant to satisfy national audit 

requirements, or by two or more Contributing Participants to satisfy similar audit 

requirements. 

7.3.1 Such audit will be conducted in consultation with the NSPO PM, who will 

coordinate audit support resources and will assist to determine which Participant 

or other entity is the most appropriate to conduct the audit. 

7.3.2 The Contributing Participant(s) requesting the audit will consult with the NSPO 

PM to identify the costs associated with the audit. If the NSPO PM determines 

that the audit cannot be conducted without undue impact on the execution of the 

ESSM Block 2 E&MD Phase, or further guidance is necessary, the audit 

requirement may be referred to the NSPSC for further resolution. 

7.3.3 If the NSPSC determines that additional funding is required to conduct the 

audit, the Contributing Participant(s) requesting the audit will provide such 

funds consistent with any applicable bilateral or multilateral agreements or 

arrangements between the Participants. 

7.3 .4 If a Contributing Participant or its national audit authority needs to obtain or to 

inspect specific ESSM Block 2 E&MD Phase Information in order to fulfill its 

national obligations, the NSPO PM will coordinate access to such specific 

ESSM Block 2 E&MD Phase Information at mutually determined times and 

locations. 

25 
7.3.5 Reports of any audit will be released to the maximum extent permissible and in 

a timely manner to all the Contributing Participants, taking into account any 

funding provided by the Contributing Participant(s) requesting the audit. 

7.4 Audit of Contracting activities will be the responsibility of the Contracting Participant in 

accordance with its national audit laws, regulations, and policies. Where necessary, this 

audit may be conducted by the Participant in whose country the Contractor or 

subcontractor is located. The Participants will use their best efforts to perform any audits 

requested by a Contributing Participant. In the event that an audit of the Contracting 

activities requested by another Contributing Participant cannot be performed by the 

Contracting Participant or the Participant in whose country the Contractor or 

subcontractor is located, then the Contracting Participant will coordinate for the 

requesting Contributing Participant to perform the audit itself. The Contracting Officer 

will insert into prospective Contracts (and require its Contractors to insert into 

subcontracts) suitable provisions to ensure necessary access to Contractors' and 

subcontractors' premises and records. Each Participant's audit reports will be made 

available to the Contributing Participants to the maximum extent permissible and in a 

timely manner. 

7.5 Audits performed under this Section will not relieve Contractor(s) and subcontractor(s) of 

their obligations to ensure performance in accordance with the Contract or subcontract. 

7.6 Audits performed under this Section will be conducted in accordance with the national 

laws, regulations, and policies of the auditing Participant and consistent with existing 

bilateral or multilateral agreements or arrangements between the Participants. Where no 

applicable agreements or arrangements exist, provision of audits may be negotiated on a 

case-by-case basis between or among the relevant Participants, recognizing applicable 

NATO and other international standards. 

26 
SECTION 8. WORK SHARING 

8.1 Work performed under this MOU will consist of government work and industrial work. 

Government work will be performed primarily by the U.S. Government. The NSPO PM 

will, in accordance with Section 4 (Management (Organization and Responsibility)) of 

this MOU and to the extent practicable, share government work with the other 

Contributing Participants. 

8.2 Industrial work will be shared among the Contributing Participants in accordance with 

their cost share percentages as specified in paragraph 5.4 of Section 5 (Financial 

Provisions) of this MOU. Industrial work sharing will be consistent with the need to 

maintain high technical merit, attain reasonable costs, comply with releasability policies, 

and achieve the timely, economic, and efficient execution of this MOU. 

8.3 Contributing Participants may make separate arrangements with the Contractor 

responsible for the industrial work. 

8.4 The NSPO PM will report ESSM Block 2 E&MD Phase government and industrial work 

share to the NSPSC. If a Contributing Participant considers it has not received its fair 

share of the industrial work in accordance with this Section, that Contributing Participant 

may raise the matter with the NSPSC. 

8.5 No requirement will be imposed by any Participant for work sharing or for other 

industrial or commercial compensation in connection with this MOU that is not in 

accordance with this MOU. 

27 
SECTION 9. ESSM BLOCK 2 E&MD PHASE EQUIPMENT 

9.1 Any Participant may provide ESSM Block 2 E&MD Phase Equipment that is identified 

as being necessary for executing this MOU to another Participant. Such transfers will be 

made in accordance with the providing Participant's national laws, regulations, and 

policies. Such equipment will remain the property of the providing Participant. A list of 

all ESSM Block 2 E&MD Phase Equipment provided by one Participant to another 

Participant will be developed and maintained by the NSPO PM consistent with the 

template below and approved by the NSPSC in accordance with Section 4 (Management 

(Organization and Responsibility)) of this MOU prior to such transfers. 

NSN/Part Replacement Providing Receiving Consumable 

Nomenclature No./Model No. Quantity Value Participant Partichlant _{_Yes/No}_ Transfer Date Return Date 

9.2 The receiving Participant will maintain any such ESSM Block 2 E&MD Phase 

Equipment in good order, repair, and operable condition. Unless the providing Participant 

has authorized. the ESSM Block 2 E&MD Phase Equipment to be expended or otherwise 

consumed without reimbursement to the providing Participant, the receiving Participant 

will return such equipment in as good condition as received, normal wear and tear 

excepted, or return such equipment and pay the cost to restore it. If such equipment is 

damaged beyond economical repair, the receiving Participant will notify the providing 

Participant and return such equipment to the providing Participant (unless otherwise 

specified in writing by the providing Participant) and pay the replacement value, which 

will be computed pursuant to the providing Participant's national laws and regulations. If 

such equipment is lost while in the custody of the receiving Participant, the receiving 

Participant will issue a certificate of loss to the providing Participant and pay the 

replacement value. 

9.3 The providing Participant will deliver ESSM Block 2 E&MD Phase Equipment to the 

receiving Participant at a mutually determined location. Possession of such equipment 

will pass from the providing Participant to the receiving Participant at the time of receipt 

thereof. Any further transportation will be the responsibility of the receiving Participant. 

9.4 Unless otherwise mutually determined by the providing and receiving Participants, all 

ESSM Block 2 E&MD Phase Equipment that is transferred will be used by the receiving 

Participant only for the purposes of carrying out this MOU. In addition, in accordance 

with Section 14 (Sales and Transfers) of this MOU, ESSM Block 2 E&MD Phase 

Equipment will not be retransferred or sold to a Third Party without the prior written 

approval of the providing Participant. 

9.5 Unless otherwise mutually determined by the providing and receiving Participants, 

ESSM Block 2 E&MD Phase Equipment transferred to one or more Participants under 

28 
this MOU will be returned to the providing Participant prior to the termination or 

expiration of this MOU or the withdrawal of either the providing or receiving Participant. 

9.6 Any ESSM Block 2 E&MD Phase Equipment that is cooperatively acquired on behalf of 

the Contributing Participants for use under this MOU will be disposed of prior to the 

expiration of the ESSM Block 2 E&MD Phase, as determined by the NSPSC in 

accordance with Section 4 (Management (Organization and Responsibility)) ofthis 

MOU. 

9. 7 Disposal of cooperatively acquired ESSM Block 2 E&MD Phase Equipment may include 

a transfer of the interest of one Contributing Participant in such equipment to another 

Participant or the sale of such equipment to a Third Party in accordance with Section 14 

(Sales and Transfers) ofthis MOU. The Contributing Participants will share the payment 

from cooperatively acquired ESSM Block 2 E&MD Phase Equipment transferred or sold 

to a Third Party or a Non-contributing Participant in the same ratio as costs are shared 

under this MOU. 

29 
SECTION 10. DISCLOSURE AND USE OF ESSM BLOCK 2 E&MD PHASE 

INFORMATION 

10.1 General 

1 0.1.1 All Participants recognize that successful collaboration depends on full and 

prompt exchange oflnformation necessary for carrying out this ESSM Block 2 

E&MD Phase. However, any disclosure of Information will be in accordance 

with the providing Participant's national laws, regulations, and policies. The 

Contributing Participants intend to obtain sufficient ESSM Block 2 E&MD 

Phase Information and rights to use such Information to enable the execution of 

the ESSM Block 2 E&MD Phase, future prod;uction, support, and follow-on 

development of the ESSM Block 2. The nature and amount of ESSM Block 2 

E&MD Phase Information to be obtained will be consistent with the objectives 

stated in Section 2 (Objectives) and Section 3 (Scope of Work) of this MOU. 

1 0.1.2 The Contributing Participants will disclose to the Nol}-contributing Participants 

selected summary-level ESSM Block 2 E&MD Phase Information as 

determined by the Contributing Participants' NSPSC members in accordance 

with subparagraph 4.5 .1 of Section 4 (Management (Organization and 

Responsibility)) and paragraph 3.3 of Section 3 (Scope ofWork) ofthis MOU. 

This summary-level Information will be provided in order to facilitate a Noncontributing Participant's decision to become a Contributing Participant. 

Sensitive or protected Information, including Classified Information or 

Controlled Unclassified Information, will be provided to Non-contributing 

Participants with the approval of the Contributing Participants' NSPSC 

members on a case by case basis to permit detailed analysis for a Noncontributing Participant considering transition to Contributing Participant status 

or as required in relation to the baseline ESSM. The Non-contributing 

Participants will have the right to use this Information only for Information and 

Evaluation Purposes and they will have no rights to disclose or transfer this 

Information. 

1 0.1.3 Notwithstanding any other provision in this Section, the U.S. DoD will neither 

disclose ESSM Block 2 E&MD Phase Information related to U.S.-Restricted 

ESSM Block 2 Item production, manufacturing, and maintenance design data, 

manufacturing know-how, and software source code and documentation, nor 

ESSM Block 2 U.S. employment doctrine, U.S. raw test data, U.S.-specific 

threat data, and ESSM Block 2 countermeasures vulnerability, unless otherwise 

authorized by the U.S. DoD pursuant to its national disclosure laws, regulations, 

and policies. 

30 
1 0.1.4 With regard to the Contributing Participants, the following export control 

provisions will apply to the transfer of ESSM Block 2 E&MD Phase 

Information: 

10.1.4.1 Transfer ofESSM Block 2 E&MD Phase Information will be 

consistent with the furnishing Participant's applicable export 

control laws and regulations. 

10. 1.4.2 Unless otherwise restricted by duly authorized officials of the 

furnishing Participant at the time of transfer to another Participant, 

all export-controlled Information furnished by one Participant to 

another Participant may be retransferred to the other Participant's 

Contractors, subcontractors, Prospective Contractors, and 

prospective subcontractors, subject to the requirements of 

paragraphs 6.5 and 6.6 of Section 6 (Contractual Provisions) of this 

MOU. 

1 0.1.4.3 Export-controlled Information may only be furnished by 

Contractors, subcontractors, Prospective Contractors, and 

prospective subcontractors of one Participant's country to the 

Contractors, subcontractors, Prospective Contractors, and 

prospective subcontractors of another Participant's country 

pursuant to this MOU, subject to the conditions established in 

licenses or other approvals issued by the Government of the 

furnishing Participant in accordance with its applicable export 

control laws and regulations. 

10 .1.4 .4 If a Participant finds it necessary to exercise a restriction on the 

retransfer of export-controlled Information as set out in 

subparagraph 10.1.4.2 ofthis Section, it will promptly inform the 

other Participants. If a restriction is then exercised and the affected 

Participant(s) objects, the NSPSC representative of the affected 

Participant(s) will notify promptly the other Participants' NSPSC 

representatives and they will immediately consult in order to 

discuss ways to resolve such issues or mitigate any adverse effects. 

1 0.1.4.5 The Participants will use their best efforts to facilitate timely 

export authorizations related to the scope of work under this MOU. 

10.2 Government ESSM Block 2 E&MD Phase Foreground Information 

1 0.2.1 Disclosure: Except as provided in subparagraph 1 0.1.3 ofthis Section, all 

ESSM Block 2 E&MD Phase Foreground Information generated by a 

Contributing Participant's military or civilian employees (hereinafter referred to 

31 
as "Government ESSM Block 2 E&MD Phase Foreground Information") will 

be disclosed promptly and without charge to the other Contributing Participants. 

10.2.2 Use: Each Contributing Participant may use or have used all Government 

ESSM Block 2 E&MD Phase Foreground Information without charge for 

Defense Purposes. The Contributing Participant generating Government ESSM 

Block 2 E&MD Phase Foreground Information will retain all its rights thereto. 

If a Contributing Participant intends to use the Government ESSM Block 2 

E&MD Phase Foreground Information in a sale or other transfer to a Third 

Party, the provisions of Section 14 (Sales and Transfers) ofthis MOU will 

apply. 

10.3 Government ESSM Block 2 E&MD Phase Background Information 

10.3.1 Disclosure: Except as provided in subparagraph 10.1.3 ofthis Section, each 

Contributing Participant, upon request, will disclose promptly and without 

charge to the other Contributing Participants any relevant ESSM Block 2 

E&MD Phase Background Information generated by its military or civilian 

employees (hereinafter referred to as "Government ESSM Block 2 E&MD 

Phase Background Information"), provided that: 

10.3.1.1 Such Government ESSM Block 2 E&MD Phase Background 

Information is necessary to or useful in the ESSM Block 2 E&MD 

Phase, with the Contributing Participant in possession of the 

Information determining, after consulting with the other 

Contributing Participants, whether it is "necessary to" or "useful 

in" the ESSM Block 2 E&MD Phase. 

10.3.1.2 Such Government ESSM Block 2 E&MD Phase Background 

Information may be made available only if it does not result in 

infringement of Intell~ctual Property rights. 

10.3 .1.3 Disclosure of such Government ESSM Block 2 E&MD Phase 

Background Information is consistent with national disclosure 

laws, regulations, and policies of the furnishing Participant. 

10.3.1.4 Any disclosure or transfer of such Government ESSM Block 2 

E&MD Phase Background Information to Contractors is consistent 

with the furnishing Participant's export control laws and 

regulations. . 

32 
10.3.2 Use: 

10.3.2.1 Government ESSM Block 2 E&MD Phase Background 

Information furnished by a Contributing Participant may be used 

without charge by or for the receiving Contributing Participant for 

ESSM Block 2 E&MD Phase purposes. 

10.3.2.2 However, when Government ESSM Block 2 E&MD Phase 

Background Information is necessary for the use ofESSM Block 2 

E&MD Phase Foreground Information, such Government ESSM 

Block 2 E&MD Phase Background Information may be used for 

Defense Purposes by the receiving"Contributing Participant, 

without charge, subject to Intellectual Property rights held by 

entities other than the Contributing Participants. The furnishing 

Participant, in consultation with the receiving Contributing 

Participant, will determine whether the Government ESSM Block 

2 E&MD Phase Background Information is necessary for the use 

of ESSM Block 2 E&MD Phase Foreground Information. 

10.3.2.3 The furnishing Participant will retain all its rights with respect to 

Government ESSM Block 2 E&MD Phase Background 

Information. 

10.4 Contractor ESSM Block 2 E&MD Phase Foreground Information 

1 0.4.1 ·Disclosure: Except as provided in subparagraph 1 0.1.3 of this Section, ESSM 

Block 2 E&MD Phase Fore ground Information generated and delivered by 

Contractors (hereinafter referred to as "Contractor ESSM Block 2 E&MD Phase 

Foreground Information") will be disclosed promptly and without charge to the 

Contributing Participants. 

10.4.2 Use: Each Contributing Participant may use or have used without charge for 

Defense Purposes all Contractor ESSM Block 2 E&MD Phase Foreground 

Information. The Participant whose Contractors generate and deliver Contractor 

ESSM Block 2 E&MD Phase Foreground Information will also retain all its 

rights thereto in accordance with the applicable Contracts. Any sale or other 

transfer to a Third Party of Contractor ESSMBlock 2 E&MD Phase Foreground 

Information will be subject to the provisions of Section 14 (Sales and Transfers) 

ofthis MOlT. 

10.5 Contractor ESSM Block 2 E&MD Phase Background Information 

10.5.1 Disclosure: Except as provided in subparagraph 10.1.3 ofthis Section, a 

Contributing Participant entering into Contracts will make available to the other 

33 
Contributing Participants promptly and without charge all ESSM Block 2 

E&MD Phase Background Information generated by Contractors (hereinafter 

referred to as "Contractor ESSM Block 2 E&MD Phase Background 

Information") that is delivered under Contracts awarded in accordance with this 

MOU. Any other ESSM Block 2 E&MD Phase Background Information that is 

generated by Contractors and that is in the possession of one Contributing 

Participant will be made available promptly and without charge to the other 

Contributing Participants, upon their request, provided the following conditions 

are met: 

1 0.5.1.1 Such Contractor ESSM Block 2 E&MD Phase Background 

Information is necessary to or useful in the ESSM Block 2 E&MD 

Phase, with the Contributing Participant in possession of the 

Information determining, after consulting with the other 

Contributing Participants, whether it is "necessary to" or "useful 

in" the ESSM Block 2 E&MD Phase. 

10.5.1.2 Such Contractor ESSM Block 2 E&MD Phase Background 

Information may be made available only if it does not result in 

infringement of Intellectual Property rights. 

1 0.5.1.3 Disclosure of such Contractor ESSM Block 2 E&MD Phase 

Background Information is consistent with national disclosure 

laws, regulations, and policies of the furnishing Participant. 

10.5.1.4 Any disclosure or transfer of such Contractor ESSM Block 2 

E&MD Phase Background Information to Contractors is consistent 

with the furnishing Participant's export control laws and 

regulations. 

10.5.2 Use: 

1 0.5.2.1 Contractor ESSM Block 2 E&MD Phase Background Information 

delivered under Contracts awarded in accordance with this MOU, 

and any other Contractor ESSM Block 2 E&MD Phase 

Background Information furnished by a Contributing Participant's 

Contractors, may be used without charge by or for the receiving 

Contributing Participant for ESSM Block 2 E&MD Phase 

purposes, subject to any Intellectual Property rights restrictions and 

conditions. 

10.5.2.2 However, when necessary for the use ofESSM Block 2 E&MD 

Phase Foreground Information, such Contractor ESSM Block 2 

E&MD Phase Background Infonriation may be used by the 

34 
receiving Contributing Participant for Defense Purposes, subject to 

any Intellectual Property rights restrictions and conditions. The 

furnishing Participant, in consultation with the receiving 

Contributing Participant, will determine whether the Contractor 

ESSM Block 2 E&MD Phase Background Information is 

necessary for the use ofESSM Block 2 E&MD Phase Foreground 

Information. 

10.5.2.3 The furnishing Participant will retain all its rights with respect to 

Contractor ESSM Block 2 E&MD Phase Background Information. 

10.6 Alternative Uses ofESSM Block 2 E&MD Phase Information 

1 0.6.1 Any ESSM Block 2 E&MD Phase Background Information furnished by one 

Contributing Participant will be used by the receiving Contributing Participant 

only for the purposes set forth in this MOU, unless otherwise consented to in 

writing by the furnishing Contributing Participant. 

10.6.2 The prior written consent of the Contributing Participants will be required for 

the use ofESSM Block 2 E&MD Phase Foreground Information (excluding 

U.S.-Restricted ESSM Block 2 Items) for purposes other than those set forth in 

this MOU. 

10.6.3 The prior written consent ofthe U.S. DoD will be required for the use ofESSM 

Block 2 E&MD Phase Foreground Information related to U.S.-Restricted ESSM 

Block 2 Items for purposes other than those set forth in this MOU. 

10.7 Proprietary ESSM Block 2 E&MD Phase Information 

10.7 .1 All ESSM Block 2 E&MD Phase Information that is subject to Intellectual 

Property rights will be identified and marked, and it will be handled as 

Controlled Unclassified Information or as Classified Information, depending on 

its security classification. 

10.7.2 The PSI will contain such provisions as are necessary to ensure the protected 

communication ofESSM Block 2 E&MD Phase Information that is subject to 

Intellec~al Property rights. For NATO member Participants, the provisions of 

the NATO Agreement on Communication ofTechnical Information for Defense 

Purposes, done at Brussels, October 19, 1970, and the Implementing Procedures 

for the NATO Agreement on Communication of Technical Information for 

Defense Purposes approved by the North Atlantic Council on January 1, 1971 

(or any successor agreement or procedures), will apply to Information that is 

subject to Intellectual Property rights. The Australian DOD consents to the 

insertion of provisions in the PSI that are no less stringent than the 

35 
10.8 Patents 

aforementioned NATO Agreement and Implementing Procedures. As to the 

Australian DOD, in the event of an inconsistency between the PSI and the 

NATO Agreement, the PSI will prevail. 

10. 8.1 Each Contributing Participant will include in all its Contracts for the ESSM 

Block 2 E&MD Phase a provision governing the disposition of rights in regard 

to ESSM Block 2 E&MD Phase Inventions and Patent rights relating thereto 

that either: 

10.8.1.1 Provides that the Participant will hold title to all such ESSM Block 

2 E&MD Phase Inventions together with the right to make Patent 

applications for the same, free of encumbrance from the Contractor 

concerned; or 

1 0.8.1.2 Provides that the Contractor will hold title (or may elect to retain 

title) to such ESSM Block 2 E&MD Phase Inventions together 

with the right to make Patent applications for the same, while 

securing for the Contributing Participants a license for the ESSM 

Block 2 E&MD Phase Inventions, and any Patents thereto, on 

terms in compliance with the provisions of subparagraph 1 0.8.2 of 

this Section. 

10.8.2 In the event that a Contractor owns title (or elects to retain title) to any ESSM 

Block 2 E&MD Phase Invention, the Contracting Participant will secure for the 

other Contributing Participants non-exclusive, irrevocable, royalty-free licenses 

under all Patents secured for that invention, to practice or have practiced the 

patented ESSM Block 2 E&MD Phase Invention throughout the world for 

Defense Purposes. 

10.8.3 The provisions of subparagraphs 10.8.4 through 10.8.7 of this Section will 

apply in regard to Patent rights for all ESSM Block 2 E&MD Phase Inventions 

made by the Contributing Participants' military or civilian employees and for all 

ESSM Block 2 E&MD Phase Inventions made by Contractors for which the 

Contracting Participant holds title or is entitled to acquire title. 

10.8.4 When a Contributing Participant has or can secure the right to file a Patent 

application with regard to an ESSM Block 2 E&MD Phase Invention, that 

Contributing Participant will consult with the other Contributing Participants 

regarding the filing of such Patent application. The Contributing Participant that 

has or receives title to such ESSM Block 2 E&MD Phase Invention will, in 

other countries, file, cause to be filed, or provide the other Contributing 

Participants with the opportunity to file on behalf of the Participant holding 

36 
title, Patent applications covering that ESSM Block 2 E&MD Phase Invention. 

A Contributing Participant will immediately notify the other Contributing 

Participants that a Patent application has been filed. If a Contributing 

Participant, having filed or caused to be filed a Patent application, abandons 

prosecution of the application or ceases maintaining the Patent granted or issued 

on the application, that Contributing Participant will notify the other 

Contributing Participants in writing of that decision and permit the other 

Contributing Participants to continue the prosecution or maintain the Patent as 

the case may be. 

10.8.5 Each Contributing Participant will be furnished with copies of Patent 

applications filed and Patents granted with regard to ESSM Block 2 E&MD 

Phase Inventions. 

1 0.8.6 Each Contributing Participant will grant to the other Contributing Participants a 

non-exclusive, irrevocable, royalty-free license under its Patents for ESSM 

Block 2 E&MD Phase Inventions, to practice or have practiced the patented 

ESSM Block 2 E&MD Phase Invention throughout the world for Defense 

Purposes. 

10.8.7 For NATO member Participants, Patent applications to be filed, or assertions of 

other Intellectual Property rights, under this MOU that contain Classified 

Information will be protected and safeguarded in a manner no less stringent than 

the requirements contained in the NATO Agreement for the Mutual 

Safeguarding of Secrecy of Inventions Relating to Defence and for Which 

Applications for Patents Have Been Made, done in Paris on September 21, 

1960, and its Implementing Procedures (or any successor agreement and 

procedures). The Australian DOD consents to the insertion of provisions in the 

PSI that are no less stringent than the aforementioned NATO Agreement and its 

Implementing Procedures. As to the Australian DOD, in the event of an 

inconsistency between the PSI and the NATO Agreement, the PSI will prevail. 

10.9 Each Contributing Participant will notify promptly the other Contributing Participants in 

writing of any Intellectual Property rights infringement claims brought against that 

Participant arising in the course of work performed under the ESSM Block 2 E&MD 

Phase on behalf of the other Contributing Participants. Insofar as possible, the other 

Contributing Participants will provide Information available to it that may assist in 

defending such claims. Each Contributing Participant will be responsible for handling 

such Intellectual Property rights infringement claims brought against it, and will consult 

with the other Contributing Participants during the handling, and prior to any settlement, 

of such claims. The Contributing Participants will share the costs of resolving such 

Intellectual Property rights infringement claims in proportion to their contributions for 

that work specified in Section 5 (Financial Provisions) of this MOU. 

37 
10.10 The Contributing Participants will, as permitted by their national laws, regulations, and 

policies, give their authorization and consent for all use and manufacture in the course of 

work performed under the ESSM Block 2 E&MD Phase of any ESSM Block 2 E&MD 

Phase Invention covered by Patent, or as determined to be necessary for work under the 

ESSM Block 2 E&MD Phase, authorization and consent for non-commercial copyright, 

granted or otherwise provided by their respective countries. 

38 
SECTION 11. CONTROLLED UNCLASSIFIED INFORMATION 

11.1 Except as otherwise provided in this MOU or authorized in writing by the originating 

Participant, Controlled Unclassified Information provided or generated pursuant to this 

MOU will be controlled as follows: 

11.1.1 Such Information will be used only for the purposes authorized for use of 

ESSM Block 2 E&MD Phase Information as specified in Section 10 (Disclosure 

and Use ofESSM Block 2 E&MD Phase Information) of this MOU. 

11.1.2 Access to such Information will be limited to personnel whose access is 

necessary for the permitted use under subparagraph 11.1.1 of this Section and 

will be subject to the provisions of Section 14 (Sales and Transfers) ofthis 

MOU. 

11.1.3 Each Participant will take all appropriate lawful steps, which may include 

national classification, available to it to keep such Information free from further 

disclosure (including requests under any legislative provisions), except as 

provided in subparagraph 11.1.2 of this Section, unless the originating 

Participant consents to such disclosure. In the event of unauthorized disclosure, 

or if it becomes probable that the Information may have to be further disclosed 

under any legislative provision, immediate notification will be given to the 

originating Participant. ' 

11.2 To assist in providing the appropriate controls, the originating Participant will ensure that 

Controlled Unclassified Information is appropriately marked to ensure its "in confidence" 

nature. The Participants will decide, in advance and in writing, on the markings to be 

placed on the Controlled Unclassified Information. The Participants' export-controlled 

Information will be marked in accordance with the applicable Participant's export control 

markings. The appropriate markings will be defmed in the PSI. 

11.3 Prior to authorizing the release of Controlled Unclassified Information to Contractors, the 

Participants will ensure the Contractors are legally bound to control such Information in 

accordance with the provisions of this MOU. 

39 
SECTION 12. VISITS TO ESTABLISHMENTS 

12.1 For purposes of this MOU, each Participant will permit visits to its goverlll11ent 

establishments, agencies, laboratories, and Contractor facilities by employees of the other 

Participants or by employees of the other Participants' Contractor(s), provided that the 

visit is authorized by the Participants involved in the visit, and the employees have any 

necessary and appropriate security clearances and a need-to-know. 

12.2 All visiting personnel will be required to comply with security regulations of the hosting 

Participant. Any Information disclosed or made available to visitors will be treated as if 

supplied to the Participant sponsoring the visiting personnel and will be subject to the 

provisions of this MOU. 

12.3 Requests for visits, on a one-time or recurring basis, by personnel of one Participant to a 

facility of another Participant will be coordinated through official channels and will 

conform to the established visit procedures of the hosting Participant. Requests for visits 

will bear the name of the ESSM Block 2 E&MD Phase. 

40 
SECTION 13. SECURITY 

13.1 All Classified Information provided or generated pursuant to this MOU will be stored, 

handled, transmitted, safeguarded, and disposed of in accordance with the Participants' 

applicable national security laws and regulations and with applicable security agreements 

and arrangements between or among the Participants, to the extent that they provide a 

· degree of protection no less stringent than that provided for NATO classified material as 

set forth in the NATO C-M(2002)49, "Security Within the North Atlantic Treaty 

Organization", and its related directives, issued June 17, 2002, including all supplements 

and amendments thereto. 

13.2 Classified Information will be transferred only through official governm.ent-togovernment channels or through channels approved by the DSAs of the Participants. 

Such Classified Information will bear the level of classification and denote the country of 

origin, the provisions of release, and the fact that the Information relates to this MOU. 

13.3 Each Participant will take all appropriate lawful steps available to it to ensure that 

Classified Information provided or generated pursuant to this MOU is protected from 

further disclosure, except as permitted by this Section. Accordingly, each Participant will 

ensure that the recipient: 

13.4 

13.5 

13.3.1 Will not release the Classified Information to any Third Party without the prior 

written consent of the originating Participant in accordance with the procedures 

set forth in Section 14 (Sales and Transfers) of this MOU. 

13.3.2 Will not use the Classified Information for other than the purposes provided for 

in this MOU. 

13.3.3 Will comply with any distribution and access restrictions on Classified 

Information that is provided under this MOU. 

The Participants will investigate all cases in which it is known or when there are grounds 

for suspecting that Classified Information provided or generated pursuant to this MOU 

has been lost or disclosed to unauthorized persons. Each Participant will inform promptly 

and fully the other Participants in writing of the details of any such occurrence, and of the 

final results of the investigation and of the corrective action taken to preclude recurrence. 

The NSPO PM will prepare a PSI and a CG for the ESSM Block 2 E&MD Phase. The 

PSI and the CG will describe the methodsby which ESSM Block 2 E&MD Phase 

Information will be classified, marked, used, transmitted, safeguarded, and disposed of, 

and will require that all export-con~rolled Classified Information includes the applicable 

export control markings identified in the PSI in accordance with paragraph 11.2 of 

Section 11 (Controlled Unclassified Information) ofthis MOU. The PSI and CG will be 

submitted by the NSPSC members to their respective DSAs for approval within one 

41 
month after this MOU enters into effect. The approved PSI and CG will be applicable to 

all Government and Contractor personnel participating in the ESSM Block 2 E&MD 

Phase. The CG will be subject to regular review and revision with the aim of 

downgrading the classification whenever this is appropriate. The PSI and the CG will be 

approved by the Participants' DSAs prior to the transfer of any Classified Information or 

Controlled Unclassified Information. 

13.6 The DSA of the Participant that awards a classified Contract will assume responsibility 

for administering within its territory security measures for the protection of the Classified 

Information, in accordance with its laws and regulations. Prior to the release to a 

Contractor, Prospective Contractor, or subcontractor of any Classified Information 

received under this MOU, the DSAs or their designees will: 

13.6.1 Ensure that such Contractor, Prospective Contractor, or subcontractor (and their 

facilities) has the capability to protect the Classified Information adequately. 

13.6.2 Grant a security clearance to the facilities, if appropriate. 

13.6.3 Grant a security clearance for all personnel with duties that require access to 

Classified Information, if appropriate. 

13.6.4 Ensure that all persons having access to the Classified Information are informed 

of their responsibilities to protect the Classified Information in accordance with 

national security laws and regulations and the provisions of this MOU. 

13.6.5 Carry out periodic security inspections of cleared facilities to ensure that the 

Classified Information is properly protected. 

13.6.6 Ensure that access to the Classified Information is limited to those persons who 

have a need-to-know for the purposes of this MOU. 

13.7 Contractors, Prospective Contractors, or subcontractors that are determined by DSAs to 

be under financial, administrative, policy, or management control of nationals or entities 

of a Third Party, may participate in a Contract or subcontract requiring access to 

Classified Information provided or generated pursuant to this MOU only when 

enforceable measures are in effect to ensure that nationals or other entities of a Third 

Party will not have access to Classified Information. If enforceable measures are not in 

effect to preclude access by nationals or other entities of a Third Party, the other 

Contributing Participants will be consulted for approval prior to permitting such access. 

13.8 For any facility in which Classified Information is to be used, the responsible Participant 

or Contractor will approve the appointment of a person or persons to exercise effectively 

the responsibilities for safeguarding at such facility the Information pertaining to this 

MOU. These officials will be responsible for limiting access to Classified Information 

42 
involved in this MOU to those persons who have been properly approved for access and 

have a need-to-know. 

13.9 Each Participant will ensure that access to Classified Information is limited to those 

persons who possess requisite security clearances and have a specific need for access to 

the Classified Information in order to participate in the ESSM Block 2 E&MD Phase. All 

Classified Information made available to a Participant's personnel will be considered as 

Classified Information furnished to that Participant, unless otherwise restricted by the 

furnishing Participant. A Participant's personnel will not have personal custody of 

Classified Information or Controlled Unclassified Information unless authorized by that 

Participantorthe furnishing Participant, as appropriate, or approved by the NSPO PM. 

13.10 Information provided or generated pursuant to this MOU may be classified as high as 

SECRET. The existence of this MOU is unclassified and the contents are unclassified. 

43 
SECTION 14. SALES AND TRANSFERS 

14.1 Except as provided in paragraph 14.3 of this Section, the Contributing Participants will 

not sell, transfer title to, disclose, or transfer possession of ESSM Block 2 E&MD Phase 

Foreground Information, cooperatively acquired or produced ESSM Block 2 E&MD 

Phase Equipment, or any item produced either wholly or in part from ESSM Block 2 

E&MD Phase Foreground Information to any Third Party without the prior written 

approval of the Governments of all the Contributing Participants. Furthermore, the 

Contributing Participants will not permit any such sale, disclosure, or transfer, including 

by the owner of the item, without the prior written approval of the Governments of all the 

Contributing Participants. Such approval will not be given unless the Government of the 

intended recipient confirms in writing to the providing Participant that it will: 

14.1.1 Not retransfer, or permit the further retransfer of, any equipment or Information 

provided, and 

14.1.2 Use, or permit the use of, the equipment or Information provided only for the 

purposes specified by the Contributing Participants, 

unless otherwise approved in writing by the providing Participant, who will obtain the 

prior written approval ofthe Governments of all ofthe Contributing Participants. 

14.2 The Contributing Participants will not sell, transfer title to, disclose, or transfer 

possession of ESSM Hlock 2 E&MD Phase Equipment or ESSM Block 2 E&MD Phase 

Background Information provided by another Contributing Participant to any Third Party 

without the prior written approval of the Government of the Contributing Participant that 

provided such equipment or Information. The providing Participant's Government will be 

solely responsible for authorizing such transfers and, as applicable, specifying the method 

and provisions for implementing such transfers. 

14.3 In recognition of the significant past and ongoing investments made by the U.S. DoD in 

the design, development, and production ofU.S.-Restricted ESSM Block 21tems, and 

where only U.S.-Restricted ESSM Block 21tems are involved, the U.S. DoD may, after 

consultation with the other Contributing Participants, sell, transfer title to, disclose, or 

transfer possession of such U.S.-Restricted ESSM Block 2 Items to Non-contributing 

Participants or Third Parties. The U.S. DoD may, after consultation with the other 

Contributing Participants, permit sale, disclosure, or transfer of possession ofU.S.-

Restricted ESSM Block 2ltems. The U.S. DoD recognizes the importance to the other 

Contributing Participants of U.S. DoD decisions on such potential sales, disclosures, and 

transfers and will accordingly take into account the national positions expressed by the 

other Contributing Participants in making its decisions. The U.S. DoD recognizes that 

sales, disclosures, or other transfers described in this paragraph will only be made if the 

Government(s) of the recipient(s) consents in writing that it will: 

44 
14.3.1 Not retransfer, or permit the further retransfer of, any equipment or Information 

provided, and 

14.3.2 Use, or permit the use of, the equipment or Information provided only for the 

purposes for which such equipment or Information is furnished. 

14.4 Sales and other transfers of equipment developed or ESSM Block 2 E&MD Phase 

Foreground Information generated under this MOU may attract a levy to be shared 

among the Contributing Participants. Prior to any such sale or other transfer, the amounts 

of any levy and the procedures for assessing and distributing such levy will be mutually 

determined by the Contributing Participants and coordinated through the NSPSC 

consistent with the laws and regulations of each Contributing Participant. Any 

Contributing Participant may reduce the assessment of its share of the levy consistent 

with the laws and regulations of that Contributing Participant. 

14.5 As to paragraphs 14.1 and 14.2 ofthis Section, approval of sales and transfers ofESSM 

Block 2 E&MD Phase Foreground Information, cooperatively acquired ESSM Block 2 

E&MD Phase Equipment, or any item produced wholly or in part from ESSM Block 2 

E&MD Phase Foreground Information will be subject to foreign policy and national 

security considerations, and to natiomillaws, regulations, and policies.· The Contributing 

Participants will not refuse approval of such a sale or transfer to a Third Party when they 

would be willing to sell or transfer such equipment or ESSM Block 2 E&MD Phase 

· Information to the same Third Party. 

14.6 With respect to summary-level ESSM Block 2 E&MD Phase Foreground Information or 

ESSM Block 2 E&MD Phase Background Information received that was not already in 

the possession of a Non-contributing Participant by other means, Non-contributing 

Participants will not sell, transfer title to, disclose, or transfer possession of such 

Inforrhation or any item produced wholly or in part from it to any Third Party. If a Noncontributing Participant requests ESSM Block 2 E&MD Phase Foreground Information, 

cooperatively acquired ESSM Block 2 E&MD Phase Equipment, or any item produced 

wholly or in part from ESSM Block 2 E&MD Phase Foreground Information and the 

Non-contributing Participant does riot wish to become a Contributing Participant, the 

Contributing Participants will favorably review the request in determining whether to 

provide their required written approval. The conditions for such transfer will be mutually 

determined by the Contributing Participants on a case-by-case basis. 

45 
SECTION 15. LIABILITY AND CLAIMS 

15.1 For liability arising out of, or in connection with, activities undertaken in the performance 

of official duty in the execution of the ESSM Block 2 E&MD Phase, the provisions set 

forth below will apply. 

15.2 Where relevant multilateral or bilateral agreements or arrangements exist between two or 

more of the Participants regarding liabilities for claims, those agreements or 

arrangements will apply to this MOU. 

15.3 Where no relevant multilateral or bilateral agreements or arrangements exist between two 

or more of the Participants, the following provisions will apply: 

15.3.1 With the exception of claims for loss or damage to ESSM Block 2 E&MD 

Phase Equipment, which are addressed in Section 9 (ESSM Block 2 E&MD 

Phase Equipment) of this MOU, each Participant waives all claims against the 

other Participants in respect of injury to or death of its military or civilian 

personnel and for damage to or loss of its property (including its interest in 

cooperatively acquired ESSM Block 2 E&MD Phase Equipment) caused by 

such personnel of the other Participants. However, ifthe Participants mutually 

determine that such injury, death, damage, or loss results from reckless acts or 

reckless omissions, willful misconduct, or gross negligence (which may or may 

not amount to a criminal standard of negligence) of a Participant's military or 

civilian personnel, the costs of any liability will be borne by that Participant 

alone. 

15.3 .2 Claims from any other persons for injury, death, damage, or loss of any kind 

caused by military or civilian personnel of a Participant will be processed by the 

most appropriate Participant, as mutually determined by the Participants. 

Generally, this will be the Participant in whose country the claim arose. Any 

costs determined to be owed the claimant will be borne by the Contributing 

Participants in the same ratio as their contributions under this MOU. However, 

if the Participants mutually determine that such injury, death, damage, or loss 

results from reckless acts or reckless omissions, willful misconduct, or gross 

negligence (which may or may not amount to a criminal standard of negligence) 

of a Participant's military or civilian personnel, the cost of any liability will be 

borne by that Participant alone. 

15.3.3 If a person or entity, other than the Participant's military or civilian personnel, 

damages cooperatively acquired ESSM Block 2 E&MD Phase Equipment, and 

the cost of making good such damage is not recoverable from such person or 

entity, such cost will be borne by the Contributing Participants in the same ratio 

as their contributions under this MOU. 

46 
15.3.4 Claims arising under any Contract awarded under this MOU will be resolved in 

accordance with the provisions of the Contract. The Participants will not 

indemnify Contractors against liability for claims by any other persons. 

However, in exceptional circumstances (e.g., involving unduly hazardous 

activity where the cost of insurance is excessively high), the Contributing 

Participants may mutually consider whether to indemnify Contractors against 

liability for claims by any other persons. 

47 
SECTION 16. CUSTOMS DUTIES, IMPORT AND EXPORT TAXES, 

AND SIMILAR CHARGES 

16.1 Customs duties, import and export taxes, and similar charges will be administered in 

accordance with each Participant's respective laws and regulations. Insofar as existing 

national laws and regulations permit, the Participants will endeavor to ensure that such 

readily identifiable customs duties, import and export taxes and similar charges, as well 

as quantitative or other restrictions on imports and exports, are not imposed in connection 

with work carried out under the ESSM Block 2 E&MD Phase. 

16.2 Each Participant will endeavor to ensure that customs duties, import and export taxes, 

and similar charges are administered in a manner favorable to the efficient and 

economical conduct of the work of the ESSM Block 2 E&MD Phase. If any such customs 

duties, import and export taxes, or similar charges are levied, the Participant in whose 

country they are levied will bear such costs over and above that Participant's share of the 

Total Cost Target. If, in order to apply European Union (EU) regulations, it is necessary 

to levy duties, then these will be met by the EU member end recipient. To this end, parts 

or components of the equipment coming from outside the EU will proceed to their final 

destination accompanied by the relevant customs document enabling settlement of duties 

to take place. The duties will be paid as a cost over and above that EU Participant's share 

ofthe Total Cost Target. 

48 
SECTION 17. ACCESSION OF NON-CONTRIBUTING PARTICIPANTS 

17.1 Upon its request, a Non-contributing Participant will be permitted to accede to 

Contributing Participant status. The Contributing Participants recognize that Noncontributing Participant involvement in ESSM Block 2 risk reduction efforts will be 

accounted for, notwithstanding whether a Non-contributing Participant accedes to this 

MOU as a Contributing Participant. In consultation with the Non-contributing 

Participant, the Contributing Participants will jointly negotiate the provisions under 

which the Non-contributing Participant may accede to Contributing Participant status. 

The accession of a Non-contributing Participant to the status of a Contributing Participant 

will require an amendment to this MOU with revisions of the financial tables in Section 5 

(Financial Provisions) of this MO U, including recognition of contributions of that 

Participant to the ESSM Block 2 risk reduction efforts. 

49 
SECTION 18. ACCESSION OF POTENTIAL PARTICIPANTS 

18.1 It is recognized that potential participants may wish to join the ESSM Block 2 E&MD 

Phase. 

18.2 Unanimous approval by the Participants will be required to conduct formal discussions 

with a: potential participant. The Contributing Participants will discuss the arrangements 

under which a potential participant might join, including the furnishing of releasable 

ESSM Block 2 E&MD Phase Information for evaluation, prior to joining. If the 

disclosure ofESSM Block 2 E&MD Phase Information is necessary to conduct 

discussions, such disclosure will be in accordance with provisions of this MOU. 

18.3 The Contributing Participants will jointly formulate the provisions under which that 

potential participant may join. The accession of potential participants to this MOU will 

require an amendment to this MOU. 

50 
SECTION 19. SETTLEMENT OF DISPUTES 

19.1 Disputes among the Participants arising under or relating to this MOU will be resolved 

only by consultation among the Participants and will not be referred to a national or 

international court or tribunal, or any other person or entity for settlement. 

51 
SECTION 20. AMENDMENTS 

20.1 This MOU may be changed by written amendment. The amendment will enter into effect 

when signed by all the Participants. However, in the event that one or more Noncontributing Participants has not signed the amendment by the time all Contributing 

Participants have signed, the amendment will then enter into effect for all Participants 

that have signed. The amendment will enter into effect for each of the remaining Noncontributing Participants upon their signature. 

20.1.1 As to any Non-contributing Participant that signs the amendment after it has 

entered into effect, the Participants who have previously signed the amendment 

will have no responsibilities under the amendment with regard to that Noncontributing Participant, and the Non-contributing Participant will have no 

responsibilities or benefits under the amendment, until such time as the Noncontributing Participant has signed the amendment. 

20.2 Annex A (ESSM Block 2 E&MD Phase Plan) and Annex B (NSPO ESSM Block 2 

E&MD Phase Staffing Requirements) to this MOU and the documents referred to therein 

may be amended by the written approval of the NSPSC. 

52 
SECTION 21. GENERAL PROVISIONS, WITHDRAWAL, TERMINATION, 

ENTRY INTO EFFECT, AND DURATION 

21.1 All activities of the Participants under this MOU will be carried out in accordance with 

their respective national laws and regulations, including their respective import and 

export control laws and regulations. The responsibilities of the Participants will be 

subject to the availability of funds for such purposes. 

21.2 In the event of a conflict between a Section ofthis MOU and any Annex to this MOU, 

the Section of the MOU will prevail. 

21.3 The working language ofthis MOU will be the English language. 

21.4 This MOU may be terminated at any time upon the unanimous written approval of the 

Contributing Participants. In the event the Contributing Participants mutually determine 

to terminate this MOU, the Participants will consult prior to the date of termination to 

ensure termination on the most economical and equitable terms. 

21.5 Any Participant may withdraw from this MOU upon one (1) year's written notification to 

the other Participants. Such notice will be the subject of immediate consultation by the 

NSPSC to decide upon the 'appropriate course of action for the continuation and 

completion ofthe work described in Section 3 (Scope of Work) of this MOU to the 

mutu~l satisfaction of the remaining Contributing Participants. In the event of such 

withdrawal, the following will apply: 

21.5.1 The withdrawing Participant will continue participation, financial or otherwise, 

up to the effective date of withdrawal. 

21.5.2 Unless otherwise mutually determined by the remaining Contributing 

Participants, the work allocated to the Participant withdrawing and associated 

cooperatively acquired ESSM Block 2 E&MD Phase Equipment may be 

transferred to the other Participants. 

21.5 .3 Except as to Contracts awarded on behalf of the Contributing Participants, each 

Participant will be responsible for its own ESSM Block 2 E&MD Phase-related 

costs associated with withdrawing from this MOU. For Contracts awarded on 

behalf of the Contributing Participants, the Participant withdrawing from this 

MOU will pay all Contract modification or termination costs that would not 

otherwise have heen incurred. However, in no event will a withdrawing 

Participant's total contribution, including Contract termination costs, exceed that 

Participant's touil share ofthe Total Cost Ceiling for contributions as established 

in Section 5 (Financial Provisions) of this MOU. The NSPSC will determine, in 

consultation with the withdrawing Participant, the most economical 

arrangements in the event of a withdrawal. 

53 
21.5.4 All ESSM Block 2 E&MD Phase Information and related rights provided by the 

withdrawing Participant under the provisions of this MOU prior to the 

withdrawal will be retained by the remaining Participants, in accordance with 

the provisions of this MOU. All ESSM Block 2 E&MD Phase Information 

received by the withdrawing Participant prior to the withdrawal may be retained 

by that Participant in accordance with the provisions of this MOU. 

21.5.5 If requested by the remaining Participants, the withdrawing Participant may 

continue to administer, on a reimbursable basis, ESSM Block 2 E&MD Phase 

Contract( s) which it awarded on behalf of the remaining Participants or will 

take steps to transfer administration of these Contracts to another Contributing 

Participant. 

21.6 The respective rights and responsibilities ofthe Participants regarding Section 9 (ESSM 

Block 2 E&MD Phase Equipment), Section 10 (Disclosure and Use ofESSM Block 2 

E&MD Phase Information), Section 13 (Security), Section 14 (Sales and Transfers), 

Section 15 (Liability and Claims), Section 19 (Settlement of Disputes), and this Section 

of this MOU will continue notwithstanding termination of, withdrawal from, or 

expiration ofthis MOU. 

21.6.1 Contributing Participants will be responsible for any payments, and entitled to 

any credits, outstanding up to the point of withdrawal from, expiration, or 

termination of this MOU until settled, notwithstanding withdrawal from, 

expiration, or termination of this MOU. 

21.7 This MOU will enter into effect when signed by all the Participants (which, for the 

MoND of Turkiye, will be after parliamentary approval has been issued). However, in the 

event that one or more Non-contributing Participants has not signed this MOU by the 

time all the Contributing Participants have signed, this MOU will then enter into effect 

for all the Participants that have signed. This MOU will enter into effect for each of the 

remaining Non-contributing Participants upon their signature. 

21.7 .1 As to any Non-contributing Participant that signs this MOU after it has entered 

into effect (referred to as the "subsequent Participant"), the Participants who 

have previously signed this MOU will have no responsibilities with regard to 

that subsequent Participant, and that· subsequent Participant will have no 

responsibilities or benefits under this MOU, until such time as the subsequent 

Participant has signed this MOU. 

21.8 This MOU will remain in effect until December 31, 2023, unless terminated under the 

provisions of paragraph 21.4 above. This MOU may be extended by amendment in 

accordance with Section 20 (Amendments) of this MOU. 

54 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTER FOR DEFENCE ON BEHALF OF 

THE DEPARTMENT OF DEFENCE OF AUSTRALIA 

Signature 

Commodore P.M. Quinn CSC, RAN 

Name 

Director General Navy Capability Transition and Sustainment 

Title 

Date 

Canberra, Australia 

Location 

55 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTER OF DEFENCE OF THE 

KINGDOM OF BELGIUM 

Signature 

Title 

Date 

Location 

56 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE DEPARTMENT OF NATIONAL DEFENCE 

OF CANADA 

c:{..91 John M. Turner 

Name 

Assistant Deputy Minister (Materiel) 

Title 

(2__November 2014 

Date 

Ottawa, Ontario, Canada 

Location 

57 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTER OF DEFENCE OF 

THE KINGDOM OF DENMARK 

Signat!!!:!J lz • 0/ 

Name 

Per Pugholm Olsen 

Generall0jtnant 

Chef for F01$varels Materieltjeneste 

__ L_ { . 6-e.nJ/ Co ,., ,.. w. c1. ~ Title 

Date 

Location 

() 14-t 0 

58 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE FEDERAL MINISTRY OF DEFENCE OF 

THE FEDERAL REPUBLIC OF GERMANY 

Signature 

Name 

Title 

Date 

Location 

Vizeprasident beim 

Bundesarnt fur Ausrustung, 

lnformationstechnik 

und Nutzung der Bundeswehr 

Dipl.-lng. Thomas Wardecki 

59 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELO~MENT OF 

THE EVOLVED SEASPARROW MISSll.,E BLOCK 2 

FOR THE MINISTRY OF NATIONAL DEFENCE OF 

THE HELLENIC REPUBLIC 

Signature . 

Location 

60 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTER OF DEFENCE OF 

THE KINGDOM OF THE NETHERLANDS 

Signature 

A.G.J. van de Geijn 

Name 

Director for Procurement 

Defence Materiel Organisation 

Title 

December 5, 2013 

Date 

The Hague 

Location 

61 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTER OF DEFENCE OF 

THE KINGDOM OF NORWAY 

Signature 

ARNE W ANGSHOLM 

Name 

CAPTAIN, THE NORWEGIAN DEFENCE LOGISTICS 

ORGANISATION 

Title ,. 

Date 

BERGEN, NORWAY 

Location 

62 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTER OF DEFENCE OF PORTUGAL 

Signature 

Name 

Title 

Date 

Location 

63 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK 2 

FOR THE MINISTRY OF DEFENCE OF 

THE KINGDOM OF SPAIN 

Signature 

EST ANISLAO PER PAREDES 

Name 

ADMIRJ\L CHIEF OF LOGISTIC SUPPORT 

Title 

1 April, 2014 

Date 

Madrid, Spain 

Location 

64 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASP ARROW MISSILE BLOCK 2 

FOR THE MINISTRY OF NATIONAL DEFENCE OF 

TURKIYE 

Si~ / 

OnderKARA 

Name 

Captain, Turkish Navy 

Electronic and Weapon Systems Department Head 

Title 

27 May2014 

Date 

Ankara, Tiirkiye 

Location 

65 
MEMORANDUM OF UNDERSTANDING FOR THE COOPERATIVE 

ENGINEERING AND MANUFACTURING DEVELOPMENT OF 

THE EVOLVED SEASPARROW MISSILE BLOCK2 

FOR THE DEPARTMENT OF DEFENSE OF 

THE UNITED STATES OF AMERICA 

Signature 

RADM J. A. Hom, Jr. 

Name 

Program Executive Officer, Integrated Warfare Systems 

Title 

Date 

Washington, D. C. U.S.A. 

Location 

66 
ANNEXA 

ESSM BLOCK 2 E&MD PHASE PLAN 

The acquisition baseline for the ESSM Block 2 E&MD Phase is defined by: 

a. The ESSM Block 2 Requirements Document 

b. The ESSM Block 2 Missile Performance Specification 

c. The ESSM Block 2 E&MD Project Manager's Cost Estimate 

d. The ESSM Block 2 E&MD Program Structure 

e. The ESSM Block 2 Test & Evaluation Strategy 

These documents collectively comprise the ESSM Block 2 E&MD Phase Plan. 

The NSPSC may amend this Annex in accordance with subparagraph 4.2.3 of Section 4 

(Management (Organization and Responsibility)) and paragraph 20.2 of Section 20 

(Amendments) ofthis MOU. 

67 
ANNEXB 

NSPO ESSM BLOCK 2 E&MD PHASE STAFFING REQillREMENTS 

Direct Project Manning 

Missile Development Division Director 

ESSM Block 2 Lead Systems Engineer 

ESSM Block 2 International Integration Manager 

ESSM Block 2 Systems Engineer 

ESSM Block 2 Project Manager/Engineer 

Matrix Project Manning (Existing Positions) 

ESSM Block 2 Security Officer 

ESSM Block 2 Financial Manager 

ESSM Block 2 International Funds Manager/Work Share 

Combat Systems Integration Manager/Engineer 

ESSM Block 2 Contracts/Business Analyst 

ESSM Block 2 Transition to Production Manager 

ESSM Block 2 Logistician 

ESSM Block 2 Test & Evaluation Lead 

Division 

N-50 

N-50 

N-50 

N-50 

N-50 

N-00 

N-10 

N-10/N-30 

N-20 

N-30 

N-40 

N-40 

N-60 

The NSPSC may amend this Annex in accordance with subparagraph 4.2.16 of Section 4 

(Management (Organization and Responsibility)) and paragraph 20.2 of Section 20 

(Amendments) of this MOU. 

68 
ANNEXC 

COOPERATIVE PROJECT PERSONNEL (CPP) 

1.0 Introduction 

1.1 CPP will be assigned to the NSPO in accordance with Section 4 (Management 

(Organization and Responsibility)) and Section 5 (Financial Provisions) of this MOU. 

CPP will be able to perform all the responsibilities assigned to them under this MOU. 

Commencement of assignments will be subject to requirements that may be imposed by 

the Host Participant or its Government regarding acceptance of CPP. The NSPO PM and 

the Parent Participant will mutually determine the length of assignment for the full-time 

CPP positions at the time of initial assignment. Since National Deputies are not full-time 

CPP, the assignments and the length of assignments of the National Deputies will be 

determined by the Parent Participant. 

1.2 Full-time CPP will be assigned to the NSPO for ESSM Block 2 E&MD Phase work and 

will report to their designated NSPO supervisor regarding that work. The NSPO PM will 

be responsible for the creation of a document describing the duties of each CPP position. 

Full-time CPP will not act as liaison officers on behalf of the Parent Participant. Upon 

request from their respective NSPSC member, full-time CPP may act from time to time 

on behalf of their Parent Participant if the NSPO PM so authorizes. 

1.3 CPP will not be assigned to command positions or other positions that would require 

them to exercise responsibilities that are reserved by law or regulation to an officer or 

employee of the Host Participant's Government. 

2.0 Security 

2.1 The NSPO PM will establish the level of security clearance required to permit CPP to 

have access to Classified Information and facilities in which Classified Information is 

used in accordance with the PSI and CG. Access to Classified Information and facilities 

in which Classified Information is used will be consistent with, and limited by, Section 2 

(Objectives), Section 3 (Scope of Work), Section 12 (Visits to Establishments), and 

Section 13 (Security) of this MOU and will be kept to the minimum required to 

accomplish the work assignments. 

2.2 The Parent Participant will file visit requests for the CPP through prescribed channels in 

compliance with the Host Participant's procedures. As part of the visit request 

procedures, the Parent Participant will provide security assurances through their embassy 

or military attache and specify the security clearances for the CPP being assigned. 

69 
2.3 The Host Participant and Parent Participant will use their best efforts to ensure that CPP 

assigned to the NSPO are aware of, and comply with, applicable laws and regulations as 

well as the requirements of Section 11 (Controlled Unclassified Information), Section 12 

(Visits to Establishments), Section 13 (Security), and paragraph 21.6 of Section 21 

(General Provisions, Withdrawal, Termination, Entry into Effect, and Duration) of this 

MOU and the provisions of the PSI and CG. Prior to commencing assigned duties, CPP 

will, as required by the Host Participant Government's laws, regulations, policies, or 

procedures, sign a certification concerning the conditions and responsibilities of CPP. 

2.4 CPP will at all times be required to comply with the security and export control laws, 

regulations, and procedures of the Host Participant's Government. Any violation of 

security procedures by CPP during their assignment will be reported to the Parent 

Participant for appropriate action. CPP committing significant violations of security or 

export control laws, regulations, or procedures during their assignments will be 

withdrawn with a view toward appropriate administrative or disciplinary action by their 

Parent Participant. 

2.5 CPP will not serve as conduits between the Host Participant and Parent Participant for 

requests and/or transmission of Classified Information or Controlled Unclassified 

Information unless specifically authorized by the NSPO PM and the Parent Participant. 

An exception is made for National Deputies performing additional duties related to 

NSPO assigned by the Parent Participant; they may transfer Information to the Parent 

Participant in accordance with the applicable disclosure statements and security 

procedures set out in the PSI. 

3.0 Administrative Matters 

3.1 On arrival, CPP will be provided briefings arranged by the NSPO about applicable laws, 

orders, regulations, customs, and NSPO standard operating procedures and the need to 

comply with them. CPP will also be provided information regarding entitlements, 

privileges, and obligations. 

3.2 The tax treatment of income received by CPP from the Parent Participant will be 

determined by reference to the tax legislation of the Government of the Host Participant 

and the Government of the Parent Participant, subject to the terms of any double taxation 

agreement in force between the Government of the Host Participant and the Government 

of the Parent Participant, or by the terms of any applicable status of forces agreement. 

3.3 CPP committing an offense under the laws of the Government of the Host Participant or 

Parent Participant may be withdrawn with a view toward further administrative or 

disciplinary action by the Parent Participant. Disciplinary action, however, will not be 

taken by the Host Participant against CPP, nor will the CPP exercise disciplinary powers 

70 
over another Participant's personnel. In accordance with the laws and regulations of the 

Host Participant's Government, the Host Participant will assist the Parent Participant in 

carrying out investigations of offenses involving CPP. 

3.4 The Participants whose countries are NATO member countries recognize the following: 

the military members and civilian employees of a Participant whose country is a NATO 

member country, assigned to duty with its Defense Department or Ministry for the 

purpose of working under this MOU, while present in the territory of another Participant 

whose country is a NATO member country, will, to the extent that they are so qualified, 

be members of a "force" and "civilian component", respectively, within the meaning of 

Article I ofthe NATO Status ofForces Agreement (NATO SOFA), which entered into 

force on June 19, 1951. Employees and agents of Contractors do not constitute a "civilian 

component", and the NATO SOFA will not apply to them. The Participants whose 

countries are NATO member countries consider the provisions of this MOU concerning 

military members and civilian employees to be consistent with the provisions of the 

NATO SOFA, and they recognize that the provisions of the NATO SOFA would govern 

if there were to be a conflict between the provisions ofthe NATO SOFA and the 

provisions of this MOU. 

3.5 The Department ofDefense of the United States of America and the Department of 

Defence of Australia invoke the Agreement between the Government of Australia and the 

Government of the United States of America concerning Certain Mutual Defence 

Commitments, which entered into force on December 1, 1995, as amended (Chapeau 

Agreement). This MOU is subject to the Chapeau Agreement for the matters set out in 

the Chapeau Agreement. 

71