Seal of approval: US Congress authorises Virginia Class submarine transfer to Australia

The NDAA will establish a national exemption for Australia and the United Kingdom from US defence export control licensing and adds Australia and the United Kingdom to the US Defense Production Act.

Specifically, the NDAA authorises two in-service and one off the production line Virginia Class submarine to Australia to ensure there is no gap in Australia’s critical submarine capability in the lead-up to delivering Australian-built SSN-AUKUS from the early 2040s. Australia will retain the option to seek congressional approval for the purchase of up to two more Virginia Class submarines.

The act authorises the maintenance of US submarines by Australians in Australia to coincide with increased port visits by UK and US nuclear-powered submarines and a rotational presence from as early as 2027 under Submarine Rotational Force West. The most complex maintenance activity on a US nuclear-powered submarine in Australia to date is planned at HMAS Stirling in the second half of 2024.

Hours after the initial US Senate approval, the US House of Representatives also reportedly approved the transfer of submarines to Australia.

The federal government welcomes the significant and tangible steps the US Congress and the Biden administration have taken to deliver on its commitment to both Pillar I and Pillar II of AUKUS, said Deputy Prime Minister Richard Marles.

“The US Congress has provided unprecedented support to Australia in passing the National Defense Authorization Act, which will see the transfer of submarines and streamlined export control provisions, symbolising the strength of our alliance and our shared commitment to the AUKUS partnership,” he said.

“We are on the precipice of historic reform that will transform our ability to effectively deter, innovate, and operate together.

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“AUKUS is a game changer for Australia, the United Kingdom and the United States – the legislation passed by US Congress will enhance our individual and collective capacity to support security, peace, and prosperity in the Indo-Pacific.

“I thank the United States Congress for their support for AUKUS.”

In addition, Australian contractors are authorised to train in US shipyards to support the development of Australia’s submarine industrial base.

A mechanism will be established for the US to accept funds from Australia to lift the capacity of the submarine industrial base, allowing US capacity to meet demand to deliver Virginia Class submarines to Australia as soon as possible.

A national exemption from US export control licencing requirements is authorised and complemented by the Defence Trade Controls Amendment Bill 2023, introduced into the Australian Parliament by the Australian federal government on 30 November 2023, and will allow the transfer of controlled goods and technology between Australia, the UK, and the US without the need for an export licence.

Directs expedited decision making for foreign military sales and exports not covered by the national exemption. This includes a pre-clearance list and expedited decision process for foreign military sales and a maximum of 45 days for a decision on exports not covered by the national exemption. This will expedite the delivery of critical defence capability.

The act adds Australia and the United Kingdom to Title III of the US Defense Production Act. This act allows the US government to incentivise its industrial base to expand the production and supply of critical materials and goods. Australia’s addition will open new opportunities for Australia-based industry to directly compete for business with the US government.

Earlier this weekend, senior US Defense leaders met with Australian Minister for Defence Industry Pat Conroy at the Pentagon on 13 December.

Department of Defense leaders Dr William LaPlante, Under Secretary for Acquisition and Sustainment, and performing the duties of Deputy Under Secretary of Defense for Policy, Dr Mara Karlin, hosted Australia’s Minister for Defence Industry to discuss the global security environment and opportunities for further collaboration.

Officials also discussed US support for Australia’s Guided Weapons and Explosive Ordinance Enterprise (GWEO).

“Australia’s alliance with the United States is unprecedented in scale, scope and significance, underscored by this momentous day for the AUKUS partnership, which demonstrates the historic AUKUS agreement is being implemented at pace,” according to Minister Conroy.

“The congressional approval of the National Defense Authorization Act brings us closer to realising a generational opportunity to ensure Australia is best equipped to not only protect Australians and their interests but to also support stability and security in the Indo-Pacific.

“Crucially, the passage of the NDAA will revolutionise and enable unprecedented levels of collaboration, scientific, technological and industrial cooperation and co-development and paves the way for Australia to continue to build up its sovereign workforce capacity.”