Security Sector Governance Compacts Act
- Sponsor
- Rep. Jacobs, Sara [D-CA-51]
- Committees
- Armed Services Committee (primary)
- Last action
- Jul 20, 2026
Bottom line
This bill fundamentally reforms how the U.S. provides security assistance by linking it directly to a partner country's security sector governance quality through a new index, tiered system, and structured compacts.
What it actually does
This bill mandates the creation of a "Security Sector Governance Index" to assess the quality of governance in security sectors of U.S. partner countries. Based on this index, partner countries will be assigned to one of four tiers, which will then dictate the specific types of security assistance they are eligible to receive. The bill also authorizes the Secretary of State and Secretary of Defense to enter into multi-year "Security Sector Governance Compacts" with eligible Tier 2 and Tier 3 countries to foster institutional reforms, backed by a newly established Security Sector Compact Fund.
Proponents argue
Proponents argue that this bill will ensure U.S. security assistance is more effective, accountable, and aligned with democratic values by incentivizing good governance and preventing the misuse or illicit transfer of U.S.-origin defense articles. They contend that partners with well-governed security sectors are more reliable and contribute more effectively to global stability.
Opponents contend
Opponents might argue that the rigid tiered system could limit the flexibility of U.S. foreign policy, potentially alienating strategically important partners with imperfect governance. Concerns could also be raised about the administrative burden of developing and maintaining the index, or the potential for unintended consequences in critical security relationships if assistance is abruptly curtailed.
The bill is structured logically and clearly outlines its core mechanisms, making it accessible for an informed reader to understand its implications within a reasonable timeframe.
Section 3
Establishment of Security Sector Governance Index
This section requires the Secretary of State, through the Defense Security Cooperation University and the Office of Security Assistance, to develop a "Security Sector Governance Index" within 90 days of enactment. This index will assess the quality of security sector governance in U.S. partner countries, considering factors such as state corruption, civilian oversight, military involvement in politics and commerce, merit-based promotions, and human rights records. The development must involve consultation with the Secretary of Defense, the Bureau of Democracy, Human Rights, and Labor, and relevant nongovernmental organizations and experts.
Supporters argue
Proponents argue that establishing a standardized, data-driven index provides an objective and transparent basis for evaluating partner governance, ensuring U.S. security assistance is strategically deployed and promotes accountability.
Critics contend
Opponents might raise concerns about the inherent subjectivity in defining and measuring complex governance factors across diverse national contexts, potentially leading to an index that is difficult to apply consistently or is perceived as biased.
Tradeoffs
The provision seeks to balance the need for objective, measurable criteria with the inherent complexities and sensitivities of assessing governance in sovereign nations, requiring careful calibration of metrics and consultation.
Section 4
Annual Assessments and Tiered Ranking System
This section requires the Secretary of State, in coordination with the Secretary of Defense, to conduct annual assessments of each security partner country based on the newly developed Security Sector Governance Index. Following these assessments, each country will be designated into one of four tiers: Tier 1 (low quality governance), Tier 2 (low to mid), Tier 3 (mid to high), or Tier 4 (high quality governance). These assessments and designations, along with annual updates, must be reported to the appropriate congressional committees.
Section 5
Tier-Based Restrictions on Security Sector Assistance
This section establishes strict limitations on the types of security sector assistance a country can receive based on its assigned tier. Tier 1 countries are restricted to governance-focused aid (e.g., defense institution building, human rights training). Tier 2 countries can receive Tier 1 assistance plus anti-terrorism aid, tailored capacity building, and nonlethal equipment. Tier 3 countries can receive Tier 1 and 2 assistance plus lethal equipment and advanced military education/exercises. Tier 4 countries are eligible for the broadest range of cooperation, including international armament cooperation and foreign internal defense. The section includes an exemption for already obligated funds for one year and a waiver mechanism for U.S. national security interests, which requires congressional notification and an annual update.
Section 6
Security Sector Governance Compacts
This section authorizes the Secretary of State and Secretary of Defense to jointly establish multi-year "Security Sector Governance Compacts" with Tier 2 or Tier 3 partner countries that are not under a waiver. These compacts aim to provide structured security sector assistance to achieve shared security objectives and improve governance. Eligibility criteria include a country's performance on the Index, commitment to mutual objectives, capacity to absorb assistance, and strategic significance. Compacts must include joint planning, tailored goals, a commitment from the partner country to sustain capabilities, coordination with other donors, and consultation with the partner country's national legislature and civil society. A minimum of 30% of compact assistance must be dedicated to institutional capacity building.
Section 7
Authorization of Appropriations and Security Sector Compact Fund
This section authorizes the use of funds from the existing International Security Cooperation Program account for the purposes of entering into the new Security Sector Governance Compacts. Crucially, it also establishes a new "Security Sector Compact Fund" in the U.S. Treasury, to be administered jointly by the Department of State and Department of Defense. The bill authorizes "such sums as may be necessary" to be appropriated to this Fund for fiscal years 2027 through 2031. These funds are specifically designated for training, technical assistance, capacity building, defense equipment, and military-to-military exchanges to advance shared security goals, including defense institutional capacity building, counterterrorism, and maritime security operations. Congressional notification is required for any obligations from this Fund.
Section 8
Graduation from Assistance Assessment
This section requires the Secretary of State, in coordination with the Secretary of Defense, to conduct an annual assessment of any partner country that has been ranked as a Tier 4 (high quality governance) for five consecutive years. The purpose of this assessment is to determine whether the country should continue to receive security sector assistance, or if the type and amount of such assistance should be adjusted, based on whether previously identified short-term and long-term desired outcomes have been achieved. The provision explicitly exempts North Atlantic Treaty Organization (NATO) member countries, Australia, New Zealand, Japan, and South Korea from this assessment requirement.
This provision allows security sector assistance funds that were obligated to a partner country before its tier ranking, but which the country is no longer eligible to receive due to a lower tier designation, to still be expended during the first year in which the country is ranked in the lower tier.
Section 5(e)(1)
Why it matters:This is standard legislative practice to manage the transition period for funding. It prevents immediate disruption or waste of already committed funds, allowing time for U.S. agencies and partner countries to adjust to new eligibility rules.
Case for: Supporters would argue that this exemption ensures continuity for ongoing projects, avoids immediate disruption to critical security programs, and prevents the inefficient cancellation of already planned and funded activities, providing a grace period for adaptation.
Case against: Critics might contend that this provision acts as a loophole, delaying the immediate impact of a lower tier designation and potentially allowing assistance to flow to countries whose governance has been deemed poor for an additional year, thereby undermining the bill's intent for prompt accountability.
Estimated impact: The impact could be significant, depending on the volume of pre-obligated funds for countries whose tier status changes, potentially allowing millions of dollars in assistance to proceed despite new restrictions.
This provision stipulates that if a country receives a waiver from the tiered assistance restrictions for five consecutive years, it becomes ineligible for further waivers. To continue receiving assistance under a waiver, a new law must be enacted specifically providing for its continuation and identifying the precise purpose of the security sector assistance.
Section 5(f)(4)
Why it matters:This is a mechanism to ensure congressional oversight and prevent indefinite executive waivers from undermining the core policy. It forces a legislative re-evaluation for long-term exceptions, which is a standard practice for special authorities.
Case for: Supporters would argue that this clause prevents the waiver authority from becoming a permanent workaround to the tiered system, ensuring that any prolonged exceptions for strategically important but poorly governed partners require explicit legislative approval and public justification, thereby strengthening accountability.
Case against: Critics might contend that this provision could create significant diplomatic and national security challenges. If a strategically critical partner consistently fails to improve governance but remains essential for U.S. interests, forcing a new law every five years could lead to legislative bottlenecks or difficult public debates that strain alliances.
Estimated impact: Potentially high for countries that consistently rely on waivers for critical assistance, forcing a legislative debate and potentially impacting the continuity of security cooperation.
This provision mandates that the Secretary of State, in consultation with the Secretary of Defense and relevant external stakeholders, establish and submit to the appropriate congressional committees definitions for "lethal equipment" and "non-lethal equipment" within 180 days of the Act's enactment.
Section 5(h)
Why it matters:It's likely placed here to keep it close to the provisions it directly impacts, as the distinction between lethal and non-lethal equipment is central to the tiered assistance framework. However, its placement can make it less prominent than other definitional clauses.
Case for: Supporters would argue that clear, agreed-upon definitions for lethal and non-lethal equipment are absolutely critical for the practical and consistent implementation of the tiered assistance system, ensuring that the restrictions on aid for Tier 2 and Tier 3 countries are applied uniformly and transparently.
Case against: Critics might contend that the process of defining these terms, especially with external stakeholders, could be contentious and time-consuming, potentially delaying the full operationalization of the tiered assistance framework or leading to definitions that are either too broad or too narrow, creating unintended consequences.
Estimated impact: High, as these definitions will directly shape the types of defense articles and capabilities that can be transferred to partner countries, impacting U.S. security cooperation and defense industry sales.