UNITED STATES–FEDERAL REPUBLIC OF GERMANY
AGREEMENT ON THE TRANSFER OF MILITARY EQUIPMENT AND COOPERATIVE DEVELOPMENT
Signed at Bonn, March, 1961
Preamble
In recognition of the continued friendship and close alliance between the United States of America and the Federal Republic of Germany under the auspices of the North Atlantic Treaty Organization (NATO);
In light of the pressing need to bolster collective defense and deterrence capabilities along the frontier of the Free World;
Desiring to strengthen the Federal Republic’s ground and air defense forces through the transfer of United States military materiel and technical expertise;
And in the spirit of transatlantic cooperation in military research and development,
The Government of the United States of America and the Government of the Federal Republic of Germany, hereinafter referred to as “the Parties,” have agreed as follows:
Article I – Transfer of Military Equipment
- The United States of America agrees to transfer, by sale under the terms of the Mutual Defense Assistance Act and related legislation, the following articles of military equipment to the Federal Republic of Germany:
- 216 units of the M40 106mm Recoilless Rifle
- 7,540 units of the M113 Armored Personnel Carrier
- 216 units of the M106 Self-Propelled Mortar Carrier
- 3,240 units of the M42 Duster Twin 40mm Self-Propelled Anti-Aircraft Gun
- 126 batteries of the MIM-14 Nike Hercules Surface-to-Air Missile System
- 895 units of the M41A1 Walker Bulldog Light Tank
- All equipment shall be provided in fully serviceable condition, suitable for immediate integration into Bundeswehr formations.
- Delivery of said equipment shall commence no later than April 1961 and shall be completed within a period not to exceed six years from the date of entry into force of this Agreement.
Article II – Cooperative Development of Anti-Tank Variant
- The Parties shall establish a bilateral working group to undertake the joint development of a new anti-tank vehicle based on the M41A1 Walker Bulldog chassis.
- The objective shall be to adapt and modernize the M41A1 platform to enhance its anti-armor capability through integration of anti-tank weaponry, optics, and improved mobility.
- Both nations shall contribute technical personnel, design facilities, and resources to this cooperative effort. The development program shall be administered jointly and governed by separate technical protocols annexed to this Agreement.
- Intellectual property and production rights shall be shared equally between the Parties.
Article III – Training and Technical Support
- The United States shall provide, at mutually agreed locations, training programs for Bundeswehr personnel in the operation and maintenance of all transferred equipment.
- Training shall include classroom instruction, field exercises, and operational simulations, with particular emphasis on the Nike Hercules system, the M113 family of vehicles, and the M41A1 platform.
- The United States shall also provide:
- Technical manuals and documentation in English and German, where feasible;
- Initial stocks of spare parts, sufficient for two (2) years of standard operational usage;
- Toolkits and maintenance equipment necessary for unit-level and depot-level repairs.
Article IV – Financial Provisions
- The total cost of the equipment and associated services shall be determined in accordance with the U.S. Foreign Military Sales procedures and detailed in an appended Financial Protocol (Annex A).
- Payments shall be made by the Federal Republic of Germany in U.S. dollars, in accordance with an agreed-upon schedule.
- Germany may request U.S. logistical support for transportation, warehousing, or port-of-entry services, subject to reimbursement.
Article V – End-Use and Non-Transfer Obligations
- The Government of the Federal Republic of Germany shall use all transferred equipment solely for defense purposes and in accordance with the NATO Treaty.
- The retransfer or resale of any item to third countries or parties is prohibited without the prior written consent of the Government of the United States.
Article VI – Entry into Force and Duration
- This Agreement shall enter into force upon signature by both Parties and shall remain in effect until all obligations herein have been fulfilled.
- The provisions related to the joint development of the anti-tank vehicle shall remain binding for a period of ten (10) years unless extended by mutual written agreement.
- Either Party may terminate the Agreement by providing six (6) months’ prior written notice, provided that such termination shall not affect commitments already undertaken.
Done at Bonn, this 20th day of March, 1961, in two original copies, in the English and German languages, both texts being equally authentic.
Annex A – Financial Protocol and Payment Schedule
Pursuant to Article IV of the Agreement
1. Estimated Total Contract Value
The total value of the arms transfer, inclusive of training, initial spare parts, and technical documentation, is estimated at $1,104,820,000 United States Dollars.
This sum includes:
- Cost of equipment
- Packaging and handling
- Technical publications
- Initial spare parts for two years
- Transportation and delivery
- Training and advisory services
(A classified pricing breakdown is available upon request through the U.S. Military Assistance Advisory Group – MAAG Bonn.)
2. Payment Terms
2.1 The Government of the Federal Republic of Germany shall remit payment in full, over four equal installments, according to the following schedule:
- First Installment – 30 days following entry into force of the Agreement
- Second Installment – 90 days following entry into force of the agreement
- Third Installment – 150 days following entry into force of the agreement
- Final Installment – 425 days following entry into force of the agreement
2.2 Payments shall be made to the account of the U.S. Department of Defense, via the Federal Reserve Bank of New York, in U.S. dollars.
3. Audits and Reporting
3.1 The U.S. Department of Defense shall furnish the Government of the Federal Republic of Germany with quarterly reports detailing the status of expenditures and deliveries.
3.2 Any discrepancies or objections must be submitted in writing within thirty (30) days of report issuance.
Annex B – Technical Protocol for Joint Anti-Tank Vehicle Development
Pursuant to Article II of the Agreement
1. Purpose
The Governments of the United States and the Federal Republic of Germany agree to collaborate in the joint development of a modernized anti-tank armored fighting vehicle utilizing the M41A1 Walker Bulldog chassis as a base platform.
2. Program Management
2.1 A Bilateral Program Office (BPO) shall be established, headquartered in Düsseldorf, staffed with an equal number of U.S. and German defense personnel.
2.2 The BPO shall be responsible for:
- Defining technical objectives and timelines
- Overseeing design and engineering phases
- Managing testing and prototyping
- Coordinating contractor involvement
3. Development Objectives
The new variant shall feature:
- Four M40 Recoilless Rifles in a quad-gun configuration, not dissimilar to the M-50 Ontos design
- Enhanced fire-control and optical targeting systems
- Upgraded engine and suspension systems for increased mobility
- Additional armor protection
4. Funding and Industrial Participation
4.1 Each Party shall contribute 50% of development costs, with initial funding of $2,500,000 USD committed within the first fiscal year.
4.2 German and American defense industries shall be granted equal opportunity for subcontracting and licensed production rights.
4.3 The vehicle shall be considered for mass production and deployment by both Parties pending successful trials.
5. Duration and Review
5.1 The development program shall operate for an initial term of two (2) years, with an option to extend by mutual agreement.
5.2 The BPO shall submit annual progress reports and conduct a formal mid-term review after 12 months.
Annex C – Training and Spare Parts Delivery Plan
Pursuant to Article III of the Agreement
1. Training Program
1.1 The United States shall provide comprehensive training for Bundeswehr personnel covering:
- Operator and crew-level training for all transferred vehicles and systems
- Unit maintenance and depot-level repair techniques
- Technical instruction for the Nike Hercules missile batteries
1.2 Training locations shall include:
- U.S. Army Europe facilities in Germany (e.g., Mannheim, Grafenwöhr)
- Redstone Arsenal, Alabama (Nike Hercules systems)
- Aberdeen Proving Ground, Maryland (mechanical and gunnery systems)
1.3 Training duration shall vary from 4 to 12 weeks depending on equipment type and technical complexity.
2. Spare Parts Delivery
2.1 Initial shipments of spare parts will be delivered alongside each tranche of equipment.
2.2 Parts coverage shall include:
- High-wear mechanical components
- Fire-control and electronics
- Tracks, wheels, and suspension elements
- Maintenance and repair toolkits
2.3 A complete two-year operational parts package shall be assembled in accordance with U.S. Army Tables of Organization and Equipment (TO&E).
3. Technical Documentation
3.1 Each system shall be accompanied by:
- Operator’s manuals (in English and German)
- Field-level maintenance manuals
- Depot-level technical repair guides
- Illustrated parts breakdowns and schematics
3.2 Updates and revisions will be issued as available, through the U.S. Army Liaison Office in Bonn.
