Israeli Offsets Soar; More Local Firms Earn a Share of buyback business 
http://www.defensenews.com/article/20130119/DEFREG04/301190023/Israel-8217-s-Offsets-Soar-59-More-Local-Firms-Earn-Share
Walking on Eggshells
However, Bar-On insists that Israeli defense purchases funded by annual U.S. foreign military financing (FMF) aid are exempt from sanctions and 50 percent offset demands. Instead, U.S. defense firms are encouraged to negotiate industrial participation contracts, with a reciprocal target value of 35 percent.“On FMF cases we walk on eggshells. There are no sanctions and no coercion… just the expectation for industrial participation with local firms based on merit,” Bar-On told the MoD business gathering.In a follow-up interview, Bar-On said she is well aware of Washington’s restrictions on direct offsets on FMF purchases, and sensitive to charges of so-called double dipping by demands for reciprocity from U.S. defense firms whose sales are funded by the U.S. government.“The Americans have very clear demands that 100 percent of the work associated with a particular U.S. defense procurement be done in the United States. But at the same time, we found that other products and other items of that same firm can be purchased here in Israel on the basis of quality and competitiveness,” she said.She added that U.S. firms often continue doing business in Israel well after initial industrial participation obligations are fulfilled.