[Congressional Record Volume 142, Number 100 (Tuesday, July 9, 1996)]
[Senate]
[Page S7500]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          PASSAGE OF H.R. 3121

 Mr. SARBANES. Mr. President, today by unanimous consent the 
House approved H.R. 3121, a bill that will make a real contribution to 
increasing transparency and improving congressional oversight over arms 
transfers. In taking this action, the House accepted the Senate-passed 
amendments, obviating the need for a conference and clearing the bill 
for signature by the President. Since no report was filed with the bill 
in the Senate, I would like to take this opportunity to explain some of 
the changes that were made in the Foreign Relations Committee, and the 
rationale behind them.
  First, we deleted a section that would have raised the thresholds 
above which arms sales must be notified to Congress. The current 
levels--$14 million for major defense equipment, $50 million for any 
defense articles or services, and $200 million for design and 
construction services--cannot be raised without reducing effective 
oversight, particularly since many of the most serious abuses of human 
rights take place with less sophisticated weapons systems.
  Second, we lengthened the notification period for grant transfers of 
excess defense articles to 30 days, which is the current standard under 
section 516 of the Foreign Assistance Act of 1961. H.R. 3121 
streamlines the existing excess defense article authorities, giving the 
administration added flexibility in many areas in exchange for a tight 
cap on the value of weapons that are provided to foreign countries 
without cost. Although it would have been preferable that this new cap 
of $350 million be calculated according to original acquisition cost 
rather than current value, the important point is that the cap is a 
firm one.
  I remain concerned, however, about procedures for determining the 
current value of excess defense articles. In January 1994, a GAO report 
found that ``irregularities in pricing/valuing EDA's compromise the 
reliability of EDA data.'' It concluded that ``the military services 
did not always adhere to guidelines for pricing/valuing EDA's, and as a 
result, the acquisition and current values of the EDA program were 
understated.''
  According to pricing directives now in effect, equipment may be 
valued at anywhere between 5 and 50 percent of its original acquisition 
cost, depending on its age and condition. Over the past 4 years the 
current values have averaged about 25 percent of acquisition costs. It 
is the congressional expectation that, in implementing this provision, 
the Secretary of Defense will instruct the military services to adhere 
consistently to pricing directives that accurately reflect the value of 
the article to be transferred. Pricing decisions must be made without 
regard to the recipient of the article or to the amount of equipment 
that could be transferred within the statutory ceiling.
  A third change to the initial version of the bill is a renewal of the 
requirement in current law that excess defense articles be offered to 
Greece and Turkey at the same ratio that applies to foreign military 
financing. The purpose of this provision is to promote peace and 
stability in the eastern Mediterranean by maintaining the military 
balance and restraining arms transfers to the region.
  Fourth, we have reinstated an annual report that will show all the 
defense articles and services the United States provided to each 
foreign country in the previous fiscal year. There is growing concern 
about the proliferation of authorities under which the United States 
provides military aid, weapons and training to foreign countries. In 
addition to traditional sources such as grant military aid, 
international military education and training, leases and loans, and 
commercial sales, there have now been added such authorities as excess 
defense article transfers, drawdowns, cascading under the CFE Treaty, 
the defense export loan guarantee facility, and the military-to-
military contacts program. Obviously it is important that, in making 
foreign policy decisions, we have a complete picture of all the ways in 
which we are providing arms or military assistance to other countries.
  Fifth, a provision was added repealing the sunset clause on the 
Nuclear Proliferation Prevention Act. The NPPA, which refines and 
expands sanctions against countries and companies that help non-nuclear 
weapon states to acquire nuclear weapons, would otherwise expire with 
the enactment of the next State Department authorization bill.
  Finally, two new sections increase transparency in reporting of arms 
sales. Section 155 requires that certifications of government-to-
government arms sales, which are submitted under section 36(b) of the 
Arms Export Control Act, and notifications of commercial arms sales, 
submitted under section 36(c), are printed in the Federal Register. 
Section 156 ensures that at least the name of the country and the type 
and quantity of equipment for which commercial export licenses are 
issued be publicly disclosed, unless the President determines this 
would be contrary to the national interest. This reverses the burden of 
proof that applies under current law, where commercial licenses are 
revealed only if the Secretary of State determines it to be in the 
national interest to do so. Both of these provisions are of particular 
interest to the arms control and human rights communities, who have 
experienced unnecessary difficulty in obtaining information about 
unclassified arms sales.

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