[House Report 104-519]
[From the U.S. Government Publishing Office]
104th Congress Rept. 104-519
HOUSE OF REPRESENTATIVES
2d Session Part 1
_______________________________________________________________________
TO MAKE IMPROVEMENTS TO CERTAIN DEFENSE AND SECURITY ASSISTANCE LAWS
AND TO AUTHORIZE THE TRANSFER OF NAVAL VESSELS TO CERTAIN FOREIGN
COUNTRIES
_______
April 16, 1996.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Gilman, from the Committee on International Relations, submitted
the following
R E P O R T
[To accompany H.R. 3121]
[Including cost estimate of the Congressional Budget Office]
The Committee on International Relations, to whom was
referred the bill (H.R. 3121) to amend the Foreign Assistance
Act of 1961 and the Arms Export Control Act to make
improvements to certain defense and security assistance
provisions under those Acts, to authorize the transfer of naval
vessels to certain foreign countries, and for other purposes,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
Background and Purpose
The purpose of title I of this bill, H.R. 3121, is to amend
authorities under the Foreign Assistance Act (FAA) of 1961, as
amended, and the Arms Export Control Act (AECA) to revise and
consolidate defense and security assistance authorities, in
particular by updating policy and statutory authorities. The
genesis of this effort began nearly seven years ago with H.R.
2655, the International Cooperation Act of 1989. Subsequent
legislation by the then Committee on Foreign Affairs, including
H.R. 2508, the International Cooperation Act of 1991, and later
bills, continued efforts to amend and update these important
authorities.
On June 8, 1995, the House of Representatives passed H.R.
1561, the American Overseas Interests Act of 1995, by a vote of
222-192. Title XXXI of Division C, the ``Foreign Aid Reduction
Act of 1995,'' was dedicated to defense and security assistance
provisions. On March 12, 1996, the House of Representatives
agreed to the conference report on H.R. 1561 by a vote of 226-
172. The conference report did not include provisions from
Division C of the House-passed bill.
This legislation, H.R. 3121, continues the effort by the
Committee on International Relations to amend the FAA and AECA
to make improvements to defense and security assistance
provisions under those Acts. The provisions included in title I
of this bill are nearly identical to title XXXI of H.R. 1561
and are the product of bipartisan effort and cooperation and
enjoy the strong support of the Departments of State and
Defense.
Central to consideration of this bill is the Committee's
view that this legislation fulfills its responsibilities as an
authorizing committee. Specifically, this legislation codifies
in permanent law authorizing language which has been too long
carried on annual appropriations measures.
Title I of this bill is organized by chapter as follows:
Chapter 1 modifies applicable provisions on terms and
criteria of financing assistance, including drawdown
authorities and a rewrite of the excess defense article
authority.
Chapter 2 modifies terms of assistance for the
international military education and training (IMET)
program and includes language limiting Indonesia to E-
IMET assistance.
Chapter 3 clarifies current law authorities under
which Antiterrorism assistance is provided.
Chapter 4 modifies authorities under which assistance
for international narcotics is provided.
Chapter 5 deals with general provisions regarding
military assistance including approval of third-country
transfers, standardization of congressional review
procedures for arms sales, definitions, arms sales
certification thresholds, designation of major non-NATO
allies, end-use monitoring, and other miscellaneous
issues.
The purpose of title II of this bill is to authorize the
transfer of naval vessels to certain foreign countries pursuant
to the Administration's request of January 29, 1996.
Legislation authorizing the proposed transfer of these
ships is required by section 7307(b)(1) of Title 10, United
States Code, which provides in relevant part that ``a naval
vessel in excess of 3,000 tons or less than 20 years of age may
not be sold, leased, granted . . . or otherwise disposed of to
another nation unless the disposition of that vessel is
approved by law. . .'' Each naval vessel proposed for transfer
under this legislation displaces in excess or 3,000 tons and/or
is less than 20 years of age and therefore the Committee must
act.
Title II of this bill authorizes the transfer of ten naval
vessels (8 sales, 1 lease, 1 grant) to the following countries:
To the Government of Egypt
1 ``OLIVER HAZARD PERRY'' class frigate GALLERY (FFG
26)
Sales: $47.2 million
To the Government of Mexico
2 ``KNOX'' class frigates: STEIN (FF 1065) and MARVIN
SHIELDS (FF 1066)
Sales: $5.9 million
To the Government of New Zealand
1 ``STALWART'' class ocean surveillance ship: TENACIOUS
(T-AGOS 17)
Sale: $7.7 million
To the Government of Portugal
1 ``STALWART'' class ocean surveillance ship: AUDACIOUS
(T-AGOS 11)
Grant: $13.7 million
To Taiwan (the Taipai Economic and Cultural
Representative Office in the United States)
3 ``KNOX'' class frigates: AYLWIN (FF 1081), PHARRIS
(FF 1094), and VALDEZ (FF 1096)
Sale: $8.2 million.
1 ``NEWPORT'' class tank landing ship: NEWPORT (LST
1179)
Lease: No rent lease
To the Government of Thailand
1 ``KNOX'' class frigate: OUELLET (FF 1077)
Sale: $2.7 million
According to the Department of Defense, the Chief of Naval
Operations has certified that these naval vessels are not
essential to the defense of the United States.
As detailed above, the U.S. plans to transfer eight naval
vessels by sale pursuant to section 21 of the Arms Export
Control Act; one of the vessels will be transferred as a lease
pursuant to Chapter six of the Arms Export Control Act; and one
of the vessels will be transferred as a grant pursuant to
section 519 of the Foreign Assistance Act of 1961, as amended.
The U.S. will incur no costs for the transfer of the naval
vessels under this legislation. The foreign recipients will be
responsible for all costs associated with the transfers of the
vessels, including maintenance, repairs, training, and fleet
turnover costs. Any expenses incurred in connection with the
transfers will be charged to the foreign recipients.
Through the sale of these naval vessels, this legislation
generates $71.7 million in revenue for the U.S. Treasury. In
addition, through repair and reactivation work, service
contracts, ammunition sales, and savings generated from
avoidance of storage/deactivation costs, the Navy estimates
this legislation generates an additional $525 million in
revenue for the U.S. Treasury and private U.S. firms.
Committee Action
Numerous hearings were held by the Committee on
International Relations in the fall of 1995 which were
dedicated to Division C of H.R. 1561. For a full list of these
hearings see House Report 104-128, Part I.
On March 20, 1996, Chairman Benjamin A. Gilman, along with
the Ranking Democratic Member, Lee Hamilton, introduced H.R.
3121. On March 21, 1996, the Committee on International
Relations received testimony on the legislation from Mr. John
P. Caves, Deputy Director of Plans, Defense Security Assistance
Agency, and Ms. Barbara Larkin, Acting Assistant Secretary for
Legislative Affairs, Department of State. The Committee
subsequently debated the measure and reported out H.R. 3121
unanimously by voice vote.
Rollcall Votes and Amendments and Final Passage
During consideration of H.R. 3121 by the Committee on
International Relations on March 21, 1996, there were no
amendments and a rollcall vote was not requested on final
passage.
Description of Amendment, Motion, Order, or Other Proposition
Mr. Roth moved and the Committee agreed that the Chairman
or his designee be requested to seek consideration of H.R. 3121
on the suspension calendar.
Section-By-Section Analysis
Title I--Defense and Security Assistance
Chapter I--Military and Related Assistance
Section 101. Terms of Loans Under the Foreign Military Financing
Program.
Section 101 states that loans made available under section
23 of the Arms Export Control Act shall not be provided at
concessional rates of interest. This section updates and
codifies in the Arms Export Control Act the FMF loan terms that
have been carried annually on the Foreign Operations
Appropriation bill.
Section 102. Additional Requirements under the Foreign Military
Financing Program.
Section 102 amends section 23 of the Arms Export Control
Act to codify several provisions which have been carried on
annual appropriations bills. The first provision allows the
President to exempt Israel from certain costs imposed on
government-to-government arms sales. Utilization of this
authority is contingent on Israel providing the U.S. the same
authority on a reciprocal basis. The second provision directs
the Secretary of Defense, as requested by the Director of the
Defense Security Assistance Agency, to conduct audits on a
nonreimbursable basis of firms which have entered into
contracts with foreign governments under which grant or loan
Foreign Military Financing under section 23 of the Arms Export
Control Act is utilized. The third provision states that the
Committee shall receive a 15-day pre-notification for any
country or international organization which has been approved
for cash flow financing for the procurement of defense
articles, services or design and construction services in
excess of $100 million that is financed in whole or in part
with funds made available under the Arms Export Control Act or
the Foreign Assistance Act of 1961. The fourth provision limits
to $100 million the amount of grant or loan Foreign Military
Financing under section 23 of the Arms Export Control Act that
may be made available to countries, other than Egypt and
Israel, for the purpose of financing commercial sales. Finally,
the fifth provision in this section requires a report which
details all articles, services, credits, guarantees, and any
other form of assistance furnished by the U.S. in the preceding
fiscal year to countries and international organizations for
the detection and clearance of landmines.
With respect to the demining activities, the Committee
directs the Secretary of State to make all possible efforts to
ensure that assistance, including the provision of mine
detection/clearing equipment, mine clearing training and other
assistance related to reducing the threat of injury from mines,
especially to civilian personnel, be made available to
Solvenia, Croatia, Bosnia-Herzegovina, Macedonia, Angola and
Mozambique.
Section 103. Drawdown Special Authorities.
Section 103 increases the special drawdown authorities of
defense articles and services from stocks to assist foreign
countries from $75 million to $100 million (for unforeseen
emergencies) and from $75 million to $150 million (for national
interests relating to international narcotics, international
disaster assistance, migration and refugee assistance and POW/
MIA repatriation efforts). The POW/MIA repatriation drawdown is
codified from the current appropriations law. It allows for the
drawdown of up to $15 million in defense articles and services
to Vietnam, Cambodia and Laos to support efforts to locate and
repatriate members of the U.S. Armed Forces and civilian who
remain unaccounted for since the end of the Vietnam war.
Section 104. Transfer of Excess Defense Articles.
Section 104 streamlines and consolidates DOD authorities of
current law to transfer excess defense articles.
This new consolidated authority stipulates that only
countries which are justified in the annual congressional
presentation documents for military assistance or counter-
narcotics programs, or separately justified during the fiscal
year for such purposes, are eligible to receive excess defense
articles. This section retains current limitations on EDA
transfers, including: excess defense articles must be drawn
from existing DoD stocks; no DoD procurement funds may be
expended in connection with the transfer; the transfer of EDA
will not have an adverse impact on the military readiness of
the U.S.; that an analysis be prepared on the impact of
providing EDA on a grant versus sales basis; and the transfer
of such articles is consistent with the policy framework for
the Eastern Mediterranean pursuant to section 620C of the
Foreign Assistance Act.
An additional limitation on proposed transfers requires the
President to determine that the transfer will not have an
adverse impact on U.S. defense industry and that the transfer
will not reduce opportunities of U.S. companies to sell new or
used equipment to countries where transfers are either being
transferred or being considered for transferred. Such
determination is also required to be included as part of the
congressional notification on any proposed transfer (see
below). The Committee would note that such determination
applies to both grant transfers and sales of EDA. The Committee
expects the Defense Security Assistance Agency to work closely
with U.S. defense industry to ensure that both the spirit and
the law are met fully with regard to this limitation. The
Committee will be monitoring the implementation of this
provision closely.
This section also codifies EDA provisions carried over form
appropriations law including a provision which directs that EDA
provided to NATO countries on the southern and southeastern
flank of NATO and major non-NATO nations on such southern and
southeastern flank shall be given priority to the maximum
extent feasible on the delivery of EDA over other countries.
This section also includes a subsection which prohibits the
expenditure of DoD funds for packing, crating, and handling
associated with transfers of EDA. Transportation may be
provided and paid for with DoD funds but on the strict terms
outlined in this subsection.
Other subsections of this section include a provision for
congressional notification of proposed transfers of EDA if the
proposed transfer is significant military equipment or EDA
valued at more than $7 million (acquisition cost). This
notification requires that specific information and assessments
be made with regard to the proposed transfer.
This section also includes an aggrevate annual limitation
of $350 million (current value) on the transfer of EDA under
this section to countries in any fiscal year. The aggregate
annual limitation shall apply beginning in fiscal year 1997.
The Committee directs the Defense Security Assistance Agency to
promptly consult with the Committee should DSAA consider
changing the regulations or definitions addressing how current
value is determined. The Aggregate ceiling does not apply to
sales of EDA.
Finally, this section requires that the Executive branch
expand upon the current EDA section in the annual congressional
presentation documents to provide the committee with specific
information.
Section 105. Excess Defense Articles for Certain European Countries.
Section 105 authorizes DoD to expend funds for crating,
packing, handling and transportation of excess defense articles
transferred under section 516 of the Foreign Assistance Act to
countries that are eligible to participate in the Partnership
for Peace and that are eligible under the SEED Act. Those
countries include Albania, Bulgaria, the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia
and Slovenia.
Chapter 2--International Military Education and Training
Section 111. Assistance for Indonesia.
Section 111 authorizes the resumption of IMET for Indonesia
with the condition that all such IMET be comprised of the human
rights-oriented Expanded IMET program as described in clauses
(i) through (iv) of the second sentence of section 541 of 22
U.S.C. Sec. 2347. The decision to resume targeted IMET for
Indonesia is based on the importance of Indonesia as a trade
and security partner, on professionalism and human rights
sensitivity of the foreign military beneficiaries.
This limited restoration of IMET, therefore, should not be
interpreted as an expression of congressional satisfaction with
the Government of Indonesia's human rights performance in East
Timor or elsewhere in Indonesia. The Congress remains concerned
about poor human rights conditions in Indonesia and urges the
Administration to actively promote better human rights
practices. Moreover, the Congress looks for improvements in
these areas prior to restoration of the full range of security
cooperation with Indonesia as it existed prior to the massacre
in Dili, East Timor, in November 1991.
Section 112. Additional Requirements.
Section 112 amends the Foreign Assistance Act to place into
permanent law several provisions carried in annual
appropriations law regarding the IMET program: first, a
provision which allows NGOs to be eligible for Expanded IMET
assistance; second, a new authority which allows foreign
military and civilian defense personnel to attend U.S. flight
training schools and programs if such attendance is agreed to
on a reciprocal basis with a foreign country and is
accomplished without charge. This authority will allow the Air
Force to train pilots from the U.K. and France and other
countries on a reciprocal basis without cost to the U.S.
Government. A third provision modifies current law to prohibit
grant IMET assistance to the following ``high-income
countries'': Austria, Finland, the Republic of Korea, Singapore
and Spain. For purposes of this section ``high-income country''
means any nation listed as high-income earning countries in the
``World Development Report, 1994'' and the Government of
Korea). Current law limits grant assistance to $100,000 to any
high-income country.
Chapter 3--Antiterrorism Assistance
Section 121. Antiterrorism Training Assistance.
Section 121 makes a variety of amendments to the Foreign
Assistance Act relating to the manner in which Antiterrorism
Training Assistance (ATA) assistance may be provided. When the
ATA program was established, a variety of restrictions were
imposed on how training could be provided and specified that
only certain types of material assistance could be provided due
to lingering sensitivities about U.S.-supported police training
assistance. Some of these restrictions currently make the
program less effective.
Section 121 allows assistance through the ATA program to be
provided outside the United States, mirroring other current law
enforcement training authorities. This modification will make
the program more efficient as well as more cost effective.
Section 121 also removes the specific list of material
assistance that may be provided in favor of a restriction on
the provision of arms and ammunition. Arms and ammunition may
only be provided if they are directly and integrally related to
training being provided and if the Congress is notified 15 days
in advance in accordance with regular reprogramming procedures.
This change also makes the program consistent with other U.S.-
supported law enforcement training programs.
Section 122. Research and Development Expenses.
Section 122 would allow the Bureau of Diplomatic Security's
Office of Antiterrorism Assistance to use funds, as
practicable, for the State Department's Technical Support
Working Group. Such funds could be made available during the
fiscal year only after the Office of Antiterrorism Assistance
determines that its remaining annual training requirements,
related equipment purchases, and contractual obligations can be
effectively met by the existing funding allocation. Priority
use of funds to carry out chapter 8 of part II of the Foreign
Assistance Act (22 U.S.C. Sec. 2349aa et seq.; relating to
antiterrorism assistance) shall continue to focus upon training
and training-related equipment purchases.
Chapter 4--Narcotics Control Assistance
Section 131. Additional Requirements.
Section 131 makes the following technical and
administrative amendments to the narcotics control authorities
under the Foreign Assistance Act.
Section 131(a) restates a one-year provision of the
International Narcotics Control Corrections Act of 1994
relating to programs to combat other international criminal
activities and makes the provision permanent law. The section
reflects concern over the increased level of organized
international criminal activity and the threat posed by such
activity to U.S. national security. The section is intended to
allow the provision of assistance to address a variety of
criminal activities that may not be directly related to
narcotics production and trafficking, such as alien smuggling,
counterfeiting, and other types of illegal international
activity. The section also reflects the creation in the
Department of State of the Bureau of International Narcotics
and Law Enforcement Affairs. The Committee intends that all
Department of State anticrime activities (other than
antiterrorism activities) be conducted by that bureau.
Section 131(b) establishes administrative authorities for
the provision of international narcotics control assistance by
allowing the President to accept contributions from other
governments to augment existing narcotics control activities
and to provide training and other assistance on a reimbursable
basis. The United States has the most well-established
mechanism for providing a wide variety of international
counter-narcotics related assistance. An integral component of
the U.S. international narcotics control strategy for the past
seven years has been efforts to increase support for counter-
narcotics activities by other countries affected by the
narcotics problem. However, most of these countries do not have
any type of mechanism available that would allow the effective
delivery of such assistance. The authority to accept
contributions from other interested foreign governments will
allow the President to administer another country's assistance
efforts under the same terms and conditions as U.S. assistance.
Section 131(c) requires that funds authorized under other
sections of the Foreign Assistance Act for narcotics control or
crime purposes be apportioned directly to the Bureau for
International Narcotics and Law Enforcement Affairs. This
provision is intended to address a problem with internal
transfers of funds within the Department and between the
Department and AID (or AID's successor). In FY95, $5 million in
Economic Support Fund assistance was authorized for anticrime
programs. These funds experienced a long delay in obligation
because of the cumbersome inter-Department transfer system. A
similar situation arose with respect to the $30 million
authorized for law enforcement assistance to Central Europe and
the independent states of the former Soviet Union. Despite the
urgent problems in those countries which the assistance was
designed to address, the obligation of these funds was delayed
for several months due to the necessity to transfer the money
from AID to the Department and then within the Department.
Section 131(c) also allows the Secretary to receive property
declared excess by other U.S. Government agencies and to
transfer such property to foreign governments under the same
terms and conditions as funds authorized for international
narcotics control programs.
Section 132. Notification Requirement.
Section 132 requires the Director of the Office of National
Drug Control Policy to notify the appropriate congressional
committees 15 days in advance of using the authority of the
National Narcotics Control Leadership Act of 1988 to reallocate
resources and personnel associated with international narcotics
control programs and activities. The Committee believes that in
order to fulfill its oversight responsibilities with respect to
such programs and activities, no such reallocation of personnel
or resources should be permitted without the prior consultation
and approval of the Committee.
Section 133. Waiver of Restrictions for Narcotics-Related Economic
Assistance.
Section 133 restates for FY96 and FY97 a provision of law
allowing the President to provide narcotics-related economic
assistance without regard to other restrictions on assistance,
except for countries which have been decertified for narcotics
concerns or which systematically violate internationally
recognized human rights.
Chapter 5--Other Provisions
Section 141. Standardization of Congressional Review Procedures for
Arms Transfers.
Section 141 eliminates anomalies in current law regarding
congressional review procedures applicable to different
categories of transfers to the same country or group of
countries. This section creates common review procedures for
given recipients irrespective of the nature of the type of
transfer (for example, FMS or commercial sale). This section
also equates the statutory period of time for enactment of a
joint resolution of disapproval of a transfer to the period of
time stipulated for review of that transfer. Finally, this
section standardizes the requirements for all types of sales
for any Presidential waiver of congressional notification.
The Committee notes that this section does not affect the
informal process agreed to between the Committee and the
Administration regarding arms transfers.
Section 142. Standardization of Third Country Transfers of Defense
Articles.
Section 142 standardizes the rules governing the retransfer
of certain U.S.-origin military equipment. Currently,
retransfer regulations for direct commercial sales and FMS
sales differ with respect to retransfers. By standardizing the
rules governing third party transfers of FMS equipment and
commercial sales this section provides equitable treatment of
equipment previously bought under FMS or DCS. While requests to
approve retransfers of the type permitted under this proposal
are routinely granted under the current system, the requirement
to seek U.S. government approval is administratively burdensome
for both the foreign parties and the U.S. government. This
section also details the specific conditions under which the
consent of the President is required for retransfers to occur.
Section 143. Increased Standardization, Rationalization, and
Interoperability of Assistance and Sales Programs.
Section 143 amends the Foreign Assistance Act to remove
country specific references with respect to standardization,
rationalization and interoperability of assistance and sales
programs, thereby allowing the U.S. to pursue these objectives
with other nations. Section 515(a)(6) of the Foreign Assistance
Act (current law) states that the President may assign members
of the U.S. Armed Forces in a foreign country the function of
``promoting rationalization, standardization and
interoperability, and other defense cooperation measures among
members of NATO, and the armed forces of Japan, Australia and
New Zealand. . .'' By deleting the specific country references,
this section makes it clear that U.S. security assistance
officers may pursue those functions worldwide.
Section 144. Definition of Significant Military Equipment.
Section 144 amends the Arms Export Control Act to provide a
definition of significant military equipment as defined in the
International Traffic in Arms Regulation (ITAR).
Section 145. Elimination of Annual Reporting Requirements relating to
the Special Defense Acquisition Fund.
Section 145 repeals an annual reporting requirement in the
Special Defense Acquisition Fund (SDAF) which is no longer
needed or useful. Section 53(a) of the Arms Export Control Act
requires a report on specific SDAF issues related to the SDAF
fund for which monies are no longer being appropriated. The
report is therefore obsolete and this section eliminates the
report.
Section 146. Cost of leased Defense Articles that Have been Lost or
Destroyed.
Section 146 conforms provisions within the AECA which
require reimbursement for the cost of leased defense articles
that have been lost or destroyed. Current law requires the
leasing country to pay ``the replacement cost (less any
depreciation in the value) of the articles if the articles are
lost or destroyed while leased.'' In circumstances in which the
leased item is not going to be replaced by the U.S. Government,
the rationale that justifies charging the foreign government
the full replacement cost is no longer valid or just. Section
21(a)(1)(A) of the Arms Export Control Act contains a provision
regarding the pricing of items to be sold which the U.S. does
not intend to replace: ``The President may sell. . . if such
country agrees to pay, in the case of a defense article not
intended to be replaced at the time such an agreement is
entered into, not less than the actual value thereof.'' This
section applies the same rationale to the pricing of lost or
destroyed leased items.
Section 147. Designation of Major Non-NATO Allies.
Section 147 designates Australia, Egypt, Israel, Japan,
Korea and New Zealand as major non-NATO allies for purposes
under the Foreign Assistance Act and Arms Export Control Act.
This section also authorizes the President to designate
additional major non-NATO allies and terminate such
designations if he notifies the Congress.
Sections 148. Certification Thresholds.
Section 3189 amends the Arms Export Control Act to increase
the dollar thresholds for reporting arms sales to the Congress:
from $14 million to $25 million for major defense equipment;
from $50 million to $75 million for defense articles and
services; and from $200 million to $300 million for design and
construction services.
Section 149. Depleted Uranium Ammunition.
Section 149 amends the Foreign Assistance Act to place into
permanent law a provision carried in annual appropriations law
that restricts the sale or transfer of M-833 antitank shells or
any comparable antitank shell containing a depleted uranium
penetrating component to any country except for NATO member
states, major non-NATO states and Taiwan. The section also
contains a national security interest waiver for the President.
Section 150. End-Use Monitoring of Defense Articles and Defense
Services.
Section 150 directs the President to establish a
comprehensive end-use monitoring program for defense articles
and services in order to improve accountability with respect to
those defense articles and services sold, leased or exported
under the Arms Export Control Act or Foreign Assistance Act.
The Committee believes that the benefits of an effective system
of pre-and post-shipment verifications are clear. A random
selection of licenses/applications for bona fides and end use
checks will deter those who would illegally acquire and/or
divert U.S defense articles. Having proven the effectiveness of
this type of program for commercial arms transactions through
the Blue Lantern program at the Office of Defense Trade
Controls in the Department of State, the Committee believes
that there would be clear benefits in using a similar procedure
for FMS sales. Accordingly, this section directs the President
to establish a comprehensive program which covers both
commercial and FMS types of transactions. This section outlines
the purposes and objectives of the program and requires a
report on the implementation of the new program.
The Committee places a high priority on the timely
establishment and effective implementation of such a program.
Section 151. Brokering Activities relating to Commercial Sales of
Defense Articles and Services.
Section 151 requires U.S. persons (and foreign persons
located in the U.S.) involved in defense trade of U.S. and non-
U.S. defense equipment or technology to register with the U.S.
government and provides the U.S. government authority to
regulate such brokering activities. The Arms Export Control Act
provides the Department of State with the authority to regulate
the destination and use of U.S. origin and U.S.-made defense
commodities. However, the AECA does not authorize the
Department to regulate the activities of U.S. persons (and
foreign persons located in the U.S.) brokering defense
transactions overseas (except for transactions involving a
small number of terrorist countries). Nor does the AECA
authorize the Department to regulate the brokering of non-U.S.
defense articles or technology.
This provision provides those new authorities to ensure
that arms export support the furtherance of U.S. foreign policy
objectives, national security interests and world peace. More
specifically, in some instances U.S. persons are involved in
arms deals that are inconsistent with U.S. policy. Certain of
these transactions could fuel regional instability, lend
support to terrorism or run counter to a U.S. policy decision
not to sell arms to a specific country or area. The extension
of U.S. legal authority under this provision to regulate
brokering activities would help to curtail such transactions.
Section 152. Return and Exchanges of Defense Articles Previously
Transferred Pursuant to the Arms Export Control
Act.
Section 152 authorizes repairable exchange programs and
permits the Department of Defense to accept for return defense
articles previously sold through the Foreign Military Sales
program. This section provides clear statutory authority in
both of these areas, increasing the readiness of both the U.S.
and its allies and friends, particularly in contingency
situations.
Under the present procedure for the repair of items for FMS
customers, the item is received into the repair system and
tracked through the repair cycle to ensure that the exact same
item is returned to the FMS customer. Both the cost and the
time taken to repair the item is increased by the requirement
to track the item through the process. Section 152(a) would
allow the FMS process to mirror the process used by the rest of
the U.S. Government. That process allows for immediate exchange
for a serviceable replacement part from DoD stocks. No tracking
of individual items is required.
Section 152(b) of this provision would allow DoD to accept
the return of items previously sold to a foreign government
when either the U.S. has a requirement for the item for when
another eligible foreign country or international organization
wishes to receive the item pursuant to FMS procedures.
Section 153. National Security Interest Determination to Waive
Reimbursement of Depreciation for Leased Defense
Articles.
Section 153 modifies current law to delete language which
permits the President to provide no-cost leases for U.S.
defense articles to countries and international organizations
if such defense articles have passed three-quarters of their
normal service life. In lieu of current law, this section
allows the President to provide no-cost leases for U.S. defense
articles if such articles have passed three-quarters of their
normal service life and only if the President determines to do
so is important to the national security interests of the U.S.
The Committee intends that this waiver be used sparingly
and is not to be delegated below of the Secretary of Defense.
Title Ii--Transfer of Naval Vessels to Certain Foreign Countries
Section 201. Authority to Transfer Naval Vessels.
Section 201 authorizes the transfer of ten naval vessels to
six countries. Specifically, it authorizes the Secretary of the
Navy to sell eight naval vessels, lease one naval vessel and
grant one naval vessel. Sales include: To the Government of
Egypt, the ``OLIVER HAZARD PERRY'' class frigate GALLERY; To
the Government of Mexico, the ``KNOX'' class frigates STEIN (FF
1065) and MARVIN SHIELDS (FF 1066); To the Government of New
Zealand, the ``STALWART'' class ocean surveillance ship
TENACIOUS; To the Government of Taiwan the ``KNOX'' class
frigates AYLWIN, PHARRIS and VALDEZ; and to the Government of
Thailand, the ``KNOX'' class frigate OUELLET. The lease is to
the Government of Taiwan, the ``NEWPORT'' class tank landing
ship NEWPORT. The grant transfer is to the Government of
Portugal, the ``STALWART'' class ocean surveillance ship
AUDACIOUS.
Section 202. Costs of Transfers.
Section 202 states that any expense to the U.S. in
connection with a transfer authorized by Title II of this bill
shall be charged to the recipient country.
Section 203. Expiration of Authority.
Section 203 provides that the authority to transfer naval
vessels in section 201 expires at the end of a 2-year period
beginning on the date of the enactment of this bill.
Section 204. Repair and Refurbishment of Vessels in United States
Shipyards.
Section 204 requires the Secretary of the Navy, to the
maximum extent possible, to have repair and refurbishment work
performed at shipyards located in the U.S., including U.S. Navy
shipyards.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives are incorporated in the
descriptive portions of this report. Among the principal
oversight activities which contributed to the Committee's
formulation of H.R. 3121 were:
Extensive hearings and previous legislation
considered by the Committee (see background and
purpose) and numerous consultations and briefings
between staff, Committee Members and Executive branch
officials.
As a result of these oversight activities, the Committee
recommends that the House approve H.R. 3121, as reported.
Committee on Government Reform and Oversight Function
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
The Committee adopts the cost estimate of the Congressional
Budget Office, set out below, as its submission of any required
information on new budget authority, new spending authority,
new credit authority or an increase or decrease in the national
debt required by clause 2(l)(3)(B) of rule XI of the Rules of
the House of Representatives.
Inflationary Impact Statement
In compliance with clause 2(l)(4) of rule XI of the Rules
of the House of Representatives, the Committee estimates that
H.R. 3121 will have no significant inflationary impact on
prices and costs in the operation of the national economy.
Congressional Budget Office Estimate
In compliance with clause 2(1)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets forth
with respect to H.R. 3121 the following estimate and comparison
prepared by the Director of the Congressional Budget Office
under section 403 of the Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 27, 1996.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3121, a bill to
amend the Foreign Assistance Act of 1961 and the Arms Export
Control Act to make improvements to certain defense and
security assistance provisions under those Acts, to authorize
the transfer of naval vessels to certain foreign countries, and
for other purposes, as ordered reported by the House Committee
on International Relations on March 21, 1996.
Section 4 of the Unfunded Mandates Reform Act of 1995, P.L.
104-4, excludes legislative provisions that are necessary for
the national security from the application of that act. CBO has
determined that all provisions of H.R. 3121 fit within that
provision.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
June E. O'Neill, Director.
Enclosure.
Congressional Budget Office Cost Estimate
1. Bill number: H.R. 3121.
2. Bill title: A bill to amend the Foreign Assistance Act
of 1961 and the Arms Export Control Act to make improvements to
certain defense and security assistance provisions under those
Acts, to authorize the transfer of naval vessels to certain
foreign countries, and for other purposes.
3. Bill status: As ordered reported by the House Committee
on International Relations on March 21, 1996.
4. Bill purpose: The bill would authorize the sale or
disposal of certain naval vessels and would otherwise address
defense and security assistance programs.
5. Estimated cost to the Federal Government: Table 1 shows
the estimated cost to the Federal Government. The costs of the
bill would fall within budget function 150 (international
affairs).
6. Basis of estimate: The estimate assumes enactment of the
bill by June 1, 1996, and subsequent appropriation of the
estimated authorization amounts. CBO used historical spend-out
rates for estimating outlays.
Asset Sales
The bill would authorize the Secretary of the Navy to sell
eight naval vessels to certain foreign countries and otherwise
dispose of two other vessels. The Navy estimates the sale would
generate $72 million in offsetting receipts in 1996.
Under the 1996 budget resolution, proceeds from asset sales
are counted in the budget totals for purposes of Congressional
scoring. Under the Balanced Budget Act, however, proceeds from
asset sales are not counted in determining compliance with the
discretionary spending limits or pay-as-you-go requirement.
Direct Spending and Revenues
The bill contains three provisions affecting direct
spending and receipts.
Fees for Activities Supporting Arms Sales.--Section 151
would require persons engaged in financing, transporting,
freight forwarding, or other activity facilitating the
manufacture, export, or import of a defense article or service
to register with the Federal Government as a broker and to pay
a fee. Based on information from the Department of State, the
fees are estimated to increase revenues by less than $500,000 a
year.
Waiver of Charges for Contract Administration Services.--
Section 102 would permit the President to provide without
charge on a reciprocal basis certain contract administration
services on military sales to Israel. The U.S. government
currently charges 1.5 percent of the value of sales for such
services. CBO estimates that enactment of the provision would
have little effect on collections in 1996, but should lower
collections by $20 million a year beginning in 1997.
International Narcotics Control.--Section 131 would
authorize the President to accept and to spend contributions
from other governments for international narcotics control
activities and to provide narcotics control services on a
reimbursable basis. Although CBO cannot estimate the amount of
activity that might be undertaken using this authority, it
would have no net budgetary impact over the long run.
Spending Subject to Appropriations Action
The bill would impose new responsibilities on the
Departments of State and Defense but would not explicitly
authorize additional appropriations. Section 150 would require
the President to monitor the use of defense articles and
services sold, leased, or exported under U.S. laws. Section 151
would also require additional resources to register arms
brokers and enforce compliance. The Department of State
estimates that it would require 6 to 12 staff-years to comply
with these requirements. CBO estimates that it would require an
additional $1 million in funding to implement the new
requirements.
TABLE 1.--BUDGETARY IMPACTS OF H.R. 3121 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON INTERNATIONAL RELATIONS
ON MARCH 21, 1996
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
ASSET SALES \2\
Estimated Budget Authority............................... -72 0 0 0 0
Estimated Outlays........................................ -72 0 0 0 0
DIRECT SPENDING AND REVENUES
Estimated Revenues....................................... (\1\) (\1\) (\1\) (\1\) (\1\)
Estimated Budget Authority............................... (\1\) 20 20 20 20
Estimated Outlays........................................ (\1\) 20 20 20 20
SPENDING SUBJECT TO APPROPRIATIONS ACTION
Estimated Authorization of Appropriations................ 0 1 1 1 1
Estimated Outlays........................................ 0 1 1 1 1
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,00.
\2\ Under the 1996 budget resolution, proceeds from asset sales are counted in the budget totals for purposes of
Congressional scoring. Under the Balanced Budget Act, however, proceeds from asset sales are not counted in
determining compliance with the discretionary spending limits or pay-as-you-go requirement.
7. Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act of 1985 sets up pay-as-you-go
procedures for legislation affecting direct spending or
receipts through 1998. H.R. 3121 would have the following pay-
as-you-go impact:
------------------------------------------------------------------------
1996 1997 1008
------------------------------------------------------------------------
Change in Outlays...................... 0 20 20
Change in Receipts..................... 0 0 0
------------------------------------------------------------------------
8. Estimated cost to state, local, and tribal governments:
Section 4 of the Unfunded Mandates Reform Act of 1995 excludes
legislative provisions that are necessary for the national
security from the application of that act. CBO has determined
that all provisions of H.R. 3121 fit within that provision.
9. Estimated impact on the private sector: Section 4 of the
Unfunded Mandates Reform Act of 1995 excludes legislative
provisions that are necessary for the national security from
the application of that act. CBO has determined that all
provisions of H.R. 3121 fit within that provision.
10. Previous CBO estimate: None.
11. Estimate prepared by: Joseph C. Whitehill prepared the
estimate of costs to the federal government. Pepper Santalucia
prepared the estimated impact on state, local, and tribal
governments. Eric Labs prepared the estimated impact on the
private sector.
12. Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
Jurisdictional Issues
H.R. 3121, as ordered reported by the Committee on
International Relations, contains provisions which fall within
the shared jurisdiction of other committees of the House,
including the committee on Rules and the Committee on National
Security.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italics, existing law in which no change is proposed
is shown in roman):
ARMS EXPORT CONTROL ACT
* * * * * * *
CHAPTER 1.--FOREIGN AND NATIONAL SECURITY POLICY OBJECTIVES AND
RESTRAINTS
Sec. 3. Eligibility.--(a) * * *
(b) The consent of the President under paragraph (2) of
subsection (a) or under paragraph (1) of section 505(a) of the
Foreign Assistance Act of 1961 (as it relates to subparagraph
(B) of such paragraph) shall not be required for the transfer
by a foreign country or international organization of defense
articles sold by the United States under this Act if--
(1) such articles constitute components incorporated
into foreign defense articles;
(2) the recipient is the government of a member
country of the North Atlantic Treaty Organization, the
Government of Australia, the Government of Japan, or
the Government of New Zealand;
(3) the recipient is not a country designated under
section 620A of the Foreign Assistance Act of 1961;
(4) the United States-origin components are not--
(A) significant military equipment (as
defined in section 47(9));
(B) defense articles for which notification
to Congress is required under section 36(b);
and
(C) identified by regulation as Missile
Technology Control Regime items; and
(5) the foreign country or international organization
provides notification of the transfer of the defense
articles to the United States Government not later than
30 days after the date of such transfer.
* * * * * * *
(d)(1) The President may not give his consent under paragraph
(2) of subsection (a) or under the third sentence of such
subsection, or under section 505(a)(1) or 505(a)(4) of the
Foreign Assistance Act of 1961, to a transfer of any major
defense equipment valued (in terms of its original acquisition
cost) at [$14,000,000] $25,000,000 or more, or any defense
article or related training or other defense service valued (in
terms of its original acquisition cost) at [$50,000,000]
$75,000,000 or more, unless the President submits to the
Speaker of the House of Representatives and the Committee on
Foreign Relations of the Senate a written certification with
respect to such proposed transfer containing--
(A) * * *
* * * * * * *
(2) (A) Except as provided in subparagraph (B), unless the
President states in the certification submitted pursuant to
paragraph (1) of this subsection that an emergency exists which
requires that consent to the proposed transfer become effective
immediately in the national security interests of the United
States, such consent shall not become effective until 30
calendar days after the date of such submission and such
consent shall become effective then only if the Congress does
not enact, within such 30-day period, a joint resolution[, as
provided for in sections 36(b)(2) and 36(b)(3) of this Act]
prohibiting the proposed transfer.
(B) In the case of a proposed transfer to the North Atlantic
Treaty Organization, or any member country of such
Organization, Japan, Australia, or New Zealand, unless the
President states in the certification submitted pursuant to
paragraph (1) of this subsection that an emergency exists which
requires that consent to the proposed transfer become effective
immediately in the national security interests of the United
States, such consent shall not become effective until fifteen
calendar days after the date of such submission and such
consent shall become effective then only if the Congress does
not enact, within such fifteen-day period, a [law] joint
resolution prohibiting the proposed transfer.
(C) If the President states in his certification under
subparagraph (A) or (B) that an emergency exists which requires
that consent to the proposed transfer become effective
immediately in the national security interests of the United
States, thus waiving the requirements of that subparagraph, the
President shall set forth in the certification a detailed
justification for his determination, including a description of
the emergency circumstances which necessitate immediate consent
to the transfer and a discussion of the national security
interests involved.
(D)(i) Any joint resolution under this paragraph shall be
considered in the Senate in accordance with the provisions of
section 601(b) of the International Security Assistance and
Arms Export Control Act of 1976.
(ii) For the purpose of expediting the consideration and
enactment of joint resolutions under this paragraph, a motion
to proceed to the consideration of any such joint resolution
after it has been reported by the appropriate committee shall
be treated as highly privileged in the House of
Representatives.
(3)(A) The President may not give his consent to the transfer
of any major defense equipment valued (in terms of its original
acquisition cost) at [$14,000,000] $25,000,000 or more, or of
any defense article or defense service valued (in terms of its
original acquisition cost) at [$50,000,000] $75,000,000 or
more, the export of which has been licensed or approved under
section 38 of this Act, unless [at least 30 calendar days]
before giving such consent the President submits to the Speaker
of the House of Representatives and the Chairman of the
Committee on Foreign Relations of the Senate a [report]
certification containing the information specified in
subparagraphs (A) through (E) of paragraph (1). [Such consent
shall become effective then only if the Congress does not
enact, within a 30-day period, a joint resolution, as provided
for in sections 36(c)(2) and 36(c)(3) of this Act prohibiting
the proposed transfer.] Such certification shall be submitted--
(i) at least 15 calendar days before such consent is
given in the case of a transfer to a country which is a
member of the North Atlantic Treaty Organization or
Australia, Japan, or New Zealand; and
(ii) at least 30 calendar days before such consent is
given in the case of a transfer to any other country,
unless the President states in his certification that an
emergency exists which requires that consent to the proposed
transfer become effective immediately in the national security
interests of the United States. If the President states in his
certification that such an emergency exists (thus waiving the
requirements of clause (i) or (ii), as the case may be, and of
subparagraph (B)) the President shall set forth in the
certification a detailed justification for his determination,
including a description of the emergency circumstances which
necessitate that consent to the proposed transfer become
effective immediately and a discussion of the national security
interests involved.
(B) Consent to a transfer subject to subparagraph (A) shall
become effective after the end of the 15-day or 30-day period
specified in subparagraph (A)(i) or (ii), as the case may be,
only if the Congress does not enact, within that period, a
joint resolution prohibiting the proposed transfer.
(C)(i) Any joint resolution under this paragraph shall be
considered in the Senate in accordance with the provisions of
section 601(b) of the International Security Assistance and
Arms Export Control Act of 1976.
(ii) For the purpose of expediting the consideration and
enactment of joint resolutions under this paragraph, a motion
to proceed to the consideration of any such joint resolution
after it has been reported by the appropriate committee shall
be treated as highly privileged in the House of
Representatives.
* * * * * * *
CHAPTER 2.--FOREIGN MILITARY SALES AUTHORIZATIONS
Sec. 21. Sales From Stocks.--(a)(1) The President may sell
defense articles and defense services from the stocks of the
Department of Defense to any eligible country or international
organization if such country or international organization
agrees to pay in United States dollars--
(A) * * *
* * * * * * *
(C) in the case of the sale of a defense service, the
full cost to the United States Government of furnishing
such service, except that in the case of training sold
to a purchaser who is concurrently receiving assistance
under chapter 5 of part II of the Foreign Assistance
Act of 1961 or to any high-income foreign country (as
described in that chapter), only those additional costs
that are incurred by the United States Government in
furnishing such assistance.
* * * * * * *
(g) The President may enter into North Atlantic Treaty
Organization standardization agreements in carrying out section
814 of the Act of October 7, 1975 (Public Law 94-106), and may
enter into [similar agreements with Japan, Australia, and New
Zealand, and with other countries] similar agreements with
countries which are major non-NATO allies, for the cooperative
furnishing of training on a bilateral or multilateral basis, if
the financial principles of such agreements are based on
reciprocity. Such agreements shall include reimbursement for
all direct costs but may exclude reimbursement for indirect
costs, administrative surcharges, and costs of billeting of
trainees (except to the extent that members of the United
States Armed Forces occupying comparable accommodations are
charged for such accommodations by the United States). Each
such agreement shall be transmitted promptly to the Speaker of
the House of Representatives and the Committees on
Appropriations, Armed Services, and Foreign Relations of the
Senate. [As used in this subsection, the term ``major non-NATO
allies'' means those countries designated as major non-NATO
allies for purposes of section 2350a(i)(3) of title 10, United
States Code.]
(h)(1) The President is authorized to provide (without
charge) quality assurance, inspection, contract administration
services, and contract audit defense services under this
section--
(A) in connection with the placement or
administration of any contract or subcontract for
defense articles, defense services, or design and
construction services entered into after the date of
enactment of this subsection by, or under this Act on
behalf of, a foreign government which is a member of
the North Atlantic Treaty Organization or the
Government of Israel, if such government provides such
services in accordance with an agreement on a
reciprocal basis, without charge, to the United States
Government; or
* * * * * * *
(2) In carrying out the objectives of this section, the
President is authorized to provide cataloging data and
cataloging services, without charge, to the North Atlantic
Treaty Organization [or to any member government of that
Organization if that Organization or member government], any
member government of that Organization, or the Government of
Israel, if the Organization, member government, or Government
of Israel, as the case may be, provides such data and services
in accordance with an agreement on a reciprocal basis, without
charge, to the United States Government.
* * * * * * *
(k) Before entering into the sale under this Act of defense
articles that are excess to the stocks of the Department of
Defense, [the President shall first consider the effects of the
sale of the articles on the national technology and industrial
base, particularly the extent, if any, to which the sale
reduces the opportunities of entities in the national
technology and industrial base to sell new equipment to the
country or countries to which the excess defense articles are
sold.] the President shall determine that the sale of such
articles will not have an adverse impact on the national
technology and industrial base and, particularly, will not
reduce the opportunities of entities in the national technology
and industrial base to sell new or used equipment to the
countries to which such articles are transferred.
(l) Repair of defense articles.--
(1) In general.--The President may acquire a
repairable defense article from a foreign country or
international organization if such defense article--
(A) previously was transferred to such
country or organization under this Act;
(B) is not an end item; and
(C) will be exchanged for a defense article
of the same type that is in the stocks of the
Department of Defense.
(2) Limitation.--The President may exercise the
authority provided in paragraph (1) only to the extent
that the Department of Defense--
(A)(i) has a requirement for the defense
article being returned; and
(ii) has available sufficient funds
authorized and appropriated for such purpose;
or
(B)(i) is accepting the return of the defense
article for subsequent transfer to another
foreign government or international
organization pursuant to a letter of offer and
acceptance implemented in accordance with this
Act; and
(ii) has available sufficient funds provided
by or on behalf of such other foreign
government or international organization
pursuant to a letter of offer and acceptance
implemented in accordance with this Act.
(3) Requirement.--(A) The foreign government or
international organization receiving a new or repaired
defense article in exchange for a repairable defense
article pursuant to paragraph (1) shall, upon the
acceptance by the United States Government of the
repairable defense article being returned, be charged
the total cost associated with the repair and
replacement transaction.
(B) The total cost charged pursuant to subparagraph
(A) shall be the same as that charged the United States
Armed Forces for a similar repair and replacement
transaction, plus an administrative surcharge in
accordance with subsection (e)(1)(A) of this section.
(4) Relationship to certain other provisions of
law.--The authority of the President to accept the
return of a repairable defense article as provided in
subsection (a) shall not be subject to chapter 137 of
title 10, United States Code, or any other provision of
law relating to the conclusion of contracts.
(m) Return of Defense Articles.--
(1) In general.--The President may accept the return
of a defense article from a foreign country or
international organization if such defense article--
(A) previously was transferred to such
country or organization under this Act;
(B) is not significant military equipment (as
defined in section 47(9) of this Act); and
(C) is in fully functioning condition without
need of repair or rehabilitation.
(2) Limitation.--The President may exercise the
authority provided in paragraph (1) only to the extent
that the Department of Defense--
(A)(i) has a requirement for the defense
article being returned; and
(ii) has available sufficient funds
authorized and appropriated for such purpose;
or
(B)(i) is accepting the return of the defense
article for subsequent transfer to another
foreign government or international
organization pursuant to a letter of offer and
acceptance implemented in accordance with this
Act; and
(ii) has available sufficient funds provided
by or on behalf of such other foreign
government or international organization
pursuant to a letter of offer and acceptance
implemented in accordance with this Act.
(3) Credit for transaction.--Upon acquisition and
acceptance by the United States Government of a defense
article under paragraph (1), the appropriate Foreign
Military Sales account of the provider shall be
credited to reflect the transaction.
(4) Relationship to certain other provisions of
law.--The authority of the President to accept the
return of a defense article as provided in paragraph
(1) shall not be subject to chapter 137 of title 10,
United States Code, or any other provision of law
relating to the conclusion of contracts.
* * * * * * *
Sec. 23. Credit Sales.--(a) * * *
* * * * * * *
(f) For each fiscal year, the Secretary of Defense, as
requested by the Director of the Defense Security Assistance
Agency, shall conduct audits on a nonreimbursable basis of
private firms that have entered into contracts with foreign
governments under which defense articles, defense services, or
design and construction services are to be procured by such
firms for such governments from financing under this section.
(g)(1) For each country and international organization that
has been approved for cash flow financing under this section,
any letter of offer and acceptance or other purchase agreement,
or any amendment thereto, for a procurement of defense
articles, defense services, or design and construction services
in excess of $100,000,000 that is to be financed in whole or in
part with funds made available under this Act or the Foreign
Assistance Act of 1961 shall be submitted to the congressional
committees specified in section 634A(a) of the Foreign
Assistance Act of 1961 in accordance with the procedures
applicable to reprogramming notifications under that section.
(2) For purposes of this subsection, the term ``cash flow
financing'' has the meaning given such term in the second
subsection (d) of section 25.
(h) Of the amounts made available for a fiscal year to carry
out this section, not more than $100,000,000 for such fiscal
year may be made available for countries other than Israel and
Egypt for the purpose of financing the procurement of defense
articles, defense services, and design and construction
services that are not sold by the United States Government
under this Act.
* * * * * * *
Sec. 25. Annual Estimate and Justification for Sales
Program.--(a) Except as provided in subsection (d) of this
section, no later than February 1 of each year, the President
shall transmit to the Congress, as a part of the annual
presentation materials for security assistance programs
proposed for the next fiscal year, a report which sets forth--
(1) * * *
* * * * * * *
(11) the status of each loan and each contract of
guaranty or insurance theretofore made under the
Foreign Assistance Act of 1961, predecessor Acts, or
any Act authorizing international security assistance,
with respect to which there remains outstanding any
unpaid obligation or potential liability; the status of
each extension of credit for the procurement of defense
articles or defense services, and of each contract of
guaranty in connection with any such procurement,
theretofore made under the Arms Export Control Act with
respect to which there remains outstanding any unpaid
obligation or potential liability; [and]
(12)(A) a detailed accounting of all articles,
services, credits, guarantees, or any other form of
assistance furnished by the United States to each
country and international organization, including
payments to the United Nations, during the preceding
fiscal year for the detection and clearance of
landmines, including activities relating to the
furnishing of education, training, and technical
assistance for the detection and clearance of
landmines; and
(B) for each provision of law making funds available
or authorizing appropriations for demining activities
described in subparagraph (A), an analysis and
description of the objectives and activities undertaken
during the preceding fiscal year, including the number
of personnel involved in performing such activities;
and
[(12)] (13) such other information as the President
may deem necessary.
* * * * * * *
CHAPTER 3.--MILITARY EXPORT CONTROLS
Sec. 31. Authorization and Aggregate Ceiling on Foreign
Military Sales Credits.--(a) * * *
* * * * * * *
[(c) For fiscal year 1986 and fiscal year 1987, the principal
amount of credits provided under section 23 at market rates of
interest with respect to Greece, the Republic of Korea, the
Philippines, Portugal, Spain, Thailand, and Turkey shall (if
and to the extent each country so desires) be repaid in not
more than twenty years, following a grace period of ten years
on repayment of principal.
[(d) The aggregate acquisition cost to the United States of
excess defense articles ordered by the President in any fiscal
year after fiscal year 1976 for delivery to foreign countries
or international organizations under the authority of chapter 2
of part II of the Foreign Assistance Act of 1961 or pursuant to
sales under this Act may not exceed $250,000,000 (exclusive of
ships and their onboard stores and supplies transferred in
accordance with law, and of any defense articles with respect
to which the President submits a certification under section
36(b) of this Act).]
(c) Loans available under section 23 shall be provided at
rates of interest that are not less than the current average
market yield on outstanding marketable obligations of the
United States of comparable maturities.
* * * * * * *
Sec. 36. Reports on Commercial and Governmental Military
Exports; Congressional Action.--(a) * * *
(b)(1) In the case of any letter of offer to sell any defense
articles or services under this Act for [$50,000,000]
$75,000,000 or more, any design and construction services for
[$200,000,000] $300,000,000 or more, or any major defense
equipment for [$14,000,000] $25,000,000 or more, before such
letter of offer is issued, the President shall submit to the
Speaker of the House of Representatives and to the chairman of
the Committee on Foreign Relations of the Senate a numbered
certification with respect to such offer to sell containing the
information specified in clauses (i) through (iv) of subsection
(a), or (in the case of a sale of design and construction
services) the information specified in clauses (A) through (D)
of paragraph (9) of subsection (a), and a description,
containing the information specified in paragraph (8) of
subsection (a), of any contribution, gift, commission, or fee
paid or offered or agreed to be paid in order to solicit,
promote, or otherwise to secure such letter of offer. Such
numbered certifications shall also contain an item, classified
if necessary, identifying the sensitivity of technology
contained in the defense articles, defense services, or design
and construction services proposed to be sold, and a detailed
justification of the reasons necessitating the sale of such
articles or services in view of the sensitivity of such
technology. In a case in which such articles or services listed
on the Missile Technology Control Regime Annex are intended to
support the design, development, or production of a Category I
space launch vehicle system (as defined in section 74), such
report shall include a description of the proposed export and
rationale for approving such export, including the consistency
of such export with United States missile nonproliferation
policy. Each such numbered certification shall contain an item
indicating whether any offset agreement is proposed to be
entered into in connection with such letter of offer to sell
(if known on the date of transmittal of such certification). In
addition, the President shall, upon the request of such
committee or the Committee on Foreign Affairs of the House of
Representatives, transmit promptly to both such committees a
statement setting forth, to the extent specified in such
request--
(A) * * *
* * * * * * *
(5)(A) * * *
* * * * * * *
(C) If the enhancement or upgrade in the sensitivity of
technology or the capability of major defense equipment,
defense articles, defense services, or design and construction
services described in a numbered certification submitted under
this subsection costs [$14,000,000] $25,000,000 or more in the
case of any major defense equipment, [$50,000,000] $75,000,000
or more in the case of defense articles or defense services, or
[$200,000,000] $300,000,000 or more in the case of design or
construction services, then the President shall submit to the
Speaker of the House of Representatives and the chairman of the
Committee on Foreign Relations of the Senate a new numbered
certification which relates to such enhancement or upgrade and
which shall be considered for purposes of this subsection as if
it were a separate letter of offer to sell defense equipment,
articles, or services, subject to all of the requirements,
restrictions, and conditions set forth in this subsection. For
purposes of this subparagraph, references in this subsection to
sales shall be deemed to be references to enhancements or
upgrades in the sensitivity of technology or the capability of
major defense equipment, articles, or services, as the case may
be.
* * * * * * *
(c)(1) In the case of an application by a person (other than
with regard to a sale under section 21 or section 22 of this
Act) for a license for the export of any major defense
equipment sold under a contract in the amount of [$14,000,000]
$25,000,000 or more or of defense articles or defense services
sold under a contract in the amount of [$50,000,000]
$75,000,000 or more, before issuing such license the President
shall transmit to the Speaker of the House of Representatives
and to the chairman of the Committee on Foreign Relations of
the Senate an unclassified numbered certification with respect
to such application specifying (A) the foreign country or
international organization to which such export will be made,
(B) the dollar amount of the items to be exported, and (C) a
description of the items to be exported. Each such numbered
certification shall also contain an item indicating whether any
offset agreement is proposed to be entered into in connection
with such export (if known on the date of transmittal of such
certification). In addition, the President shall, upon the
request of such committee or the Committee on Foreign Affairs
of the House of Representatives, transmit promptly to both such
committees a statement setting forth, to the extent specified
in such request a description of the capabilities of the items
to be exported, an estimate of the total number of United
States personnel expected to be needed in the foreign country
concerned in connection with the items to be exported and an
analysis of the arms control impact pertinent to such
application, prepared in consultation with the Secretary of
Defense. In a case in which such articles or services listed on
the Missile Technology Control Regime Annex are intended to
support the design, development, or production of a Category I
space launch vehicle system (as defined in section 74), such
report shall include a description of the proposed export and
rationale for approving such export, including the consistency
of such export with United States missile nonproliferation
policy. A certification transmitted pursuant to this subsection
shall be unclassified, except that the information specified in
clause (B) and the details of the description specified in
clause (C) may be classified if the public disclosure thereof
would be clearly detrimental to the security of the United
States.
(2) Unless the President states in his certification that an
emergency exists which requires the proposed export in the
national security interests of the United States, a license for
export described in paragraph (1)--
[(A) shall not be issued until at least 30 calendar
days after the Congress receives such certification;
and
[(B) shall not be issued then if the Congress, within
such 30-day period, enacts a joint resolution
prohibiting the proposed export, except that this
subparagraph does not apply with respect to a license
issued for an export to the North Atlantic Treaty
Organization, any member country of that Organization,
Japan, Australia, or New Zealand.]
(A) in the case of a license for an export to the
North Atlantic Treaty Organization, any member country
of that Organization or Australia, Japan, or New
Zealand, shall not be issued until at least 15 calendar
days after the Congress receives such certification,
and shall not be issued then if the Congress, within
that 15-day period, enacts a joint resolution
prohibiting the proposed export; and
(B) in the case of any other license, shall not be
issued until at least 30 calendar days after the
Congress receives such certification, and shall not be
issued then if the Congress, within that 30-day period,
enacts a joint resolution prohibiting the proposed
export.
If the President states in his certification that an emergency
exists which requires the proposed export in the national
security interests of the United States, thus waiving the
requirements of subparagraphs (A) and (B) of this paragraph, he
shall set forth in the certification a detailed justification
for his determination, including a description of the emergency
circumstances which necessitate the immediate issuance of the
export license and a discussion of the national security
interests involved.
* * * * * * *
(d)(1) In the case of an approval under section 38 of this
Act of a United States commercial technical assistance or
manufacturing licensing agreement [for or in a country not a
member of the North Atlantic Treaty Organization] which
involves the manufacture abroad of any item of significant
combat equipment on the United States Munitions List, before
such approval is given, the President shall submit a
certification with respect to such proposed commercial
agreement in a manner similar to the certification required
under subsection (c)(1) containing comparable information,
except that the last sentence of such subsection shall not
apply to certifications submitted pursuant to this subsection.
(2) A certification under this subsection shall be
submitted--
(A) at least 15 days before approval is given in the
case of an agreement for or in a country which is a
member of the North Atlantic Treaty Organization or
Australia, Japan, or New Zealand; and
(B) at least 30 days before approval is given in the
case of an agreement for or in any other country;
unless the President states in his certification that an
emergency exists which requires the immediate approval of the
agreement in the national security interests of the United
States.
(3) If the President states in his certification that an
emergency exists which requires the immediate approval of the
agreement in the national security interests of the United
States, thus waiving the requirements of paragraph (4), he
shall set forth in the certification a detailed justification
for his determination, including a description of the emergency
circumstances which necessitate the immediate approval of the
agreement and a discussion of the national security interests
involved.
(4) Approval for an agreement subject to paragraph (1) may
not be given under section 38 if the Congress, within the 15-
day or 30-day period specified in paragraph (2) (A) or (B), as
the case may be, enacts a joint resolution prohibiting such
approval.
(5)(A) Any joint resolution under paragraph (4) shall be
considered in the Senate in accordance with the provisions of
section 601(b) of the International Security Assistance and
Arms Export Control Act of 1976.
(B) For the purpose of expediting the consideration and
enactment of joint resolutions under paragraph (4), a motion to
proceed to the consideration of any such joint resolution after
it has been reported by the appropriate committee shall be
treated as highly privileged in the House of Representatives.
* * * * * * *
Sec. 38. Control of Arms Exports and Imports.--(a) * * *
(b)(1)(A) [As prescribed in regulations] (i) As prescribed in
regulations issued under this section, every person (other than
an officer or employee of the United States Government acting
in an official capacity) who engages in the business of
manufacturing, exporting, or importing any defense articles or
defense services designated by the President under subsection
(a)(1) shall register with the United States Government agency
charged with the administration of this section, and shall pay
a registration fee which shall be prescribed by such
regulations. Such regulations shall prohibit the return to the
United States for sale in the United States (other than for the
Armed Forces of the United States and its allies or for any
State for local law enforcement agency) of any military
firearms or ammunition of United States manufacture furnished
to foreign governments by the United States under this Act or
any other foreign assistance or sales program of the United
States, whether or not enhanced in value or improved in
condition in a foreign country. This prohibition shall not
extend to similar firearms that have been so substantially
transformed as to become, in effect, articles of foreign
manufacture.
(ii)(I) As prescribed in regulations issued under this
section, every person (other than an officer or employee of the
United States Government acting in official capacity) who
engages in the business of brokering activities with respect to
the manufacture, export, import, or transfer of any defense
article or defense service designated by the President under
subsection (a)(1), or in the business of brokering activities
with respect to the manufacture, export, import, or transfer of
any foreign defense article or defense service (as defined in
subclause (IV)), shall register with the United States
Government agency charged with the administration of this
section, and shall pay a registration fee which shall be
prescribed by such regulations.
(II) Such brokering activities shall include the financing,
transportation, freight forwarding, or taking of any other
action that facilitates the manufacture, export, or import of a
defense article or defense service.
(III) No person may engage in the business of brokering
activities described in subclause (I) without a license, issued
in accordance with this Act, except that no license shall be
required for such activities undertaken by or for an agency of
the United States Government--
(aa) for use by an agency of the United States
Government; or
(bb) for carrying out any foreign assistance or sales
program authorized by law and subject to the control of
the President by other means.
(IV) For purposes of this clause, the term ``foreign defense
article or defense service'' includes any non-United States
defense article or defense service of a nature described on the
United States Munitions List regardless of whether such article
or service is of United States origin or whether such article
or service contains United States origin components.
* * * * * * *
CHAPTER 3A--END-USE MONITORING OF DEFENSE ARTICLES AND DEFENSE SERVICES
SEC. 40A. END-USE MONITORING OF DEFENSE ARTICLES AND DEFENSE SERVICES.
(a) Establishment of Monitoring Program.--
(1) In general.--In order to improve accountability
with respect to defense articles and defense services
sold, leased, or exported under this Act or the Foreign
Assistance Act of 1961 (22 U.S.C. 2151 et seq.), the
President shall establish a program which provides for
the end-use monitoring of such articles and services.
(2) Requirements of program.--To the extent
practicable, such program--
(A) shall provide for the end-use monitoring
of defense articles and defense services in
accordance with the standards that apply for
identifying high-risk exports for regular end-
use verification developed under section
38(g)(7) of this Act (commonly referred to as
the ``Blue Lantern'' program); and
(B) shall be designed to provide reasonable
assurance that--
(i) the recipient is complying with
the requirements imposed by the United
States Government with respect to use,
transfers, and security of defense
articles and defense services; and
(ii) such articles and services are
being used for the purposes for which
they are provided.
(b) Conduct of Program.--In carrying out the program
established under subsection (a), the President shall ensure
that the program--
(1) provides for the end-use verification of defense
articles and defense services that incorporate
sensitive technology, defense articles and defense
services that are particularly vulnerable to diversion
or other misuse, or defense articles or defense
services whose diversion or other misuse could have
significant consequences; and
(2) prevents the diversion (through reverse
engineering or other means) of technology incorporated
in defense articles.
(c) Report to Congress.--Not later than 6 months after the
date of the enactment of this section, and annually thereafter
as a part of the annual congressional presentation documents
submitted under section 634 of the Foreign Assistance Act of
1961, the President shall transmit to the Congress a report
describing the actions taken to implement this section,
including a detailed accounting of the costs and number of
personnel associated with the monitoring program.
(d) Third Country Transfers.--For purposes of this section,
defense articles and defense services sold, leased, or exported
under this Act or the Foreign Assistance Act of 1961 (22 U.S.C.
2151 et seq.) includes defense articles and defense services
that are transferred to a third country or other third party.
CHAPTER 4.--GENERAL, ADMINISTRATIVE, AND MISCELLANEOUS PROVISIONS
* * * * * * *
Sec. 47. Definitions.--For purposes of this Act, the term--
(1) * * *
* * * * * * *
(7) ``defense articles and defense services'' means, with
respect to commercial exports subject to the provisions of
section 38 of this Act, those items designated by the President
pursuant to subsection (a)(1) of such section; [and]
(8) ``design and construction services'' means, with respect
to sales under section 29 of this Act, the design and
construction of real property facilities, including necessary
construction equipment and materials, engineering services,
construction contract management services relating thereto, and
technical advisory assistance in the operation and maintenance
of real property facilities provided or performed by any
department or agency of the Department of Defense or by a
contractor pursuant to a contract with such department or
agency[.]; and
(9) ``significant military equipment'' means articles--
(A) for which special export controls are warranted
because of the capacity of such articles for
substantial military utility or capability; and
(B) identified on the United States Munitions List.
CHAPTER 5--SPECIAL DEFENSE ACQUISITION FUND
Sec. 51. Special Defense Acquisition Fund.--(a)(1) * * *
* * * * * * *
(4)[(a)] The Fund shall also be used to acquire defense
articles that are particularly suited for use for narcotics
control purposes and are appropriate to the needs of recipient
countries, such as small boats, planes (including helicopters),
and communications equipment.
[(b) Each report pursuant to section 53(a) shall designate
the defense articles that have been acquired or are to be
acquired pursuant to this paragraph and the defense articles
acquired under this chapter that were transferred for use in
narcotics control purposes.]
* * * * * * *
[Sec. 53. Annual Reports to Congress.--(a) Not later than
December 31 of each year, the President shall submit to the
Congress a comprehensive report on acquisitions of defense
articles and defense services under this chapter. Each such
report shall include--
[(1) a description of each contract for the
acquisition of defense articles or defense services
under this chapter which was entered into during the
preceding fiscal year;
[(2) a description of each contract for the
acquisition of defense articles or defense services
under this chapter which the President anticipates will
be entered into during the current fiscal year;
[(3) a description of each defense article or defense
service acquired under this chapter which was
transferred to a foreign country or international
organization during the preceding fiscal year; and
[(4) an evaluation of the impact of the utilization
of the authority of this chapter on United States
defense production and the readiness of the United
States Armed Forces.
[(b) As part of the annual written report to the Congress
required by section 2431(a) of title 10, United States Code,
regarding procurement schedules for each weapon system for
which funding authorization is required, the President shall
provide a report estimating the likely procurements to be made
through the Fund.]
CHAPTER 6--LEASES OF DEFENSE ARTICLES AND LOAN AUTHORITY FOR
COOPERATIVE RESEARCH AND DEVELOPMENT PURPOSES
Sec. 61. Leasing Authority.--(a) The President may lease
defense articles in the stocks of the Department of Defense to
an eligible foreign country or international organization if--
(1) he determines that there are compelling foreign
policy and national security reasons for providing such
articles on a lease basis rather than on a sales basis
under this Act;
(2) he determines that the articles are not for the
time needed for public use;
(3) the President first considers the effects of the
lease of the articles on the national technology and
industrial base, particularly the extent, if any, to
which the lease reduces the opportunities of entities
in the national technology and industrial base to sell
new equipment to the country or countries to which the
articles are leased; and
(4) the country or international organization has
agreed to pay in United States dollars all costs
incurred by the United States Government in leasing
such articles, including reimbursement for depreciation
of such articles while leased, the costs of restoration
or replacement if the articles are damaged while
leased, [and the replacement cost (less any
depreciation in the value) of the articles if the
articles are lost or destroyed while leased.] and, if
the articles are lost or destroyed while leased--
(A) in the event the United States intends to
replace the articles lost or destroyed, the
replacement cost (less any depreciation in the
value) of the articles; or
(B) in the event the United States does not
intend to replace the articles lost or
destroyed, an amount not less than the actual
value (less any depreciation in the value)
specified in the lease agreement.
The requirement of paragraph (4) shall not apply to leases
entered into for purposes of cooperative research or
development, military exercises, or communications or
electronics interface projects[, or to any defense article
which has passed three-quarters of its normal service life].
The President may waive the requirement of paragraph (4) for
reimbursement of depreciation for any defense article which has
passed three-quarters of its normal service life if the
President determines that to do so is important to the national
security interest of the United States.
The President may waive the requirement of paragraph (4) with
respect to a lease which is made in exchange with the lessee
for a lease on substantially reciprocal terms of defense
articles for the Department of Defense, except that this waiver
authority--
(A) may be exercised only if the President submits to
the Committee on Foreign Affairs and the Committee on
Appropriations of the House of Representatives and the
Committee on Foreign Relations and the Committee on
Appropriations of the Senate, in accordance with the
regular notification procedures of those Committees, a
detailed notification for each lease with respect to
which the authority is exercised; and
(B) may be exercised only during the fiscal year 1996
and only with respect to one country, unless the
Congress hereafter provides otherwise.
The preceding sentence does not constitute authorization of
appropriations for payments by the United States for leased
articles.
* * * * * * *
Sec. 62. Reports to the Congress.--(a) [Not less than 30 days
before] Before entering into or renewing any agreement with a
foreign country or international organization to lease any
defense article under this chapter, or to loan any defense
article under chapter 2 of part II of the Foreign Assistance
Act of 1961, for a period of one year or longer, the President
shall transmit to the Speaker of the House of Representatives,
and to the chairman of the Committee on Foreign Relations of
the Senate and the chairman of the Committee on Armed Services
of the Senate, a written certification which specifies--
(1) * * *
* * * * * * *
(b) The President may waive the requirements of this section
(and in the case of an agreement described in section 63, may
waive the provisions of that section) if he [determines, and
immediately reports to the Congress] states in his
certification, that an emergency exists which requires that the
lease or loan be entered into immediately in the national
security interests of the United States. If the President
states in his certification that such an emergency exists, he
shall set forth in the certification a detailed justification
for his determination, including a description of the emergency
circumstances which necessitate that the lease be entered into
immediately and a discussion of the national security interests
involved.
(c) The certification required by subsection (a) shall be
transmitted--
(1) not less than 15 calendar days before the
agreement is entered into or renewed in the case of an
agreement with the North Atlantic Treaty Organization,
any member country of that Organization or Australia,
Japan, or New Zealand; and
(2) not less than 30 calendar days before the
agreement is entered into or renewed in the case of an
agreement with any other organization or country.
Sec. 63. Legislative Review.--(a)[(1)] In the case of any
agreement involving the lease under this chapter, or the loan
under chapter 2 of part II of the Foreign Assistance Act of
1961, to any foreign country or international organization for
a period of one year or longer of any defense articles which
are either (i) major defense equipment valued (in terms of its
replacement cost less any depreciation in its value) at
[$14,000,000] $25,000,000 or more, or (ii) defense articles
valued (in terms of their replacement cost less any
depreciation in their value) at [$50,000,000] $75,000,000 or
more, the agreement may not be entered into or renewed if the
Congress, within [30 calendar days after receiving the
certification with respect to that proposed agreement pursuant
to section 62(a),] the 15-day or 30-day period specified in
section 62(c) (1) or (2), as the case may be, enacts a joint
resolution prohibiting the proposed lease or loan.
[(2) This section shall not apply with respect to a loan or
lease to the North Atlantic Treaty Organization, any member
country of that Organization, Japan, Australia, or New
Zealand.]
* * * * * * *
Sec. 65. Loan of Materials, Supplies, and Equipment for
Research and Development Purposes.--(a) * * *
* * * * * * *
(d) For purposes of this section, the term ``NATO [or major
non-NATO] ally'' means a member country of the North Atlantic
Treaty Organization (other than the United States) [or a
foreign country other than a member nation of NATO designated
as a major non-NATO ally under section 2350a(i)(3) of title 10,
United States Code].
* * * * * * *
----------
FOREIGN ASSISTANCE ACT OF 1961
* * * * * * *
PART I
* * * * * * *
Chapter 8--International Narcotics Control
SEC. 481. POLICY, GENERAL AUTHORITIES, COORDINATION, FOREIGN POLICE
ACTIONS, DEFINITIONS, AND OTHER PROVISIONS.
(a) Policy and General Authorities.--
(1) Statements of policy.--(A) * * *
* * * * * * *
(D) International criminal activities, particularly
international narcotics trafficking, money laundering,
and corruption, endanger political and economic
stability and democratic development, and assistance
for the prevention and suppression of international
criminal activities should be a priority for the United
States.
[(D)] (E) The international community should provide
assistance, where appropriate, to those producer and
transit countries which require assistance in
discharging these primary obligations.
[(E)] (F) The objective of the United States in
dealing with the problem of international money
laundering is to ensure that countries adopt
comprehensive domestic measures against money
laundering and cooperate with each other in narcotics
money laundering investigations, prosecutions, and
related forfeiture actions.
[(F)] (G) Effective international cooperation is
necessary to control the illicit cultivation,
production, and smuggling of, trafficking in, and abuse
of narcotic and psychotropic drugs.
* * * * * * *
(4) Notwithstanding any other provision of law, the President
is authorized to furnish assistance to any country or
international organization, on such terms and conditions as he
may determine, for the control of narcotic and psychotropic
drugs and other controlled substances, or for other anticrime
purposes.
* * * * * * *
Sec. 482. Authorization.--(a) * * *
* * * * * * *
(c) [Contribution by Recipient Country.--To] Contributions
and Reimbursement.--(1) To ensure local commitment to the
activities assisted under this chapter, a country receiving
assistance under this chapter should bear an appropriate share
of the costs of any narcotics control program, project, or
activity for which such assistance is to be provided. A country
may bear such costs on an ``in-kind'' basis.
(2)(A) The President is authorized to accept contributions
from foreign governments to carry out the purposes of this
chapter. Such contributions shall be deposited as an offsetting
collection to the applicable appropriation account and may be
used under the same terms and conditions as funds appropriated
pursuant to this chapter.
(B) At the time of submission of the annual congressional
presentation documents required by section 634(a), the
President shall provide a detailed report on any contributions
received in the preceding fiscal year, the amount of such
contributions, and the purposes for which such contributions
were used.
(3) The President is authorized to provide assistance under
this chapter on a reimbursable basis. Such reimbursements shall
be deposited as an offsetting collection to the applicable
appropriation and may be used under the same terms and
conditions as funds appropriated pursuant to this chapter.
* * * * * * *
(f) Treatment of Funds.--Funds transferred to and
consolidated with funds appropriated pursuant to this chapter
may be made available on such terms and conditions as are
applicable to funds appropriated pursuant to this chapter.
Funds so transferred or consolidated shall be apportioned
directly to the bureau within the Department of State
responsible for administering this chapter.
(g) Excess Property.--For purposes of this chapter, the
Secretary of State may use the authority of section 608,
without regard to the restrictions of such section, to receive
nonlethal excess property from any agency of the United States
Government for the purpose of providing such property to a
foreign government under the same terms and conditions as funds
authorized to be appropriated for the purposes of this chapter.
* * * * * * *
PART II
Chapter 1--Policy
* * * * * * *
[Sec. 502A. Excess Defense Articles.--Excess defense articles
shall be provided whenever possible rather than providing such
articles by the procurement of new items.]
* * * * * * *
Sec. 506. Special Authority.--(a)(1) If the President
determines and reports to the Congress in accordance with
section 652 of this Act that--
(A) an unforeseen emergency exists which requires
immediate military assistance to a foreign country or
international organization; and
(B) the emergency requirement cannot be met under the
authority of the Arms Export Control Act or any other
law except this section;
he may direct, for the purposes of this part, the drawdown of
defense articles from the stocks of the Department of Defense,
defense services of the Department of Defense, and military
education and training, of an aggregate value of not to exceed
[$75,000,000] $100,000,000 in any fiscal year.
(2) (A) If the President determines and reports to
the Congress in accordance with section 652 of this Act
that it is in the national interest of the United
States to draw down [defense articles from the stocks
of the Department of Defense, defense services of the
Department of Defense, and military education and
training, he may direct--
[(i) the drawdown of such articles, services,
and the provision of such training for the
purposes and under the authorities of chapters
8 and 9 of part I, as the case may be; and
[(ii) the drawdown of defense services for
the purposes and under the authorities of the
Migration and Refugee Assistance Act of 1962.]
articles and services from the inventory and
resources of any agency of the United States
Government and military education and training
from the Department of Defense, the President
may direct the drawdown of such articles,
services, and military education and training--
(i) for the purposes and under the
authorities of--
(I) chapter 8 of part I (relating to
international narcotics control
assistance);
(II) chapter 9 of part I (relating to
international disaster assistance); or
(III) the Migration and Refugee
Assistance Act of 1962; or
(ii) for the purpose of providing such
articles, services, and military education and
training to Vietnam, Cambodia, and Laos as the
President determines are necessary--
(I) to support cooperative efforts to
locate and repatriate members of the
United States Armed Forces and
civilians employed directly or
indirectly by the United States
Government who remain unaccounted for
from the Vietnam War; and
(II) to ensure the safety of United
States Government personnel engaged in
such cooperative efforts and to support
Department of Defense-sponsored
humanitarian projects associated with
such efforts.
(B) An aggregate value of not to exceed [$75,000,000
in any fiscal year of defense articles, defense
services, and military education and training may be
provided pursuant to subparagraph (A) of this
paragraph.] $150,000,000 in any fiscal year of such
articles, services, and military education and training
may be provided pursuant to subparagraph (A) of this
paragraph--
(i) not more than $75,000,000 of which may be
provided from the drawdown from the inventory
and resources of the Department of Defense;
(ii) not more than $75,000,000 of which may
be provided pursuant to clause (i)(I) of such
subparagraph; and
(iii) not more than $15,000,000 of which may
be provided to Vietnam, Cambodia, and Laos
pursuant to clause (ii) of such subparagraph.
(b)(1) The authority contained in this section shall be
effective for any such emergency only upon prior notification
to the Committee on Foreign Affairs of the House of
Representatives, the Committee on Foreign Relations of the
Senate, and the Committee on Appropriations of each House of
Congress. In the case of drawdowns authorized by subclauses (I)
and (III) of subsection (a)(2)(A)(i), notifications shall be
provided to those committees at least 15 days in advance of the
drawdowns in accordance with the procedures applicable to
reprogramming notifications under section 634A.
* * * * * * *
Sec. 515. Overseas Management of Assistance and Sales
Programs.--(a) In order to carry out his responsibilities for
the management of international security assistance programs
conducted under this chapter, chapter 5 of this part, and the
Arms Export Control Act, the President may assign members of
the Armed Forces of the United States to a foreign country to
perform one or more of the following functions:
(1) * * *
* * * * * * *
(6) promoting rationalization, standardization,
interoperability, and other defense cooperation
measures [among members of the North Atlantic Treaty
Organization and with the Armed Forces of Japan,
Australia, and New Zealand]; and
* * * * * * *
[Sec. 516. Modernization of Defense Capabilities of Countries
of NATO's Southern Flank.--(a) Authority To Transfer Excess
Defense Articles.--Notwithstanding any other provision of law
and subject to subsection (b), the President may transfer (1)
to those member countries of the North Atlantic Treaty
Organization (NATO) on the southern flank of NATO which are
eligible for United States security assistance and which are
integrated into NATO's military structure, (2) to major non-
NATO allies on the southern and southeastern flank of NATO
which are eligible for United States security assistance, and
(3) to those countries which, as of October 1, 1990,
contributed armed forces to deter Iraqi aggression in the
Arabian Gulf, and which either received Foreign Military
Financing (FMF) assistance in fiscal year 1990 or are in the
Near East Region and received Foreign Military Financing (FMF)
assistance in fiscal year 1991 or fiscal year 1992, such excess
defense articles as the President determines necessary to help
modernize the defense capabilities of such countries. Such
excess defense articles may be transferred without cost to the
recipient countries. Transfers to recipient countries under
this subsection shall be consistent with the policy framework
for the Eastern Mediterranean region established in section
620C of this Act.
[(b) Limitations on Transfers.--The President may transfer
excess defense articles under this section only if--
[(1) the equipment is drawn from existing stocks of
the Department of Defense;
[(2) no funds available to the Department of Defense
for the procurement of defense equipment are expended
in connection with the transfer;
[(3) the President determines that the transfer of
the excess defense articles will not have an adverse
impact on the military readiness of the United States;
and
[(4) the President first considers the effects of the
transfer of the excess defense articles on the national
technology and industrial base, particularly the
extent, if any, to which the transfer reduces the
opportunities of entities in the national technology
and industrial base to sell new equipment to the
country or countries to which the excess defense
articles are transferred.
[(c) Notification to Committees of Congress.--The President
may not transfer excess defense articles under this section
until 30 days after he has notified the Committees on Armed
Services and Foreign Relations of the Senate and the Committees
on Armed Services and Foreign Affairs of the House of
Representatives of the proposed transfer. This notification
shall include a certification of the need for the transfer and
an assessment of the impact of the transfer on the military
readiness of the United States.
[(d) Waiver or Requirement for Reimbursement of DOD
Expenses.--Section 632(d) shall not apply with respect to
transfers of excess defense articles under this section.
[(e) Definition.--As used in subsection (a), the term
``member countries of the North Atlantic Treaty Organization
(NATO) on the southern flank of NATO'' means Greece, Italy,
Portugal, Spain, and Turkey.
[(f) Duration of Authority.--The authority of this section
shall be effective during fiscal years 1992 through 1996.
[(g) Prohibition on Certain Transfers of Vessels on Grant
Basis.--(1) The President may not transfer on a grant basis
under this section a vessel that is in excess of 3,000 tons or
that is less than 20 years of age.
[(2) If the President determines that it is in the national
security interests of the United States to transfer a
particular vessel on a grant basis under this section, the
President may request that Congress enact legislation exempting
the transfer from the prohibition in paragraph (1).
[Sec. 517. Modernization of Counternarcotics Capabilities of
Certain Countries.--(a) Authority to Transfer Excess Defense
Articles.--Subject to the limitations in this section, the
President may transfer to a country--
[(1) which is a major illicit drug producing country
or a major drug-transit country in Latin America and
the Caribbean,
[(2) which has a democratic government,
[(3) whose armed forces do not engage in a consistent
pattern of gross violations of internationally
recognized human rights (as defined in section
502B(d)(1)); and
[(4) the President first considers the effects of the
transfer of the excess defense articles on the national
technology and industrial base, particularly the
extent, if any, to which the transfer reduces the
opportunities of entities in the national technology
and industrial base to sell new equipment to the
country or countries to which the excess defense
articles are transferred.
such excess defense articles as may be necessary to carry out
subsection (b).
[(b) Purpose.--Excess defense articles may be transferred
under subsection (a) only for the purpose of encouraging the
military forces and local law enforcement agencies of an
eligible country in Latin America and the Caribbean to
participate cooperatively in a comprehensive national
antinarcotics program, conceived and developed by the
government of that country, by conducting activities within
that country and on the high seas to prevent the production,
processing, trafficking, transportation, and consumption of
illicit narcotic or psychotropic drugs or other controlled
substances.
[(c) Uses of Excess Defense Articles.--Excess defense
articles may be furnished to a country under subsection (a)
only if that country ensures that those excess defense articles
will be used primarily in support of antinarcotics activities.
[(d) Role of the Secretary of State.--The Secretary of State
shall determine the eligibility of countries to receive excess
defense articles under subsection (a). In accordance with
section 481(b) of this Act, the Secretary shall ensure that the
transfer of excess defense articles under subsection (a) is
coordinated with other antinarcotics enforcement programs
assisted by the United States Government.
[(e) Dollar Limitation.--The aggregate value of excess
defense articles transferred to a country under subsection (a)
in any fiscal year may not exceed $10,000,000.
[(f) Conditions on Transfers.--The President may transfer
excess defense articles under this section only if--
[(1) they are drawn from existing stocks of the
Department of Defense;
[(2) funds available to the Department of Defense for
the procurement of defense equipment are not expended
in connection with the transfer; and
[(3) the President determines that the transfer of
the excess defense articles will not have an adverse
impact on the military readiness of the United States.
[(4) the President first considers the effects of the
transfer of the excess defense articles on the national
technology and industrial base, particularly the
extent, if any, to which the transfer reduces the
opportunities of entities in the national technology
and industrial base to sell new equipment to the
country or countries to which the excess defense
articles are transferred.
[(g) Terms of Transfers.--Excess defense articles may be
transferred under this section without cost to the recipient
country.
[(h) Waiver of Requirement for Reimbursement of DOD
Expenses.--Section 632(d) does not apply with respect to
transfers of excess defense articles under this section.
[(i) Notification to Congress.--
[(1) Advance notice.--The President may not transfer
excess defense articles under this section until 15
days after the President has provided notice of the
proposed transfer to the committees specified in
paragraph (2). This notification shall include--
[(A) a certification of the need for the
transfer;
[(B) an assessment of the impact of the
transfer on the military readiness of the
United States; and
[(C) a statement of the value of the excess
defense articles to be transferred.
[(2) Committees to be notified.--Notice shall be
provided pursuant to paragraph (1) to the Committee on
Armed Services, the Committee on Foreign Affairs, and
the Committee on Appropriations of the House of
Representatives and the Committee on Armed Services,
the Committee on Foreign Relations, and the Committee
on Appropriations of the Senate.
[(j) Limitation on Use of Other Authorities to Transfer
Excess Defense Articles.--The transfer authority provided in
sections 518 and 519 may not be exercised with respect to any
major illicit drug producing country or major drug-transit
country in Latin America or the Caribbean.
[(k) Excess Coast Guard Property.--As used in this section,
the term ``excess defense articles'' shall be deemed to include
excess property of the Coast Guard, and the term ``Department
of Defense'' shall be deemed, with respect to such excess
property, to include the Coast Guard.
[Sec. 518. Natural Resources and Wildlife Management.--
[(a) Authority to Transfer Nonlethal Excess Defense Articles
and Small Arms.--Subject to the limitations in this section,
the President may transfer nonlethal excess defense articles
and small arms to friendly countries and to international
organizations and private and voluntary organizations for the
purposes contained in section 119 of this Act.
[(b) Limitation on Transfers.--Transfers under this section
shall be subject to the limitations contained in section
516(b).
[(c) Transportation.--The Department is authorized to
transport nonlethal excess defense articles and small arms made
available pursuant to this section without charge on a space
available basis.
[(d) Waiver of Requirements for Reimbursement of DOD
Expenses.--Section 632(d) shall not apply with respect to
transfers of nonlethal excess defense articles and small arms
under this section or the transportation of such articles as
authorized by subsection (c).
[(e) Notification to Committees of Congress.--The President
may not transfer nonlethal excess defense articles and small
arms under this section until 30 days after he has notified the
Committees on Appropriations of the proposed transfer. This
notification shall include a certification of the need for the
transfer and an assessment of the impact of the transfer on the
military readiness of the United States. Transfers under this
section shall also be subject to the notification requirements
of section 516(c) of this Act.
[Sec. 519. Additional Authorities Relating to Modernization
of Military Capabilities.--(a) Authority to Transfer Excess
Defense Articles.--Notwithstanding any other provision of law
(except title V of the National Security Act of 1947) and
subject to subsection (b), the President may transfer to
countries for whom a foreign military financing program was
justified for the fiscal year in which the transfer is
authorized, such nonlethal excess defense articles as the
President determines necessary to help modernize the defense
capabilities of such countries, in accordance with the
provisions of this section.
[(b) Limitations on Transfers.--The President may transfer
nonlethal excess defense articles under this section only if--
[(1) the equipment is drawn from existing stocks of
the Department of Defense;
[(2) no funds available to the Department of Defense
for the procurement of defense equipment are expended
in connection with the transfer;
[(3) the President determines that the transfer of
the nonlethal excess defense articles will not have an
adverse impact on the military readiness of the United
States; and
[(4) the President determines that transferring the
articles under the authority of this section is
preferable to selling them, after taking into account
the potential proceeds from, and likelihood of, such
sales, and the comparative foreign policy benefits that
may accrue to the United States as the result of either
a transfer or sale; and
[(5) the President first considers the effects of the
transfer of the excess defense articles on the national
technology and industrial base, particularly the
extent, if any, to which the transfer reduces the
opportunities of entities in the national technology
and industrial base to sell new equipment to the
country or countries to which the excess defense
articles are transferred.
[(c) Notification to Congress.--The President shall notify
the Committees on Appropriations, Armed Services, and Foreign
Relations of the Senate, and the Committees on Appropriations,
Armed Services, and Foreign Affairs of the House of
Representatives fifteen days before transferring nonlethal
excess defense articles under subsection (a), in accordance
with the regular notification procedures of those committees.
[(d) Waiver of Requirement for Reimbursement of DOD
Expenses.--Section 632(d) shall not apply with respect to
transfers of nonlethal excess defense articles under this
section.
[(e) Annual Report.--Commencing in 1991, not later than
December 15 of each year, the President shall transmit to the
committees described in subsection (c) a report with respect to
the previous fiscal year which contains--
[(1) a list of the countries to which the President
has furnished nonlethal excess defense articles under
the authority of this section; and
[(2) the value of the excess nonlethal defense
articles that were furnished to each such country.
[(f) Transportation and Related Costs.--(1) Except as
provided in paragraph (2), funds available to the Department of
Defense shall not be expended for crating, packing, handling
and transportation of nonlethal excess defense articles
transferred under the authority of this section.
[(2) Notwithstanding section 632(d) or any other provision of
law, the President may direct the crating, packing, handling
and transport of nonlethal excess defense articles without
charge to a country if--
[(A) that country has an agreement providing the
United States with base rights in that country;
[(B) that country is eligible for assistance from the
International Development Association; and
[(C) the nonlethal excess defense articles are being
provided to that country under the authority of this
section.
[SEC. 520. TRANSFERS OF EXCESS DEFENSE ARTICLES FOR INTERNATIONAL
PEACEKEEPING OPERATIONS.
[(a) General Authority.--The President may transfer to
international and regional organizations of which the United
States is a member such excess defense articles as the
President determines necessary to support international
peacekeeping operations and other activities and operations to
maintain and restore international peace and security. Such
transfers shall be on such terms and conditions as the
President may determine, consistent with this section.
[(b) Conditionality of Authority.--
[(1) In general.--The authority of subsection (a) may
not be exercised with respect to an international or
regional organization until the United States has
entered into a written agreement with that organization
providing that the value of any excess defense articles
transferred under this section shall be credited
against United States assessed contributions to that
organization. For purposes of this paragraph, the term
``value'' means such amount as may be agreed upon by
the United States and the recipient organization,
except that such amount may not be less than the value
(as defined in section 644(m)(1) of this Act) of the
articles transferred.
[(2) Crediting of transfers.--(A) The credit provided
for pursuant to paragraph (1) shall be counted against
United States assessed contributions to the recipient
organization that are payable from the ``Contribution
to International Peacekeeping Activities'' account of
the Department of State, except to the extent such
credit is counted, in accordance with subparagraph (B),
against an assessed contribution payable from an
account established within the Department of Defense.
[(B) If--
[(i) an account is established within the
Department of Defense for payment of a portion
of United States assessed contributions for
United Nations operations,
[(ii) excess defense articles are transferred
under this section for a United Nations
operation, and
[(iii) the United States assessed
contribution for that operation is payable from
that account,
the credit for those excess defense articles shall be
counted against the assessed contribution payable from
that account, but only to the extent that the value of
the excess defense articles so transferred for that
operation during a fiscal year does not exceed the
total United States assessed contribution payable for
that operation from that account during that fiscal
year.
[(c) Limitations on Transfers.--The President may transfer
excess defense articles under this section only if--
[(1) they are drawn from existing stocks of the
Department of Defense (or the Coast Guard);
[(2) funds available to the Department of Defense (or
the Coast Guard) for the procurement of defense
equipment are not expended in connection with the
transfer;
[(3) the transfer of the excess defense articles will
not have an adverse impact on the military readiness of
the United States; and
[(4) the President has established procedures and
requirements, comparable to those applicable under
section 505 of this Act, to ensure that such excess
defense articles will be used only for purposes that
have been agreed to by the United States.
[(d) Notification to Congress.--
[(1) In general.--The President shall notify the
designated congressional committees regarding any
transfer of excess defense articles under this section
in accordance with paragraph (2). This notification
shall include--
[(A) a discussion of the need for the
transfer;
[(B) an assessment of the impact of the
transfer on the military readiness of the
United States; and
[(C) a statement of--
[(i) the acquisition cost and the
value (as defined in section 644(m)(1)
of this Act) of the excess defense
articles to be transferred, and
[(ii) the aggregate acquisition cost
and the aggregate value (as so defined)
of all excess defense articles for
which notification has been provided
under this subsection during that
fiscal year with respect to transfers
to the same organization under this
section.
[(2) Timing of notice.--(A) The President shall
notify the designated congressional committees pursuant
to paragraph (1) at least 15 days before the excess
defense articles are transferred under this section,
except as provided in subparagraph (B).
[(B) If the President determines that an unforeseen
emergency requires the immediate transfer of excess
defense articles under this section, the President--
[(i) may waive the requirement of
subparagraph (A) that notice be provided at
least 15 days in advance of the transfer; and
[(ii) shall promptly notify the designated
congressional committees of such waiver and
transfer.
[(3) Designated committees.--As used in this
subsection, the term ``designated congressional
committees'' means the Committee on Foreign Affairs,
the Committee on Armed Services, and the Committee on
Appropriations of the House of Representatives and the
Committee on Foreign Relations, the Committee on Armed
Services, and the Committee on Appropriations of the
Senate.
[(e) Transportation and Related Costs.--
[(1) In general.--Except as provided in paragraph
(2), funds available to the Department of Defense shall
not be expended for crating, packing, handling, and
transporting excess defense articles transferred under
the authority of this section.
[(2) Exception.--Notwithstanding any other provision
of law, the President may direct the crating, packing,
handling, and transporting of excess defense articles
without charge to an international or regional
organization if the President determines that waiving
such costs advances the foreign policy interests of the
United States.
[(f) Waiver of Requirement for Reimbursement of DOD
Expenses.--Section 632(d) shall not apply with respect to
transfers of excess defense articles under this section and to
any costs of crating, packing, handling, and transporting
incurred under subsection (e)(2).]
SEC. 516. AUTHORITY TO TRANSFER EXCESS DEFENSE ARTICLES.
(a) Authorization.--The President is authorized to transfer
excess defense articles under this section to countries for
which receipt of such articles was justified pursuant to the
annual congressional presentation documents for military
assistance programs, or for programs under chapter 8 of part I
of this Act, submitted under section 634 of this Act, or for
which receipt of such articles was separately justified to the
Congress, for the fiscal year in which the transfer is
authorized.
(b) Limitations on Transfers.--The President may transfer
excess defense articles under this section only if--
(1) such articles are drawn from existing stocks of
the Department of Defense;
(2) funds available to the Department of Defense for
the procurement of defense equipment are not expended
in connection with the transfer;
(3) the transfer of such articles will not have an
adverse impact on the military readiness of the United
States;
(4) with respect to a proposed transfer of such
articles on a grant basis, such a transfer is
preferable to a transfer on a sales basis, after taking
into account the potential proceeds from, and
likelihood of, such sales, and the comparative foreign
policy benefits that may accrue to the United States as
the result of a transfer on either a grant or sales
basis;
(5) the President determines that the transfer of
such articles will not have an adverse impact on the
national technology and industrial base and,
particularly, will not reduce the opportunities of
entities in the national technology and industrial base
to sell new or used equipment to the countries to which
such articles are transferred; and
(6) the transfer of such articles is consistent with
the policy framework for the Eastern Mediterranean
established under section 620C of this Act.
(c) Terms of Transfers.--
(1) No cost to recipient country.--Excess defense
articles may be transferred under this section without
cost to the recipient country.
(2) Priority.--Notwithstanding any other provision of
law, the delivery of excess defense articles under this
section to member countries of the North Atlantic
Treaty Organization (NATO) on the southern and
southeastern flank of NATO and to major non-NATO allies
on such southern and southeastern flank shall be given
priority to the maximum extent feasible over the
delivery of such excess defense articles to other
countries.
(d) Waiver of Requirement for Reimbursement of Department of
Defense Expenses.--Section 632(d) shall not apply with respect
to transfers of excess defense articles (including
transportation and related costs) under this section.
(e) Transportation and Related Costs.--
(1) In general.--Except as provided in paragraph (2),
funds available to the Department of Defense may not be
expended for crating, packing, handling, and
transportation of excess defense articles transferred
under the authority of this section.
(2) Exception.--The President may provide for the
transportation of excess defense articles without
charge to a country for the costs of such
transportation if--
(A) it is determined that it is in the
national interest of the United States to do
so;
(B) the recipient is a developing country
receiving less than $10,000,000 of assistance
under chapter 5 of part II of this Act
(relating to international military education
and training) or section 23 of the Arms Export
Control Act (22 U.S.C. 2763; relating to the
Foreign Military Financing program) in the
fiscal year in which the transportation is
provided;
(C) the total weight of the transfer does not
exceed 25,000 pounds; and
(D) such transportation is accomplished on a
space available basis.
(f) Advance Notification to Congress for Transfer of Certain
Excess Defense Articles.--
(1) In general.--The President may not transfer
excess defense articles that are significant military
equipment (as defined in section 47(9) of the Arms
Export Control Act) or excess defense articles valued
(in terms of original acquisition cost) at $7,000,000
or more, under this section or under the Arms Export
Control Act (22 U.S.C. 2751 et seq.) until 15 days
after the date on which the President has provided
notice of the proposed transfer to the congressional
committees specified in section 634A(a) in accordance
with procedures applicable to reprogramming
notifications under that section.
(2) Contents.--Such notification shall include--
(A) a statement outlining the purposes for
which the article is being provided to the
country, including whether such article has
been previously provided to such country;
(B) an assessment of the impact of the
transfer on the military readiness of the
United States;
(C) an assessment of the impact of the
transfer on the national technology and
industrial base and, particularly, the impact
on opportunities of entities in the national
technology and industrial base to sell new or
used equipment to the countries to which such
articles are to be transferred; and
(D) a statement describing the current value
of such article and the value of such article
at acquisition.
(g) Aggregate Annual Limitation.--
(1) In general.--The aggregate value of excess
defense articles transferred to countries under this
section in any fiscal year may not exceed $350,000,000.
(2) Effective date.--The limitation contained in
paragraph (1) shall apply only with respect to fiscal
years beginning after fiscal year 1996.
(h) Congressional Presentation Documents.--Documents
described in subsection (a) justifying the transfer of excess
defense articles shall include an explanation of the general
purposes of providing excess defense articles as well as a
table which provides an aggregate annual total of transfers of
excess defense articles in the preceding year by country in
terms of offers and actual deliveries and in terms of
acquisition cost and current value. Such table shall indicate
whether such excess defense articles were provided on a grant
or sale basis.
(i) Excess Coast Guard Property.--For purposes of this
section, the term ``excess defense articles'' shall be deemed
to include excess property of the Coast Guard, and the term
``Department of Defense'' shall be deemed, with respect to such
excess property, to include the Coast Guard.
SEC. 517. DESIGNATION OF MAJOR NON-NATO ALLIES.
(a) Notice to Congress.--The President shall notify the
Congress in writing at least 30 days before--
(1) designating a country as a major non-NATO ally
for purposes of this Act and the Arms Export Control
Act (22 U.S.C. 2751 et seq.); or
(2) terminating such a designation.
(b) Initial Designations.--Australia, Egypt, Israel, Japan,
the Republic of Korea, and New Zealand shall be deemed to have
been so designated by the President as of the effective date of
this section, and the President is not required to notify the
Congress of such designation of those countries.
* * * * * * *
Chapter 5--International Military Education and Training
Sec. 541. General Authority.--The President is authorized to
furnish, on such terms and conditions consistent with this Act
as the President may determine (but whenever feasible on a
reimbursable basis), military education and training to
military and related civilian personnel of foreign countries.
Such civilian personnel shall include foreign governmental
personnel of ministries other than ministries of defense, and
may also include legislators and individuals who are not
members of the government, if the military education and
training would (i) contribute to responsible defense resource
management, (ii) foster greater respect for and understanding
of the principle of civilian control of the military, (iii)
contribute to cooperation between military and law enforcement
personnel with respect to counternarcotics law enforcement
efforts, or (iv) improve military justice systems and
procedures in accordance with internationally recognized human
rights. Such training and education may be provided through--
(1) attendance at military educational and training
facilities in the United States (other than Service
academies) and abroad;
* * * * * * *
Sec. 544. Exchange Training.--[In carrying out this chapter]
(a) In carrying out this chapter, the President is authorized
to provide for attendance of foreign military personnel at
professional military education institutions in the United
States (other than service academies) without charge, and
without charge to funds available to carry out this chapter
(notwithstanding section 632(d) of this Act), if such
attendance is pursuant to an agreement providing for the
exchange of students on a one-for-one, reciprocal basis each
fiscal year between those United States professional military
education institutions and comparable institutions of foreign
countries and international organizations.
(b) The President may provide for the attendance of foreign
military and civilian defense personnel at flight training
schools and programs (including test pilot schools) in the
United States without charge, and without charge to funds
available to carry out this chapter (notwithstanding section
632(d) of this Act), if such attendance is pursuant to an
agreement providing for the exchange of students on a one-for-
one basis each fiscal year between those United States flight
training schools and programs (including test pilot schools)
and comparable flight training schools and programs of foreign
countries.
* * * * * * *
SEC. 546. PROHIBITION ON GRANT ASSISTANCE FOR CERTAIN HIGH INCOME
FOREIGN COUNTRIES.
(a) In General.--None of the funds made available for a
fiscal year for assistance under this chapter may be made
available for assistance on a grant basis for any of the high-
income foreign countries described in subsection (b) for
military education and training of military and related
civilian personnel of such country.
(b) High-Income Foreign Countries Described.--The high-income
foreign countries described in this subsection are Austria,
Finland, the Republic of Korea, Singapore, and Spain.
* * * * * * *
Chapter 8--Antiterrorism Assistance
Sec. 571. General Authority.--[Subject to the provisions of
this chapter] Notwithstanding any other provision of law that
restricts assistance to foreign countries (other than sections
502B and 620A of this Act), the President is authorized to
furnish, on such terms and conditions as the President may
determine, assistance to foreign countries in order to enhance
the ability of their law enforcement personnel to deter
terrorists and terrorist groups from engaging in international
terrorist acts such as bombing, kidnaping, assassination,
hostage taking, and hijacking. Such assistance may include
training services and the provision of equipment and other
commodities related to bomb detection and disposal, management
of hostage situations, physical security, and other matters
relating to the detection, deterrence, and prevention of acts
of terrorism, the resolution of terrorist incidents, and the
apprehension of those involved in such acts.
* * * * * * *
Sec. 573. [Specific Authorities and] Limitations.--[(a)
Notwithstanding section 660 of this Act, services and
commodities may be granted for the purposes of this chapter to
eligible foreign countries, subject to reimbursement of the
value thereof (within the meaning of section 644(m)) pursuant
to section 632 of this Act from funds available to carry out
this chapter.
[(b)] (a) Whenever the President determines it to be
consistent with and in furtherance of the purposes of this
chapter, and on such terms and conditions consistent with this
Act as he may determine, any agency of the United States
Government is authorized to furnish services and commodities,
without charge to funds available to carry out this chapter, to
an eligible foreign country, subject to payment in advance of
the value thereof (within the meaning of section 644(m)) in
United States dollars by the foreign country. Credits and the
proceeds of guaranteed loans made available to such countries
pursuant to the Arms Export Control Act shall not be used for
such payments. Collections under this chapter shall be credited
to the currently applicable appropriation, account, or fund of
the agency providing such services and commodities and shall be
available for the purposes for which such appropriation,
account, or fund is authorized to be used.
[(c)] (b) The Assistant Secretary of State for Democracy,
Human Rights, and Labor shall be consulted in the development
and implementation of the antiterrorism assistance program
under this chapter, including determinations of the foreign
countries that will be furnished assistance under this chapter
and determinations of the nature of assistance to be furnished
to each such country.
[(d)] (c)[(1) Training services (including short term
refresher training) provided pursuant to this chapter may be
conducted outside the United States only if--
[(A) the training to be conducted outside the United
States will be provided during a period of not more
than 30 days;
[(B) such training relates to--
[(i) aviation security;
[(ii) crisis management;
[(iii) document screening techniques;
[(iv) facility security;
[(v) maritime security;
[(vi) VIP protection; or
[(vii) the handling of detector dogs, except
that only short term refresher training may be
provided under this clause; and
[(C) at least 15 days before such training is to
begin, the Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations
of the Senate are notified in accordance with the
procedures applicable to reprogramming notifications.
[(2) Personnel of the United States Government authorized to
advise eligible foreign countries on antiterrorism matters
shall carry out their responsibilities, to the maximum extent
possible, within the United States. Such personnel may provide
advice outside the United States on antiterrorism matters to
eligible foreign countries for periods not to exceed 30
consecutive calendar days.
[(3)] (1)(A) Except as provided in subparagraph (B),
employees of the Department of State shall not engage in the
training of law enforcement personnel or the provision of
services under this chapter.
(B) Subparagraph (A) does not apply to training (including
short term refresher training) or services provided to law
enforcement personnel by employees of the Bureau of Diplomatic
Security with regard to crisis management, facility security,
or VIP protection.
[(4)(A) Articles on the United States Munitions List may be
made available under this chapter only if--
[(i) they are small arms in category I (relating to
firearms), ammunition in category III (relating to
ammunition) for small arms in category I, articles in
category IV(c) or VI(c) (relating to detection and
handling of explosive devices), articles in category X
(relating to protective personnel equipment), or
articles in paragraph (b), (c), or (d) of category XIII
(relating to speech privacy devices, underwater
breathing apparatus and armor plating), and they are
directly related to antiterrorism training under this
chapter;
[(ii) the recipient country is not prohibited by law
from receiving assistance under one or more of the
following provisions: chapter 2 of this part (relating
to grant military assistance), chapter 5 of this part
(relating to international military education and
training), or the Arms Export Control Act (relating to
foreign military sales financing); and
[(iii) at least 15 days before the articles are made
available to the foreign country, the President
notifies the Committee on Foreign Affairs of the House
of Representatives and Committee on Foreign Relations
of the Senate of the proposed transfer, in accordance
with the procedures applicable to reprogramming
notifications pursuant to section 634A of this Act.
[(B) The value (in terms of original acquisition cost) of all
equipment and commodities provided under subsection (a) in any
fiscal year may not exceed 25 percent of the funds made
available to carry out this chapter for that fiscal year.
[(C) No shock batons or similar devices may be provided under
this chapter.]
(2)(A) Except as provided in subparagraph (B), funds made
available to carry out this chapter shall not be made available
for the procurement of weapons and ammunition.
(B) Subparagraph (A) shall not apply to small arms and
ammunition in categories I and III of the United States
Munitions List that are integrally and directly related to
antiterrorism training provided under this chapter if, at least
15 days before obligating those funds, the President notifies
the appropriate congressional committees specified in section
634A of this Act in accordance with the procedures applicable
to reprogramming notifications under such section.
(C) The value (in terms of original acquisition cost) of all
equipment and commodities provided under this chapter in any
fiscal year may not exceed 25 percent of the funds made
available to carry out this chapter for that fiscal year.
[(5)] (3) Assistance under this chapter shall not include
provision of services, equipment, personnel, or facilities
involved in the collection of intelligence as defined in
Executive Order 12333 of December 4, 1981, other than limited
training in the organization of intelligence for antiterrorism
purposes.
[(e)] (d) This chapter does not apply to information exchange
activities conducted by agencies of the United States
Government under other authority for such purposes.
[(f)] (e) Funds made available to carry out this chapter may
not be used for personnel compensation or benefits.
[Sec. 574. Reports to Congress.--(a)(1) Not less than thirty
days before providing assistance to a foreign country under
this chapter, the President shall transmit to the Speaker of
the House of Representatives and the chairman of the Committee
on Foreign Relations of the Senate a written notification which
specifies--
[(A) the country to which such assistance is to be
provided;
[(B) the type and value of the assistance to be
provided;
[(C) the terms and duration of assistance; and
[(D) an explanation of how the proposed assistance
will further the objectives of this chapter to assist
eligible foreign countries in deterring terrorism.
[(2) The chairman of either the Committee on Foreign Affairs
of the House of Representatives or the Committee on Foreign
Relations of the Senate may request, as deemed necessary, a
current report on the state of observance of and respect for
internationally recognized human rights in the country to which
assistance is to be provided. In the event that a report is
requested, no assistance under subsection (a) shall be provided
to the country specified prior to transmittal of the report to
the requesting committee.
[(b) The annual congressional presentation materials shall
include--
[(1) a list of the countries which received
assistance under this chapter for the preceding fiscal
year, a list of the countries which are programmed to
receive assistance under this chapter for the current
fiscal year, and a list of the countries which are
proposed as recipients of assistance under this chapter
for the next fiscal year; and
[(2) with respect to each country listed pursuant to
paragraph (1) and for each such fiscal year, a
description of the assistance under this chapter
furnished, programed, or proposed, including--
[(A) the place where training or other
services under this chapter were or will be
furnished, the duration of such training or
other services, and the number of personnel
from that country which were or will receive
training under this chapter;
[(B) the types of equipment or other
commodities which were or will be furnished
under this chapter; and
[(C) whether the assistance was furnished on
a grant basis, on an advance payment basis, or
on some other basis.
Each report shall also describe the ways in which the provision
of such assistance has furthered the objective of enhancing the
ability of foreign law enforcement authorities to deter acts of
terrorism.]
Sec. [575.] 574. Authorizations of Appropriations.--(a) There
are authorized to be appropriated to the President to carry out
this chapter $9,840,000 for the fiscal year 1986 and
$14,680,000 for the fiscal year 1987.
(b) Amounts appropriated under this section are authorized to
remain available until expended.
Sec. [576.] 575. Administrative Authorities.--Except where
expressly provided to the contrary, any reference in any law to
part I of this Act shall be deemed to include reference to this
chapter and any reference in any law to part II of this Act
shall be deemed to exclude reference to this chapter.
* * * * * * *
PART III
Chapter 1--General Provisions
* * * * * * *
SEC. 620H. DEPLETED URANIUM AMMUNITION.
(a) Prohibition.--Except as provided in subsection (b), none
of the funds made available to carry out this Act or any other
Act may be made available to facilitate in any way the sale of
M-833 antitank shells or any comparable antitank shells
containing a depleted uranium penetrating component to any
country other than--
(1) a country that is a member of the North Atlantic
Treaty Organization;
(2) a country that has been designated as a major
non-NATO ally (as defined in section 644(q)); or
(3) Taiwan.
(b) Exception.--The prohibition contained in subsection (a)
shall not apply with respect to the use of funds to facilitate
the sale of antitank shells to a country if the President
determines that to do so is in the national security interest
of the United States.
* * * * * * *
Chapter 3--Miscellaneous Provisions
Sec. 644. Definitions.--As used in this Act--
(a) * * *
* * * * * * *
(q) ``Major non-NATO ally'' means a country which is
designated in accordance with section 517 as a major non-NATO
ally for purposes of this Act and the Arms Export Control Act
(22 U.S.C. 2751 et seq.).
* * * * * * *
Sec. 652. Limitation Upon Exercise of Special Authorities.--
The President shall not exercise any special authority granted
to him under section 506(a), 552(c)(2), or 610(a) of this Act
unless the President, [prior to the date] before he intends to
exercise any such authority, notifies the Speaker of the House
of Representatives and the Committee on Foreign Relations of
the Senate in writing of each such intended exercise, the
section of this Act under which such authority is to be
exercised, and the justification for, and the extent of, the
exercise of such authority.
* * * * * * *