I

104TH CONGRESS

2D SESSION 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.

IN THE HOUSE OF REPRESENTATIVES

MARCH 20, 1996

Mr. GILMAN (for himself and Mr. HAMILTON) introduced the following bill;

which was referred to the Committee on International Relations, and in

addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. TABLE OF CONTENTS.

4 The table of contents of this Act is as follows:

Sec. 1. Table of contents.

TITLE I—DEFENSE AND SECURITY ASSISTANCE
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CHAPTER 1—MILITARY AND RELATED ASSISTANCE

Sec. 101. Terms of loans under the Foreign Military Financing program.

Sec. 102. Additional requirements under the Foreign Military Financing program.

Sec. 103. Drawdown special authorities.

Sec. 104. Transfer of excess defense articles.

Sec. 105. Excess defense articles for certain European countries.

CHAPTER 2—INTERNATIONAL MILITARY EDUCATION AND TRAINING

Sec. 111. Assistance for Indonesia.

Sec. 112. Additional requirements.

CHAPTER 3—ANTITERRORISM ASSISTANCE

Sec. 121. Antiterrorism training assistance.

Sec. 122. Research and development expenses.

CHAPTER 4—NARCOTICS CONTROL ASSISTANCE

Sec. 131. Additional requirements.

Sec. 132. Notification requirement.

Sec. 133. Waiver of restrictions for narcotics-related economic assistance.

CHAPTER 5—OTHER PROVISIONS

Sec. 141. Standardization of congressional review procedures for arms transfers.

Sec. 142. Standardization of third country transfers of defense articles.

Sec. 143. Increased standardization, rationalization, and interoperability of assistance and sales programs.

Sec. 144. Definition of significant military equipment.

Sec. 145. Elimination of annual reporting requirement relating to the Special

Defense Acquisition Fund.

Sec. 146. Cost of leased defense articles that have been lost or destroyed.

Sec. 147. Designation of major non-NATO allies.

Sec. 148. Certification thresholds.

Sec. 149. Depleted uranium ammunition.

Sec. 150. End-use monitoring of defense articles and defense services.

Sec. 151. Brokering activities relating to commercial sales of defense articles

and services.

Sec. 152. Return and exchanges of defense articles previously transferred pursuant to the arms export control act.

Sec. 153. National security interest determination to waive reimbursement of

depreciation for leased defense articles.

TITLE II—TRANSFER OF NAVAL VESSELS TO CERTAIN FOREIGN

COUNTRIES

Sec. 201. Authority to transfer naval vessels.

Sec. 202. Costs of transfers.

Sec. 203. Expiration of authority.

Sec. 204. Repair and refurbishment of vessels in United States shipyards.
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1 TITLE I—DEFENSE AND

2 SECURITY ASSISTANCE

3 CHAPTER 1—MILITARY AND RELATED

4 ASSISTANCE

5 SEC. 101. TERMS OF LOANS UNDER THE FOREIGN MILI6 TARY FINANCING PROGRAM.

7 Section 31(c) of the Arms Export Control Act (22

8 U.S.C. 2771(c)) is amended to read as follows:

9 ‘‘(c) Loans available under section 23 shall be pro10 vided at rates of interest that are not less than the current

11 average market yield on outstanding marketable obliga12 tions of the United States of comparable maturities.’’.

13 SEC. 102. ADDITIONAL REQUIREMENTS UNDER THE FOR14 EIGN MILITARY FINANCING PROGRAM.

15 (a) FOREIGN MILITARY SALES.—Section 21(h) of the

16 Arms Export Control Act (22 U.S.C. 2761(h)) is amend17 ed—

18 (1) in paragraph (1)(A), by inserting ‘‘or the

19 Government of Israel’’ after ‘‘North Atlantic Treaty

20 Organization’’; and

21 (2) in paragraph (2), by striking ‘‘or to any

22 member government of that Organization if that Or23 ganization or member government’’ and inserting ‘‘,

24 any member government of that Organization, or the

25 Government of Israel, if the Organization, member
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1 government, or Government of Israel, as the case

2 may be,’’.

3 (b) AUDIT OF CERTAIN PRIVATE FIRMS.—Section 23

4 of such Act (22 U.S.C. 2763) is amended by adding at

5 the end the following new subsection:

6 ‘‘(f) For each fiscal year, the Secretary of Defense,

7 as requested by the Director of the Defense Security As8 sistance Agency, shall conduct audits on a

9 nonreimbursable basis of private firms that have entered

10 into contracts with foreign governments under which de11 fense articles, defense services, or design and construction

12 services are to be procured by such firms for such govern13 ments from financing under this section.’’.

14 (c) NOTIFICATION REQUIREMENT WITH RESPECT TO

15 CASH FLOW FINANCING.—Section 23 of such Act (22

16 U.S.C. 2763), as amended by this Act, is further amended

17 by adding at the end the following new subsection:

18 ‘‘(g)(1) For each country and international organiza19 tion that has been approved for cash flow financing under

20 this section, any letter of offer and acceptance or other

21 purchase agreement, or any amendment thereto, for a pro22 curement of defense articles, defense services, or design

23 and construction services in excess of $100,000,000 that

24 is to be financed in whole or in part with funds made avail25 able under this Act or the Foreign Assistance Act of 1961
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1 shall be submitted to the congressional committees speci2 fied in section 634A(a) of the Foreign Assistance Act of

3 1961 in accordance with the procedures applicable to

4 reprogramming notifications under that section.

5 ‘‘(2) For purposes of this subsection, the term ‘cash

6 flow financing’ has the meaning given such term in the

7 second subsection (d) of section 25.’’.

8 (d) LIMITATIONS ON USE OF FUNDS FOR DIRECT

9 COMMERCIAL CONTRACTS.—Section 23 of such Act (22

10 U.S.C. 2763), as amended by this Act, is further amended

11 by adding at the end the following new subsection:

12 ‘‘(h) Of the amounts made available for a fiscal year

13 to carry out this section, not more than $100,000,000 for

14 such fiscal year may be made available for countries other

15 than Israel and Egypt for the purpose of financing the

16 procurement of defense articles, defense services, and de17 sign and construction services that are not sold by the

18 United States Government under this Act.’’.

19 (e) ANNUAL ESTIMATE AND JUSTIFICATION FOR

20 SALES PROGRAM.—Section 25 of such Act (22 U.S.C.

21 2765) is amended—

22 (1) by striking the ‘‘and’’ at the end of para23 graph (11);

24 (2) by redesignating paragraph (12) as para25 graph (13); and
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1 (3) by inserting after paragraph (11) the fol2 lowing new paragraph:

3 ‘‘(12)(A) a detailed accounting of all articles,

4 services, credits, guarantees, or any other form of

5 assistance furnished by the United States to each

6 country and international organization, including

7 payments to the United Nations, during the preced8 ing fiscal year for the detection and clearance of

9 landmines, including activities relating to the fur10 nishing of education, training, and technical assist11 ance for the detection and clearance of landmines;

12 and

13 ‘‘(B) for each provision of law making funds

14 available or authorizing appropriations for demining

15 activities described in subparagraph (A), an analysis

16 and description of the objectives and activities un17 dertaken during the preceding fiscal year, including

18 the number of personnel involved in performing such

19 activities; and’’.

20 SEC. 103. DRAWDOWN SPECIAL AUTHORITIES.

21 (a) UNFORESEEN EMERGENCY DRAWDOWN.—Sec22 tion 506(a)(1) of the Foreign Assistance Act of 1961 (22

23 U.S.C. 2318(a)(1)) is amended by striking ‘‘$75,000,000’’

24 and inserting ‘‘$100,000,000’’.
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1 (b) ADDITIONAL DRAWDOWN.—Section 506 of such

2 Act (22 U.S.C. 2318) is amended—

3 (1) in subsection (a)(2)(A), by striking ‘‘defense

4 articles from the stocks’’ and all that follows and in5 serting the following: ‘‘articles and services from the

6 inventory and resources of any agency of the United

7 States Government and military education and

8 training from the Department of Defense, the Presi9 dent may direct the drawdown of such articles, serv10 ices, and military education and training—

11 ‘‘(i) for the purposes and under the au12 thorities of—

13 ‘‘(I) chapter 8 of part I (relating to

14 international narcotics control assistance);

15 ‘‘(II) chapter 9 of part I (relating to

16 international disaster assistance); or

17 ‘‘(III) the Migration and Refugee As18 sistance Act of 1962; or

19 ‘‘(ii) for the purpose of providing such arti20 cles, services, and military education and train21 ing to Vietnam, Cambodia, and Laos as the

22 President determines are necessary—

23 ‘‘(I) to support cooperative efforts to

24 locate and repatriate members of the Unit25 ed States Armed Forces and civilians em-
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1 ployed directly or indirectly by the United

2 States Government who remain unac3 counted for from the Vietnam War; and

4 ‘‘(II) to ensure the safety of United

5 States Government personnel engaged in

6 such cooperative efforts and to support De7 partment of Defense-sponsored humani8 tarian projects associated with such ef9 forts.’’;

10 (2) in subsection (a)(2)(B), by striking

11 ‘‘$75,000,000’’ and all that follows and inserting

12 ‘‘$150,000,000 in any fiscal year of such articles,

13 services, and military education and training may be

14 provided pursuant to subparagraph (A) of this para15 graph—

16 ‘‘(i) not more than $75,000,000 of which

17 may be provided from the drawdown from the

18 inventory and resources of the Department of

19 Defense;

20 ‘‘(ii) not more than $75,000,000 of which

21 may be provided pursuant to clause (i)(I) of

22 such subparagraph; and

23 ‘‘(iii) not more than $15,000,000 of which

24 may be provided to Vietnam, Cambodia, and
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1 Laos pursuant to clause (ii) of such subpara2 graph.’’; and

3 (3) in subsection (b)(1), by adding at the end

4 the following: ‘‘In the case of drawdowns authorized

5 by subclauses (I) and (III) of subsection

6 (a)(2)(A)(i), notifications shall be provided to those

7 committees at least 15 days in advance of the

8 drawdowns in accordance with the procedures appli9 cable to reprogramming notifications under section

10 634A.’’.

11 (c) NOTICE TO CONGRESS OF EXERCISE OF SPECIAL

12 AUTHORITIES.—Section 652 of such Act (22 U.S.C.

13 2411) is amended by striking ‘‘prior to the date’’ and in14 serting ‘‘before’’.

15 SEC. 104. TRANSFER OF EXCESS DEFENSE ARTICLES.

16 (a) IN GENERAL.—Section 516 of the Foreign Assist17 ance Act of 1961 (22 U.S.C. 2321j) is amended to read

18 as follows:

19 ‘‘SEC. 516. AUTHORITY TO TRANSFER EXCESS DEFENSE AR20 TICLES.

21 ‘‘(a) AUTHORIZATION.—The President is authorized

22 to transfer excess defense articles under this section to

23 countries for which receipt of such articles was justified

24 pursuant to the annual congressional presentation docu25 ments for military assistance programs, or for programs
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1 under chapter 8 of part I of this Act, submitted under

2 section 634 of this Act, or for which receipt of such arti3 cles was separately justified to the Congress, for the fiscal

4 year in which the transfer is authorized.

5 ‘‘(b) LIMITATIONS ON TRANSFERS.—The President

6 may transfer excess defense articles under this section

7 only if—

8 ‘‘(1) such articles are drawn from existing

9 stocks of the Department of Defense;

10 ‘‘(2) funds available to the Department of De11 fense for the procurement of defense equipment are

12 not expended in connection with the transfer;

13 ‘‘(3) the transfer of such articles will not have

14 an adverse impact on the military readiness of the

15 United States;

16 ‘‘(4) with respect to a proposed transfer of such

17 articles on a grant basis, such a transfer is pref18 erable to a transfer on a sales basis, after taking

19 into account the potential proceeds from, and likeli20 hood of, such sales, and the comparative foreign pol21 icy benefits that may accrue to the United States as

22 the result of a transfer on either a grant or sales

23 basis;

24 ‘‘(5) the President determines that the transfer

25 of such articles will not have an adverse impact on
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1 the national technology and industrial base and, par2 ticularly, will not reduce the opportunities of entities

3 in the national technology and industrial base to sell

4 new or used equipment to the countries to which

5 such articles are transferred; and

6 ‘‘(6) the transfer of such articles is consistent

7 with the policy framework for the Eastern Medi8 terranean established under section 620C of this

9 Act.

10 ‘‘(c) TERMS OF TRANSFERS.—

11 ‘‘(1) NO COST TO RECIPIENT COUNTRY.—Ex12 cess defense articles may be transferred under this

13 section without cost to the recipient country.

14 ‘‘(2) PRIORITY.—Notwithstanding any other

15 provision of law, the delivery of excess defense arti16 cles under this section to member countries of the

17 North Atlantic Treaty Organization (NATO) on the

18 southern and southeastern flank of NATO and to

19 major non-NATO allies on such southern and south20 eastern flank shall be given priority to the maximum

21 extent feasible over the delivery of such excess de22 fense articles to other countries.

23 ‘‘(d) WAIVER OF REQUIREMENT FOR REIMBURSE24 MENT OF DEPARTMENT OF DEFENSE EXPENSES.—Sec25 tion 632(d) shall not apply with respect to transfers of
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1 excess defense articles (including transportation and relat2 ed costs) under this section.

3 ‘‘(e) TRANSPORTATION AND RELATED COSTS.—

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), funds available to the Department of De6 fense may not be expended for crating, packing,

7 handling, and transportation of excess defense arti8 cles transferred under the authority of this section.

9 ‘‘(2) EXCEPTION.—The President may provide

10 for the transportation of excess defense articles with11 out charge to a country for the costs of such trans12 portation if—

13 ‘‘(A) it is determined that it is in the na14 tional interest of the United States to do so;

15 ‘‘(B) the recipient is a developing country

16 receiving less than $10,000,000 of assistance

17 under chapter 5 of part II of this Act (relating

18 to international military education and train19 ing) or section 23 of the Arms Export Control

20 Act (22 U.S.C. 2763; relating to the Foreign

21 Military Financing program) in the fiscal year

22 in which the transportation is provided;

23 ‘‘(C) the total weight of the transfer does

24 not exceed 25,000 pounds; and
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1 ‘‘(D) such transportation is accomplished

2 on a space available basis.

3 ‘‘(f) ADVANCE NOTIFICATION TO CONGRESS FOR

4 TRANSFER OF CERTAIN EXCESS DEFENSE ARTICLES.—

5 ‘‘(1) IN GENERAL.—The President may not

6 transfer excess defense articles that are significant

7 military equipment (as defined in section 47(9) of

8 the Arms Export Control Act) or excess defense arti9 cles valued (in terms of original acquisition cost) at

10 $7,000,000 or more, under this section or under the

11 Arms Export Control Act (22 U.S.C. 2751 et seq.)

12 until 15 days after the date on which the President

13 has provided notice of the proposed transfer to the

14 congressional committees specified in section

15 634A(a) in accordance with procedures applicable to

16 reprogramming notifications under that section.

17 ‘‘(2) CONTENTS.—Such notification shall in18 clude—

19 ‘‘(A) a statement outlining the purposes

20 for which the article is being provided to the

21 country, including whether such article has

22 been previously provided to such country;

23 ‘‘(B) an assessment of the impact of the

24 transfer on the military readiness of the United

25 States;
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1 ‘‘(C) an assessment of the impact of the

2 transfer on the national technology and indus3 trial base and, particularly, the impact on op4 portunities of entities in the national technology

5 and industrial base to sell new or used equip6 ment to the countries to which such articles are

7 to be transferred; and

8 ‘‘(D) a statement describing the current

9 value of such article and the value of such arti10 cle at acquisition.

11 ‘‘(g) AGGREGATE ANNUAL LIMITATION.—

12 ‘‘(1) IN GENERAL.—The aggregate value of ex13 cess defense articles transferred to countries under

14 this section in any fiscal year may not exceed

15 $350,000,000.

16 ‘‘(2) EFFECTIVE DATE.—The limitation con17 tained in paragraph (1) shall apply only with respect

18 to fiscal years beginning after fiscal year 1996.

19 ‘‘(h) CONGRESSIONAL PRESENTATION DOCU20 MENTS.—Documents described in subsection (a) justifying

21 the transfer of excess defense articles shall include an ex22 planation of the general purposes of providing excess de23 fense articles as well as a table which provides an aggre24 gate annual total of transfers of excess defense articles

25 in the preceding year by country in terms of offers and
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1 actual deliveries and in terms of acquisition cost and cur2 rent value. Such table shall indicate whether such excess

3 defense articles were provided on a grant or sale basis.

4 ‘‘(i) EXCESS COAST GUARD PROPERTY.—For pur5 poses of this section, the term ‘excess defense articles’

6 shall be deemed to include excess property of the Coast

7 Guard, and the term ‘Department of Defense’ shall be

8 deemed, with respect to such excess property, to include

9 the Coast Guard.’’.

10 (b) CONFORMING AMENDMENTS.—

11 (1) ARMS EXPORT CONTROL ACT.—Section

12 21(k) of the Arms Export Control Act (22 U.S.C.

13 2761(k)) is amended by striking ‘‘the President

14 shall’’ and all that follows and inserting the follow15 ing: ‘‘the President shall determine that the sale of

16 such articles will not have an adverse impact on the

17 national technology and industrial base and, particu18 larly, will not reduce the opportunities of entities in

19 the national technology and industrial base to sell

20 new or used equipment to the countries to which

21 such articles are transferred.’’.

22 (2) REPEALS.—The following provisions of law

23 are hereby repealed:

24 (A) Section 502A of the Foreign Assist25 ance Act of 1961 (22 U.S.C. 2303).
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1 (B) Sections 517 through 520 of the For2 eign Assistance Act of 1961 (22 U.S.C. 2321k

3 through 2321n).

4 (C) Section 31(d) of the Arms Export Con5 trol Act (22 U.S.C. 2771(d)).

6 SEC. 105. EXCESS DEFENSE ARTICLES FOR CERTAIN EURO7 PEAN COUNTRIES.

8 Notwithstanding section 516(e) of the Foreign As9 sistance Act of 1961, during each of the fiscal years 1996

10 and 1997, funds available to the Department of Defense

11 may be expended for crating, packing, handling, and

12 transportation of excess defense articles transferred under

13 the authority of section 516 of such Act to countries that

14 are eligible to participate in the Partnership for Peace and

15 that are eligible for assistance under the Support for East

16 European Democracy (SEED) Act of 1989.

17 CHAPTER 2—INTERNATIONAL MILITARY

18 EDUCATION AND TRAINING

19 SEC. 111. ASSISTANCE FOR INDONESIA.

20 Funds made available for fiscal years 1996 and 1997

21 to carry out chapter 5 of part II of the Foreign Assistance

22 Act of 1961 (22 U.S.C. 2347 et seq.) may be obligated

23 for Indonesia only for expanded military and education

24 training that meets the requirements of clauses (i)
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1 through (iv) of the second sentence of section 541 of such

2 Act (22 U.S.C. 2347).

3 SEC. 112. ADDITIONAL REQUIREMENTS.

4 (a) GENERAL AUTHORITY.—Section 541 of the For5 eign Assistance Act of 1961 (22 U.S.C. 2347) is amended

6 in the second sentence in the matter preceding clause (i)

7 by inserting ‘‘and individuals who are not members of the

8 government’’ after ‘‘legislators’’.

9 (b) EXCHANGE TRAINING.—Section 544 of such Act

10 (22 U.S.C. 2347c) is amended—

11 (1) by striking ‘‘In carrying out this chapter’’

12 and inserting ‘‘(a) In carrying out this chapter’’; and

13 (2) by adding at the end the following new sub14 section:

15 ‘‘(b) The President may provide for the attendance

16 of foreign military and civilian defense personnel at flight

17 training schools and programs (including test pilot

18 schools) in the United States without charge, and without

19 charge to funds available to carry out this chapter (not20 withstanding section 632(d) of this Act), if such attend21 ance is pursuant to an agreement providing for the ex22 change of students on a one-for-one basis each fiscal year

23 between those United States flight training schools and

24 programs (including test pilot schools) and comparable
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1 flight training schools and programs of foreign coun2 tries.’’.

3 (c) ASSISTANCE FOR CERTAIN HIGH-INCOME FOR4 EIGN COUNTRIES.—

5 (1) AMENDMENT TO THE FOREIGN ASSISTANCE

6 ACT OF 1961.—Chapter 5 of part II of such Act (22

7 U.S.C. 2347 et seq.) is amended by adding at the

8 end the following new section:

9 ‘‘SEC. 546. PROHIBITION ON GRANT ASSISTANCE FOR CER10 TAIN HIGH INCOME FOREIGN COUNTRIES.

11 ‘‘(a) IN GENERAL.—None of the funds made avail12 able for a fiscal year for assistance under this chapter may

13 be made available for assistance on a grant basis for any

14 of the high-income foreign countries described in sub15 section (b) for military education and training of military

16 and related civilian personnel of such country.

17 ‘‘(b) HIGH-INCOME FOREIGN COUNTRIES DE18 SCRIBED.—The high-income foreign countries described in

19 this subsection are Austria, Finland, the Republic of

20 Korea, Singapore, and Spain.’’.

21 (2) AMENDMENT TO THE ARMS EXPORT CON22 TROL ACT.—Section 21(a)(1)(C) of the Arms Export

23 Control Act (22 U.S.C. 2761) is amended by insert24 ing ‘‘or to any high-income foreign country (as de-
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1 scribed in that chapter)’’ after ‘‘Foreign Assistance

2 Act of 1961’’.

3 CHAPTER 3—ANTITERRORISM

4 ASSISTANCE

5 SEC. 121. ANTITERRORISM TRAINING ASSISTANCE.

6 (a) IN GENERAL.—Section 571 of the Foreign Assist7 ance Act of 1961 (22 U.S.C. 2349aa) is amended by strik8 ing ‘‘Subject to the provisions of this chapter’’ and insert9 ing ‘‘Notwithstanding any other provision of law that re10 stricts assistance to foreign countries (other than sections

11 502B and 620A of this Act)’’.

12 (b) LIMITATIONS.—Section 573 of such Act (22

13 U.S.C. 2349aa–2) is amended—

14 (1) in the heading, by striking ‘‘SPECIFIC AU15 THORITIES AND’’;

16 (2) by striking subsection (a);

17 (3) by redesignating subsections (b) through (f)

18 as subsections (a) through (e), respectively; and

19 (4) in subsection (c) (as redesignated)—

20 (A) by striking paragraphs (1) and (2);

21 (B) by redesignating paragraphs (3)

22 through (5) as paragraphs (1) through (3), re23 spectively; and

24 (C) by amending paragraph (2) (as redes25 ignated) to read as follows:
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1 ‘‘(2)(A) Except as provided in subparagraph (B),

2 funds made available to carry out this chapter shall not

3 be made available for the procurement of weapons and am4 munition.

5 ‘‘(B) Subparagraph (A) shall not apply to small arms

6 and ammunition in categories I and III of the United

7 States Munitions List that are integrally and directly re8 lated to antiterrorism training provided under this chapter

9 if, at least 15 days before obligating those funds, the

10 President notifies the appropriate congressional commit11 tees specified in section 634A of this Act in accordance

12 with the procedures applicable to reprogramming notifica13 tions under such section.

14 ‘‘(C) The value (in terms of original acquisition cost)

15 of all equipment and commodities provided under this

16 chapter in any fiscal year may not exceed 25 percent of

17 the funds made available to carry out this chapter for that

18 fiscal year.’’.

19 (c) ANNUAL REPORT.—Section 574 of such Act (22

20 U.S.C. 2349aa–3) is hereby repealed.

21 (d) TECHNICAL CORRECTIONS.—Section 575 (22

22 U.S.C. 2349aa–4) and section 576 (22 U.S.C. 2349aa–

23 5) of such Act are redesignated as sections 574 and 575,

24 respectively.
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1 SEC. 122. RESEARCH AND DEVELOPMENT EXPENSES.

2 Funds made available for fiscal years 1996 and 1997

3 to carry out chapter 8 of part II of the Foreign Assistance

4 Act of 1961 (22 U.S.C. 2349aa et seq.; relating to

5 antiterrorism assistance) may be made available to the

6 Technical Support Working Group of the Department of

7 State for research and development expenses related to

8 contraband detection technologies or for field demonstra9 tions of such technologies (whether such field demonstra10 tions take place in the United States or outside the United

11 States).

12 CHAPTER 4—NARCOTICS CONTROL

13 ASSISTANCE

14 SEC. 131. ADDITIONAL REQUIREMENTS.

15 (a) POLICY AND GENERAL AUTHORITIES.—Section

16 481(a) of the Foreign Assistance Act (22 U.S.C. 2291(a))

17 is amended—

18 (1) in paragraph (1)—

19 (A) by redesignating subparagraphs (D)

20 through (F) as subparagraphs (E) through (G),

21 respectively; and

22 (B) by inserting after subparagraph (C)

23 the following new subparagraph:

24 ‘‘(D) International criminal activities, particu25 larly international narcotics trafficking, money laun26 dering, and corruption, endanger political and eco-
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1 nomic stability and democratic development, and as2 sistance for the prevention and suppression of inter3 national criminal activities should be a priority for

4 the United States.’’; and

5 (2) in paragraph (4), by adding before the pe6 riod at the end the following: ‘‘, or for other

7 anticrime purposes’’.

8 (b) CONTRIBUTIONS AND REIMBURSEMENT.—Sec9 tion 482(c) of that Act (22 U.S.C. 2291a(c)) is amend10 ed—

11 (1) by striking ‘‘CONTRIBUTION BY RECIPIENT

12 COUNTRY.—To’’ and inserting ‘‘CONTRIBUTIONS

13 AND REIMBURSEMENT.—(1) To’’; and

14 (2) by adding at the end the following new

15 paragraphs:

16 ‘‘(2)(A) The President is authorized to accept con17 tributions from foreign governments to carry out the pur18 poses of this chapter. Such contributions shall be depos19 ited as an offsetting collection to the applicable appropria20 tion account and may be used under the same terms and

21 conditions as funds appropriated pursuant to this chapter.

22 ‘‘(B) At the time of submission of the annual congres23 sional presentation documents required by section 634(a),

24 the President shall provide a detailed report on any con25 tributions received in the preceding fiscal year, the amount
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1 of such contributions, and the purposes for which such

2 contributions were used.

3 ‘‘(3) The President is authorized to provide assist4 ance under this chapter on a reimbursable basis. Such re5 imbursements shall be deposited as an offsetting collection

6 to the applicable appropriation and may be used under the

7 same terms and conditions as funds appropriated pursu8 ant to this chapter.’’.

9 (c) IMPLEMENTATION OF LAW ENFORCEMENT AS10 SISTANCE.—Section 482 of such Act (22 U.S.C. 2291a)

11 is amended by adding at the end the following new sub12 sections:

13 ‘‘(f) TREATMENT OF FUNDS.—Funds transferred to

14 and consolidated with funds appropriated pursuant to this

15 chapter may be made available on such terms and condi16 tions as are applicable to funds appropriated pursuant to

17 this chapter. Funds so transferred or consolidated shall

18 be apportioned directly to the bureau within the Depart19 ment of State responsible for administering this chapter.

20 ‘‘(g) EXCESS PROPERTY.—For purposes of this chap21 ter, the Secretary of State may use the authority of section

22 608, without regard to the restrictions of such section, to

23 receive nonlethal excess property from any agency of the

24 United States Government for the purpose of providing

25 such property to a foreign government under the same
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1 terms and conditions as funds authorized to be appro2 priated for the purposes of this chapter.’’.

3 SEC. 132. NOTIFICATION REQUIREMENT.

4 (a) IN GENERAL.—The authority of section 1003(d)

5 of the National Narcotics Control Leadership Act of 1988

6 (21 U.S.C. 1502(d)) may be exercised with respect to

7 funds authorized to be appropriated pursuant to the For8 eign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) and

9 with respect to the personnel of the Department of State

10 only to the extent that the appropriate congressional com11 mittees have been notified 15 days in advance in accord12 ance with the reprogramming procedures applicable under

13 section 634A of that Act (22 U.S.C. 2394).

14 (b) DEFINITION.—For purposes of this section, the

15 term ‘‘appropriate congressional committees’’ means the

16 Committee on International Relations and the Committee

17 on Appropriations of the House of Representatives and the

18 Committee on Foreign Relations and the Committee on

19 Appropriations of the Senate.

20 SEC. 133. WAIVER OF RESTRICTIONS FOR NARCOTICS-RE21 LATED ECONOMIC ASSISTANCE.

22 For each of the fiscal years 1996 and 1997, narcot23 ics-related assistance under part I of the Foreign Assist24 ance Act of 1961 (22 U.S.C. 2151 et seq.) may be pro25 vided notwithstanding any other provision of law that re-
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1 stricts assistance to foreign countries (other than section

2 490(e) or section 502B of that Act (22 U.S.C. 2291j(e)

3 and 2304)) if, at least 15 days before obligating funds

4 for such assistance, the President notifies the appropriate

5 congressional committees (as defined in section 481(e) of

6 that Act (22 U.S.C. 2291(e))) in accordance with the pro7 cedures applicable to reprogramming notifications under

8 section 634A of that Act (22 U.S.C. 2394).

9 CHAPTER 5—OTHER PROVISIONS

10 SEC. 141. STANDARDIZATION OF CONGRESSIONAL REVIEW

11 PROCEDURES FOR ARMS TRANSFERS.

12 (a) THIRD COUNTRY TRANSFERS UNDER FMS

13 SALES.—Section 3(d)(2) of the Arms Export Control Act

14 (22 U.S.C. 2753(d)(2)) is amended—

15 (1) in subparagraph (A), by striking ‘‘, as pro16 vided for in sections 36(b)(2) and 36(b)(3) of this

17 Act’’;

18 (2) in subparagraph (B), by striking ‘‘law’’ and

19 inserting ‘‘joint resolution’’; and

20 (3) by adding at the end the following:

21 ‘‘(C) If the President states in his certification under

22 subparagraph (A) or (B) that an emergency exists which

23 requires that consent to the proposed transfer become ef24 fective immediately in the national security interests of the

25 United States, thus waiving the requirements of that sub-
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1 paragraph, the President shall set forth in the certification

2 a detailed justification for his determination, including a

3 description of the emergency circumstances which neces4 sitate immediate consent to the transfer and a discussion

5 of the national security interests involved.

6 ‘‘(D)(i) Any joint resolution under this paragraph

7 shall be considered in the Senate in accordance with the

8 provisions of section 601(b) of the International Security

9 Assistance and Arms Export Control Act of 1976.

10 ‘‘(ii) For the purpose of expediting the consideration

11 and enactment of joint resolutions under this paragraph,

12 a motion to proceed to the consideration of any such joint

13 resolution after it has been reported by the appropriate

14 committee shall be treated as highly privileged in the

15 House of Representatives.’’.

16 (b) THIRD COUNTRY TRANSFERS UNDER COMMER17 CIAL SALES.—Section 3(d)(3) of such Act (22 U.S.C.

18 2753(d)(3)) is amended—

19 (1) by inserting ‘‘(A)’’ after ‘‘(3)’’;

20 (2) in the first sentence—

21 (A) by striking ‘‘at least 30 calendar

22 days’’; and

23 (B) by striking ‘‘report’’ and inserting

24 ‘‘certification’’; and
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1 (3) by striking the last sentence and inserting

2 the following: ‘‘Such certification shall be submit3 ted—

4 ‘‘(i) at least 15 calendar days before such con5 sent is given in the case of a transfer to a country

6 which is a member of the North Atlantic Treaty Or7 ganization or Australia, Japan, or New Zealand; and

8 ‘‘(ii) at least 30 calendar days before such con9 sent is given in the case of a transfer to any other

10 country,

11 unless the President states in his certification that an

12 emergency exists which requires that consent to the pro13 posed transfer become effective immediately in the na14 tional security interests of the United States. If the Presi15 dent states in his certification that such an emergency ex16 ists (thus waiving the requirements of clause (i) or (ii),

17 as the case may be, and of subparagraph (B)) the Presi18 dent shall set forth in the certification a detailed justifica19 tion for his determination, including a description of the

20 emergency circumstances which necessitate that consent

21 to the proposed transfer become effective immediately and

22 a discussion of the national security interests involved.

23 ‘‘(B) Consent to a transfer subject to subparagraph

24 (A) shall become effective after the end of the 15-day or

25 30-day period specified in subparagraph (A)(i) or (ii), as
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1 the case may be, only if the Congress does not enact, with2 in that period, a joint resolution prohibiting the proposed

3 transfer.

4 ‘‘(C)(i) Any joint resolution under this paragraph

5 shall be considered in the Senate in accordance with the

6 provisions of section 601(b) of the International Security

7 Assistance and Arms Export Control Act of 1976.

8 ‘‘(ii) For the purpose of expediting the consideration

9 and enactment of joint resolutions under this paragraph,

10 a motion to proceed to the consideration of any such joint

11 resolution after it has been reported by the appropriate

12 committee shall be treated as highly privileged in the

13 House of Representatives.’’.

14 (c) COMMERCIAL SALES.—Section 36(c)(2) of such

15 Act (22 U.S.C. 2776(c)(2)) is amended by amending sub16 paragraphs (A) and (B) to read as follows:

17 ‘‘(A) in the case of a license for an export to

18 the North Atlantic Treaty Organization, any mem19 ber country of that Organization or Australia,

20 Japan, or New Zealand, shall not be issued until at

21 least 15 calendar days after the Congress receives

22 such certification, and shall not be issued then if the

23 Congress, within that 15-day period, enacts a joint

24 resolution prohibiting the proposed export; and
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1 ‘‘(B) in the case of any other license, shall not

2 be issued until at least 30 calendar days after the

3 Congress receives such certification, and shall not be

4 issued then if the Congress, within that 30-day pe5 riod, enacts a joint resolution prohibiting the pro6 posed export.’’.

7 (d) COMMERCIAL MANUFACTURING AGREEMENTS.—

8 Section 36(d) of such Act (22 U.S.C. 2776(d)) is amend9 ed—

10 (1) by inserting ‘‘(1)’’ after ‘‘(d)’’;

11 (2) by striking ‘‘for or in a country not a mem12 ber of the North Atlantic Treaty Organization’’; and

13 (3) by adding at the end the following:

14 ‘‘(2) A certification under this subsection shall be

15 submitted—

16 ‘‘(A) at least 15 days before approval is given

17 in the case of an agreement for or in a country

18 which is a member of the North Atlantic Treaty Or19 ganization or Australia, Japan, or New Zealand; and

20 ‘‘(B) at least 30 days before approval is given

21 in the case of an agreement for or in any other

22 country;

23 unless the President states in his certification that an

24 emergency exists which requires the immediate approval
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1 of the agreement in the national security interests of the

2 United States.

3 ‘‘(3) If the President states in his certification that

4 an emergency exists which requires the immediate ap5 proval of the agreement in the national security interests

6 of the United States, thus waiving the requirements of

7 paragraph (4), he shall set forth in the certification a de8 tailed justification for his determination, including a de9 scription of the emergency circumstances which neces10 sitate the immediate approval of the agreement and a dis11 cussion of the national security interests involved.

12 ‘‘(4) Approval for an agreement subject to paragraph

13 (1) may not be given under section 38 if the Congress,

14 within the 15-day or 30-day period specified in paragraph

15 (2)(A) or (B), as the case may be, enacts a joint resolution

16 prohibiting such approval.

17 ‘‘(5)(A) Any joint resolution under paragraph (4)

18 shall be considered in the Senate in accordance with the

19 provisions of section 601(b) of the International Security

20 Assistance and Arms Export Control Act of 1976.

21 ‘‘(B) For the purpose of expediting the consideration

22 and enactment of joint resolutions under paragraph (4),

23 a motion to proceed to the consideration of any such joint

24 resolution after it has been reported by the appropriate
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1 committee shall be treated as highly privileged in the

2 House of Representatives.’’.

3 (e) GOVERNMENT-TO-GOVERNMENT LEASES.—

4 (1) CONGRESSIONAL REVIEW PERIOD.—Section

5 62 of such Act (22 U.S.C. 2796a) is amended—

6 (A) in subsection (a), by striking ‘‘Not less

7 than 30 days before’’ and inserting ‘‘Before’’;

8 (B) in subsection (b)—

9 (i) by striking ‘‘determines, and im10 mediately reports to the Congress’’ and in11 serting ‘‘states in his certification’’; and

12 (ii) by adding at the end of the sub13 section the following: ‘‘If the President

14 states in his certification that such an

15 emergency exists, he shall set forth in the

16 certification a detailed justification for his

17 determination, including a description of

18 the emergency circumstances which neces19 sitate that the lease be entered into imme20 diately and a discussion of the national se21 curity interests involved.’’; and

22 (C) by adding at the end of the section the

23 following:

24 ‘‘(c) The certification required by subsection (a) shall

25 be transmitted—
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1 ‘‘(1) not less than 15 calendar days before the

2 agreement is entered into or renewed in the case of

3 an agreement with the North Atlantic Treaty Orga4 nization, any member country of that Organization

5 or Australia, Japan, or New Zealand; and

6 ‘‘(2) not less than 30 calendar days before the

7 agreement is entered into or renewed in the case of

8 an agreement with any other organization or coun9 try.’’.

10 (2) CONGRESSIONAL DISAPPROVAL.—Section

11 63(a) of such Act (22 U.S.C. 2796b(a)) is amend12 ed—

13 (A) by striking ‘‘(a)(1)’’ and inserting

14 ‘‘(a)’’;

15 (B) by striking out the ‘‘30 calendar days

16 after receiving the certification with respect to

17 that proposed agreement pursuant to section

18 62(a),’’ and inserting in lieu thereof ‘‘the 15-

19 day or 30-day period specified in section 62(c)

20 (1) or (2), as the case may be,’’; and

21 (C) by striking paragraph (2).

22 (f) EFFECTIVE DATE.—The amendments made by

23 this section apply with respect to certifications required

24 to be submitted on or after the date of the enactment of

25 this Act.
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1 SEC. 142. STANDARDIZATION OF THIRD COUNTRY TRANS2 FERS OF DEFENSE ARTICLES.

3 Section 3 of the Arms Export Control Act (22 U.S.C.

4 2753) is amended by inserting after subsection (a) the fol5 lowing new subsection:

6 ‘‘(b) The consent of the President under paragraph

7 (2) of subsection (a) or under paragraph (1) of section

8 505(a) of the Foreign Assistance Act of 1961 (as it relates

9 to subparagraph (B) of such paragraph) shall not be re10 quired for the transfer by a foreign country or inter11 national organization of defense articles sold by the United

12 States under this Act if—

13 ‘‘(1) such articles constitute components incor14 porated into foreign defense articles;

15 ‘‘(2) the recipient is the government of a mem16 ber country of the North Atlantic Treaty Organiza17 tion, the Government of Australia, the Government

18 of Japan, or the Government of New Zealand;

19 ‘‘(3) the recipient is not a country designated

20 under section 620A of the Foreign Assistance Act of

21 1961;

22 ‘‘(4) the United States-origin components are

23 not—

24 ‘‘(A) significant military equipment (as de25 fined in section 47(9));
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1 ‘‘(B) defense articles for which notification

2 to Congress is required under section 36(b);

3 and

4 ‘‘(C) identified by regulation as Missile

5 Technology Control Regime items; and

6 ‘‘(5) the foreign country or international orga7 nization provides notification of the transfer of the

8 defense articles to the United States Government

9 not later than 30 days after the date of such trans10 fer.’’.

11 SEC. 143. INCREASED STANDARDIZATION, RATIONALIZA12 TION, AND INTEROPERABILITY OF ASSIST13 ANCE AND SALES PROGRAMS.

14 Paragraph (6) of section 515(a) of the Foreign As15 sistance Act of 1961 (22 U.S.C. 2321i(a)(6)) is amended

16 by striking ‘‘among members of the North Atlantic Treaty

17 Organization and with the Armed Forces of Japan, Aus18 tralia, and New Zealand’’.

19 SEC. 144. DEFINITION OF SIGNIFICANT MILITARY EQUIP20 MENT.

21 Section 47 of the Arms Export Control Act (22

22 U.S.C. 2794) is amended—

23 (1) in paragraph (7), by striking ‘‘and’’ at the

24 end;
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1 (2) in paragraph (8), by striking the period at

2 the end and inserting ‘‘; and’’; and

3 (3) by adding at the end the following new

4 paragraph:

5 ‘‘(9) ‘significant military equipment’ means articles—

6 ‘‘(A) for which special export controls are war7 ranted because of the capacity of such articles for

8 substantial military utility or capability; and

9 ‘‘(B) identified on the United States Munitions

10 List.’’.

11 SEC. 145. ELIMINATION OF ANNUAL REPORTING REQUIRE12 MENT RELATING TO THE SPECIAL DEFENSE

13 ACQUISITION FUND.

14 (a) IN GENERAL.—Section 53 of the Arms Export

15 Control Act (22 U.S.C. 2795b) is hereby repealed.

16 (b) CONFORMING AMENDMENT.—Section 51(a)(4) of

17 such Act (22 U.S.C. 2795(a)(4)) is amended—

18 (1) by striking ‘‘(a)’’; and

19 (2) by striking subparagraph (B).

20 SEC. 146. COST OF LEASED DEFENSE ARTICLES THAT HAVE

21 BEEN LOST OR DESTROYED.

22 Section 61(a)(4) of the Arms Export Control Act (22

23 U.S.C. 2796(a)(4)) is amended by striking ‘‘and the re24 placement cost’’ and all that follows and inserting the fol-
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1 lowing: ‘‘and, if the articles are lost or destroyed while

2 leased—

3 ‘‘(A) in the event the United States in4 tends to replace the articles lost or destroyed,

5 the replacement cost (less any depreciation in

6 the value) of the articles; or

7 ‘‘(B) in the event the United States does

8 not intend to replace the articles lost or de9 stroyed, an amount not less than the actual

10 value (less any depreciation in the value) speci11 fied in the lease agreement.’’.

12 SEC. 147. DESIGNATION OF MAJOR NON-NATO ALLIES.

13 (a) DESIGNATION.—

14 (1) NOTICE TO CONGRESS.—Chapter 2 of part

15 II of the Foreign Assistance Act of 1961 (22 U.S.C.

16 2311 et seq.), as amended by this Act, is further

17 amended by adding at the end the following new sec18 tion:

19 ‘‘SEC. 517. DESIGNATION OF MAJOR NON-NATO ALLIES.

20 ‘‘(a) NOTICE TO CONGRESS.—The President shall no21 tify the Congress in writing at least 30 days before—

22 ‘‘(1) designating a country as a major non23 NATO ally for purposes of this Act and the Arms

24 Export Control Act (22 U.S.C. 2751 et seq.); or

25 ‘‘(2) terminating such a designation.
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1 ‘‘(b) INITIAL DESIGNATIONS.—Australia, Egypt, Is2 rael, Japan, the Republic of Korea, and New Zealand shall

3 be deemed to have been so designated by the President

4 as of the effective date of this section, and the President

5 is not required to notify the Congress of such designation

6 of those countries.’’.

7 (2) DEFINITION.—Section 644 of such Act (22

8 U.S.C. 2403) is amended by adding at the end the

9 following:

10 ‘‘(q) ‘Major non-NATO ally’ means a country which

11 is designated in accordance with section 517 as a major

12 non-NATO ally for purposes of this Act and the Arms Ex13 port Control Act (22 U.S.C. 2751 et seq.).’’.

14 (3) EXISTING DEFINITIONS.—(A) The last sen15 tence of section 21(g) of the Arms Export Control

16 Act (22 U.S.C. 2761(g)) is repealed.

17 (B) Section 65(d) of such Act (22 U.S.C.

18 2796d(d)) is amended—

19 (i) by striking ‘‘or major non-NATO’’; and

20 (ii) by striking out ‘‘or a’’ and all that fol21 lows through ‘‘Code’’.

22 (b) COOPERATIVE TRAINING AGREEMENTS.—Section

23 21(g) of the Arms Export Control Act (22 U.S.C.

24 2761(g)) is amended in the first sentence by striking

25 ‘‘similar agreements’’ and all that follows through ‘‘other
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1 countries’’ and inserting ‘‘similar agreements with coun2 tries’’.

3 SEC. 148. CERTIFICATION THRESHOLDS.

4 (a) INCREASE IN DOLLAR THRESHOLDS.—The Arms

5 Export Control Act (22 U.S.C. 2751 et seq.) is amended—

6 (1) in section 3(d) (22 U.S.C. 2753(d))—

7 (A) in paragraphs (1) and (3), by striking

8 ‘‘$14,000,000’’ each place it appears and in9 serting ‘‘$25,000,000’’; and

10 (B) in paragraphs (1) and (3), by striking

11 ‘‘$50,000,000’’ each place it appears and in12 serting ‘‘$75,000,000’’;

13 (2) in section 36 (22 U.S.C. 2776)—

14 (A) in subsections (b)(1), (b)(5)(C), and

15 (c)(1), by striking ‘‘$14,000,000’’ each place it

16 appears and inserting ‘‘$25,000,000’’;

17 (B) in subsections (b)(1), (b)(5)(C), and

18 (c)(1), by striking ‘‘$50,000,000’’ each place it

19 appears and inserting ‘‘$75,000,000’’; and

20 (C) in subsections (b)(1) and (b)(5)(C), by

21 striking ‘‘$200,000,000’’ each place it appears

22 and inserting ‘‘$300,000,000’’; and

23 (3) in section 63(a) (22 U.S.C. 2796b(a))—

24 (A) by striking ‘‘$14,000,000’’ and insert25 ing ‘‘$25,000,000’’; and
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1 (B) by striking ‘‘$50,000,000’’ and insert2 ing ‘‘$75,000,000’’.

3 (b) EFFECTIVE DATE.—The amendments made by

4 subsection (a) apply with respect to certifications submit5 ted on or after the date of the enactment of this Act.

6 SEC. 149. DEPLETED URANIUM AMMUNITION.

7 Chapter 1 of part III of the Foreign Assistance Act

8 of 1961 (22 U.S.C. 2370 et seq.), as amended by this Act,

9 is further amended by adding at the end the following new

10 section:

11 ‘‘SEC. 620H. DEPLETED URANIUM AMMUNITION.

12 ‘‘(a) PROHIBITION.—Except as provided in sub13 section (b), none of the funds made available to carry out

14 this Act or any other Act may be made available to facili15 tate in any way the sale of M–833 antitank shells or any

16 comparable antitank shells containing a depleted uranium

17 penetrating component to any country other than—

18 ‘‘(1) a country that is a member of the North

19 Atlantic Treaty Organization;

20 ‘‘(2) a country that has been designated as a

21 major non-NATO ally (as defined in section 644(q));

22 or

23 ‘‘(3) Taiwan.

24 ‘‘(b) EXCEPTION.—The prohibition contained in sub25 section (a) shall not apply with respect to the use of funds
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1 to facilitate the sale of antitank shells to a country if the

2 President determines that to do so is in the national secu3 rity interest of the United States.’’.

4 SEC. 150. END-USE MONITORING OF DEFENSE ARTICLES

5 AND DEFENSE SERVICES.

6 (a) IN GENERAL.—The Arms Export Control Act (22

7 U.S.C. 2751 et seq.) is amended by inserting after chapter

8 3 the following new chapter:

9 ‘‘CHAPTER 3A—END-USE MONITORING OF

10 DEFENSE ARTICLES AND DEFENSE

11 SERVICES

12 ‘‘SEC. 40A. END-USE MONITORING OF DEFENSE ARTICLES

13 AND DEFENSE SERVICES.

14 ‘‘(a) ESTABLISHMENT OF MONITORING PROGRAM.—

15 ‘‘(1) IN GENERAL.—In order to improve ac16 countability with respect to defense articles and de17 fense services sold, leased, or exported under this

18 Act or the Foreign Assistance Act of 1961 (22

19 U.S.C. 2151 et seq.), the President shall establish a

20 program which provides for the end-use monitoring

21 of such articles and services.

22 ‘‘(2) REQUIREMENTS OF PROGRAM.—To the ex23 tent practicable, such program—

24 ‘‘(A) shall provide for the end-use monitor25 ing of defense articles and defense services in
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1 accordance with the standards that apply for

2 identifying high-risk exports for regular end-use

3 verification developed under section 38(g)(7) of

4 this Act (commonly referred to as the ‘Blue

5 Lantern’ program); and

6 ‘‘(B) shall be designed to provide reason7 able assurance that—

8 ‘‘(i) the recipient is complying with

9 the requirements imposed by the United

10 States Government with respect to use,

11 transfers, and security of defense articles

12 and defense services; and

13 ‘‘(ii) such articles and services are

14 being used for the purposes for which they

15 are provided.

16 ‘‘(b) CONDUCT OF PROGRAM.—In carrying out the

17 program established under subsection (a), the President

18 shall ensure that the program—

19 ‘‘(1) provides for the end-use verification of de20 fense articles and defense services that incorporate

21 sensitive technology, defense articles and defense

22 services that are particularly vulnerable to diversion

23 or other misuse, or defense articles or defense serv24 ices whose diversion or other misuse could have sig25 nificant consequences; and
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1 ‘‘(2) prevents the diversion (through reverse en2 gineering or other means) of technology incorporated

3 in defense articles.

4 ‘‘(c) REPORT TO CONGRESS.—Not later than 6

5 months after the date of the enactment of this section,

6 and annually thereafter as a part of the annual congres7 sional presentation documents submitted under section

8 634 of the Foreign Assistance Act of 1961, the President

9 shall transmit to the Congress a report describing the ac10 tions taken to implement this section, including a detailed

11 accounting of the costs and number of personnel associ12 ated with the monitoring program.

13 ‘‘(d) THIRD COUNTRY TRANSFERS.—For purposes of

14 this section, defense articles and defense services sold,

15 leased, or exported under this Act or the Foreign Assist16 ance Act of 1961 (22 U.S.C. 2151 et seq.) includes de17 fense articles and defense services that are transferred to

18 a third country or other third party.’’.

19 (b) EFFECTIVE DATE.—Section 40A of the Arms Ex20 port Control Act, as added by subsection (a), applies with

21 respect to defense articles and defense services provided

22 before or after the date of the enactment of this Act.
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1 SEC. 151. BROKERING ACTIVITIES RELATING TO COMMER2 CIAL SALES OF DEFENSE ARTICLES AND

3 SERVICES.

4 (a) IN GENERAL.—Section 38(b)(1)(A) of the Arms

5 Export Control Act (22 U.S.C. 2778(b)(1)(A)) is amend6 ed—

7 (1) in the first sentence, by striking ‘‘As pre8 scribed in regulations’’ and inserting ‘‘(i) As pre9 scribed in regulations’’; and

10 (2) by adding at the end the following new

11 clause:

12 ‘‘(ii)(I) As prescribed in regulations issued under this

13 section, every person (other than an officer or employee

14 of the United States Government acting in official capac15 ity) who engages in the business of brokering activities

16 with respect to the manufacture, export, import, or trans17 fer of any defense article or defense service designated by

18 the President under subsection (a)(1), or in the business

19 of brokering activities with respect to the manufacture, ex20 port, import, or transfer of any foreign defense article or

21 defense service (as defined in subclause (IV)), shall reg22 ister with the United States Government agency charged

23 with the administration of this section, and shall pay a

24 registration fee which shall be prescribed by such regula25 tions.
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1 ‘‘(II) Such brokering activities shall include the fi2 nancing, transportation, freight forwarding, or taking of

3 any other action that facilitates the manufacture, export,

4 or import of a defense article or defense service.

5 ‘‘(III) No person may engage in the business of

6 brokering activities described in subclause (I) without a

7 license, issued in accordance with this Act, except that no

8 license shall be required for such activities undertaken by

9 or for an agency of the United States Government—

10 ‘‘(aa) for use by an agency of the United States

11 Government; or

12 ‘‘(bb) for carrying out any foreign assistance or

13 sales program authorized by law and subject to the

14 control of the President by other means.

15 ‘‘(IV) For purposes of this clause, the term ‘foreign

16 defense article or defense service’ includes any non-United

17 States defense article or defense service of a nature de18 scribed on the United States Munitions List regardless of

19 whether such article or service is of United States origin

20 or whether such article or service contains United States

21 origin components.’’.

22 (b) EFFECTIVE DATE.—Section 38(b)(1)(A)(ii) of

23 the Arms Export Control Act, as added by subsection (a),

24 shall apply with respect to brokering activities engaged in
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1 beginning on or after 120 days after the enactment of this

2 Act.

3 SEC. 152. RETURN AND EXCHANGES OF DEFENSE ARTICLES

4 PREVIOUSLY TRANSFERRED PURSUANT TO

5 THE ARMS EXPORT CONTROL ACT.

6 (a) REPAIR OF DEFENSE ARTICLES.—Section 21 of

7 the Arms Export Control Act (22 U.S.C. 2761) is amend8 ed by adding at the end the following new subsection:

9 ‘‘(l) REPAIR OF DEFENSE ARTICLES.—

10 ‘‘(1) IN GENERAL.—The President may acquire

11 a repairable defense article from a foreign country

12 or international organization if such defense arti13 cle—

14 ‘‘(A) previously was transferred to such

15 country or organization under this Act;

16 ‘‘(B) is not an end item; and

17 ‘‘(C) will be exchanged for a defense article

18 of the same type that is in the stocks of the De19 partment of Defense.

20 ‘‘(2) LIMITATION.—The President may exercise

21 the authority provided in paragraph (1) only to the

22 extent that the Department of Defense—

23 ‘‘(A)(i) has a requirement for the defense

24 article being returned; and
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1 ‘‘(ii) has available sufficient funds author2 ized and appropriated for such purpose; or

3 ‘‘(B)(i) is accepting the return of the de4 fense article for subsequent transfer to another

5 foreign government or international organiza6 tion pursuant to a letter of offer and acceptance

7 implemented in accordance with this Act; and

8 ‘‘(ii) has available sufficient funds provided

9 by or on behalf of such other foreign govern10 ment or international organization pursuant to

11 a letter of offer and acceptance implemented in

12 accordance with this Act.

13 ‘‘(3) REQUIREMENT.—(A) The foreign govern14 ment or international organization receiving a new

15 or repaired defense article in exchange for a repair16 able defense article pursuant to paragraph (1) shall,

17 upon the acceptance by the United States Govern18 ment of the repairable defense article being re19 turned, be charged the total cost associated with the

20 repair and replacement transaction.

21 ‘‘(B) The total cost charged pursuant to sub22 paragraph (A) shall be the same as that charged the

23 United States Armed Forces for a similar repair and

24 replacement transaction, plus an administrative sur-
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1 charge in accordance with subsection (e)(1)(A) of

2 this section.

3 ‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVI4 SIONS OF LAW.—The authority of the President to

5 accept the return of a repairable defense article as

6 provided in subsection (a) shall not be subject to

7 chapter 137 of title 10, United States Code, or any

8 other provision of law relating to the conclusion of

9 contracts.’’.

10 (b) RETURN OF DEFENSE ARTICLES.—Section 21 of

11 such Act (22 U.S.C. 2761), as amended by this Act, is

12 further amended by adding at the end the following new

13 subsection:

14 ‘‘(m) RETURN OF DEFENSE ARTICLES.—

15 ‘‘(1) IN GENERAL.—The President may accept

16 the return of a defense article from a foreign coun17 try or international organization if such defense arti18 cle—

19 ‘‘(A) previously was transferred to such

20 country or organization under this Act;

21 ‘‘(B) is not significant military equipment

22 (as defined in section 47(9) of this Act); and

23 ‘‘(C) is in fully functioning condition with24 out need of repair or rehabilitation.
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1 ‘‘(2) LIMITATION.—The President may exercise

2 the authority provided in paragraph (1) only to the

3 extent that the Department of Defense—

4 ‘‘(A)(i) has a requirement for the defense

5 article being returned; and

6 ‘‘(ii) has available sufficient funds author7 ized and appropriated for such purpose; or

8 ‘‘(B)(i) is accepting the return of the de9 fense article for subsequent transfer to another

10 foreign government or international organiza11 tion pursuant to a letter of offer and acceptance

12 implemented in accordance with this Act; and

13 ‘‘(ii) has available sufficient funds provided

14 by or on behalf of such other foreign govern15 ment or international organization pursuant to

16 a letter of offer and acceptance implemented in

17 accordance with this Act.

18 ‘‘(3) CREDIT FOR TRANSACTION.—Upon acqui19 sition and acceptance by the United States Govern20 ment of a defense article under paragraph (1), the

21 appropriate Foreign Military Sales account of the

22 provider shall be credited to reflect the transaction.

23 ‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVI24 SIONS OF LAW.—The authority of the President to

25 accept the return of a defense article as provided in
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1 paragraph (1) shall not be subject to chapter 137

2 of title 10, United States Code, or any other provi3 sion of law relating to the conclusion of contracts.’’.

4 (c) REGULATIONS.—Under the direction of the Presi5 dent, the Secretary of Defense shall promulgate regula6 tions to implement subsections (l) and (m) of section 21

7 of the Arms Export Control Act, as added by this section.

8 SEC. 153. NATIONAL SECURITY INTEREST DETERMINATION

9 TO WAIVE REIMBURSEMENT OF DEPRECIA10 TION FOR LEASED DEFENSE ARTICLES.

11 (a) IN GENERAL.—Section 61(a) of the Arms Export

12 Control Act (22 U.S.C. 2796(a)) is amended—

13 (1) in the second sentence, by striking ‘‘, or to

14 any defense article which has passed three-quarters

15 of its normal service life’’; and

16 (2) by inserting after the second sentence the

17 following new sentence: ‘‘The President may waive

18 the requirement of paragraph (4) for reimbursement

19 of depreciation for any defense article which has

20 passed three-quarters of its normal service life if the

21 President determines that to do so is important to

22 the national security interest of the United States.’’.

23 (b) EFFECTIVE DATE.—The third sentence of section

24 61(a) of the Arms Export Control Act, as added by sub25 section (a)(2), shall apply only with respect to a defense
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1 article leased on or after the date of the enactment of this

2 Act.

3 TITLE II—TRANSFER OF NAVAL

4 VESSELS TO CERTAIN FOR5 EIGN COUNTRIES

6 SEC. 201. AUTHORITY TO TRANSFER NAVAL VESSELS.

7 (a) EGYPT.—The Secretary of the Navy is authorized

8 to transfer to the Government of Egypt the ‘‘OLIVER

9 HAZARD PERRY’’ frigate GALLERY. Such transfer

10 shall be on a sales basis under section 21 of the Arms

11 Export Control Act (22 U.S.C. 2761; relating to the for12 eign military sales program).

13 (b) MEXICO.—The Secretary of the Navy is author14 ized to transfer to the Government of Mexico the

15 ‘‘KNOX’’ class frigates STEIN (FF 1065) and MARVIN

16 SHIELDS (FF 1066). Such transfers shall be on a sales

17 basis under section 21 of the Arms Export Control Act

18 (22 U.S.C. 2761; relating to the foreign military sales pro19 gram).

20 (c) NEW ZEALAND.—The Secretary of the Navy is

21 authorized to transfer to the Government of New Zealand

22 the ‘‘STALWART’’ class ocean surveillance ship TENA23 CIOUS. Such transfer shall be on a sales basis under sec24 tion 21 of the Arms Export Control Act (22 U.S.C. 2761;

25 relating to the foreign military sales program).
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1 (d) PORTUGAL.—The Secretary of the Navy is au2 thorized to transfer to the Government of Portugal the

3 ‘‘STALWART’’ class ocean surveillance ship AUDA4 CIOUS. Such transfer shall be on a grant basis under sec5 tion 516 of the Foreign Assistance Act of 1961 (22 U.S.C.

6 2321j; relating to transfers of excess defense articles).

7 (e) TAIWAN.—The Secretary of the Navy is author8 ized to transfer to the Taipei Economic and Cultural Rep9 resentative Office in the United States (which is the Tai10 wan instrumentality designated pursuant to section 10(a)

11 of the Taiwan Relations Act) the following:

12 (1) The ‘‘KNOX’’ class frigates AYLWIN (FF

13 1081), PHARRIS (FF 1094), and VALDEZ (FF

14 1096). Such transfers shall be on a sales basis under

15 section 21 of the Arms Export Control Act (22

16 U.S.C. 2761; relating to the foreign military sales

17 program).

18 (2) The ‘‘NEWPORT’’ class tank landing ship

19 NEWPORT (LST 1179). Such transfer shall be on

20 a lease basis under section 61 of the Arms Export

21 Control Act (22 U.S.C. 2796).

22 (f) THAILAND.—The Secretary of the Navy is author23 ized to transfer to the Government of Thailand the

24 ‘‘KNOX’’ class frigate OUELLET (FF 1077). Such

25 transfer shall be on a sales basis under section 21 of the
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1 Arms Export Control Act (22 U.S.C. 2761; relating to the

2 foreign military sales program).

3 SEC. 202. COSTS OF TRANSFERS.

4 Any expense of the United States in connection with

5 a transfer authorized by this title shall be charged to the

6 recipient.

7 SEC. 203. EXPIRATION OF AUTHORITY.

8 The authority granted by section 201 shall expire at

9 the end of the 2-year period beginning on the date of the

10 enactment of this Act.

11 SEC. 204. REPAIR AND REFURBISHMENT OF VESSELS IN

12 UNITED STATES SHIPYARDS.

13 The Secretary of the Navy shall require, to the maxi14 mum extent possible, as a condition of a transfer of a ves15 sel under this title, that the country to which the vessel

16 is transferred have such repair or refurbishment of the

17 vessel as is needed, before the vessel joins the naval forces

18 of that country, performed at a shipyard located in the

19 United States, including a United States Navy shipyard.

Æ