Union Calendar No. 253

104TH CONGRESS

2D SESSION H. R. 3121

[Report No. 104–519, Part I]

A BILL

To amend the Foreign Assistance Act of 1961 and

tries, and for other purposes.transfer of naval vessels to certain foreign counprovisions under those Acts, to authorize thements to certain defense and security assistancethe Arms Export Control Act to make improveAPRIL 16, 1996

Referral to the Committee on Rules extended for a period

ending not later than April 16, 1996

APRIL 16, 1996

Committee on Rules discharged; committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,
IB

Union Calendar No. 253

104TH CONGRESS

2D SESSION H. R. 3121

[Report No. 104–519, Part I]

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

MARCH 21, 1996

Reported from the Committee on International Relations

APRIL 16, 1996

Referral to the Committee on Rules extended for a period ending not later

than April 16, 1996

APRIL 16, 1996

Committee on Rules discharged; committed to the Committee of the Whole

House on the State of the Union and ordered to be printed
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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

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.
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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.

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.’’.
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1 SEC. 102. ADDITIONAL REQUIREMENTS UNDER THE FOR2 EIGN MILITARY FINANCING PROGRAM.

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

4 Arms Export Control Act (22 U.S.C. 2761(h)) is amend5 ed—

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

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

8 Organization’’; and

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

10 member government of that Organization if that Or11 ganization or member government’’ and inserting ‘‘,

12 any member government of that Organization, or the

13 Government of Israel, if the Organization, member

14 government, or Government of Israel, as the case

15 may be,’’.

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

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

18 the end the following new subsection:

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

20 as requested by the Director of the Defense Security As21 sistance Agency, shall conduct audits on a

22 nonreimbursable basis of private firms that have entered

23 into contracts with foreign governments under which de24 fense articles, defense services, or design and construction

25 services are to be procured by such firms for such govern26 ments from financing under this section.’’.
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1 (c) NOTIFICATION REQUIREMENT WITH RESPECT TO

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

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

4 by adding at the end the following new subsection:

5 ‘‘(g)(1) For each country and international organiza6 tion that has been approved for cash flow financing under

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

8 purchase agreement, or any amendment thereto, for a pro9 curement of defense articles, defense services, or design

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

11 is to be financed in whole or in part with funds made avail12 able under this Act or the Foreign Assistance Act of 1961

13 shall be submitted to the congressional committees speci14 fied in section 634A(a) of the Foreign Assistance Act of

15 1961 in accordance with the procedures applicable to

16 reprogramming notifications under that section.

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

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

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

20 (d) LIMITATIONS ON USE OF FUNDS FOR DIRECT

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

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

23 by adding at the end the following new subsection:

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

25 to carry out this section, not more than $100,000,000 for
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1 such fiscal year may be made available for countries other

2 than Israel and Egypt for the purpose of financing the

3 procurement of defense articles, defense services, and de4 sign and construction services that are not sold by the

5 United States Government under this Act.’’.

6 (e) ANNUAL ESTIMATE AND JUSTIFICATION FOR

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

8 2765) is amended—

9 (1) by striking the ‘‘and’’ at the end of para10 graph (11);

11 (2) by redesignating paragraph (12) as para12 graph (13); and

13 (3) by inserting after paragraph (11) the fol14 lowing new paragraph:

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

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

17 assistance furnished by the United States to each

18 country and international organization, including

19 payments to the United Nations, during the preced20 ing fiscal year for the detection and clearance of

21 landmines, including activities relating to the fur22 nishing of education, training, and technical assist23 ance for the detection and clearance of landmines;

24 and
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1 ‘‘(B) for each provision of law making funds

2 available or authorizing appropriations for demining

3 activities described in subparagraph (A), an analysis

4 and description of the objectives and activities un5 dertaken during the preceding fiscal year, including

6 the number of personnel involved in performing such

7 activities; and’’.

8 SEC. 103. DRAWDOWN SPECIAL AUTHORITIES.

9 (a) UNFORESEEN EMERGENCY DRAWDOWN.—Sec10 tion 506(a)(1) of the Foreign Assistance Act of 1961 (22

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

12 and inserting ‘‘$100,000,000’’.

13 (b) ADDITIONAL DRAWDOWN.—Section 506 of such

14 Act (22 U.S.C. 2318) is amended—

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

16 articles from the stocks’’ and all that follows and in17 serting the following: ‘‘articles and services from the

18 inventory and resources of any agency of the United

19 States Government and military education and

20 training from the Department of Defense, the Presi21 dent may direct the drawdown of such articles, serv22 ices, and military education and training—

23 ‘‘(i) for the purposes and under the au24 thorities of—
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1 ‘‘(I) chapter 8 of part I (relating to

2 international narcotics control assistance);

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

4 international disaster assistance); or

5 ‘‘(III) the Migration and Refugee As6 sistance Act of 1962; or

7 ‘‘(ii) for the purpose of providing such arti8 cles, services, and military education and train9 ing to Vietnam, Cambodia, and Laos as the

10 President determines are necessary—

11 ‘‘(I) to support cooperative efforts to

12 locate and repatriate members of the Unit13 ed States Armed Forces and civilians em14 ployed directly or indirectly by the United

15 States Government who remain unac16 counted for from the Vietnam War; and

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

18 States Government personnel engaged in

19 such cooperative efforts and to support De20 partment of Defense-sponsored humani21 tarian projects associated with such ef22 forts.’’;

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

24 ‘‘$75,000,000’’ and all that follows and inserting

25 ‘‘$150,000,000 in any fiscal year of such articles,
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1 services, and military education and training may be

2 provided pursuant to subparagraph (A) of this para3 graph—

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

5 may be provided from the drawdown from the

6 inventory and resources of the Department of

7 Defense;

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

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

10 such subparagraph; and

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

12 may be provided to Vietnam, Cambodia, and

13 Laos pursuant to clause (ii) of such subpara14 graph.’’; and

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

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

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

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

19 committees at least 15 days in advance of the

20 drawdowns in accordance with the procedures appli21 cable to reprogramming notifications under section

22 634A.’’.

23 (c) NOTICE TO CONGRESS OF EXERCISE OF SPECIAL

24 AUTHORITIES.—Section 652 of such Act (22 U.S.C.
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1 2411) is amended by striking ‘‘prior to the date’’ and in2 serting ‘‘before’’.

3 SEC. 104. TRANSFER OF EXCESS DEFENSE ARTICLES.

4 (a) IN GENERAL.—Section 516 of the Foreign Assist5 ance Act of 1961 (22 U.S.C. 2321j) is amended to read

6 as follows:

7 ‘‘SEC. 516. AUTHORITY TO TRANSFER EXCESS DEFENSE AR8 TICLES.

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

10 to transfer excess defense articles under this section to

11 countries for which receipt of such articles was justified

12 pursuant to the annual congressional presentation docu13 ments for military assistance programs, or for programs

14 under chapter 8 of part I of this Act, submitted under

15 section 634 of this Act, or for which receipt of such arti16 cles was separately justified to the Congress, for the fiscal

17 year in which the transfer is authorized.

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

19 may transfer excess defense articles under this section

20 only if—

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

22 stocks of the Department of Defense;

23 ‘‘(2) funds available to the Department of De24 fense for the procurement of defense equipment are

25 not expended in connection with the transfer;
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1 ‘‘(3) the transfer of such articles will not have

2 an adverse impact on the military readiness of the

3 United States;

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

5 articles on a grant basis, such a transfer is pref6 erable to a transfer on a sales basis, after taking

7 into account the potential proceeds from, and likeli8 hood of, such sales, and the comparative foreign pol9 icy benefits that may accrue to the United States as

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

11 basis;

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

13 of such articles will not have an adverse impact on

14 the national technology and industrial base and, par15 ticularly, will not reduce the opportunities of entities

16 in the national technology and industrial base to sell

17 new or used equipment to the countries to which

18 such articles are transferred; and

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

20 with the policy framework for the Eastern Medi21 terranean established under section 620C of this

22 Act.

23 ‘‘(c) TERMS OF TRANSFERS.—
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1 ‘‘(1) NO COST TO RECIPIENT COUNTRY.—Ex2 cess defense articles may be transferred under this

3 section without cost to the recipient country.

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

5 provision of law, the delivery of excess defense arti6 cles under this section to member countries of the

7 North Atlantic Treaty Organization (NATO) on the

8 southern and southeastern flank of NATO and to

9 major non-NATO allies on such southern and south10 eastern flank shall be given priority to the maximum

11 extent feasible over the delivery of such excess de12 fense articles to other countries.

13 ‘‘(d) WAIVER OF REQUIREMENT FOR REIMBURSE14 MENT OF DEPARTMENT OF DEFENSE EXPENSES.—Sec15 tion 632(d) shall not apply with respect to transfers of

16 excess defense articles (including transportation and relat17 ed costs) under this section.

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

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), funds available to the Department of De21 fense may not be expended for crating, packing,

22 handling, and transportation of excess defense arti23 cles transferred under the authority of this section.

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

25 for the transportation of excess defense articles with-
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1 out charge to a country for the costs of such trans2 portation if—

3 ‘‘(A) it is determined that it is in the na4 tional interest of the United States to do so;

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

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

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

8 to international military education and train9 ing) or section 23 of the Arms Export Control

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

11 Military Financing program) in the fiscal year

12 in which the transportation is provided;

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

14 not exceed 25,000 pounds; and

15 ‘‘(D) such transportation is accomplished

16 on a space available basis.

17 ‘‘(f) ADVANCE NOTIFICATION TO CONGRESS FOR

18 TRANSFER OF CERTAIN EXCESS DEFENSE ARTICLES.—

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

20 transfer excess defense articles that are significant

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

22 the Arms Export Control Act) or excess defense arti23 cles valued (in terms of original acquisition cost) at

24 $7,000,000 or more, under this section or under the

25 Arms Export Control Act (22 U.S.C. 2751 et seq.)
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1 until 15 days after the date on which the President

2 has provided notice of the proposed transfer to the

3 congressional committees specified in section

4 634A(a) in accordance with procedures applicable to

5 reprogramming notifications under that section.

6 ‘‘(2) CONTENTS.—Such notification shall in7 clude—

8 ‘‘(A) a statement outlining the purposes

9 for which the article is being provided to the

10 country, including whether such article has

11 been previously provided to such country;

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

13 transfer on the military readiness of the United

14 States;

15 ‘‘(C) an assessment of the impact of the

16 transfer on the national technology and indus17 trial base and, particularly, the impact on op18 portunities of entities in the national technology

19 and industrial base to sell new or used equip20 ment to the countries to which such articles are

21 to be transferred; and

22 ‘‘(D) a statement describing the current

23 value of such article and the value of such arti24 cle at acquisition.

25 ‘‘(g) AGGREGATE ANNUAL LIMITATION.—
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1 ‘‘(1) IN GENERAL.—The aggregate value of ex2 cess defense articles transferred to countries under

3 this section in any fiscal year may not exceed

4 $350,000,000.

5 ‘‘(2) EFFECTIVE DATE.—The limitation con6 tained in paragraph (1) shall apply only with respect

7 to fiscal years beginning after fiscal year 1996.

8 ‘‘(h) CONGRESSIONAL PRESENTATION DOCU9 MENTS.—Documents described in subsection (a) justifying

10 the transfer of excess defense articles shall include an ex11 planation of the general purposes of providing excess de12 fense articles as well as a table which provides an aggre13 gate annual total of transfers of excess defense articles

14 in the preceding year by country in terms of offers and

15 actual deliveries and in terms of acquisition cost and cur16 rent value. Such table shall indicate whether such excess

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

18 ‘‘(i) EXCESS COAST GUARD PROPERTY.—For pur19 poses of this section, the term ‘excess defense articles’

20 shall be deemed to include excess property of the Coast

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

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

23 the Coast Guard.’’.

24 (b) CONFORMING AMENDMENTS.—
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1 (1) ARMS EXPORT CONTROL ACT.—Section

2 21(k) of the Arms Export Control Act (22 U.S.C.

3 2761(k)) is amended by striking ‘‘the President

4 shall’’ and all that follows and inserting the follow5 ing: ‘‘the President shall determine that the sale of

6 such articles will not have an adverse impact on the

7 national technology and industrial base and, particu8 larly, will not reduce the opportunities of entities in

9 the national technology and industrial base to sell

10 new or used equipment to the countries to which

11 such articles are transferred.’’.

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

13 are hereby repealed:

14 (A) Section 502A of the Foreign Assist15 ance Act of 1961 (22 U.S.C. 2303).

16 (B) Sections 517 through 520 of the For17 eign Assistance Act of 1961 (22 U.S.C. 2321k

18 through 2321n).

19 (C) Section 31(d) of the Arms Export Con20 trol Act (22 U.S.C. 2771(d)).

21 SEC. 105. EXCESS DEFENSE ARTICLES FOR CERTAIN EURO22 PEAN COUNTRIES.

23 Notwithstanding section 516(e) of the Foreign As24 sistance Act of 1961, during each of the fiscal years 1996

25 and 1997, funds available to the Department of Defense
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1 may be expended for crating, packing, handling, and

2 transportation of excess defense articles transferred under

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

4 are eligible to participate in the Partnership for Peace and

5 that are eligible for assistance under the Support for East

6 European Democracy (SEED) Act of 1989.

7 CHAPTER 2—INTERNATIONAL MILITARY

8 EDUCATION AND TRAINING

9 SEC. 111. ASSISTANCE FOR INDONESIA.

10 Funds made available for fiscal years 1996 and 1997

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

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

13 for Indonesia only for expanded military and education

14 training that meets the requirements of clauses (i)

15 through (iv) of the second sentence of section 541 of such

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

17 SEC. 112. ADDITIONAL REQUIREMENTS.

18 (a) GENERAL AUTHORITY.—Section 541 of the For19 eign Assistance Act of 1961 (22 U.S.C. 2347) is amended

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

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

22 government’’ after ‘‘legislators’’.

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

24 (22 U.S.C. 2347c) is amended—
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1 (1) by striking ‘‘In carrying out this chapter’’

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

3 (2) by adding at the end the following new sub4 section:

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

6 of foreign military and civilian defense personnel at flight

7 training schools and programs (including test pilot

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

9 charge to funds available to carry out this chapter (not10 withstanding section 632(d) of this Act), if such attend11 ance is pursuant to an agreement providing for the ex12 change of students on a one-for-one basis each fiscal year

13 between those United States flight training schools and

14 programs (including test pilot schools) and comparable

15 flight training schools and programs of foreign coun16 tries.’’.

17 (c) ASSISTANCE FOR CERTAIN HIGH-INCOME FOR18 EIGN COUNTRIES.—

19 (1) AMENDMENT TO THE FOREIGN ASSISTANCE

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

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

22 end the following new section:
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1 ‘‘SEC. 546. PROHIBITION ON GRANT ASSISTANCE FOR CER2 TAIN HIGH INCOME FOREIGN COUNTRIES.

3 ‘‘(a) IN GENERAL.—None of the funds made avail4 able for a fiscal year for assistance under this chapter may

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

6 of the high-income foreign countries described in sub7 section (b) for military education and training of military

8 and related civilian personnel of such country.

9 ‘‘(b) HIGH-INCOME FOREIGN COUNTRIES DE10 SCRIBED.—The high-income foreign countries described in

11 this subsection are Austria, Finland, the Republic of

12 Korea, Singapore, and Spain.’’.

13 (2) AMENDMENT TO THE ARMS EXPORT CON14 TROL ACT.—Section 21(a)(1)(C) of the Arms Export

15 Control Act (22 U.S.C. 2761) is amended by insert16 ing ‘‘or to any high-income foreign country (as de17 scribed in that chapter)’’ after ‘‘Foreign Assistance

18 Act of 1961’’.

19 CHAPTER 3—ANTITERRORISM

20 ASSISTANCE

21 SEC. 121. ANTITERRORISM TRAINING ASSISTANCE.

22 (a) IN GENERAL.—Section 571 of the Foreign Assist23 ance Act of 1961 (22 U.S.C. 2349aa) is amended by strik24 ing ‘‘Subject to the provisions of this chapter’’ and insert25 ing ‘‘Notwithstanding any other provision of law that re-
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1 stricts assistance to foreign countries (other than sections

2 502B and 620A of this Act)’’.

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

4 U.S.C. 2349aa–2) is amended—

5 (1) in the heading, by striking ‘‘SPECIFIC AU6 THORITIES AND’’;

7 (2) by striking subsection (a);

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

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

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

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

12 (B) by redesignating paragraphs (3)

13 through (5) as paragraphs (1) through (3), re14 spectively; and

15 (C) by amending paragraph (2) (as redes16 ignated) to read as follows:

17 ‘‘(2)(A) Except as provided in subparagraph (B),

18 funds made available to carry out this chapter shall not

19 be made available for the procurement of weapons and am20 munition.

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

22 and ammunition in categories I and III of the United

23 States Munitions List that are integrally and directly re24 lated to antiterrorism training provided under this chapter

25 if, at least 15 days before obligating those funds, the
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1 President notifies the appropriate congressional commit2 tees specified in section 634A of this Act in accordance

3 with the procedures applicable to reprogramming notifica4 tions under such section.

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

6 of all equipment and commodities provided under this

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

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

9 fiscal year.’’.

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

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

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

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

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

15 respectively.

16 SEC. 122. RESEARCH AND DEVELOPMENT EXPENSES.

17 Funds made available for fiscal years 1996 and 1997

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

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

20 antiterrorism assistance) may be made available to the

21 Technical Support Working Group of the Department of

22 State for research and development expenses related to

23 contraband detection technologies or for field demonstra24 tions of such technologies (whether such field demonstra-
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1 tions take place in the United States or outside the United

2 States).

3 CHAPTER 4—NARCOTICS CONTROL

4 ASSISTANCE

5 SEC. 131. ADDITIONAL REQUIREMENTS.

6 (a) POLICY AND GENERAL AUTHORITIES.—Section

7 481(a) of the Foreign Assistance Act (22 U.S.C. 2291(a))

8 is amended—

9 (1) in paragraph (1)—

10 (A) by redesignating subparagraphs (D)

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

12 respectively; and

13 (B) by inserting after subparagraph (C)

14 the following new subparagraph:

15 ‘‘(D) International criminal activities, particu16 larly international narcotics trafficking, money laun17 dering, and corruption, endanger political and eco18 nomic stability and democratic development, and as19 sistance for the prevention and suppression of inter20 national criminal activities should be a priority for

21 the United States.’’; and

22 (2) in paragraph (4), by adding before the pe23 riod at the end the following: ‘‘, or for other

24 anticrime purposes’’.
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1 (b) CONTRIBUTIONS AND REIMBURSEMENT.—Sec2 tion 482(c) of that Act (22 U.S.C. 2291a(c)) is amend3 ed—

4 (1) by striking ‘‘CONTRIBUTION BY RECIPIENT

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

6 AND REIMBURSEMENT.—(1) To’’; and

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

8 paragraphs:

9 ‘‘(2)(A) The President is authorized to accept con10 tributions from foreign governments to carry out the pur11 poses of this chapter. Such contributions shall be depos12 ited as an offsetting collection to the applicable appropria13 tion account and may be used under the same terms and

14 conditions as funds appropriated pursuant to this chapter.

15 ‘‘(B) At the time of submission of the annual congres16 sional presentation documents required by section 634(a),

17 the President shall provide a detailed report on any con18 tributions received in the preceding fiscal year, the amount

19 of such contributions, and the purposes for which such

20 contributions were used.

21 ‘‘(3) The President is authorized to provide assist22 ance under this chapter on a reimbursable basis. Such re23 imbursements shall be deposited as an offsetting collection

24 to the applicable appropriation and may be used under the
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1 same terms and conditions as funds appropriated pursu2 ant to this chapter.’’.

3 (c) IMPLEMENTATION OF LAW ENFORCEMENT AS4 SISTANCE.—Section 482 of such Act (22 U.S.C. 2291a)

5 is amended by adding at the end the following new sub6 sections:

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

8 and consolidated with funds appropriated pursuant to this

9 chapter may be made available on such terms and condi10 tions as are applicable to funds appropriated pursuant to

11 this chapter. Funds so transferred or consolidated shall

12 be apportioned directly to the bureau within the Depart13 ment of State responsible for administering this chapter.

14 ‘‘(g) EXCESS PROPERTY.—For purposes of this chap15 ter, the Secretary of State may use the authority of section

16 608, without regard to the restrictions of such section, to

17 receive nonlethal excess property from any agency of the

18 United States Government for the purpose of providing

19 such property to a foreign government under the same

20 terms and conditions as funds authorized to be appro21 priated for the purposes of this chapter.’’.

22 SEC. 132. NOTIFICATION REQUIREMENT.

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

24 of the National Narcotics Control Leadership Act of 1988

25 (21 U.S.C. 1502(d)) may be exercised with respect to
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1 funds authorized to be appropriated pursuant to the For2 eign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) and

3 with respect to the personnel of the Department of State

4 only to the extent that the appropriate congressional com5 mittees have been notified 15 days in advance in accord6 ance with the reprogramming procedures applicable under

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

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

9 term ‘‘appropriate congressional committees’’ means the

10 Committee on International Relations and the Committee

11 on Appropriations of the House of Representatives and the

12 Committee on Foreign Relations and the Committee on

13 Appropriations of the Senate.

14 SEC. 133. WAIVER OF RESTRICTIONS FOR NARCOTICS-RE15 LATED ECONOMIC ASSISTANCE.

16 For each of the fiscal years 1996 and 1997, narcot17 ics-related assistance under part I of the Foreign Assist18 ance Act of 1961 (22 U.S.C. 2151 et seq.) may be pro19 vided notwithstanding any other provision of law that re20 stricts assistance to foreign countries (other than section

21 490(e) or section 502B of that Act (22 U.S.C. 2291j(e)

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

23 for such assistance, the President notifies the appropriate

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

25 that Act (22 U.S.C. 2291(e))) in accordance with the pro-
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1 cedures applicable to reprogramming notifications under

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

3 CHAPTER 5—OTHER PROVISIONS

4 SEC. 141. STANDARDIZATION OF CONGRESSIONAL REVIEW

5 PROCEDURES FOR ARMS TRANSFERS.

6 (a) THIRD COUNTRY TRANSFERS UNDER FMS

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

8 (22 U.S.C. 2753(d)(2)) is amended—

9 (1) in subparagraph (A), by striking ‘‘, as pro10 vided for in sections 36(b)(2) and 36(b)(3) of this

11 Act’’;

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

13 inserting ‘‘joint resolution’’; and

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

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

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

17 requires that consent to the proposed transfer become ef18 fective immediately in the national security interests of the

19 United States, thus waiving the requirements of that sub20 paragraph, the President shall set forth in the certification

21 a detailed justification for his determination, including a

22 description of the emergency circumstances which neces23 sitate immediate consent to the transfer and a discussion

24 of the national security interests involved.
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1 ‘‘(D)(i) Any joint resolution under this paragraph

2 shall be considered in the Senate in accordance with the

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

4 Assistance and Arms Export Control Act of 1976.

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

6 and enactment of joint resolutions under this paragraph,

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

8 resolution after it has been reported by the appropriate

9 committee shall be treated as highly privileged in the

10 House of Representatives.’’.

11 (b) THIRD COUNTRY TRANSFERS UNDER COMMER12 CIAL SALES.—Section 3(d)(3) of such Act (22 U.S.C.

13 2753(d)(3)) is amended—

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

15 (2) in the first sentence—

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

17 days’’; and

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

19 ‘‘certification’’; and

20 (3) by striking the last sentence and inserting

21 the following: ‘‘Such certification shall be submit22 ted—

23 ‘‘(i) at least 15 calendar days before such con24 sent is given in the case of a transfer to a country
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1 which is a member of the North Atlantic Treaty Or2 ganization or Australia, Japan, or New Zealand; and

3 ‘‘(ii) at least 30 calendar days before such con4 sent is given in the case of a transfer to any other

5 country,

6 unless the President states in his certification that an

7 emergency exists which requires that consent to the pro8 posed transfer become effective immediately in the na9 tional security interests of the United States. If the Presi10 dent states in his certification that such an emergency ex11 ists (thus waiving the requirements of clause (i) or (ii),

12 as the case may be, and of subparagraph (B)) the Presi13 dent shall set forth in the certification a detailed justifica14 tion for his determination, including a description of the

15 emergency circumstances which necessitate that consent

16 to the proposed transfer become effective immediately and

17 a discussion of the national security interests involved.

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

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

20 30-day period specified in subparagraph (A)(i) or (ii), as

21 the case may be, only if the Congress does not enact, with22 in that period, a joint resolution prohibiting the proposed

23 transfer.

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

25 shall be considered in the Senate in accordance with the
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1 provisions of section 601(b) of the International Security

2 Assistance and Arms Export Control Act of 1976.

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

4 and enactment of joint resolutions under this paragraph,

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

6 resolution after it has been reported by the appropriate

7 committee shall be treated as highly privileged in the

8 House of Representatives.’’.

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

10 Act (22 U.S.C. 2776(c)(2)) is amended by amending sub11 paragraphs (A) and (B) to read as follows:

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

13 the North Atlantic Treaty Organization, any mem14 ber country of that Organization or Australia,

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

16 least 15 calendar days after the Congress receives

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

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

19 resolution prohibiting the proposed export; and

20 ‘‘(B) in the case of any other license, shall not

21 be issued until at least 30 calendar days after the

22 Congress receives such certification, and shall not be

23 issued then if the Congress, within that 30-day pe24 riod, enacts a joint resolution prohibiting the pro25 posed export.’’.
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1 (d) COMMERCIAL MANUFACTURING AGREEMENTS.—

2 Section 36(d) of such Act (22 U.S.C. 2776(d)) is amend3 ed—

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

5 (2) by striking ‘‘for or in a country not a mem6 ber of the North Atlantic Treaty Organization’’; and

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

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

9 submitted—

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

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

12 which is a member of the North Atlantic Treaty Or13 ganization or Australia, Japan, or New Zealand; and

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

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

16 country;

17 unless the President states in his certification that an

18 emergency exists which requires the immediate approval

19 of the agreement in the national security interests of the

20 United States.

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

22 an emergency exists which requires the immediate ap23 proval of the agreement in the national security interests

24 of the United States, thus waiving the requirements of

25 paragraph (4), he shall set forth in the certification a de-
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1 tailed justification for his determination, including a de2 scription of the emergency circumstances which neces3 sitate the immediate approval of the agreement and a dis4 cussion of the national security interests involved.

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

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

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

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

9 prohibiting such approval.

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

11 shall be considered in the Senate in accordance with the

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

13 Assistance and Arms Export Control Act of 1976.

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

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

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

17 resolution after it has been reported by the appropriate

18 committee shall be treated as highly privileged in the

19 House of Representatives.’’.

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

21 (1) CONGRESSIONAL REVIEW PERIOD.—Section

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

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

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

25 (B) in subsection (b)—
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1 (i) by striking ‘‘determines, and im2 mediately reports to the Congress’’ and in3 serting ‘‘states in his certification’’; and

4 (ii) by adding at the end of the sub5 section the following: ‘‘If the President

6 states in his certification that such an

7 emergency exists, he shall set forth in the

8 certification a detailed justification for his

9 determination, including a description of

10 the emergency circumstances which neces11 sitate that the lease be entered into imme12 diately and a discussion of the national se13 curity interests involved.’’; and

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

15 following:

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

17 be transmitted—

18 ‘‘(1) not less than 15 calendar days before the

19 agreement is entered into or renewed in the case of

20 an agreement with the North Atlantic Treaty Orga21 nization, any member country of that Organization

22 or Australia, Japan, or New Zealand; and

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

24 agreement is entered into or renewed in the case of
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1 an agreement with any other organization or coun2 try.’’.

3 (2) CONGRESSIONAL DISAPPROVAL.—Section

4 63(a) of such Act (22 U.S.C. 2796b(a)) is amend5 ed—

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

7 ‘‘(a)’’;

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

9 after receiving the certification with respect to

10 that proposed agreement pursuant to section

11 62(a),’’ and inserting in lieu thereof ‘‘the 15-

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

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

14 (C) by striking paragraph (2).

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

16 this section apply with respect to certifications required

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

18 this Act.

19 SEC. 142. STANDARDIZATION OF THIRD COUNTRY TRANS20 FERS OF DEFENSE ARTICLES.

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

22 2753) is amended by inserting after subsection (a) the fol23 lowing new subsection:

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

25 (2) of subsection (a) or under paragraph (1) of section
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1 505(a) of the Foreign Assistance Act of 1961 (as it relates

2 to subparagraph (B) of such paragraph) shall not be re3 quired for the transfer by a foreign country or inter4 national organization of defense articles sold by the United

5 States under this Act if—

6 ‘‘(1) such articles constitute components incor7 porated into foreign defense articles;

8 ‘‘(2) the recipient is the government of a mem9 ber country of the North Atlantic Treaty Organiza10 tion, the Government of Australia, the Government

11 of Japan, or the Government of New Zealand;

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

13 under section 620A of the Foreign Assistance Act of

14 1961;

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

16 not—

17 ‘‘(A) significant military equipment (as de18 fined in section 47(9));

19 ‘‘(B) defense articles for which notification

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

21 and

22 ‘‘(C) identified by regulation as Missile

23 Technology Control Regime items; and

24 ‘‘(5) the foreign country or international orga25 nization provides notification of the transfer of the
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1 defense articles to the United States Government

2 not later than 30 days after the date of such trans3 fer.’’.

4 SEC. 143. INCREASED STANDARDIZATION, RATIONALIZA5 TION, AND INTEROPERABILITY OF ASSIST6 ANCE AND SALES PROGRAMS.

7 Paragraph (6) of section 515(a) of the Foreign As8 sistance Act of 1961 (22 U.S.C. 2321i(a)(6)) is amended

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

10 Organization and with the Armed Forces of Japan, Aus11 tralia, and New Zealand’’.

12 SEC. 144. DEFINITION OF SIGNIFICANT MILITARY EQUIP13 MENT.

14 Section 47 of the Arms Export Control Act (22

15 U.S.C. 2794) is amended—

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

17 end;

18 (2) in paragraph (8), by striking the period at

19 the end and inserting ‘‘; and’’; and

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

21 paragraph:

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

23 ‘‘(A) for which special export controls are war24 ranted because of the capacity of such articles for

25 substantial military utility or capability; and
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1 ‘‘(B) identified on the United States Munitions

2 List.’’.

3 SEC. 145. ELIMINATION OF ANNUAL REPORTING REQUIRE4 MENT RELATING TO THE SPECIAL DEFENSE

5 ACQUISITION FUND.

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

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

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

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

10 (1) by striking ‘‘(a)’’; and

11 (2) by striking subparagraph (B).

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

13 BEEN LOST OR DESTROYED.

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

15 U.S.C. 2796(a)(4)) is amended by striking ‘‘and the re16 placement cost’’ and all that follows and inserting the fol17 lowing: ‘‘and, if the articles are lost or destroyed while

18 leased—

19 ‘‘(A) in the event the United States in20 tends to replace the articles lost or destroyed,

21 the replacement cost (less any depreciation in

22 the value) of the articles; or

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

24 not intend to replace the articles lost or de25 stroyed, an amount not less than the actual
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1 value (less any depreciation in the value) speci2 fied in the lease agreement.’’.

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

4 (a) DESIGNATION.—

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

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

7 2311 et seq.), as amended by this Act, is further

8 amended by adding at the end the following new sec9 tion:

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

11 ‘‘(a) NOTICE TO CONGRESS.—The President shall no12 tify the Congress in writing at least 30 days before—

13 ‘‘(1) designating a country as a major non14 NATO ally for purposes of this Act and the Arms

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

16 ‘‘(2) terminating such a designation.

17 ‘‘(b) INITIAL DESIGNATIONS.—Australia, Egypt, Is18 rael, Japan, the Republic of Korea, and New Zealand shall

19 be deemed to have been so designated by the President

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

21 is not required to notify the Congress of such designation

22 of those countries.’’.

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

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

25 following:
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1 ‘‘(q) ‘Major non-NATO ally’ means a country which

2 is designated in accordance with section 517 as a major

3 non-NATO ally for purposes of this Act and the Arms Ex4 port Control Act (22 U.S.C. 2751 et seq.).’’.

5 (3) EXISTING DEFINITIONS.—(A) The last sen6 tence of section 21(g) of the Arms Export Control

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

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

9 2796d(d)) is amended—

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

11 (ii) by striking out ‘‘or a’’ and all that fol12 lows through ‘‘Code’’.

13 (b) COOPERATIVE TRAINING AGREEMENTS.—Section

14 21(g) of the Arms Export Control Act (22 U.S.C.

15 2761(g)) is amended in the first sentence by striking

16 ‘‘similar agreements’’ and all that follows through ‘‘other

17 countries’’ and inserting ‘‘similar agreements with coun18 tries’’.

19 SEC. 148. CERTIFICATION THRESHOLDS.

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

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

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

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

24 ‘‘$14,000,000’’ each place it appears and in25 serting ‘‘$25,000,000’’; and
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1 (B) in paragraphs (1) and (3), by striking

2 ‘‘$50,000,000’’ each place it appears and in3 serting ‘‘$75,000,000’’;

4 (2) in section 36 (22 U.S.C. 2776)—

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

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

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

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

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

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

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

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

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

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

15 (A) by striking ‘‘$14,000,000’’ and insert16 ing ‘‘$25,000,000’’; and

17 (B) by striking ‘‘$50,000,000’’ and insert18 ing ‘‘$75,000,000’’.

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

20 subsection (a) apply with respect to certifications submit21 ted on or after the date of the enactment of this Act.

22 SEC. 149. DEPLETED URANIUM AMMUNITION.

23 Chapter 1 of part III of the Foreign Assistance Act

24 of 1961 (22 U.S.C. 2370 et seq.), as amended by this Act,
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1 is further amended by adding at the end the following new

2 section:

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

4 ‘‘(a) PROHIBITION.—Except as provided in sub5 section (b), none of the funds made available to carry out

6 this Act or any other Act may be made available to facili7 tate in any way the sale of M–833 antitank shells or any

8 comparable antitank shells containing a depleted uranium

9 penetrating component to any country other than—

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

11 Atlantic Treaty Organization;

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

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

14 or

15 ‘‘(3) Taiwan.

16 ‘‘(b) EXCEPTION.—The prohibition contained in sub17 section (a) shall not apply with respect to the use of funds

18 to facilitate the sale of antitank shells to a country if the

19 President determines that to do so is in the national secu20 rity interest of the United States.’’.

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

22 AND DEFENSE SERVICES.

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

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

25 3 the following new chapter:
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1 ‘‘CHAPTER 3A—END-USE MONITORING OF

2 DEFENSE ARTICLES AND DEFENSE

3 SERVICES

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

5 AND DEFENSE SERVICES.

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

7 ‘‘(1) IN GENERAL.—In order to improve ac8 countability with respect to defense articles and de9 fense services sold, leased, or exported under this

10 Act or the Foreign Assistance Act of 1961 (22

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

12 program which provides for the end-use monitoring

13 of such articles and services.

14 ‘‘(2) REQUIREMENTS OF PROGRAM.—To the ex15 tent practicable, such program—

16 ‘‘(A) shall provide for the end-use monitor17 ing of defense articles and defense services in

18 accordance with the standards that apply for

19 identifying high-risk exports for regular end-use

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

21 this Act (commonly referred to as the ‘Blue

22 Lantern’ program); and

23 ‘‘(B) shall be designed to provide reason24 able assurance that—
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1 ‘‘(i) the recipient is complying with

2 the requirements imposed by the United

3 States Government with respect to use,

4 transfers, and security of defense articles

5 and defense services; and

6 ‘‘(ii) such articles and services are

7 being used for the purposes for which they

8 are provided.

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

10 program established under subsection (a), the President

11 shall ensure that the program—

12 ‘‘(1) provides for the end-use verification of de13 fense articles and defense services that incorporate

14 sensitive technology, defense articles and defense

15 services that are particularly vulnerable to diversion

16 or other misuse, or defense articles or defense serv17 ices whose diversion or other misuse could have sig18 nificant consequences; and

19 ‘‘(2) prevents the diversion (through reverse en20 gineering or other means) of technology incorporated

21 in defense articles.

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

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

24 and annually thereafter as a part of the annual congres25 sional presentation documents submitted under section
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1 634 of the Foreign Assistance Act of 1961, the President

2 shall transmit to the Congress a report describing the ac3 tions taken to implement this section, including a detailed

4 accounting of the costs and number of personnel associ5 ated with the monitoring program.

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

7 this section, defense articles and defense services sold,

8 leased, or exported under this Act or the Foreign Assist9 ance Act of 1961 (22 U.S.C. 2151 et seq.) includes de10 fense articles and defense services that are transferred to

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

12 (b) EFFECTIVE DATE.—Section 40A of the Arms Ex13 port Control Act, as added by subsection (a), applies with

14 respect to defense articles and defense services provided

15 before or after the date of the enactment of this Act.

16 SEC. 151. BROKERING ACTIVITIES RELATING TO COMMER17 CIAL SALES OF DEFENSE ARTICLES AND

18 SERVICES.

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

20 Export Control Act (22 U.S.C. 2778(b)(1)(A)) is amend21 ed—

22 (1) in the first sentence, by striking ‘‘As pre23 scribed in regulations’’ and inserting ‘‘(i) As pre24 scribed in regulations’’; and
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1 (2) by adding at the end the following new

2 clause:

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

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

5 of the United States Government acting in official capac6 ity) who engages in the business of brokering activities

7 with respect to the manufacture, export, import, or trans8 fer of any defense article or defense service designated by

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

10 of brokering activities with respect to the manufacture, ex11 port, import, or transfer of any foreign defense article or

12 defense service (as defined in subclause (IV)), shall reg13 ister with the United States Government agency charged

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

15 registration fee which shall be prescribed by such regula16 tions.

17 ‘‘(II) Such brokering activities shall include the fi18 nancing, transportation, freight forwarding, or taking of

19 any other action that facilitates the manufacture, export,

20 or import of a defense article or defense service.

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

22 brokering activities described in subclause (I) without a

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

24 license shall be required for such activities undertaken by

25 or for an agency of the United States Government—
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1 ‘‘(aa) for use by an agency of the United States

2 Government; or

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

4 sales program authorized by law and subject to the

5 control of the President by other means.

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

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

8 States defense article or defense service of a nature de9 scribed on the United States Munitions List regardless of

10 whether such article or service is of United States origin

11 or whether such article or service contains United States

12 origin components.’’.

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

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

15 shall apply with respect to brokering activities engaged in

16 beginning on or after 120 days after the enactment of this

17 Act.

18 SEC. 152. RETURN AND EXCHANGES OF DEFENSE ARTICLES

19 PREVIOUSLY TRANSFERRED PURSUANT TO

20 THE ARMS EXPORT CONTROL ACT.

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

22 the Arms Export Control Act (22 U.S.C. 2761) is amend23 ed by adding at the end the following new subsection:

24 ‘‘(l) REPAIR OF DEFENSE ARTICLES.—
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1 ‘‘(1) IN GENERAL.—The President may acquire

2 a repairable defense article from a foreign country

3 or international organization if such defense arti4 cle—

5 ‘‘(A) previously was transferred to such

6 country or organization under this Act;

7 ‘‘(B) is not an end item; and

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

9 of the same type that is in the stocks of the De10 partment of Defense.

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

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

13 extent that the Department of Defense—

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

15 article being returned; and

16 ‘‘(ii) has available sufficient funds author17 ized and appropriated for such purpose; or

18 ‘‘(B)(i) is accepting the return of the de19 fense article for subsequent transfer to another

20 foreign government or international organiza21 tion pursuant to a letter of offer and acceptance

22 implemented in accordance with this Act; and

23 ‘‘(ii) has available sufficient funds provided

24 by or on behalf of such other foreign govern25 ment or international organization pursuant to
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1 a letter of offer and acceptance implemented in

2 accordance with this Act.

3 ‘‘(3) REQUIREMENT.—(A) The foreign govern4 ment or international organization receiving a new

5 or repaired defense article in exchange for a repair6 able defense article pursuant to paragraph (1) shall,

7 upon the acceptance by the United States Govern8 ment of the repairable defense article being re9 turned, be charged the total cost associated with the

10 repair and replacement transaction.

11 ‘‘(B) The total cost charged pursuant to sub12 paragraph (A) shall be the same as that charged the

13 United States Armed Forces for a similar repair and

14 replacement transaction, plus an administrative sur15 charge in accordance with subsection (e)(1)(A) of

16 this section.

17 ‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVI18 SIONS OF LAW.—The authority of the President to

19 accept the return of a repairable defense article as

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

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

22 other provision of law relating to the conclusion of

23 contracts.’’.

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

25 such Act (22 U.S.C. 2761), as amended by this Act, is
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1 further amended by adding at the end the following new

2 subsection:

3 ‘‘(m) RETURN OF DEFENSE ARTICLES.—

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

5 the return of a defense article from a foreign coun6 try or international organization if such defense arti7 cle—

8 ‘‘(A) previously was transferred to such

9 country or organization under this Act;

10 ‘‘(B) is not significant military equipment

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

12 ‘‘(C) is in fully functioning condition with13 out need of repair or rehabilitation.

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

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

16 extent that the Department of Defense—

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

18 article being returned; and

19 ‘‘(ii) has available sufficient funds author20 ized and appropriated for such purpose; or

21 ‘‘(B)(i) is accepting the return of the de22 fense article for subsequent transfer to another

23 foreign government or international organiza24 tion pursuant to a letter of offer and acceptance

25 implemented in accordance with this Act; and
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1 ‘‘(ii) has available sufficient funds provided

2 by or on behalf of such other foreign govern3 ment or international organization pursuant to

4 a letter of offer and acceptance implemented in

5 accordance with this Act.

6 ‘‘(3) CREDIT FOR TRANSACTION.—Upon acqui7 sition and acceptance by the United States Govern8 ment of a defense article under paragraph (1), the

9 appropriate Foreign Military Sales account of the

10 provider shall be credited to reflect the transaction.

11 ‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVI12 SIONS OF LAW.—The authority of the President to

13 accept the return of a defense article as provided in

14 paragraph (1) shall not be subject to chapter 137 of

15 title 10, United States Code, or any other provision

16 of law relating to the conclusion of contracts.’’.

17 (c) REGULATIONS.—Under the direction of the Presi18 dent, the Secretary of Defense shall promulgate regula19 tions to implement subsections (l) and (m) of section 21

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

21 SEC. 153. NATIONAL SECURITY INTEREST DETERMINATION

22 TO WAIVE REIMBURSEMENT OF DEPRECIA23 TION FOR LEASED DEFENSE ARTICLES.

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

25 Control Act (22 U.S.C. 2796(a)) is amended—
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1 (1) in the second sentence, by striking ‘‘, or to

2 any defense article which has passed three-quarters

3 of its normal service life’’; and

4 (2) by inserting after the second sentence the

5 following new sentence: ‘‘The President may waive

6 the requirement of paragraph (4) for reimbursement

7 of depreciation for any defense article which has

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

9 President determines that to do so is important to

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

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

12 61(a) of the Arms Export Control Act, as added by sub13 section (a)(2), shall apply only with respect to a defense

14 article leased on or after the date of the enactment of this

15 Act.

16 TITLE II—TRANSFER OF NAVAL

17 VESSELS TO CERTAIN FOR18 EIGN COUNTRIES

19 SEC. 201. AUTHORITY TO TRANSFER NAVAL VESSELS.

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

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

22 HAZARD PERRY’’ frigate GALLERY. Such transfer

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

24 Export Control Act (22 U.S.C. 2761; relating to the for25 eign military sales program).
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1 (b) MEXICO.—The Secretary of the Navy is author2 ized to transfer to the Government of Mexico the

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

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

5 basis under section 21 of the Arms Export Control Act

6 (22 U.S.C. 2761; relating to the foreign military sales pro7 gram).

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

9 authorized to transfer to the Government of New Zealand

10 the ‘‘STALWART’’ class ocean surveillance ship TENA11 CIOUS. Such transfer shall be on a sales basis under sec12 tion 21 of the Arms Export Control Act (22 U.S.C. 2761;

13 relating to the foreign military sales program).

14 (d) PORTUGAL.—The Secretary of the Navy is au15 thorized to transfer to the Government of Portugal the

16 ‘‘STALWART’’ class ocean surveillance ship AUDA17 CIOUS. Such transfer shall be on a grant basis under sec18 tion 516 of the Foreign Assistance Act of 1961 (22 U.S.C.

19 2321j; relating to transfers of excess defense articles).

20 (e) TAIWAN.—The Secretary of the Navy is author21 ized to transfer to the Taipei Economic and Cultural Rep22 resentative Office in the United States (which is the Tai23 wan instrumentality designated pursuant to section 10(a)

24 of the Taiwan Relations Act) the following:
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1 (1) The ‘‘KNOX’’ class frigates AYLWIN (FF

2 1081), PHARRIS (FF 1094), and VALDEZ (FF

3 1096). Such transfers shall be on a sales basis under

4 section 21 of the Arms Export Control Act (22

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

6 program).

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

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

9 a lease basis under section 61 of the Arms Export

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

11 (f) THAILAND.—The Secretary of the Navy is author12 ized to transfer to the Government of Thailand the

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

14 transfer shall be on a sales basis under section 21 of the

15 Arms Export Control Act (22 U.S.C. 2761; relating to the

16 foreign military sales program).

17 SEC. 202. COSTS OF TRANSFERS.

18 Any expense of the United States in connection with

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

20 recipient.

21 SEC. 203. EXPIRATION OF AUTHORITY.

22 The authority granted by section 201 shall expire at

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

24 enactment of this Act.
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1 SEC. 204. REPAIR AND REFURBISHMENT OF VESSELS IN

2 UNITED STATES SHIPYARDS.

3 The Secretary of the Navy shall require, to the maxi4 mum extent possible, as a condition of a transfer of a ves5 sel under this title, that the country to which the vessel

6 is transferred have such repair or refurbishment of the

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

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

9 United States, including a United States Navy shipyard.