PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1421

Public Law 104–164

104th Congress

An Act

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.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. TABLE OF CONTENTS.

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—INTERNATIONAL 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. Annual military assistance report.

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.

July 21, 1996

[H.R. 3121]
110 STAT. 1422 PUBLIC LAW 104–164—JULY 21, 1996

Sec. 154. Eligibility of Panama under the Arms Export Control Act.

Sec. 155. Publication of arms sales certifications.

Sec. 156. Release of information.

Sec. 157. Repeal of termination of provisions of the Nuclear Proliferation Prevention Act of 1994; Presidential determinations.

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.

TITLE I—DEFENSE AND SECURITY

ASSISTANCE

CHAPTER 1—MILITARY AND RELATED ASSISTANCE

SEC. 101. TERMS OF LOANS UNDER THE FOREIGN MILITARY FINANCING PROGRAM.

Section 31(c) of the Arms Export Control Act (22 U.S.C. 2771(c))

is amended to read as follows:

‘‘(c) Loans available under section 23 shall be provided at

rates of interest that are not less than the current average market

yield on outstanding marketable obligations of the United States

of comparable maturities.’’.

SEC. 102. ADDITIONAL REQUIREMENTS UNDER THE FOREIGN MILITARY FINANCING PROGRAM.

(a) AUDIT OF CERTAIN PRIVATE FIRMS.—Section 23 of the Arms

Export Control Act (22 U.S.C. 2763) is amended by adding at

the end the following new subsection:

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

by the Director of the Defense Security Assistance Agency, shall

conduct audits on a nonreimbursable basis of private firms that

have entered into contracts with foreign governments under which

defense articles, defense services, or design and construction services are to be procured by such firms for such governments from

financing under this section.’’.

(b) NOTIFICATION REQUIREMENT WITH RESPECT TO CASH FLOW

FINANCING.—Section 23 of such Act (22 U.S.C. 2763), as amended

by this Act, is further amended by adding at the end the following

new subsection:

‘‘(g)(1) For each country and international organization that

has been approved for cash flow financing under this section, any

letter of offer and acceptance or other purchase agreement, or

any amendment thereto, for a procurement of defense articles,

defense services, or design and construction services in excess of

$100,000,000 that is to be financed in whole or in part with funds

made available under this Act or the Foreign Assistance Act of

1961 shall be submitted to the congressional committees specified

in section 634A(a) of the Foreign Assistance Act of 1961 in accordance with the procedures applicable to reprogramming notifications

under that section.

‘‘(2) For purposes of this subsection, the term ‘cash flow financing’ has the meaning given such term in subsection (d) of section

25, as added by section 112(b) of Public Law 99–83.’’.

(c) LIMITATIONS ON USE OF FUNDS FOR DIRECT COMMERCIAL

CONTRACTS.—Section 23 of such Act (22 U.S.C. 2763), as amended
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1423

by this Act, is further amended by adding at the end the following

new subsection:

‘‘(h) Of the amounts made available for a fiscal year to carry out this section, not more than $100,000,000 for such fiscal year

may be made available for countries other than Israel and Egypt

for the purpose of financing the procurement of defense articles,

defense services, and design and construction services that are

not sold by the United States Government under this Act.’’.

(d) ANNUAL ESTIMATE AND JUSTIFICATION FOR SALES PROGRAM.—Section 25(a) of such Act (22 U.S.C. 2765(a)) is amended—

(1) by striking the ‘‘and’’ at the end of paragraph (11);

(2) by redesignating paragraph (12) as paragraph (13);

and

(3) by inserting after paragraph (11) the following:

‘‘(12)(A) a detailed accounting of all articles, services, credits, guarantees, or any other form of assistance furnished by

the United States to each country and international organization, including payments to the United Nations, during the

preceding fiscal year for the detection and clearance of landmines, including activities relating to the furnishing of education, training, and technical assistance for the detection and

clearance of landmines; and

‘‘(B) for each provision of law making funds available or

authorizing appropriations for demining activities described in

subparagraph (A), an analysis and description of the objectives

and activities undertaken during the preceding fiscal year,

including the number of personnel involved in performing such

activities; and’’.

SEC. 103. DRAWDOWN SPECIAL AUTHORITIES.

(a) UNFORESEEN EMERGENCY DRAWDOWN.—Section 506(a)(1) of

the Foreign Assistance Act of 1961 (22 U.S.C. 2318(a)(1)) is amended

by striking ‘‘$75,000,000’’ and inserting ‘‘$100,000,000’’.

(b) ADDITIONAL DRAWDOWN.—Section 506 of such Act (22 U.S.C.

2318) is amended—

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

from the stocks’’ and all that follows and inserting the following:

‘‘articles and services from the inventory and resources of any

agency of the United States Government and military education

and training from the Department of Defense, the President

may direct the drawdown of such articles, services, and military

education and training—

‘‘(i) for the purposes and under the authorities of—

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

narcotics control assistance);

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

disaster assistance); or

‘‘(III) the Migration and Refugee Assistance Act

of 1962; or

‘‘(ii) for the purpose of providing such articles, services,

and military education and training to Vietnam, Cambodia,

and Laos as the President determines are necessary—

‘‘(I) to support cooperative efforts to locate and

repatriate members of the United States Armed Forces

and civilians employed directly or indirectly by the

United States Government who remain unaccounted

for from the Vietnam War; and
110 STAT. 1424 PUBLIC LAW 104–164—JULY 21, 1996

‘‘(II) to ensure the safety of United States Government personnel engaged in such cooperative efforts

and to support Department of Defense-sponsored

humanitarian projects associated with such efforts.’’; (2) in subsection (a)(2)(B), by striking ‘‘$75,000,000’’ and all that follows and inserting ‘‘$150,000,000 in any fiscal year

of such articles, services, and military education and training

may be provided pursuant to subparagraph (A) of this paragraph— ‘‘(i) not more than $75,000,000 of which may be provided from the drawdown from the inventory and resources

of the Department of Defense; ‘‘(ii) not more than $75,000,000 of which may be provided pursuant to clause (i)(I) of such subparagraph; and ‘‘(iii) not more than $15,000,000 of which may be provided to Vietnam, Cambodia, and Laos pursuant to clause

(ii) of such subparagraph.’’; and

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

‘‘In the case of drawdowns authorized by subclauses (I) and

(III) of subsection (a)(2)(A)(i), notifications shall be provided

to those committees at least 15 days in advance of the

drawdowns in accordance with the procedures applicable to

reprogramming notifications under section 634A.’’.

(c) NOTICE TO CONGRESS OF EXERCISE OF SPECIAL AUTHORI- TIES.—Section 652 of such Act (22 U.S.C. 2411) is amended by

striking ‘‘prior to the date’’ and inserting ‘‘before’’.

SEC. 104. TRANSFER OF EXCESS DEFENSE ARTICLES.

(a) IN GENERAL.—Section 516 of the Foreign Assistance Act

of 1961 (22 U.S.C. 2321j) is amended to read as follows:

‘‘SEC. 516. AUTHORITY TO TRANSFER EXCESS DEFENSE ARTICLES.

‘‘(a) AUTHORIZATION.—The President is authorized to transfer

excess defense articles under this section to countries for which

receipt of such articles was justified pursuant to the annual congressional presentation documents for military assistance programs,

or for programs under chapter 8 of part I of this Act, submitted

under section 634 of this Act, or for which receipt of such articles

was separately justified to the Congress, for the fiscal year in

which the transfer is authorized.

‘‘(b) LIMITATIONS ON TRANSFERS.—(1) The President may transfer excess defense articles under this section only if—

‘‘(A) such articles are drawn from existing stocks of the

Department of Defense;

‘‘(B) funds available to the Department of Defense for the

procurement of defense equipment are not expended in connection with the transfer;

‘‘(C) the transfer of such articles will not have an adverse

impact on the military readiness of the United States;

‘‘(D) with respect to a proposed transfer of such articles

on a grant basis, such a transfer is preferable to a transfer

on a sales basis, after taking into account the potential proceeds

from, and likelihood of, such sales, and the comparative foreign

policy benefits that may accrue to the United States as the

result of a transfer on either a grant or sales basis;

‘‘(E) the President determines that the transfer of such

articles will not have an adverse impact on the national technology and industrial base and, particularly, will not reduce
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1425

the opportunities of entities in the national technology and

industrial base to sell new or used equipment to the countries

to which such articles are transferred; and

‘‘(F) the transfer of such articles is consistent with the

policy framework for the Eastern Mediterranean established

under section 620C of this Act.

‘‘(2) Accordingly, for the four-year period beginning on October

1, 1996, the President shall ensure that excess defense articles

offered to Greece and Turkey under this section will be made

available consistent with the manner in which the President made

available such excess defense articles during the four-year period

that began on October 1, 1992, pursuant to section 573(e) of the

Foreign Operations, Export Financing, and Related Programs

Appropriations Act, 1990.

‘‘(c) TERMS OF TRANSFERS.—

‘‘(1) NO COST TO RECIPIENT COUNTRY.—Excess defense articles may be transferred under this section without cost to

the recipient country.

‘‘(2) PRIORITY.—Notwithstanding any other provision of law,

the delivery of excess defense articles under this section to

member countries of the North Atlantic Treaty Organization

(NATO) on the southern and southeastern flank of NATO and

to major non-NATO allies on such southern and southeastern

flank shall be given priority to the maximum extent feasible

over the delivery of such excess defense articles to other countries.

‘‘(d) WAIVER OF REQUIREMENT FOR REIMBURSEMENT OF DEPARTMENT OF DEFENSE EXPENSES.—Section 632(d) shall not apply with

respect to transfers of excess defense articles (including transportation and related costs) under this section.

‘‘(e) TRANSPORTATION AND RELATED COSTS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

funds available to the Department of Defense may not be

expended for crating, packing, handling, and transportation

of excess defense articles transferred under the authority of

this section.

‘‘(2) EXCEPTION.—The President may provide for the

transportation of excess defense articles without charge to a

country for the costs of such transportation if—

‘‘(A) it is determined that it is in the national interest

of the United States to do so;

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

less than $10,000,000 of assistance under chapter 5 of

this part of this Act (relating to international military

education and training) or section 23 of the Arms Export

Control Act (22 U.S.C. 2763; relating to the Foreign Military Financing program) in the fiscal year in which the

transportation is provided;

‘‘(C) the total weight of the transfer does not exceed

25,000 pounds; and

‘‘(D) such transportation is accomplished on a space

available basis.

‘‘(f) ADVANCE NOTIFICATION TO CONGRESS FOR TRANSFER OF

CERTAIN EXCESS DEFENSE ARTICLES.—

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

defense articles that are significant military equipment (as

defined in section 47(9) of the Arms Export Control Act) or

Effective date.

President.
110 STAT. 1426 PUBLIC LAW 104–164—JULY 21, 1996

excess defense articles valued (in terms of original acquisition

cost) at $7,000,000 or more, under this section or under the

Arms Export Control Act (22 U.S.C. 2751 et seq.) until 30

days after the date on which the President has provided notice

of the proposed transfer to the congressional committees specified in section 634A(a) in accordance with procedures applicable

to reprogramming notifications under that section.

‘‘(2) CONTENTS.—Such notification shall include—

‘‘(A) a statement outlining the purposes for which the

article is being provided to the country, including whether

such article has been previously provided to such country;

‘‘(B) an assessment of the impact of the transfer on

the military readiness of the United States;

‘‘(C) an assessment of the impact of the transfer on

the national technology and industrial base and, particularly, the impact on opportunities of entities in the national

technology and industrial base to sell new or used equipment to the countries to which such articles are to be

transferred; and

‘‘(D) a statement describing the current value of such

article and the value of such article at acquisition.

‘‘(g) AGGREGATE ANNUAL LIMITATION.—

‘‘(1) IN GENERAL.—The aggregate value of excess defense

articles transferred to countries under this section in any fiscal

year may not exceed $350,000,000.

‘‘(2) EFFECTIVE DATE.—The limitation contained in paragraph (1) shall apply only with respect to fiscal years beginning

after fiscal year 1996.

‘‘(h) CONGRESSIONAL PRESENTATION DOCUMENTS.—Documents

described in subsection (a) justifying the transfer of excess defense

articles shall include an explanation of the general purposes of

providing excess defense articles as well as a table which provides

an aggregate annual total of transfers of excess defense articles

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

deliveries and in terms of acquisition cost and current value. Such

table shall indicate whether such excess defense articles were provided on a grant or sale basis.

‘‘(i) EXCESS COAST GUARD PROPERTY.—For purposes of this

section, the term ‘excess defense articles’ shall be deemed to include

excess property of the Coast Guard, and the term ‘Department

of Defense’ shall be deemed, with respect to such excess property,

to include the Coast Guard.’’.

(b) CONFORMING AMENDMENTS.—

(1) ARMS EXPORT CONTROL ACT.—Section 21(k) of the Arms

Export Control Act (22 U.S.C. 2761(k)) is amended by striking

‘‘the President shall’’ and all that follows and inserting the

following: ‘‘the President shall determine that the sale of such

articles will not have an adverse impact on the national technology and industrial base and, particularly, will not reduce

the opportunities of entities in the national technology and

industrial base to sell new or used equipment to the countries

to which such articles are transferred.’’.

(2) REPEALS.—The following provisions of law are hereby

repealed:

(A) Section 502A of the Foreign Assistance Act of 1961

(22 U.S.C. 2303).

President.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1427

(B) Sections 517 through 520 of the Foreign Assistance

Act of 1961 (22 U.S.C. 2321k through 2321n).

(C) Section 31(d) of the Arms Export Control Act (22

U.S.C. 2771(d)).

SEC. 105. EXCESS DEFENSE ARTICLES FOR CERTAIN EUROPEAN COUNTRIES.

Notwithstanding section 516(e) of the Foreign Assistance Act

of 1961, as added by this Act, during each of the fiscal years

1996 and 1997, funds available to the Department of Defense may

be expended for crating, packing, handling, and transportation of

excess defense articles transferred under the authority of section

516 of such Act to countries that are eligible to participate in

the Partnership for Peace and that are eligible for assistance under

the Support for East European Democracy (SEED) Act of 1989.

CHAPTER 2—INTERNATIONAL MILITARY EDUCATION

AND TRAINING

SEC. 111. ASSISTANCE FOR INDONESIA.

Funds made available for fiscal years 1996 and 1997 to carry

out chapter 5 of part II of the Foreign Assistance Act of 1961

(22 U.S.C. 2347 et seq.) may be obligated for Indonesia only for

expanded military and education training that meets the requirements of clauses (i) through (iv) of the second sentence of section

541 of such Act (22 U.S.C. 2347).

SEC. 112. ADDITIONAL REQUIREMENTS.

(a) GENERAL AUTHORITY.—Section 541 of the Foreign Assistance

Act of 1961 (22 U.S.C. 2347) is amended in the second sentence

in the matter preceding clause (i) by inserting ‘‘and individuals

who are not members of the government’’ after ‘‘legislators’’.

(b) EXCHANGE TRAINING.—Section 544 of such Act (22 U.S.C.

2347c) is amended—

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

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

(2) by adding at the end the following new subsection:

‘‘(b) The President may provide for the attendance of foreign

military and civilian defense personnel at flight training schools

and programs (including test pilot schools) in the United States

without charge, and without charge to funds available to carry

out this chapter (notwithstanding section 632(d) of this Act), if

such attendance is pursuant to an agreement providing for the

exchange of students on a one-for-one basis each fiscal year between

those United States flight training schools and programs (including

test pilot schools) and comparable flight training schools and programs of foreign countries.’’.

(c) ASSISTANCE FOR CERTAIN HIGH-INCOME FOREIGN COUNTRIES.—

(1) AMENDMENT TO THE FOREIGN ASSISTANCE ACT OF 1961.—

Chapter 5 of part II of such Act (22 U.S.C. 2347 et seq.)

is amended by adding at the end the following new section:

‘‘SEC. 546. PROHIBITION ON GRANT ASSISTANCE FOR CERTAIN HIGH

INCOME FOREIGN COUNTRIES.

‘‘(a) IN GENERAL.—None of the funds made available for a

fiscal year for assistance under this chapter may be made available

for assistance on a grant basis for any of the high-income foreign

22 USC 2347c.
110 STAT. 1428 PUBLIC LAW 104–164—JULY 21, 1996

countries described in subsection (b) for military education and

training of military and related civilian personnel of such country.

‘‘(b) HIGH-INCOME FOREIGN COUNTRIES DESCRIBED.—The highincome foreign countries described in this subsection are Austria,

Finland, the Republic of Korea, Singapore, and Spain.’’.

(2) AMENDMENT TO THE ARMS EXPORT CONTROL ACT.—Section 21(a)(1)(C) of the Arms Export Control Act (22 U.S.C.

2761(a)(1)(C)) is amended by inserting ‘‘or to any high-income

foreign country (as described in that chapter)’’ after ‘‘Foreign

Assistance Act of 1961’’.

CHAPTER 3—ANTITERRORISM ASSISTANCE

SEC. 121. ANTITERRORISM TRAINING ASSISTANCE.

(a) IN GENERAL.—Section 571 of the Foreign Assistance Act

of 1961 (22 U.S.C. 2349aa) is amended by striking ‘‘Subject to

the provisions of this chapter’’ and inserting ‘‘Notwithstanding any

other provision of law that restricts assistance to foreign countries

(other than sections 502B and 620A of this Act)’’.

(b) LIMITATIONS.—Section 573 of such Act (22 U.S.C. 2349aa–

2) is amended—

(1) in the heading, by striking ‘‘SPECIFIC AUTHORITIES AND’’;

(2) by striking subsection (a);

(3) by redesignating subsections (b) through (f) as subsections (a) through (e), respectively; and

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

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

(B) by redesignating paragraphs (3) through (5) as

paragraphs (1) through (3), respectively; and

(C) by amending paragraph (2) (as redesignated) to

read as follows:

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

available to carry out this chapter shall not be made available

for the procurement of weapons and ammunition.

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

ammunition in categories I and III of the United States Munitions

List that are integrally and directly related to antiterrorism training

provided under this chapter if, at least 15 days before obligating

those funds, the President notifies the appropriate congressional

committees specified in section 634A of this Act in accordance

with the procedures applicable to reprogramming notifications

under such section.

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

equipment and commodities provided under this chapter in any

fiscal year may not exceed 25 percent of the funds made available

to carry out this chapter for that fiscal year.’’.

(c) ANNUAL REPORT.—Section 574 of such Act (22 U.S.C.

2349aa–3) is hereby repealed.

(d) TECHNICAL CORRECTIONS.—Section 575 (22 U.S.C. 2349aa–

4) and section 576 (22 U.S.C. 2349aa–5) of such Act are redesignated

as sections 574 and 575, respectively.

SEC. 122. RESEARCH AND DEVELOPMENT EXPENSES.

Funds made available for fiscal years 1996 and 1997 to carry

out chapter 8 of part II of the Foreign Assistance Act of 1961

(22 U.S.C. 2349aa et seq.; relating to antiterrorism assistance)

may be made available to the Technical Support Working Group
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1429

of the Department of State for research and development expenses

related to contraband detection technologies or for field demonstrations of such technologies (whether such field demonstrations take

place in the United States or outside the United States).

CHAPTER 4—INTERNATIONAL NARCOTICS CONTROL

ASSISTANCE

SEC. 131. ADDITIONAL REQUIREMENTS.

(a) POLICY AND GENERAL AUTHORITIES.—Section 481(a) of the

Foreign Assistance Act (22 U.S.C. 2291(a)) is amended—

(1) in paragraph (1)—

(A) by redesignating subparagraphs (D) through (F)

as subparagraphs (E) through (G), respectively; and

(B) by inserting after subparagraph (C) the following:

‘‘(D) International criminal activities, particularly international narcotics trafficking, money laundering, and corruption, endanger political and economic stability and democratic

development, and assistance for the prevention and suppression

of international criminal activities should be a priority for

the United States.’’; and

(2) in paragraph (4), by adding before the period at the

end the following: ‘‘, or for other anticrime purposes’’.

(b) CONTRIBUTIONS AND REIMBURSEMENT.—Section 482(c) of

that Act (22 U.S.C. 2291a(c)) is amended—

(1) by striking ‘‘CONTRIBUTION BY RECIPIENT COUNTRY.—

To’’ and inserting ‘‘CONTRIBUTIONS AND REIMBURSEMENT.—(1)

To’’; and

(2) by adding at the end the following new paragraphs:

‘‘(2)(A) The President is authorized to accept contributions from

foreign governments to carry out the purposes of this chapter.

Such contributions shall be deposited as an offsetting collection

to the applicable appropriation account and may be used under

the same terms and conditions as funds appropriated pursuant

to this chapter.

‘‘(B) At the time of submission of the annual congressional

presentation documents required by section 634(a), the President

shall provide a detailed report on any contributions received in

the preceding fiscal year, the amount of such contributions, and

the purposes for which such contributions were used.

‘‘(3) The President is authorized to provide assistance under

this chapter on a reimbursable basis. Such reimbursements shall

be deposited as an offsetting collection to the applicable appropriation and may be used under the same terms and conditions as

funds appropriated pursuant to this chapter.’’.

(c) IMPLEMENTATION OF LAW ENFORCEMENT ASSISTANCE.—Section 482 of such Act (22 U.S.C. 2291a) is amended by adding

at the end the following new subsections:

‘‘(f) TREATMENT OF FUNDS.—Funds transferred to and consolidated with funds appropriated pursuant to this chapter may be

made available on such terms and conditions as are applicable

to funds appropriated pursuant to this chapter. Funds so transferred or consolidated shall be apportioned directly to the bureau

within the Department of State responsible for administering this

chapter.

‘‘(g) EXCESS PROPERTY.—For purposes of this chapter, the Secretary of State may use the authority of section 608, without regard

President.

Reports.
110 STAT. 1430 PUBLIC LAW 104–164—JULY 21, 1996

to the restrictions of such section, to receive nonlethal excess property from any agency of the United States Government for the

purpose of providing such property to a foreign government under

the same terms and conditions as funds authorized to be appropriated for the purposes of this chapter.’’.

SEC. 132. NOTIFICATION REQUIREMENT.

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

National Narcotics Control Leadership Act of 1988 (21 U.S.C.

1502(d)) may be exercised with respect to funds authorized to

be appropriated pursuant to the Foreign Assistance Act of 1961

(22 U.S.C. 2151 et seq.) and with respect to the personnel of

the Department of State only to the extent that the appropriate

congressional committees have been notified 15 days in advance

in accordance with the reprogramming procedures applicable under

section 634A of that Act (22 U.S.C. 2394–1).

(b) DEFINITION.—For purposes of this section, the term ‘‘appropriate congressional committees’’ means the Committee on International Relations and the Committee on Appropriations of the

House of Representatives and the Committee on Foreign Relations

and the Committee on Appropriations of the Senate.

SEC. 133. WAIVER OF RESTRICTIONS FOR NARCOTICS-RELATED ECONOMIC ASSISTANCE.

For each of the fiscal years 1996 and 1997, narcotics-related

assistance under part I of the Foreign Assistance Act of 1961

(22 U.S.C. 2151 et seq.) may be provided notwithstanding any

other provision of law that restricts assistance to foreign countries

(other than section 490(e) or section 502B of that Act (22 U.S.C.

2291j(e) and 2304)) if, at least 15 days before obligating funds

for such assistance, the President notifies the appropriate congressional committees (as defined in section 481(e) of that Act (22

U.S.C. 2291(e))) in accordance with the procedures applicable to

reprogramming notifications under section 634A of that Act (22

U.S.C. 2394–1).

CHAPTER 5—OTHER PROVISIONS

SEC. 141. STANDARDIZATION OF CONGRESSIONAL REVIEW PROCEDURES FOR ARMS TRANSFERS.

(a) THIRD COUNTRY TRANSFERS UNDER FMS SALES.—Section

3(d)(2) of the Arms Export Control Act (22 U.S.C. 2753(d)(2)) is

amended—

(1) in subparagraph (A), by striking ‘‘, as provided for

in sections 36(b)(2) and 36(b)(3) of this Act’’;

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

‘‘joint resolution’’; and

(3) by adding at the end the following:

‘‘(C) If the President states in his certification under subparagraph (A) or (B) that an emergency exists which requires that

consent to the proposed transfer become effective immediately in

the national security interests of the United States, thus waiving

the requirements of that subparagraph, the President shall set

forth in the certification a detailed justification for his determination, including a description of the emergency circumstances which

necessitate immediate consent to the transfer and a discussion

of the national security interests involved.

President.

22 USC 2151

note.

21 USC 1502

note.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1431

‘‘(D)(i) Any joint resolution under this paragraph shall be

considered in the Senate in accordance with the provisions of section

601(b) of the International Security Assistance and Arms Export

Control Act of 1976.

‘‘(ii) For the purpose of expediting the consideration and enactment of joint resolutions under this paragraph, a motion to proceed

to the consideration of any such joint resolution after it has been

reported by the appropriate committee shall be treated as highly

privileged in the House of Representatives.’’.

(b) THIRD COUNTRY TRANSFERS UNDER COMMERCIAL SALES.—

Section 3(d)(3) of such Act (22 U.S.C. 2753(d)(3)) is amended—

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

(2) in the first sentence—

(A) by striking ‘‘at least 30 calendar days’’; and

(B) by striking ‘‘report’’ and inserting ‘‘certification’’;

and

(3) by striking the last sentence and inserting the following:

‘‘Such certification shall be submitted—

‘‘(i) at least 15 calendar days before such consent is given

in the case of a transfer to a country which is a member

of the North Atlantic Treaty Organization or Australia, Japan,

or New Zealand; and

‘‘(ii) at least 30 calendar days before such consent is given

in the case of a transfer to any other country,

unless the President states in his certification that an emergency

exists which requires that consent to the proposed transfer become

effective immediately in the national security interests of the United

States. If the President states in his certification that such an

emergency exists (thus waiving the requirements of clause (i) or

(ii), as the case may be, and of subparagraph (B)) the President

shall set forth in the certification a detailed justification for his

determination, including a description of the emergency circumstances which necessitate that consent to the proposed transfer

become effective immediately and a discussion of the national security interests involved.

‘‘(B) Consent to a transfer subject to subparagraph (A) shall

become effective after the end of the 15-day or 30-day period specified in subparagraph (A)(i) or (ii), as the case may be, only if

the Congress does not enact, within that period, a joint resolution

prohibiting the proposed transfer.

‘‘(C)(i) Any joint resolution under this paragraph shall be considered in the Senate in accordance with the provisions of section

601(b) of the International Security Assistance and Arms Export

Control Act of 1976.

‘‘(ii) For the purpose of expediting the consideration and enactment of joint resolutions under this paragraph, a motion to proceed

to the consideration of any such joint resolution after it has been

reported by the appropriate committee shall be treated as highly

privileged in the House of Representatives.’’.

(c) COMMERCIAL SALES.—Section 36(c)(2) of such Act (22 U.S.C.

2776(c)(2)) is amended by amending subparagraphs (A) and (B)

to read as follows:

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

Atlantic Treaty Organization, any member country of that

Organization or Australia, Japan, or New Zealand, shall not

be issued until at least 15 calendar days after the Congress

receives such certification, and shall not be issued then if

Effective date.

President.
110 STAT. 1432 PUBLIC LAW 104–164—JULY 21, 1996

the Congress, within that 15-day period, enacts a joint resolution prohibiting the proposed export; and

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

until at least 30 calendar days after the Congress receives

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

within that 30-day period, enacts a joint resolution prohibiting

the proposed export.’’.

(d) COMMERCIAL MANUFACTURING AGREEMENTS.—Section 36(d)

of such Act (22 U.S.C. 2776(d)) is amended—

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

(2) by striking ‘‘for or in a country not a member of the

North Atlantic Treaty Organization’’; and

(3) by adding at the end the following:

‘‘(2) A certification under this subsection shall be submitted—

‘‘(A) at least 15 days before approval is given in the case

of an agreement for or in a country which is a member of

the North Atlantic Treaty Organization or Australia, Japan,

or New Zealand; and

‘‘(B) at least 30 days before approval is given in the case

of an agreement for or in any other country;

unless the President states in his certification that an emergency

exists which requires the immediate approval of the agreement

in the national security interests of the United States.

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

exists which requires the immediate approval of the agreement

in the national security interests of the United States, thus waiving

the requirements of paragraph (4), he shall set forth in the certification a detailed justification for his determination, including a

description of the emergency circumstances which necessitate the

immediate approval of the agreement and a discussion of the

national security interests involved.

‘‘(4) Approval for an agreement subject to paragraph (1) may

not be given under section 38 if the Congress, within the 15-

day or 30-day period specified in paragraph (2)(A) or (B), as the

case may be, enacts a joint resolution prohibiting such approval.

‘‘(5)(A) Any joint resolution under paragraph (4) shall be considered in the Senate in accordance with the provisions of section

601(b) of the International Security Assistance and Arms Export

Control Act of 1976.

‘‘(B) For the purpose of expediting the consideration and enactment of joint resolutions under paragraph (4), a motion to proceed

to the consideration of any such joint resolution after it has been

reported by the appropriate committee shall be treated as highly

privileged in the House of Representatives.’’.

(e) GOVERNMENT-TO-GOVERNMENT LEASES.—

(1) CONGRESSIONAL REVIEW PERIOD.—Section 62 of such

Act (22 U.S.C. 2796a) is amended—

(A) in subsection (a), by striking ‘‘Not less than 30

days before’’ and inserting ‘‘Before’’;

(B) in subsection (b)—

(i) by striking ‘‘determines, and immediately

reports to the Congress’’ and inserting ‘‘states in his

certification’’; and

(ii) by adding at the end of the subsection the

following: ‘‘If the President states in his certification

that such an emergency exists, he shall set forth in

the certification a detailed justification for his deterPresident.

President.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1433

mination, including a description of the emergency circumstances which necessitate that the lease be entered

into immediately and a discussion of the national security interests involved.’’; and

(C) by adding at the end of the section the following:

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

transmitted—

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

is entered into or renewed in the case of an agreement with

the North Atlantic Treaty Organization, any member country

of that Organization or Australia, Japan, or New Zealand;

and

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

is entered into or renewed in the case of an agreement with

any other organization or country.’’.

(2) CONGRESSIONAL DISAPPROVAL.—Section 63(a) of such

Act (22 U.S.C. 2796b(a)) is amended—

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

(B) by striking ‘‘30 calendar days after receiving the

certification with respect to that proposed agreement pursuant to section 62(a),’’ and inserting ‘‘the 15-day or 30-

day period specified in section 62(c) (1) or (2), as the case

may be,’’; and

(C) by striking paragraph (2).

(f) EFFECTIVE DATE.—The amendments made by this section

apply with respect to certifications required to be submitted on

or after the date of the enactment of this Act.

SEC. 142. STANDARDIZATION OF THIRD COUNTRY TRANSFERS OF

DEFENSE ARTICLES.

Section 3 of the Arms Export Control Act (22 U.S.C. 2753)

is amended by inserting after subsection (a) the following new

subsection:

‘‘(b) The consent of the President under paragraph (2) of subsection (a) or under paragraph (1) of section 505(a) of the Foreign

Assistance Act of 1961 (as it relates to subparagraph (B) of such

paragraph) shall not be required for the transfer by a foreign

country or international organization of defense articles sold by

the United States under this Act if—

‘‘(1) such articles constitute components incorporated into

foreign defense articles;

‘‘(2) the recipient is the government of a member country

of the North Atlantic Treaty Organization, the Government

of Australia, the Government of Japan, or the Government

of New Zealand;

‘‘(3) the recipient is not a country designated under section

620A of the Foreign Assistance Act of 1961;

‘‘(4) the United States-origin components are not—

‘‘(A) significant military equipment (as defined in section 47(9));

‘‘(B) defense articles for which notification to Congress

is required under section 36(b); and

‘‘(C) identified by regulation as Missile Technology Control Regime items; and

‘‘(5) the foreign country or international organization provides notification of the transfer of the defense articles to

22 USC 2753

note.
110 STAT. 1434 PUBLIC LAW 104–164—JULY 21, 1996

the United States Government not later than 30 days after

the date of such transfer.’’.

SEC. 143. INCREASED STANDARDIZATION, RATIONALIZATION, AND

INTEROPERABILITY OF ASSISTANCE AND SALES PROGRAMS.

Paragraph (6) of section 515(a) of the Foreign Assistance Act

of 1961 (22 U.S.C. 2321i(a)(6)) is amended by striking ‘‘among

members of the North Atlantic Treaty Organization and with the

Armed Forces of Japan, Australia, and New Zealand’’.

SEC. 144. DEFINITION OF SIGNIFICANT MILITARY EQUIPMENT.

Section 47 of the Arms Export Control Act (22 U.S.C. 2794)

is amended—

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

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

and inserting ‘‘; and’’; and

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

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

‘‘(A) for which special export controls are warranted because

of the capacity of such articles for substantial military utility

or capability; and

‘‘(B) identified on the United States Munitions List.’’.

SEC. 145. ELIMINATION OF ANNUAL REPORTING REQUIREMENT

RELATING TO THE SPECIAL DEFENSE ACQUISITION

FUND.

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

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

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

(22 U.S.C. 2795(a)(4)) is amended—

(1) by striking ‘‘(A)’’; and

(2) by striking subparagraph (B).

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

LOST OR DESTROYED.

Section 61(a)(4) of the Arms Export Control Act (22 U.S.C.

2796(a)(4)) is amended by striking ‘‘and the replacement cost’’ and

all that follows and inserting the following: ‘‘and, if the articles

are lost or destroyed while leased—

‘‘(A) in the event the United States intends to replace

the articles lost or destroyed, the replacement cost (less

any depreciation in the value) of the articles; or

‘‘(B) in the event the United States does not intend

to replace the articles lost or destroyed, an amount not

less than the actual value (less any depreciation in the

value) specified in the lease agreement.’’.

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

(a) DESIGNATION.—

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

Foreign Assistance Act of 1961 (22 U.S.C. 2311 et seq.), as

amended by this Act, is further amended by adding at the

end the following new section:

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

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

22 USC 2321k.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1435

‘‘(1) designating a country as a major non-NATO ally for

purposes of this Act and the Arms Export Control Act (22

U.S.C. 2751 et seq.); or

‘‘(2) terminating such a designation.

‘‘(b) INITIAL DESIGNATIONS.—Australia, Egypt, Israel, Japan,

the Republic of Korea, and New Zealand shall be deemed to have

been so designated by the President as of the effective date of

this section, and the President is not required to notify the Congress

of such designation of those countries.’’.

(2) DEFINITION.—Section 644 of such Act (22 U.S.C. 2403)

is amended by adding at the end the following:

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

in accordance with section 517 as a major non-NATO ally for

purposes of this Act and the Arms Export Control Act (22 U.S.C.

2751 et seq.).’’.

(3) EXISTING DEFINITIONS.—(A) The last sentence of section

21(g) of the Arms Export Control Act (22 U.S.C. 2761(g)) is

repealed.

(B) Section 65(d) of such Act (22 U.S.C. 2796d(d)) is

amended—

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

(ii) by striking out ‘‘or a’’ and all that follows through

‘‘Code’’.

(b) COOPERATIVE TRAINING AGREEMENTS.—Section 21(g) of the

Arms Export Control Act (22 U.S.C. 2761(g)) is amended in the

first sentence by striking ‘‘similar agreements’’ and all that follows

through ‘‘other countries’’ and inserting ‘‘similar agreements with

countries’’.

SEC. 148. ANNUAL MILITARY ASSISTANCE REPORT.

Section 655 of the Foreign Assistance Act of 1961 (22 U.S.C.

2415) is amended to read as follows:

‘‘SEC. 655. ANNUAL MILITARY ASSISTANCE REPORT.

‘‘(a) REPORT REQUIRED.—Not later than February 1 of each

year, the President shall transmit to the Congress an annual report

for the fiscal year ending the previous September 30.

‘‘(b) INFORMATION RELATING TO MILITARY ASSISTANCE AND MILI- TARY EXPORTS.—Each such report shall show the aggregate dollar

value and quantity of defense articles (including excess defense

articles), defense services, and international military education and

training authorized by the United States, excluding that which

is pursuant to activies reportable under title V of the National

Security Act of 1947, to each foreign country and international

organization. The report shall specify, by category, whether such

defense articles—

‘‘(1) were furnished by grant under chapter 2 or chapter

5 of part II of this Act or under any other authority of law

or by sale under chapter 2 of the Arms Export Control Act;

or

‘‘(2) were licensed for export under section 38 of the Arms

Export Control Act.

‘‘(c) INFORMATION RELATING TO MILITARY IMPORTS.—Each such

report shall also include the total amount of military items manufactured outside the United States that were imported into the United

States during the fiscal year covered by the report. For each country

of origin the report shall show the type of item being imported

and the total amount of the items.’’.

President.
110 STAT. 1436 PUBLIC LAW 104–164—JULY 21, 1996

SEC. 149. DEPLETED URANIUM AMMUNITION.

Chapter 1 of part III of the Foreign Assistance Act of 1961

(22 U.S.C. 2370 et seq.), is amended by adding at the end the

following new section:

‘‘SEC. 620G. DEPLETED URANIUM AMMUNITION.

‘‘(a) PROHIBITION.—Except as provided in subsection (b), none

of the funds made available to carry out this Act or any other

Act may be made available to facilitate in any way the sale of

M–833 antitank shells or any comparable antitank shells containing

a depleted uranium penetrating component to any country other

than—

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

Treaty Organization;

‘‘(2) a country that has been designated as a major nonNATO ally (as defined in section 644(q)); or

‘‘(3) Taiwan.

‘‘(b) EXCEPTION.—The prohibition contained in subsection (a)

shall not apply with respect to the use of funds to facilitate the

sale of antitank shells to a country if the President determines

that to do so is in the national security interest of the United

States.’’.

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

SERVICES.

(a) IN GENERAL.—The Arms Export Control Act (22 U.S.C.

2751 et seq.) is amended by inserting after chapter 3 the following

new chapter:

‘‘CHAPTER 3A—END-USE MONITORING OF DEFENSE

ARTICLES AND DEFENSE SERVICES

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

DEFENSE SERVICES.

‘‘(a) ESTABLISHMENT OF MONITORING PROGRAM.—

‘‘(1) IN GENERAL.—In order to improve accountability with

respect to defense articles and defense services sold, leased,

or exported under this Act or the Foreign Assistance Act of

1961 (22 U.S.C. 2151 et seq.), the President shall establish

a program which provides for the end-use monitoring of such

articles and services.

‘‘(2) REQUIREMENTS OF PROGRAM.—To the extent practicable, such program—

‘‘(A) shall provide for the end-use monitoring of defense

articles and defense services in accordance with the standards that apply for identifying high-risk exports for regular

end-use verification developed under section 38(g)(7) of this

Act (commonly referred to as the ‘Blue Lantern’ program);

and

‘‘(B) shall be designed to provide reasonable assurance

that—

‘‘(i) the recipient is complying with the requirements imposed by the United States Government with

respect to use, transfers, and security of defense articles and defense services; and

‘‘(ii) such articles and services are being used for

the purposes for which they are provided.

President.

22 USC 2785.

22 USC 2378a.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1437

‘‘(b) CONDUCT OF PROGRAM.—In carrying out the program established under subsection (a), the President shall ensure that the

program—

‘‘(1) provides for the end-use verification of defense articles

and defense services that incorporate sensitive technology,

defense articles and defense services that are particularly

vulnerable to diversion or other misuse, or defense articles

or defense services whose diversion or other misuse could have

significant consequences; and

‘‘(2) prevents the diversion (through reverse engineering

or other means) of technology incorporated in defense articles.

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

the date of the enactment of this section, and annually thereafter

as a part of the annual congressional presentation documents

submitted under section 634 of the Foreign Assistance Act of 1961,

the President shall transmit to the Congress a report describing

the actions taken to implement this section, including a detailed

accounting of the costs and number of personnel associated with

the monitoring program.

‘‘(d) THIRD COUNTRY TRANSFERS.—For purposes of this section,

defense articles and defense services sold, leased, or exported under

this Act or the Foreign Assistance Act of 1961 (22 U.S.C. 2151

et seq.) includes defense articles and defense services that are

transferred to a third country or other third party.’’.

(b) EFFECTIVE DATE.—Section 40A of the Arms Export Control

Act, as added by subsection (a), applies with respect to defense

articles and defense services provided before or after the date of

the enactment of this Act.

SEC. 151. BROKERING ACTIVITIES RELATING TO COMMERCIAL SALES

OF DEFENSE ARTICLES AND SERVICES.

(a) IN GENERAL.—Section 38(b)(1)(A) of the Arms Export Control Act (22 U.S.C. 2778(b)(1)(A)) is amended—

(1) in the first sentence, by striking ‘‘As prescribed in

regulations’’ and inserting ‘‘(i) As prescribed in regulations’’;

and

(2) by adding at the end the following new clause:

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

every person (other than an officer or employee of the United

States Government acting in official capacity) who engages in the

business of brokering activities with respect to the manufacture,

export, import, or transfer of any defense article or defense service

designated by the President under subsection (a)(1), or in the business of brokering activities with respect to the manufacture, export,

import, or transfer of any foreign defense article or defense service

(as defined in subclause (IV)), shall register with the United States

Government agency charged with the administration of this section,

and shall pay a registration fee which shall be prescribed by such

regulations.

‘‘(II) Such brokering activities shall include the financing,

transportation, freight forwarding, or taking of any other action

that facilitates the manufacture, export, or import of a defense

article or defense service.

‘‘(III) No person may engage in the business of brokering activities described in subclause (I) without a license, issued in accordance

with this Act, except that no license shall be required for such

Regulations.

22 USC 2785

note.
110 STAT. 1438 PUBLIC LAW 104–164—JULY 21, 1996

activities undertaken by or for an agency of the United States

Government—

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

or

‘‘(bb) for carrying out any foreign assistance or sales program authorized by law and subject to the control of the President by other means.

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

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

article or defense service of a nature described on the United

States Munitions List regardless of whether such article or service

is of United States origin or whether such article or service contains

United States origin components.’’.

(b) EFFECTIVE DATE.—Section 38(b)(1)(A)(ii) of the Arms Export

Control Act, as added by subsection (a), shall apply with respect

to brokering activities engaged in beginning on or after 120 days

after the enactment of this Act.

SEC. 152. RETURN AND EXCHANGES OF DEFENSE ARTICLES PREVIOUSLY TRANSFERRED PURSUANT TO THE ARMS

EXPORT CONTROL ACT.

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

Export Control Act (22 U.S.C. 2761) is amended by adding at

the end the following new subsection:

‘‘(l) REPAIR OF DEFENSE ARTICLES.—

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

defense article from a foreign country or international organization if such defense article—

‘‘(A) previously was transferred to such country or

organization under this Act;

‘‘(B) is not an end item; and

‘‘(C) will be exchanged for a defense article of the

same type that is in the stocks of the Department of

Defense.

‘‘(2) LIMITATION.—The President may exercise the authority

provided in paragraph (1) only to the extent that the Department of Defense—

‘‘(A)(i) has a requirement for the defense article being

returned; and

‘‘(ii) has available sufficient funds authorized and

appropriated for such purpose; or

‘‘(B)(i) is accepting the return of the defense article

for subsequent transfer to another foreign government or

international organization pursuant to a letter of offer and

acceptance implemented in accordance with this Act; and

‘‘(ii) has available sufficient funds provided by or on

behalf of such other foreign government or international

organization pursuant to a letter of offer and acceptance

implemented in accordance with this Act.

‘‘(3) REQUIREMENT.—(A) The foreign government or international organization receiving a new or repaired defense article

in exchange for a repairable defense article pursuant to paragraph (1) shall, upon the acceptance by the United States

Government of the repairable defense article being returned,

be charged the total cost associated with the repair and replacement transaction.

22 USC 2778

note.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1439

‘‘(B) The total cost charged pursuant to subparagraph (A)

shall be the same as that charged the United States Armed

Forces for a similar repair and replacement transaction, plus

an administrative surcharge in accordance with subsection

(e)(1)(A) of this section.

‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVISIONS OF LAW.—

The authority of the President to accept the return of a repairable defense article as provided in subsection (a) shall not

be subject to chapter 137 of title 10, United States Code,

or any other provision of law relating to the conclusion of

contracts.’’.

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

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

by adding at the end the following new subsection:

‘‘(m) RETURN OF DEFENSE ARTICLES.—

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

of a defense article from a foreign country or international

organization if such defense article—

‘‘(A) previously was transferred to such country or

organization under this Act;

‘‘(B) is not significant military equipment (as defined

in section 47(9) of this Act); and

‘‘(C) is in fully functioning condition without need of

repair or rehabilitation.

‘‘(2) LIMITATION.—The President may exercise the authority

provided in paragraph (1) only to the extent that the Department of Defense—

‘‘(A)(i) has a requirement for the defense article being

returned; and

‘‘(ii) has available sufficient funds authorized and

appropriated for such purpose; or

‘‘(B)(i) is accepting the return of the defense article

for subsequent transfer to another foreign government or

international organization pursuant to a letter of offer and

acceptance implemented in accordance with this Act; and

‘‘(ii) has available sufficient funds provided by or on

behalf of such other foreign government or international

organization pursuant to a letter of offer and acceptance

implemented in accordance with this Act.

‘‘(3) CREDIT FOR TRANSACTION.—Upon acquisition and

acceptance by the United States Government of a defense article

under paragraph (1), the appropriate Foreign Military Sales

account of the provider shall be credited to reflect the transaction.

‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVISIONS OF LAW.—

The authority of the President to accept the return of a defense

article as provided in paragraph (1) shall not be subject to

chapter 137 of title 10, United States Code, or any other provision of law relating to the conclusion of contracts.’’.

(c) REGULATIONS.—Under the direction of the President, the

Secretary of Defense shall promulgate regulations to implement

subsections (l) and (m) of section 21 of the Arms Export Control

Act, as added by this section.

22 USC 2761

note.
110 STAT. 1440 PUBLIC LAW 104–164—JULY 21, 1996

SEC. 153. NATIONAL SECURITY INTEREST DETERMINATION TO WAIVE

REIMBURSEMENT OF DEPRECIATION FOR LEASED

DEFENSE ARTICLES.

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

Act (22 U.S.C. 2796(a)) is amended—

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

article which has passed three-quarters of its normal service

life’’; and

(2) by inserting after the second sentence the following

new sentence: ‘‘The President may waive the requirement of

paragraph (4) for reimbursement of depreciation for any defense

article which has passed three-quarters of its normal service

life if the President determines that to do so is important

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

(b) EFFECTIVE DATE.—The third sentence of section 61(a) of

the Arms Export Control Act, as added by subsection (a)(2), shall

apply only with respect to a defense article leased on or after

the date of the enactment of this Act.

SEC. 154. ELIGIBILITY OF PANAMA UNDER THE ARMS EXPORT CONTROL ACT.

The Government of the Republic of Panama shall be eligible

to purchase defense articles and defense services under the Arms

Export Control Act (22 U.S.C. 2751 et seq.), except as otherwise

specifically provided by law.

SEC. 155. PUBLICATION OF ARMS SALES CERTIFICATIONS.

Section 36 of the Arms Export Control Act (22 U.S.C. 2776)

is amended by adding at the end the following new subsection:

‘‘(e) The President shall cause to be published in the Federal

Register, upon transmittal to the Speaker of the House of Representatives and to the chairman of the Committee on Foreign Relations

of the Senate, the full unclassified text of each numbered certification submitted pursuant to subsection (b) and each notification

of a proposed commercial sale submitted under subsection (c).’’.

SEC. 156. RELEASE OF INFORMATION.

Section 38(e) of the Arms Export Control Act (22 U.S.C. 2778(e))

is amended by inserting in the first sentence before the period

at the end the following: ‘‘, except that the names of the countries

and the types and quantities of defense articles for which licenses

are issued under this section shall not be withheld from public

disclosure unless the President determines that the release of such

information would be contrary to the national interest’’.

SEC. 157. REPEAL OF TERMINATION OF PROVISIONS OF THE NUCLEAR

PROLIFERATION PREVENTION ACT OF 1994; PRESIDENTIAL DETERMINATIONS.

(a) REPEAL.—Part D of the Nuclear Proliferation Prevention

Act of 1994 (part D of title VIII of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995; Public Law 103–236; 108

Stat. 525) is hereby repealed.

(b) JUDICIAL REVIEW.—Section 824 of the Nuclear Proliferation

Prevention Act of 1994 (22 U.S.C. 3201 note) is amended—

(1) in subsection (c), by striking ‘‘in writing after opportunity for a hearing on the record’’;

(2) by striking subsection (e); and

22 USC 3201

note.

President.

President.

Federal Register,

publication.

22 USC 2751

note.

22 USC 2796

note.
PUBLIC LAW 104–164—JULY 21, 1996 110 STAT. 1441

(3) by redesignating subsections (f) through (k) as subsections (e) through (j), respectively.

TITLE II—TRANSFER OF NAVAL VESSELS TO CERTAIN FOREIGN COUNTRIES

SEC. 201. AUTHORITY TO TRANSFER NAVAL VESSELS.

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

to the Government of Egypt the ‘‘OLIVER HAZARD PERRY

CLASS’’ frigate GALLERY. Such transfer shall be on a sales basis

under section 21 of the Arms Export Control Act (22 U.S.C. 2761;

relating to the foreign military sales program).

(b) MEXICO.—The Secretary of the Navy is authorized to transfer to the Government of Mexico the ‘‘KNOX’’ class frigates STEIN

(FF 1065) and MARVIN SHIELDS (FF 1066). Such transfers shall

be on a sales basis under section 21 of the Arms Export Control

Act (22 U.S.C. 2761; relating to the foreign military sales program).

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

to transfer to the Government of New Zealand the ‘‘STALWART’’

class ocean surveillance ship TENACIOUS. Such transfer shall

be on a sales basis under section 21 of the Arms Export Control

Act (22 U.S.C. 2761; relating to the foreign military sales program).

(d) PORTUGAL.—The Secretary of the Navy is authorized to

transfer to the Government of Portugal the ‘‘STALWART’’ class

ocean surveillance ship AUDACIOUS. Such transfer shall be on

a grant basis under section 516 of the Foreign Assistance Act

of 1961 (22 U.S.C. 2321j; relating to transfers of excess defense

articles).

(e) TAIWAN.—The Secretary of the Navy is authorized to transfer to the Taipei Economic and Cultural Representative Office in

the United States (which is the Taiwan instrumentality designated

pursuant to section 10(a) of the Taiwan Relations Act) the following:

(1) The ‘‘KNOX’’ class frigates AYLWIN (FF 1081),

PHARRIS (FF 1094), and VALDEZ (FF 1096). Such transfers

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

Control Act (22 U.S.C. 2761; relating to the foreign military

sales program).

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

(LST 1179). Such transfer shall be on a lease basis under

section 61 of the Arms Export Control Act (22 U.S.C. 2796).

(f) THAILAND.—The Secretary of the Navy is authorized to

transfer to the Government of Thailand the ‘‘KNOX’’ class frigate

OUELLET (FF 1077). Such transfer shall be on a sales basis

under section 21 of the Arms Export Control Act (22 U.S.C. 2761;

relating to the foreign military sales program).

SEC. 202. COSTS OF TRANSFERS.

Any expense of the United States in connection with a transfer

authorized by this title shall be charged to the recipient.

SEC. 203. EXPIRATION OF AUTHORITY.

The authority granted by section 201 shall expire at the end

of the 2-year period beginning on the date of the enactment of

this Act.
110 STAT. 1442 PUBLIC LAW 104–164—JULY 21, 1996

LEGISLATIVE HISTORY—H.R. 3121:

HOUSE REPORTS: No. 104–519, Pt. 1 (Comm. on International Relations).

CONGRESSIONAL RECORD, Vol. 142 (1996):

Apr. 16, considered and passed House.

June 27, considered and passed Senate, amended.

July 9, House concurred in Senate amendments.

Æ

SEC. 204. REPAIR AND REFURBISHMENT OF VESSELS IN UNITED

STATES SHIPYARDS.

The Secretary of the Navy shall require, to the maximum

extent possible, as a condition of a transfer of a vessel under

this title, that the country to which the vessel is transferred have

such repair or refurbishment of the vessel as is needed, before

the vessel joins the naval forces of that country, performed at

a shipyard located in the United States, including a United States

Navy shipyard.

Approved July 21, 1996.