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[104th Congress Public Law 164]
[From the U.S. Government Printing Office]

<DOC>
[DOCID: f:publ164.104]

[[Page 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. <<NOTE:  July 21, 
                         1996 -  [H.R. 3121]>> 

    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.

[[Page 110 STAT. 1422]]

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

[[Page 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

[[Page 110 STAT. 1424]]

                          ``(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 Authorities.--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

[[Page 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) <<NOTE: Effective date. President.>>  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

[[Page 110 STAT. 1426]]

        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: <<NOTE: President.>>  ``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).

[[Page 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. <<NOTE: 22 USC 2347c.>>  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

[[Page 110 STAT. 1428]]

countries described in subsection (b) for military education and 
training of military and related civilian personnel of such country.
    ``(b) High-Income Foreign Countries Described.--The high-income 
foreign countries described in this subsection are Austria, Finland, the 
Republic of Korea, Singapore, and Spain.''.
            (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

[[Page 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) <<NOTE: President. Reports.>>  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

[[Page 110 STAT. 1430]]

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. <<NOTE: 21 USC 1502 note.>>  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. <<NOTE: 22 USC 2151 note.>>  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) <<NOTE: President.>>  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.

[[Page 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. <<NOTE: President.>>  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) <<NOTE: Effective date.>>  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

[[Page 110 STAT. 1432]]

        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) <<NOTE: President.>>  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: <<NOTE: President.>>  ``If the 
                      President states in his certification that such an 
                      emergency exists, he shall set forth in the 
                      certification a detailed justification for his 
                      deter

[[Page 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) <<NOTE: 22 USC 2753 note.>>  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

[[Page 110 STAT. 1434]]

        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. <<NOTE: 22 USC 2321k.>>  DESIGNATION OF MAJOR NON-NATO 
            ALLIES.

    ``(a) <<NOTE: President.>>  Notice to Congress.--The President shall 
notify the Congress in writing at least 30 days before--

[[Page 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) <<NOTE: President.>>  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 Military 
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.''.

[[Page 110 STAT. 1436]]

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. <<NOTE: 22 USC 2378a.>>  DEPLETED URANIUM AMMUNITION.

    ``(a) Prohibition.--Except as provided in subsection (b), none of 
the funds made available to carry out this Act or any other Act may be 
made available to facilitate in any way the sale of M-833 antitank 
shells or any comparable antitank shells containing a depleted uranium 
penetrating component to any country other than--
            ``(1) a country that is a member of the North Atlantic 
        Treaty Organization;
            ``(2) a country that has been designated as a major non-NATO 
        ally (as defined in section 644(q)); or
            ``(3) Taiwan.

    ``(b) Exception.--The prohibition contained in subsection (a) shall 
not apply with respect to the use of funds
to facilitate the sale of antitank shells to a country if the President 
determines that to do so is in the national security interest of the 
United States.''.

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. <<NOTE: President. 22 USC 2785.>>  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.

[[Page 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) <<NOTE: 22 USC 2785 note.>> 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) <<NOTE: Regulations.>>  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

[[Page 110 STAT. 1438]]

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) <<NOTE: 22 USC 2778 note.>> 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.

[[Page 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) <<NOTE: 22 USC 2761 note.>>  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.

[[Page 110 STAT. 1440]]

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) <<NOTE: 22 USC 2796 note.>> 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. <<NOTE: 22 USC 2751 note.>>  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. <<NOTE: President. Federal Register, publication.>>  
            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. <<NOTE: President.>>  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) <<NOTE: 22 USC 3201 note.>>  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

[[Page 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.

[[Page 110 STAT. 1442]]

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.

LEGISLATIVE HISTORY--H.R. 3121:
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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.

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