420 
U.S.C. 2332h), and variola virus (18 U.S.C. 
175b); 
(2) persons who are the subject of an indict-
ment or have been convicted under section 371 of 
title 18, United States Code, for conspiracy to vio-
late any of the provisions of law described in para-
graph (1); and 
(3) persons who are ineligible— 
(A) to contract with, 
(B) to receive a license or other form of 
authorization to export from, or 
(C) to receive a license or other form of 
authorization to import defense articles or de-
fense services from, 
any Federal agency. 
(b) DISAPPROVAL OF APPLICATION.—If the Presi-
dent determines that— 
(1) an applicant for a license to export under 
this subtitle is the subject of an indictment for a vio-
lation of any of the provisions of law described in 
subsection (a), 
(2) there is reasonable cause to believe that an 
applicant for a license to export under this subtitle 
has violated any of the provisions of law described 
in subsection (a), or 
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(3) an applicant for a license to export under 
this subtitle is ineligible to contract with, or to re-
ceive a license or other form of authorization to im-
port defense articles or defense services from, any 
Federal agency, 
the President may disapprove the export license applica-
tion. The President shall consider requests by the Sec-
retary of the Treasury to disapprove any export license 
application based on these criteria. 
(c) PROHIBITION ON ISSUANCE OF LICENSE TO EX-
PORT ITEMS ON THE USML.— 
(1) IN GENERAL.—A license to export an item 
on the United States Munitions List may not be 
issued to a person— 
(A) if the person, or any party to the ex-
port, has been convicted of violating a provision 
of law described in subsection (a); or 
(B) if the person, or any party to the ex-
port, is at the time of the license review ineli-
gible to receive export licenses (or other forms 
of authorization to export) from any Federal 
agency. 
(2) EXCEPTION.—A license to export an item 
on the United States Munitions List may be issued 
to a person described in paragraph (1) if the Presi-
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dent, after consultation with the Secretary of the 
Treasury, and after a thorough review of the cir-
cumstances surrounding the conviction or ineligi-
bility to export, determines that appropriate steps 
have been taken to mitigate any law enforcement 
concerns. 
SEC. 4374. STANDARDS TO IDENTIFY HIGH-RISK EXPORTS. 
The Secretary shall, in coordination with the heads 
of appropriate Federal agencies, develop standards for 
identifying high-risk defense articles for regular end-use 
verification. 
SEC. 4375. REQUIREMENT OF EXPORTERS TO REPORT 
SHIPMENT. 
As prescribed in regulations issued under this chap-
ter, a person to whom a license has been granted to export 
an item on the United States Munitions List shall, not 
later than 15 days after the item is exported, submit to 
the Department of State a report containing all shipment 
information, including a description of the item and the 
quantity, value, port of exit, and end-user and country of 
destination of the item. 
SEC. 4376. END-USE MONITORING OF DEFENSE ARTICLES 
AND DEFENSE SERVICES. 
(a) ESTABLISHMENT OF MONITORING PROGRAM.— 
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(1) IN GENERAL.—In order to improve account-
ability with respect to defense articles and defense 
services sold, leased, or exported under this Act and 
predecessor Acts, the President shall establish a pro-
gram which provides for the end-use monitoring of 
the articles and services. 
(2) REQUIREMENTS OF PROGRAM.—To the ex-
tent practicable, the program shall be— 
(A) established and carried out in accord-
ance with the standards that apply for identi-
fying high-risk exports for regular end-use 
verification developed under section 4374 (com-
monly referred to as the ‘‘Blue Lantern’’ pro-
gram); and 
(B) designed to provide reasonable assur-
ance 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) the articles and services are being 
used for the purposes for which they are 
provided. 
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424 
(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 de-
fense 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 serv-
ices whose diversion or other misuse could have sig-
nificant consequences; and 
(2) prevents the diversion (through reverse en-
gineering or other means) of technology incorporated 
in defense articles. 
(c) REPORT TO CONGRESS.—As part of the annual 
congressional budget justification submitted under section 
8302, the President shall transmit to Congress a report 
describing the actions taken to implement this section, in-
cluding 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 includes defense articles 
and defense services that are transferred to a third coun-
try or other third party and the numbers, range, and find-
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ing of end-use monitoring of United States transfers of 
small arms and light weapons. 
SEC. 4377. FEES OF MILITARY SALES AGENTS AND OTHER 
PAYMENTS. 
(a) IN GENERAL.—In accordance with such regula-
tions as the Secretary may prescribe under subsection (b), 
the Secretary shall require adequate and timely reporting 
on political contributions, gifts, commissions and fees 
paid, or offered or agreed to be paid, by any person in 
connection with— 
(1) sales of defense articles or defense services, 
or of design and construction services under section 
4312; or 
(2) commercial sales of defense articles or de-
fense services licensed or approved under section 
4301, to or for the armed forces of a foreign country 
or international organization in order to solicit, pro-
mote, or otherwise to secure the conclusion of such 
sales. 
(b) REGULATIONS.—The regulations referred to in 
subsection (a) shall specify the amounts and the kinds of 
payments, offers, and agreements to be reported, and the 
form and timing of reports, and shall require reports on 
the names of sales agents and other persons receiving such 
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payments. The Secretary shall by regulation require such 
recordkeeping as the Secretary determines is necessary. 
(c) PROHIBITION, LIMITATION, CONDITIONS.—The 
Secretary may, by regulation, prohibit, limit, or prescribe 
conditions with respect to such contributions, gifts, com-
missions, and fees as the President determines will be in 
furtherance of the purposes of this Act. 
(d) REQUIREMENT
FOR INCLUSION
IN PROCURE-
MENT CONTRACT.— 
(1) IN GENERAL.—No such contribution, gift, 
commission, or fee may be included, in whole or in 
part, in the amount paid under any procurement 
contract entered into under section 4312, unless the 
amount thereof is reasonable, allocable to such con-
tract, and not made to a person who has solicited, 
promoted, or otherwise secured such sale, or has 
held himself out as being able to do so, through im-
proper influence. 
(2) DEFINITION.—For the purposes of this sub-
section, the term ‘‘improper influence’’ means influ-
ence, direct or indirect, which induces or attempts to 
induce consideration or action by any employee or 
officer of a purchasing foreign government or inter-
national organization with respect to such purchase 
on any basis other than such consideration of merit 
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427 
as are involved in comparable United States procure-
ments. 
(e) 
AVAILABILITY
OF
INFORMATION
AND 
RECORDS.— 
(1) IN GENERAL.—All information reported to 
the Secretary and all records maintained by any per-
son pursuant to regulations prescribed under this 
section shall be available, upon request, to any 
standing committee of Congress or any sub-
committee thereof and to any Federal agency au-
thorized by law to have access to the books and 
records of the person required to submit reports or 
to maintain records under this section. 
(2) TERMS
AND
CONDITIONS.—Access by an 
Federal agency to records maintained under this 
section shall be on the same terms and conditions 
that govern access by the agency to the books and 
records of the person concerned. 
SEC. 4378. PROHIBITION ON INCENTIVE PAYMENTS. 
(a) PROHIBITION.—A United States person, or any 
employee, agent, or subcontractor thereof, may not, with 
respect to the sale or export of any defense article or de-
fense service to a foreign country, make any incentive pay-
ments for the purpose of satisfying, in whole or in part, 
any offset agreement with the country. 
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428 
(b) CIVIL PENALTIES.—Any person who violates the 
provisions of subsection (a) shall be subject to the imposi-
tion of civil penalties as provided for in subsection (c). 
(c) ENFORCEMENT.—In providing for the enforce-
ment of this section, the Secretary is authorized to exer-
cise the same powers concerning violations and enforce-
ment and imposition of civil penalties that are conferred 
upon Federal agencies and officials by subsections (c), (d), 
(e), and (f) of section 11 of the Export Administration 
Act of 1979 and section 12(a) of such Act (as continued 
in effect under the International Emergency Economic 
Powers Act), subject to the same terms and conditions as 
are applicable to such powers under such Act, except that 
section 11(c)(2)(B) of such Act shall not apply, and in-
stead, as prescribed in regulations issued under this sec-
tion, the Secretary may assess civil penalties for violations 
of this Act and regulations prescribed thereunder and fur-
ther may commence a civil action to recover such civil pen-
alties, and except further that notwithstanding section 
11(c) of that Act, the civil penalty for each violation of 
this section may not exceed $500,000 or five times the 
amount of the prohibited incentive payment, whichever is 
greater. 
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429 
CHAPTER 6—CONGRESSIONAL REVIEW OF 
ARMS SALES 
SEC. 4381. REPORTS ON COMMERCIAL AND GOVERN-
MENTAL 
MILITARY 
EXPORTS; 
CONGRES-
SIONAL ACTION. 
(a) IN GENERAL.—The Secretary shall transmit to 
the appropriate congressional committees not later than 
60 days after the end of each calendar quarter an unclassi-
fied report (except that any material which was trans-
mitted in classified form under subsection (b)(1) or (c)(1) 
may be contained in a classified addendum to such report, 
and any letter of offer referred to in paragraph (1) may 
be listed in such addendum unless such letter of offer has 
been the subject of an unclassified certification pursuant 
to subsection (b)(1), and any information provided under 
paragraph (11) may also be provided in a classified adden-
dum) containing— 
(1) a listing of all letters of offer to sell any 
major defense equipment for $1,000,000 or more 
under this Act to each foreign country and inter-
national organization, by category, if such letters of 
offer have not been accepted or canceled; 
(2) a listing of all such letters of offer that have 
been accepted during the fiscal year in which such 
report is submitted, together with the total value of 
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430 
all defense articles and defense services sold to each 
foreign country and international organization dur-
ing such fiscal year; 
(3) the cumulative dollar amounts, by foreign 
country and international organization, of sales cred-
it agreements under section 4251 made during the 
fiscal year in which such report is submitted; 
(4) a numbered listing of all licenses and ap-
provals for the export to each foreign country and 
international organization during such fiscal year of 
commercially sold major defense equipment, by cat-
egory, sold for $1,000,000 or more, together with 
the total value of all defense articles and defense 
services so licensed for each foreign country and 
international organization, setting forth, with respect 
to the listed major defense equipment— 
(A) the items to be exported under the li-
cense; 
(B) the quantity and contract price of each 
such item to be provided; and 
(C) the name and address of the ultimate 
user of each such item; 
(5) projections of the dollar amounts, by foreign 
country and international organization, of sales ex-
pected to be made under sections 4311 and 4312, in 
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431 
the quarter of the fiscal year immediately following 
the quarter for which such report is submitted; 
(6) a projection with respect to all sales ex-
pected to be made to each country and organization 
for the remainder of the fiscal year in which such re-
port is transmitted; 
(7) a description of each payment, contribution, 
gift, commission, or fee reported to the Secretary 
under section 4377, including— 
(A) the name of the person who made such 
payment, contribution, gift, commission, or fee; 
(B) the name of any sales agent or other 
person to whom such payment, contribution, 
gift, commission, or fee was paid; 
(C) the date and amount of such payment, 
contribution, gift, commission, or fee; 
(D) a description of the sale in connection 
with which such payment, contribution, gift, 
commission, or fee was paid; and 
(E) the identification of any business infor-
mation considered confidential by the person 
submitting it which is included in the report; 
(8) a listing of each sale under section 4251 
during the quarter for which such report is made, 
specifying— 
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cluding the name of the recipient agency and a dis-
cussion of what the agency will do with those muni-
tions items) if— 
(A) the value of the munitions items was 
$250,000 of more, and 
(B) the value of all munitions items trans-
ferred to the Federal agency during that quar-
ter was $250,000 or more, 
excluding munitions items transferred (i) for disposi-
tion or use solely within the United States, or (ii) 
for use in connection with intelligence activities sub-
ject to reporting requirements under title V of the 
National Security Act of 1947 (50 U.S.C. 413 et 
seq.; relating to congressional oversight of intel-
ligence activities); 
(12) a report on all concluded government-to- 
government agreements regarding foreign coproduc-
tion of defense articles of United States origin and 
all other concluded agreements involving coproduc-
tion or licensed production outside of the United 
States of defense articles of United States origin (in-
cluding coproduction memoranda of understanding 
or agreement) that have not been previously re-
ported under this subsection, which shall include— 
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(A) the identity of the foreign countries, 
international organizations, or foreign firms in-
volved; 
(B) a description and the estimated value 
of the articles authorized to be produced, and 
an estimate of the quantity of the articles au-
thorized to be produced; 
(C) a description of any restrictions on 
third-party transfers of the foreign-manufac-
tured articles; and 
(D) if any such agreement does not pro-
vide for United States access to and verification 
of quantities of defense articles produced out-
side the United States and their disposition in 
the foreign country, a description of alternative 
measures and controls incorporated in the co-
production or licensing program to ensure com-
pliance with restrictions in the agreement on 
production quantities and third-party transfers; 
(13) a report on all exports of significant mili-
tary equipment for which information has been pro-
vided pursuant to section 4375; and 
(14) copies of security assistance surveys con-
ducted by United States Government personnel for 
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435 
the calendar quarter for which the report is trans-
mitted. 
(b) ADDITIONAL INFORMATION.—For each letter of 
offer to sell under paragraphs (1) and (2) of subsection 
(a), the report shall specify— 
(1) the foreign country or international organi-
zation to which the defense article or defense service 
is offered or was sold, as the case may be; 
(2) the dollar amount of the offer to sell or the 
sale and the number of defense articles offered or 
sold, as the case may be; 
(3) a description of the defense article or de-
fense service offered or sold, as the case may be; and 
(4) the United States Armed Forces or Federal 
agency that is making the offer to sell or the sale, 
as the case may be. 
SEC. 4382. CONGRESSIONAL CERTIFICATION OF SENSITIVE 
FOREIGN 
MILITARY 
SALES 
AND 
AGREE-
MENTS. 
(a) IN GENERAL.—The President shall submit to the 
appropriate congressional committees a numbered certifi-
cation with respect to any letter of offer to sell, or an ap-
plication by a person for a license for the export of, pursu-
ant to this or any other Act, the following to a foreign 
country or international organization: 
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(1) Major defense equipment of a type that 
have not been sold to the country or organization for 
$25,000,000 or more. 
(2) Major defense equipment of a type that 
have been sold to the country or organization but 
are significantly different in terms of capability from 
those previously sold, for $25,000,000 or more. 
(3) Fixed- or rotary-wing aircraft, whether 
flown remotely or by an onboard pilot, primarily 
used for military purposes; navigation, sensors, sen-
sitive components; and engines for same and sen-
sitive components of such engines. 
(4) Radars for military end-use. 
(5) Guided or ballistic missiles, regardless of 
mode of launch. 
(6) Firearms, close assault weapons, and com-
bat shotguns over $1,000,000. 
(7) Night vision devices. 
(8) Naval vessels, both surface vessels (above 
3,000 tons) and submersibles. 
(9) Toxicological Agents and associated equip-
ment, for $25,000,000 or more. 
(10) Tanks (including significant components) 
and armored vehicle chassis, regardless of armament 
or lack thereof. 
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437 
(11) Other defense articles and defense services 
for $100,000,000 or more. 
(12) Military-related design and construction 
services for $300,000,000 or more. 
(b) CERTIFICATION.—The following requirements 
shall apply with respect to the submission of a numbered 
certification under subsection (a): 
(1) Before a United States commercial tech-
nical assistance or manufacturing licensing agree-
ment that involves the manufacture outside the 
United States of any sensitive military equipment is 
approved under section 4301, the Secretary shall 
transmit to the appropriate congressional commit-
tees an unclassified numbered certification with re-
spect to the agreement. 
(2) Each numbered certification shall specify— 
(A) the foreign country or international or-
ganization to which the defense article or de-
fense service is offered or was sold, as the case 
may be; 
(B) the dollar amount of the offer to sell 
or the sale and the number of defense articles 
offered or sold, as the case may be; 
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438 
(C) a description of the defense article or 
defense service offered or sold, as the case may 
be; and 
(D) the United States Armed Forces or 
Federal agency that is making the offer to sell 
or the sale, as the case may be. 
(3) For commercial technical assistance or 
manufacturing licensing agreements, each numbered 
certification shall specify— 
(A) the purchaser; 
(B) the Federal agency responsible for im-
plementing the sale; 
(C) an estimate of the dollar amount of the 
sale; and 
(D) a general description of the real prop-
erty facilities to be constructed pursuant to 
such sale. 
(c) ADDITIONAL
INFORMATION.—Each numbered 
certification submitted under subsection (a) shall also con-
tain information on the following: 
(1) A description, containing the information 
described in section 4381(a)(7), of any contribution, 
gift, commission, or fee paid or offered or agreed to 
be paid in order to solicit, promote, or otherwise to 
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439 
secure the letter of offer relating to the numbered 
certification. 
(2) An item, classified if necessary, identifying 
the sensitivity of technology contained in the defense 
articles, defense services, or design and construction 
services proposed to be sold, and a detailed justifica-
tion of the reasons necessitating the sale of the arti-
cles, services, or design and construction services in 
view of the sensitivity of the technology. 
(3) In a case in which the defense articles or 
defense services listed on the Missile Technology 
Control Regime Annex are intended to support the 
design, development, or production of a Category I 
space launch vehicle system, the certification shall 
also include a description of the proposed export and 
rationale for approving such export, including the 
consistency of such export with United States mis-
sile nonproliferation policy. 
(4) Each numbered certification shall contain 
an item indicating whether any offset agreement is 
proposed to be entered into in connection with such 
letter of offer to sell (if known on the date of trans-
mittal of such certification). 
(d) FORM.—A numbered certification transmitted 
pursuant to subsection (a) shall be in unclassified form, 
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except that the information specified in paragraphs (2) 
and (3) of section 4381(b) and the details of the descrip-
tion specified in subsections (b) and (c) may be classified 
if the public disclosure thereof would be clearly detri-
mental to the security of the United States, in which case 
the information shall be accompanied by a description of 
the damage to the national security that could be expected 
to result from public disclosure of the information. 
(e) CONSULTATION.—The Secretary shall consult 
with the appropriate congressional committees prior to the 
notification of a letter of offer, an application to export, 
or the conclusion of an commercial technical assistance 
agreement or a manufacturing license agreement. 
(f) COMMITTEE INFORMATION REQUEST.—The Sec-
retary shall, upon the request of an appropriate congres-
sional committee, transmit promptly to both such commit-
tees a statement setting forth, to the extent specified in 
such request— 
(1) a detailed description of the defense articles, 
defense services, or design and construction services 
to be offered, including a brief description of the ca-
pabilities of any defense article to be offered; 
(2) an estimate of the number of officers and 
employees of the United States Government and of 
United States civilian contract personnel expected to 
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441 
be needed in such country to carry out the proposed 
sale; 
(3) the name of each contractor expected to 
provide the defense article, defense service, or design 
and construction services proposed to be sold and a 
description of any offset agreement with respect to 
such sale; 
(4) an evaluation, prepared by the Secretary in 
consultation with the Secretary of Defense and the 
Director of Central Intelligence, of the manner, if 
any, in which the proposed sale would— 
(A) contribute to an arms race; 
(B) support international terrorism; 
(C) increase the possibility of an outbreak 
or escalation of conflict; 
(D) prejudice the negotiation of any arms 
controls; 
(E) adversely affect the arms control or 
nonproliferation policy of the United States; 
(F) support blackmarket or greymarket 
trade in arms, either those transferred or obso-
lete arms to be replaced by the arms sale; or 
(G) require the transfer of United States 
arms sensitive technology or manufacturing 
techniques as a condition of the arms sale, and 
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442 
the impact of such transfer on the United 
States manufacturing base, including on jobs 
based in the United States; 
(5) the reasons why the foreign country or 
international organization to which the sale is pro-
posed to be made needs the defense articles, defense 
services, or design and construction services which 
are the subject of such sale and a description of how 
such country or organization intends to use such de-
fense articles, defense services, or design and con-
struction services; 
(6) an analysis of the impact of the proposed 
sale on the military stocks and the military pre-
paredness of the United States; 
(7) the reasons why the proposed sale is in the 
national interest of the United States; 
(8) an analysis of the impact of the proposed 
sale on the military capabilities of the foreign coun-
try or international organization to which such sale 
would be made; 
(9) an analysis of how the proposed sale would 
affect the relative military strengths of countries in 
the region to which the defense articles, defense 
services, or design and construction services which 
are the subject of such sale would be delivered and 
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443 
whether other countries in the region have com-
parable kinds and amounts of defense articles, de-
fense services, or design and construction services; 
(10) an estimate of the levels of trained per-
sonnel and maintenance facilities of the foreign 
country or international organization to which the 
sale would be made which are needed and available 
to utilize effectively the defense articles, defense 
services, or design and construction services pro-
posed to be sold; 
(11) an analysis of the extent to which com-
parable kinds and amounts of defense articles, de-
fense services, or design and construction services 
are available from other countries; 
(12) an analysis of the impact of the proposed 
sale on United States relations with the countries in 
the region to which the defense articles, defense 
services, or design and construction services which 
are the subject of such sale would be delivered; 
(13) a detailed description of any agreement 
proposed to be entered into by the United States for 
the purchase or acquisition by the United States of 
defense articles, defense services, design and con-
struction services or defense equipment, or other ar-
ticles, services, or equipment of the foreign country 
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444 
or international organization in connection with, or 
as consideration for, such letter of offer, including 
an analysis of the impact of such proposed agree-
ment upon United States business concerns which 
might otherwise have provided such articles, services, 
or equipment to the United States, an estimate of 
the costs to be incurred by the United States in con-
nection with such agreement compared with costs 
which would otherwise have been incurred, an esti-
mate of the economic impact and unemployment 
which would result from entering into such proposed 
agreement, and an analysis of whether such costs 
and such domestic economic impact justify entering 
into such proposed agreement; 
(14) the projected delivery dates of the defense 
articles, defense services, or design and construction 
services to be offered; 
(15) a detailed description of weapons and lev-
els of munitions that may be required as support for 
the proposed sale; 
(16) an analysis of the relationship of the pro-
posed sale to projected procurements of the same 
item, and 
(17) an analysis, classified if necessary, of the 
security to be provided by the proposed recipient of 
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445 
the arms sale on the defense articles and defense 
services, both against external and internal security 
threats, including espionage. 
SEC. 4383. UPGRADE OR ENHANCEMENT. 
(a) IN GENERAL.—If, before the delivery of any 
major defense article or major defense equipment, or the 
furnishing of any defense service or design and construc-
tion service, sold pursuant to a letter of offer or a contract 
pursuant to a license described in section 4382, the sensi-
tivity of technology or the capability of the article, equip-
ment, or service is enhanced or upgraded from the level 
of sensitivity or capability described in the numbered cer-
tification with respect to an offer to sell such article, 
equipment, or service, then, at least 45 days before the 
delivery of such article or equipment or the furnishing of 
such service, the President shall prepare and transmit to 
the chairman of the Committee on Foreign Affairs of the 
House of Representatives and the chairman of the Com-
mittee on Foreign Relations of the Senate a report— 
(1) describing the manner in which the tech-
nology or capability has been enhanced or upgraded 
and describing the significance of such enhancement 
or upgrade; and 
(2) setting forth a detailed justification for such 
enhancement or upgrade. 
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446 
(b) APPLICATION.—The provisions of subsection (a) 
apply to an article or equipment delivered, or a service 
furnished, within 10 years after the transmittal to the 
Congress of a numbered certification with respect to the 
sale of such article, equipment, or service. 
(c) NEW NUMBERED CERTIFICATION.— 
(1) IN GENERAL.—If the enhancement or up-
grade in the sensitivity of technology or the capa-
bility of major defense equipment, defense articles, 
defense services, or design and construction services 
described in a numbered certification submitted 
under this section costs $14,000,000 or more in the 
case of any major defense equipment, $50,000,000 
or more in the case of defense articles or defense 
services, or $200,000,000 or more in the case of de-
sign or construction services, then the Secretary 
shall submit to the chairman of the Committee on 
Foreign Affairs of the House of Representatives and 
the chairman of the Committee on Foreign Relations 
of the Senate a new numbered certification which re-
lates to such enhancement or upgrade and which 
shall be considered for purposes of this section as if 
it were a separate letter of offer to sell defense 
equipment, articles, or services, subject to all of the 
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447 
requirements, restrictions, and conditions set forth 
in this section. 
(2) RULE OF CONSTRUCTION.—For purposes of 
this subsection, references in this section to sales 
shall be deemed to be references to enhancements or 
upgrades in the sensitivity of technology or the capa-
bility of major defense equipment, defense articles, 
or defense services, as the case may be. 
SEC. 4384. CONGRESSIONAL REVIEW PERIOD AND DIS-
APPROVAL. 
(a) REVIEW PERIOD.—Any numbered certification 
submitted to the appropriate congressional committees for 
a letter of offer or a license to export under section 4382 
may not be issued not earlier than— 
(1) in the case of a strategic United States ally, 
15 legislative days after the date of submission of 
the certification; 
(2) in the case of any other country, 30 legisla-
tive days after the date of submission of the certifi-
cation; and 
(3) in the case of a license for export of a com-
mercial communications satellite for launch from, 
and by nationals of, the Russian Federation, 
Ukraine, or Kazakhstan, 15 legislative days after 
the date of submission of the certification. 
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448 
(b) DISAPPROVAL.—No letter of offer, or license to 
export, may be issued for any proposed sale subject to the 
provisions of this section if a joint resolution of dis-
approval is enacted providing for any such sale within the 
respective time periods specified in subsection (a). 
(c) PROCEDURES
FOR CONSIDERATION
OF JOINT 
RESOLUTION.— 
(1) SENATE.—Any such joint resolution shall 
be considered in the Senate in accordance with the 
provisions of section 601(b) of the International Se-
curity Assistance and Arms Export Control Act of 
1976, except that for purposes of consideration of 
any joint resolution with respect to a strategic 
United States ally, it shall be in order in the Senate 
to move to discharge a committee to which such 
joint resolution was referred if such committee has 
not reported such joint resolution at the end of 5 
calendar days after its introduction. 
(2) HOUSE
OF
REPRESENTATIVES.—For the 
purpose of expediting the consideration and enact-
ment of joint resolutions under this subsection, a 
motion to proceed to the consideration of any such 
joint resolution after it has been reported by the ap-
propriate committee shall be treated as highly privi-
leged in the House of Representatives. 
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449 
SEC. 4385. NATIONAL SECURITY WAIVER OF CONGRES-
SIONAL REVIEW OF ARMS SALES. 
(a) AUTHORITY.—If the President informs the appro-
priate congressional committees that an emergency exists 
that requires a sale of a defense article or defense service 
under section 4331 or a retransfer of a defense article or 
defense service under section 4361 in the national security 
interests of the United States, the President may exempt 
the proposed sale from the requirements of this chapter. 
(b) JUSTIFICATION.—Before exercising such waiver, 
the President shall set forth in a statement to the appro-
priate congressional committees a detailed justification for 
the President’s determination, including a description of 
the emergency circumstances that necessitate the imme-
diate issuance of the letter of offer and a discussion of 
the national security interests involved. 
SEC. 4386. PUBLICATION OF ARMS SALES NOTIFICATIONS. 
(a) PUBLICATION.—The Secretary shall publish in a 
timely manner 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 cer-
tification submitted pursuant to section 4382. 
(b) RULE OF CONSTRUCTION.—Information relating 
to offset agreements shall be treated as confidential infor-
mation in accordance with section 12(c) of the Export Ad-
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450 
ministration Act of 1979 (50 U.S.C. App. 2411(c)) (as 
continued in effect under the International Emergency 
Economic Powers Act). 
SEC. 4387. CERTIFICATION REQUIREMENT RELATING TO 
ISRAEL’S QUALITATIVE MILITARY EDGE. 
(a) IN GENERAL.—Any certification relating to a 
proposed sale or export of defense articles or defense serv-
ices under this chapter to any country in the Middle East 
other than Israel shall include an unclassified determina-
tion that the sale or export of the defense articles or de-
fense services will not adversely affect Israel’s qualitative 
military edge over military threats to Israel, but may also 
include a classified determination as well. 
(b) QUALITATIVE MILITARY EDGE DEFINED.—In 
this section, the term ‘‘qualitative military edge’’ means 
the ability to counter and defeat any credible conventional 
military threat from any individual state or possible coali-
tion of states or from non-state actors, while sustaining 
minimal damages and casualties, through the use of supe-
rior military means, possessed in sufficient quantity, in-
cluding weapons, command, control, communication, intel-
ligence, surveillance, and reconnaissance capabilities that 
in their technical characteristics are superior in capability 
to those of such other individual or possible coalition of 
states or non-state actors. 
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451 
CHAPTER 7—LANDMINES AND CLUSTER 
MUNITIONS 
SEC. 4391. LANDMINES. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, demining equipment available to the Agency 
or the Department of State and used in support of the 
clearance of landmines and unexploded ordnance for hu-
manitarian purposes may be disposed of on a grant basis 
in foreign countries. 
(b) TERMS AND CONDITIONS.—The exercise of the 
authority under subsection (a) shall be subject to such 
terms and conditions as the President may prescribe. 
SEC. 4392. CLUSTER MUNITIONS. 
No security assistance may be provided for cluster 
munitions, no defense export license for cluster munitions 
may be issued, and no cluster munitions or cluster muni-
tions technology shall be sold or transferred, unless— 
(1) the submunitions of the cluster munitions, 
after arming, do not result in more than 1 percent 
unexploded ordnance across the range of intended 
operational environments; and 
(2) the agreement applicable to the assistance, 
transfer, or sale of such cluster munitions or cluster 
munitions technology specifies that— 
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452 
(A) the cluster munitions will only be used 
against clearly defined military targets and will 
not be used where civilians are known to be 
present or in areas normally inhabited by civil-
ians; and 
(B) the recipient agrees to immediately re-
cover any unexploded submunitions, and to give 
assistance as necessary to any civilian injuries, 
that follow the use of such weapons in any area 
in which civilians are present. 
Subtitle D—General Administrative 
and Miscellaneous Provisions 
SEC. 4401. GENERAL PROVISIONS. 
(a) PROCUREMENT IN THE UNITED STATES; CO-
PRODUCTION OR LICENSED PRODUCTION OUTSIDE THE 
UNITED STATES.— 
(1) IN GENERAL.—In carrying out this title, 
special emphasis shall be placed on procurement in 
the United States, but, subject to the provisions of 
subsection (b), consideration shall also be given to 
coproduction or licensed production outside the 
United States of defense articles of United States 
origin when such production best serves the foreign 
policy, national security, and economy of the United 
States. 
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453 
(2) EVALUATION.—In evaluating any sale pro-
posed to be made pursuant to this title, there shall 
be taken into consideration— 
(A) the extent to which the proposed sale 
damages or infringes upon licensing arrange-
ments whereby United States entities have 
granted licenses for the manufacture of the de-
fense articles selected by the purchasing coun-
try to entities located in friendly foreign coun-
tries, which licenses result in financial returns 
to the United States; 
(B) the portion of the defense articles so 
manufactured which is of United States origin; 
and 
(C) whether, and the extent to which, such 
sale might contribute to an arms race, aid in 
the development of weapons of mass destruc-
tion, support international terrorism, increase 
the possibility of outbreak or escalation of con-
flict, or prejudice the development of bilateral 
or multilateral arms control or nonproliferation 
agreements or other arrangements. 
(b) PROHIBITIONS.—No credit sale shall be extended 
under section 4251 in any case involving coproduction or 
licensed production outside the United States of any de-
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454 
fense article of United States origin, unless the Secretary, 
in advance of any such transaction, advises the appro-
priate congressional committees and furnish the Speaker 
of the House of Representatives and the President of the 
Senate with full information regarding the proposed trans-
action, including a description of the particular defense 
article or articles which would be produced under license 
or coproduced outside the United States, the estimated 
value of such production or coproduction, and the probable 
impact of the proposed transaction on employment and 
production within the United States. 
(c) AVAILABILITY OF FUNDS.—Funds made available 
under this title may be used for procurement outside the 
United States only if the President determines that such 
procurement will not result in adverse effects upon the 
economy of the United States or the industrial mobiliza-
tion base, with special reference to any areas of labor sur-
plus or to the net position of the United States in its bal-
ance of payments with the rest of the world, which out-
weigh the economic or other advantages to the United 
States of less costly procurement outside the United 
States 
(d) RESPONSIBILITIES
OF
SECRETARY
OF
DE-
FENSE.— 
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455 
(1) IN GENERAL.—With respect to sales under 
sections 4311, 4312, 4324, and 4351 the Secretary 
of Defense shall, under the direction of the Presi-
dent, have primary responsibility for— 
(A) the determination of military end-item 
requirements; 
(B) the procurement of military equipment 
in a manner which permits its integration with 
service programs; 
(C) the supervision of the training of for-
eign military personnel; 
(D) the movement and delivery of military 
end-items; and 
(E) within the Department of Defense, the 
performance of any other functions with respect 
to sales and guaranties. 
(2) PRIORITIES.—The establishment of prior-
ities in the procurement, delivery, and allocation of 
military equipment shall, under the direction of the 
President, be determined by the Secretary of De-
fense. 
(e) TERMINATION PROVISIONS.— 
(1) CONTRACTS.—Each contract for sale en-
tered into under sections 4311, 4312, 4324, and 
4351, and each contract entered into under section 
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456 
4282, shall provide that such contract may be can-
celed in whole or in part, or its execution suspended, 
by the United States at any time under unusual or 
compelling circumstances if the national interest of 
the United States so requires. 
(2) EXPORT
LICENSES.—Each export license 
issued under section 4331 shall provide that such li-
cense may be revoked, suspended, or amended by the 
Secretary, without prior notice, whenever the Sec-
retary deems such action to be advisable. Nothing in 
this paragraph may be construed as limiting the reg-
ulatory authority of the President under this Act. 
(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated from time 
to time such sums as may be necessary— 
(A) to refund moneys received from pur-
chasers under contracts of sale entered into 
under sections 4311, 4312, 4324, and 4351, or 
under contracts entered into under section 
4282, that are canceled or suspended under this 
subsection to the extent such moneys have pre-
viously been disbursed to private contractors 
and United States Government agencies for 
work in progress; and 
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457 
(B) to pay such damages and costs that 
accrue from the corresponding cancellation or 
suspension of the existing procurement con-
tracts or Federal agency work orders involved. 
(f) CIVILIAN CONTRACT PERSONNEL.—The Presi-
dent shall, to the maximum extent possible and consistent 
with the purposes of this title, use civilian contract per-
sonnel in any foreign country to perform defense services 
sold under this title. 
SEC. 4402. ADMINISTRATIVE EXPENSES. 
(a) IN GENERAL.—Funds made available under other 
provisions of law for the operations of Federal agencies 
carrying out functions under this title shall be available 
for the administrative expenses incurred by such agencies 
under this title. 
(b) RECOVERY OF EXPENSES.—Charges for adminis-
trative services calculated under section 4314(a)(1) shall 
include recovery of administrative expenses and official re-
ception and representation expenses incurred by any Fed-
eral agency, including any mission or group thereof, in 
carrying out functions under this title if— 
(1) such functions are primarily for the benefit 
of any foreign country; 
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458 
(2) such expenses are not directly and fully 
charged to, and reimbursed from amounts received 
for, sale of defense services under section 4311; and 
(3) such expenses are neither salaries of the 
United States Armed Forces nor represent unfunded 
estimated costs of civilian retirement and other ben-
efits. 
(c) OFFICIAL RECEPTION
AND REPRESENTATION 
EXPENSES.—Not more than $86,500 of the funds derived 
from charges for administrative services pursuant to sec-
tion 4314(a)(1) may be used each fiscal year for official 
reception and representation expenses. 
SEC. 4403. DETAIL OF APPROPRIATE PERSONNEL. 
The President may detail, as necessary, to the De-
partment of State appropriate personnel from any other 
Federal agency on a nonreimbursable basis, to assist in 
the initial screening of applications for export licenses 
under this subtitle in order to determine the need for fur-
ther review of those applications for foreign policy, na-
tional security, and law enforcement concerns. 
SEC. 4404. RULE OF CONSTRUCTION. 
Nothing in this title shall be construed as modifying 
in any way the provisions of the Atomic Energy Act of 
1954 or section 7307 of title 10, United States Code. 
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459 
SEC. 4405. PERFORMANCE GOALS FOR PROCESSING OF AP-
PLICATIONS 
FOR 
LICENSES 
TO 
EXPORT 
ITEMS ON UNITED STATES MUNITIONS LIST. 
(a) IN GENERAL.—The Secretary shall establish and 
maintain the following goals: 
(1) The processing time for review of each ap-
plication for a license to export items on the United 
States Munitions List (other than a Manufacturing 
License Agreement) shall be not more than 60 days 
from the date of receipt of the application. 
(2) The processing time for review of each ap-
plication for a commodity jurisdiction determination 
shall be not more than 60 days from the date of re-
ceipt of the application. 
(3) The total number of applications described 
in paragraph (1) that are unprocessed shall be not 
more than 7 percent of the total number of such ap-
plications submitted in the preceding calendar year. 
(b) ADDITIONAL REVIEW.— 
(1) IN GENERAL.—If an application described 
in paragraph (1) or (2) of subsection (a) is not proc-
essed within the time period described in the respec-
tive paragraph of such subsection, then the Sec-
retary shall ensure that the appropriate managing 
official shall review the status of the application to 
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460 
determine if further action is required to process the 
application. 
(2) ADDITIONAL REQUIREMENTS.—If an appli-
cation described in paragraph (1) or (2) of sub-
section (a) is not processed within 90 days from the 
date of receipt of the application, then the appro-
priate managing official shall— 
(A) review the status of the application to 
determine if further action is required to proc-
ess the application; and 
(B) submit to the appropriate congres-
sional committees a notification of the review 
conducted under subparagraph (A), including a 
description of the application, the reason for 
delay in processing the application, and a pro-
posal for further action to process the applica-
tion. 
(3) ANNUAL REVIEW.—For each calendar year, 
the appropriate managing official shall review not 
less than 2 percent of the total number of applica-
tions described in paragraphs (1) and (2) of sub-
section (a) to ensure that the processing of such ap-
plications, including decisions to approve, deny, or 
return without action, is consistent with both the 
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461 
foreign policy and regulatory requirements of the 
United States. 
(c) STATEMENTS OF POLICY.— 
(1) UNITED STATES ALLIES.—Congress states 
that— 
(A) to ensure that, to the maximum extent 
practicable, the processing time for review of 
applications to export items to United States al-
lies in direct support of combat operations or 
peacekeeping or humanitarian operations with 
the United States Armed Forces is not more 
than 7 days from the date of receipt of the ap-
plication; and 
(B) the Secretary shall ensure that, to the 
maximum extent practicable, the processing 
time for review of applications described in sub-
section (a)(1) to export items that are not sub-
ject to the requirements of chapter 6 to a stra-
tegic United States ally, and, as appropriate, 
other major United States allies for any pur-
pose other than the purpose described in para-
graph (1) is not more than 30 days from the 
date of receipt of the application. 
(2) PRIORITY FOR APPLICATIONS FOR EXPORT 
OF U.S.-ORIGIN EQUIPMENT.—In meeting the goals 
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463 
the International Traffic in Arms Regulations), 
other than Manufacturing License Agreements; 
(4) the average processing times for applica-
tions for Manufacturing License Agreements; 
(5) any management decisions of the Direc-
torate of Defense Trade Controls of the Department 
of State that have been made in response to data 
contained in paragraphs (1) through (3); and 
(6) any advances in technology that will allow 
the time-frames described in subsection (a)(1) to be 
substantially reduced. 
(e) CONGRESSIONAL BRIEFINGS.—If, at the end of 
any month beginning after the date of the enactment of 
this Act, the total number of applications described in sub-
section (a)(1) that are unprocessed is more than 7 percent 
of the total number of such applications submitted in the 
preceding calendar year, then the Secretary shall ensure 
that the Assistant Secretary for Political-Military Affairs 
shall brief the appropriate congressional committees on 
such matters and the corrective measures that will be 
taken to comply with the requirements of subsection (a). 
(f) TRANSPARENCY OF COMMODITY JURISDICTION 
DETERMINATIONS.— 
(1) IN
GENERAL.—To the maximum extent 
practicable, commodity jurisdiction determinations 
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464 
made as the appropriate controls to be applied to 
commodities shall be made public. 
(2) PUBLICATION ON DEPARTMENT OF STATE’S 
INTERNET WEBSITE.—The Secretary shall— 
(A) publish a commodity jurisdiction deter-
mination referred to in paragraph (1) on the 
Internet website of the Department of State not 
later than 30 days after the date of the deter-
mination, which includes— 
(i) the name of the manufacturer of 
the item; 
(ii) a brief general description of the 
item; 
(iii) the model or part number of the 
item; and 
(iv) the designation under which the 
item has been designated, except that— 
(I) the name of the person or 
business organization that sought the 
commodity jurisdiction determination 
shall not be published if the person or 
business organization is not the man-
ufacturer of the item; and 
(II) the names of the customers, 
the price of the item, and any propri-
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465 
etary information relating to the item 
indicated by the person or business 
organization that sought the com-
modity 
jurisdiction 
determination 
shall not be published; and 
(B) maintain on the Internet website of 
the Department of State an archive, that is ac-
cessible to the general public and other depart-
ments and agencies of the United States, of the 
information published under subparagraph (A). 
(g) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit the President from un-
dertaking a thorough review of the national security and 
foreign policy implications of a proposed export of items 
on the United States Munitions List. 
SEC. 4406. AVAILABILITY OF INFORMATION ON THE STATUS 
OF LICENSE APPLICATIONS. 
(a) IN GENERAL.—The Secretary shall make avail-
able to persons who have pending license applications 
under this chapter and the appropriate congressional com-
mittees the ability to access electronically current informa-
tion on the status of each license application required to 
be submitted under this chapter. 
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466 
(b) MATTERS TO BE INCLUDED.—The information 
referred to in subsection (a) shall be limited to the fol-
lowing: 
(1) The case number of the license application. 
(2) The date on which the license application is 
received by the Department of State and becomes an 
‘‘open application’’. 
(3) The date on which the Directorate of De-
fense Trade Controls makes a determination with re-
spect to the license application or transmits it for 
interagency review, if required. 
(4) The date on which the interagency review 
process for the license application is completed, if 
such a review process is required. 
(5) The date on which the Department of State 
begins consultations with the appropriate congres-
sional committees with respect to the license applica-
tion. 
(6) The date on which the license application is 
sent to the appropriate congressional committees. 
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467 
SEC. 4407. REQUIREMENT TO ENSURE ADEQUATE STAFF 
AND RESOURCES FOR THE DIRECTORATE OF 
DEFENSE TRADE CONTROLS OF THE DEPART-
MENT OF STATE. 
(a) REQUIREMENT.—The Secretary shall ensure that 
there are the necessary staff and resources to carry out 
this subtitle. 
(b) MINIMUM NUMBER OF LICENSING OFFICERS.— 
The Secretary should ensure that there is at least 1 licens-
ing officer for every 1,250 applications for licenses and 
other authorizations to export items on the United States 
Munitions List or successor list. 
(c) MINIMUM NUMBER OF STAFF FOR COMMODITY 
JURISDICTION DETERMINATIONS.—The Secretary shall 
ensure that the Directorate of Defense Trade Controls 
has, to the extent practicable, not less than three individ-
uals assigned to review applications for commodity juris-
diction determinations. 
SEC. 4408. OVERSEAS MANAGEMENT OF ASSISTANCE AND 
SALES PROGRAMS. 
(a) IN GENERAL.—In order to carry out the Presi-
dent’s responsibilities for the management of international 
security assistance programs conducted under this title, 
the President may assign members of the United States 
Armed Forces, personnel of the Department of Defense, 
the Department of State, or any other Federal agency, 
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468 
to a foreign country to perform one or more of the fol-
lowing functions: 
(1) Equipment and services case management. 
(2) Training management. 
(3) Program monitoring. 
(4) Evaluation and planning of the host govern-
ment’s military capabilities and requirements. 
(5) Administrative support. 
(6) Promoting rationalization, standardization, 
interoperability, and other defense cooperation meas-
ures. 
(7) Liaison functions exclusive of advisory and 
training assistance. 
(b) ADVISORY AND TRAINING ASSISTANCE.—Advi-
sory and training assistance conducted by military per-
sonnel assigned under this section shall be kept to an ab-
solute minimum. It is the sense of Congress that advisory 
and training assistance conducted in countries to which 
military personnel are assigned under this section should 
be provided primarily by other personnel who are not as-
signed under this section and who are detailed for limited 
periods to perform specific tasks. 
(c) LIMITATION ON NUMBER OF UNITED STATES 
ARMED FORCES MEMBERS.— 
(1) LIMITATION.— 
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469 
(A) IN GENERAL.—Except as provided in 
subparagraph (C), the number of members of 
the United States Armed Forces assigned to a 
foreign country under this section in a fiscal 
year may not exceed 12 unless specifically au-
thorized by Congress. 
(B) WAIVER.—The President may waive 
the limitation in subparagraph (A) with respect 
to the number of members of the United States 
Armed Forces assigned to a foreign country if 
the President determines and reports to the ap-
propriate congressional committees 30 days 
prior to the introduction of the additional mem-
bers of the United States Armed Forces in the 
foreign country, that United States national in-
terests require that more than 12 members of 
the United States Armed Forces be assigned 
under this section to carry out international se-
curity assistance programs in the foreign coun-
try. 
(C) EXEMPTED COUNTRIES.—The limita-
tion in subparagraph (A) shall not apply with 
respect to Pakistan, Tunisia, El Salvador, Hon-
duras, Israel, Colombia, Indonesia, the Republic 
of Korea, the Philippines, Thailand, Egypt, Jor-
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470 
dan, Morocco, Saudi Arabia, Greece, Portugal, 
Spain, and Turkey. 
(2) 
CONGRESSIONAL
BUDGET
JUSTIFICA-
TION.—The total number of members of the United 
States Armed Forces assigned to a foreign country 
under this section in a fiscal year may not exceed 
the number justified to Congress for that country in 
the congressional budget justification documents for 
that fiscal year, unless the appropriate congressional 
committees are notified 30 days in advance of the 
introduction of the additional members of the United 
States Armed Forces. 
(d) COSTS.—The entire costs (excluding salaries of 
members of the United States Armed Forces (other than 
the Coast Guard)) of overseas management of inter-
national security assistance programs under this section 
shall be charged to or reimbursed from funds made avail-
able to carry out this chapter, other than any such costs 
which are either paid directly for such defense services 
under section 4311 or reimbursed from charges for serv-
ices collected from foreign governments pursuant to sec-
tion 4311 and section 4402. 
(e) SUPERVISION OF CHIEF OF DIPLOMATIC MIS-
SION.—Members of the United States Armed Forces as-
signed to a foreign country under this section shall serve 
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under the direction and supervision of the Chief of the 
United States Diplomatic Mission to that country. 
(f) GUIDANCE REGARDING PURCHASES.—The Presi-
dent shall continue to instruct United States diplomatic 
and military personnel in United States missions that such 
personnel should not encourage, promote, or influence the 
purchase by any foreign country of United States-made 
military equipment, unless such personnel are specifically 
instructed to do so by an appropriate official of the execu-
tive branch. 
SEC. 4409. DESIGNATION OF MAJOR UNITED STATES AL-
LIES. 
(a) NOTICE TO CONGRESS.—The President shall no-
tify Congress in writing at least 30 days before— 
(1) designating a country as a major United 
States ally for purposes of this Act; or 
(2) terminating such a designation. 
(b) INITIAL
DESIGNATIONS.—Egypt, Argentina, 
Pakistan, Bahrain, the Philippines, Jordan, Thailand, Ku-
wait, and Morocco shall be deemed to have been so des-
ignated by the President as of the date of the enactment 
of this Act, and the President is not required to notify 
Congress of such designation of those countries. 
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472 
SEC. 4410. 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 M833 or M900 antitank shells or 
any comparable antitank shells containing a depleted ura-
nium penetrating component to any country other than 
a country that is a strategic United States ally. 
(b) EXCEPTION.—The prohibition 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. 4411. DEFINITIONS. 
In this title: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Foreign Affairs and 
the Committee on Appropriations of the House 
of Representatives; and 
(B) the Committee on Foreign Relations 
and the Committee on Appropriations of the 
Senate. 
(2) CASH FLOW FINANCING.—The term ‘‘cash 
flow financing’’ means the dollar amount of the dif-
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473 
ference between the total estimated price of a Letter 
of Offer and Acceptance or other purchase agree-
ment that has been approved for financing under 
this title and the amount of the financing that has 
been approved therefor. 
(3) CATEGORY I SPACE LAUNCH VEHICLE SYS-
TEM.—The term ‘‘Category I space launch vehicle 
system’’ means a category I system as defined in the 
MTCR Annex for the launching of payloads into 
outer space, as well as the specially designed produc-
tion facilities for these systems. 
(4) DEFENSE ARTICLE.— 
(A) IN GENERAL.—The term ‘‘defense arti-
cle’’— 
(i) includes— 
(I) any weapon, weapons system, 
munition, aircraft, vessel, boat, or 
other implement of war and related 
technical data; 
(II) any property, installation, 
commodity, material, equipment, sup-
ply, or goods used for the purposes of 
making military sales; 
(III) any machinery, facility, tool, 
material, supply, or other item nec-
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474 
essary for the manufacture, produc-
tion, processing, repair, servicing, 
storage, construction, transportation, 
operation, or use of any article listed 
in this paragraph; and 
(IV) any significant component 
or part of any article listed in this 
paragraph that has been specifically 
designed or significantly modified for 
a military application; but 
(ii) does not include— 
(I) merchant vessels; or 
(II) source material (except ura-
nium depleted in the isotope 235 
which is incorporated in defense arti-
cles solely to take advantage of high 
density or pyrophoric characteristics 
unrelated to radioactivity), byproduct 
material, special nuclear material, 
production facilities, utilization facili-
ties, or atomic weapons or articles in-
volving Restricted Data, as defined by 
the Atomic Energy Act of 1954. 
(B) ADDITIONAL
TERMS.—In subpara-
graph (A)(i)(IV)— 
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