333 
no longer needed for the purposes for which pro-
vided. 
(b) CERTIFICATION.— 
(1) IN GENERAL.—The Secretary may not give 
consent under section 4361 to the retransfer of any 
defense article or defense service that would be, if it 
were a sale, subject to the requirements of section 
4382 (regarding congressional certification of sen-
sitive foreign military sales and agreements), unless 
the Secretary submits to the appropriate congres-
sional committees a written certification with respect 
to such proposed retransfer containing— 
(A) the name of the country or organiza-
tion proposing to make such retransfer; 
(B) a description of such article or service 
proposed to be retransferred, including its ac-
quisition cost; 
(C) the name of the proposed recipient of 
such article or service; 
(D) the reasons for such proposed re-
transfer; and 
(E) the date on which such retransfer is 
proposed to be made. 
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(2) FORM.—Any certification submitted to the 
appropriate congressional committees pursuant to 
paragraph (1)— 
(A) shall be submitted in unclassified form, 
except that information regarding the dollar 
value and number of defense articles or defense 
services proposed to be retransferred may be 
submitted in classified form if public disclosure 
thereof would be clearly detrimental to the secu-
rity of the United States; and 
(B) shall be subject to the requirements of 
sections 4384. 
(3) EXCEPTION.—Paragraph (1) shall not 
apply to an export that has been exempted from the 
licensing requirements of this title pursuant to an 
agreement pursuant to section 4341. 
(c) 
EXCEPTION
FOR
INCORPORATED
COMPO-
NENTS.—The consent of the President under subsection 
(a)(1) 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 incor-
porated into foreign defense articles; 
(2) the recipient is the government of a stra-
tegic United States ally; 
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(3) the recipient is not a country designated 
under section 9401; 
(4) the United States-origin components are 
not— 
(A) significant military equipment; 
(B) defense articles for which notification 
to Congress is required under section 4382; and 
(C) identified by regulation as Missile 
Technology Control Regime items; and 
(5) the foreign country or international organi-
zation provides notification of the transfer of the de-
fense articles to the United States Government not 
later than 30 days after the date of such transfer. 
SEC. 4213. PROHIBITION FOR MISUSE OF UNITED STATES 
ASSISTANCE. 
(a) PROHIBITION.—No foreign assistance may be 
provided under this subtitle, subtitle C, or any predecessor 
Act to any country or organization if the Secretary has 
credible information the country or organization (as the 
case may be) uses or has used assistance, including de-
fense articles or defense services, provided under this title 
or any predecessor Act in substantial violation (either in 
terms of quantities or in terms of the gravity of the con-
sequences regardless of the quantities involved) of any 
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agreement entered into pursuant to this title or any such 
Act— 
(1) by using such articles or services for a pur-
pose not authorized under section 4301 or, if such 
agreement provides that such articles or services 
may only be used for purposes more limited than 
those authorized under section 4301, for a purpose 
not authorized under such agreement; or 
(2) by transferring such articles or services to, 
or permitting any use of such articles or services by, 
anyone not an officer, employee, or agent of the 
country or organization without the prior consent of 
the United States; or 
(3) by failing to maintain the security of such 
articles or services, including attempts to obtain 
classified or proprietary information or technology 
from such articles or services. 
(b) CONGRESSIONAL NOTIFICATION.— 
(1) IN GENERAL.—The Secretary shall notify 
the appropriate congressional committees promptly 
upon the receipt of credible information that a coun-
try or organization may have committed a violation 
described in subsection (a), and what actions are 
being taken to implement the prohibition under that 
subsection. The President shall ensure that the ap-
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337 
propriate United States Government departments 
and agencies provide to the Secretary without delay 
any and all information relating to a violation de-
scribed in subsection (a). 
(2) TIMING.—The notification required under 
paragraph (1) with respect to a country or organiza-
tion shall occur before a certification required under 
chapter 6 of subtitle C relating to a proposed export 
of a defense article or defense service to the country 
or organization. 
(c) REINSTATEMENT.—The prohibition on assistance 
under subsection (a) shall cease to be effective for any 
country or organization if the Secretary determines and 
notifies the appropriate congressional committees that— 
(1) the violation for which the prohibition was 
imposed has ceased; 
(2) the country or organization (as the case 
may be) has given assurances satisfactory to the 
Secretary that the violation will not recur; and 
(3) the country or organization (as the case 
may be) has taken sufficient steps to prevent a re-
currence of any similar violation; or 
(4) the Secretary has determined that the viola-
tion did not in fact occur. 
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(d) WAIVER.—The Secretary may waive the prohibi-
tion on assistance under subsection (a) for any country 
or organization if the Secretary determines and notifies 
the appropriate congressional committees that such prohi-
bition on assistance would have a significant adverse im-
pact on the security of the United States. 
(e) REVIEW AND REPORT.— 
(1) REVIEW.—Not later than 180 days after 
the date of the enactment of this Act, and every 3 
years thereafter, the Inspector General of the De-
partment of State shall conduct a review of inves-
tigations by the Department of State of any and all 
possible occasions of misuse of defense articles and 
defense services by countries and organizations to 
determine whether the Department of State has 
fully complied with the requirements of this section, 
as well as with the Department of State’s internal 
procedures (and whether such procedures are ade-
quate), for reporting to Congress any information 
regarding the unlawful use or transfer of defense ar-
ticles and defense services by such countries and or-
ganizations. 
(2) REPORT.—The Inspector General of the 
Department of State shall submit to the appropriate 
congressional committees for each of fiscal years 
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2014 through 2017 a report that contains the find-
ings and results of the review conducted under para-
graph (1). The report shall be submitted in unclassi-
fied form to the maximum extent possible, but may 
include a classified annex. 
CHAPTER 2—DRAWDOWN AUTHORITY 
SEC. 4221. AUTHORIZATION OF EMERGENCY ASSISTANCE. 
(a) AUTHORIZATION.—If the President determines 
that— 
(1) an unforeseen emergency exists which re-
quires the immediate provision of assistance author-
ized under this subtitle to a country or organization, 
and 
(2) the emergency requirement cannot be met 
under the authority of any other provision of law ex-
cept this section, 
the President may direct, in order to meet the goals de-
scribed in section 4003, the drawdown of articles and serv-
ices, including training, from any Federal agency of an 
aggregate value of not to exceed $250,000,000 in any fis-
cal year. 
(b) CONGRESSIONAL NOTIFICATION.—The President 
may exercise the authority of subsection (a) with respect 
to an emergency described in subsection (a) only if the 
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President first notifies the appropriate congressional com-
mittees. 
SEC. 4222. AUTHORIZATION OF NON-EMERGENCY ASSIST-
ANCE. 
(a) IN GENERAL.—If the President determines that 
it is in the national interest of the United States to draw-
down articles and services from the inventory and re-
sources of any Federal agency, including military edu-
cation and training from the Department of Defense, the 
President may direct the drawdown of such articles, serv-
ices, and military education and training— 
(1) for purposes of providing foreign assistance, 
as administered by the Department of State, under 
this Act; 
(2) for purposes of providing assistance under 
the Migration and Refugee Assistance Act of 1962; 
or 
(3) to support cooperative efforts with Vietnam, 
Cambodia, or Laos to locate and repatriate members 
of the United States Armed Forces and civilians em-
ployed directly or indirectly by the United States 
Government who remain unaccounted for from the 
Vietnam War, including for purposes of— 
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341 
(A) ensuring the safety of United States 
Government personnel engaged in such coopera-
tive efforts; and 
(B) supporting Department of Defense- 
sponsored humanitarian projects associated 
with such efforts. 
(b) LIMITATION.—An aggregate value of not to ex-
ceed $250,000,000 in any fiscal year of such articles, serv-
ices, and military education and training may be provided 
pursuant to subsection (a). 
(c) NOTIFICATION.—The authority contained in this 
section shall be effective for any such drawdown only upon 
notification to the appropriate congressional committees 
at least 15 days prior to such drawdown in accordance 
with the procedures applicable to reprogramming notifica-
tions. 
SEC. 4223. COMMERCIAL TRANSPORTATION AND RELATED 
SERVICES. 
For purposes of this chapter, a drawdown of articles 
or services may include the supply of commercial transpor-
tation and related services that are acquired by contract 
for the purposes of the drawdown in question if the cost 
to acquire such commercial transportation and related 
services is less than the cost to the United States Govern-
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342 
ment of providing such services from existing assets of the 
applicable Federal agency. 
SEC. 4224. REPORT. 
(a) IN GENERAL.—The Secretary shall keep the ap-
propriate congressional committees fully and currently in-
formed of assistance provided to a country or organization 
under this chapter, including by submitting to the appro-
priate congressional committees a report describing such 
assistance delivered to each country or organization upon 
delivery of such articles or upon completion of such serv-
ices or education and training. 
(b) PUBLICATION ON WEBSITE.—The Secretary shall 
publish each report required under subsection (a) on the 
Internet website of the Department of State upon submis-
sion of the report to the appropriate congressional com-
mittees. 
CHAPTER 3—LOANS OF DEFENSE 
ARTICLES 
SEC. 4231. LOAN REQUIREMENTS. 
In addition to such other terms and conditions as the 
President may determine pursuant to section 4211, de-
fense articles and defense services may be loaned under 
such section only if— 
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(1) there is a bona fide reason, other than the 
shortage of funds, for providing such articles on a 
loan basis rather than on a grant basis; 
(2) there is a reasonable expectation that such 
articles will be returned to the Federal agency mak-
ing the loan at the end of the loan period unless the 
loan is then renewed; 
(3) the loan period is of fixed duration not ex-
ceeding five years, during which such article may be 
recalled for any reason by the United States; 
(4) the agency making the loan is reimbursed 
for the loan according to the provisions of section 
4232; and 
(5) the loan agreement provides that— 
(A) if the defense article is damaged while 
on loan, the country or organization to which it 
was loaned will reimburse the United States for 
the cost of restoring or replacing the defense 
article; and 
(B) if the defense article is lost or de-
stroyed while on loan, the country or organiza-
tion to which it was loaned will pay to the 
United States an amount equal to the replace-
ment cost (less any depreciation in the value) of 
the defense article. 
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344 
SEC. 4232. COST OF LOANS. 
(a) IN GENERAL.—In the case of any loan of a de-
fense article or defense service made under section 4211, 
there shall be a charge to the appropriation for security 
assistance for any fiscal year while such article or service 
is on loan in an amount based on— 
(1) the out-of-pocket expenses authorized to be 
incurred in connection with such loan during such 
fiscal year; and 
(2) the depreciation which occurs during such 
year while such article is on loan. 
(b) INAPPLICABILITY.—The provisions of this chap-
ter shall not apply to any defense article or defense serv-
ice, or portion thereof, acquired with funds made available 
for assistance under this title. 
CHAPTER 4—STOCKPILING OF DEFENSE 
ARTICLES 
SEC. 4241. GENERAL AUTHORITY. 
(a) IN GENERAL.—The President is authorized to set 
aside, reserve, or otherwise earmark defense articles in the 
inventory of the Department of Defense, consistent with 
the provisions of this Act, for future use by any foreign 
country that is a strategic United States ally. 
(b) NOTIFICATION.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), not later than 15 days before making a 
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SEC. 4242. VALUE OF DEFENSE ARTICLES. 
(a) IN GENERAL.—The value of defense articles to 
be set aside, reserved, or earmarked or intended for use 
under this chapter in stockpiles located in foreign coun-
tries may not exceed $300,000,000 for a fiscal year, of 
which up to $200,000,000 may be made available for 
stockpiles in the State of Israel. 
(b) VALUE DEFINED.—For purposes of this section, 
the term ‘‘value’’ means the acquisition cost plus crating, 
packing, handling, and transportation costs incurred in 
carrying out section 4241. 
CHAPTER 5—FOREIGN MILITARY 
FINANCING 
SEC. 4251. GENERAL AUTHORITY. 
The President is authorized to finance the procure-
ment of defense articles, defense services, and design and 
construction services by foreign countries and inter-
national organizations, on such terms and conditions as 
the President may determine consistent with the require-
ments of this chapter. 
SEC. 4252. RULE OF CONSTRUCTION. 
References in any law to credits extended under this 
chapter or section 21 of the Arms Export Control Act 
shall be deemed to include reference to participations in 
credits. 
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SEC. 4253. AUDITS. 
For each fiscal year, the Secretary of Defense, as re-
quested 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 
countries or organizations under which defense articles, 
defense services, or design and construction services are 
to be procured by such firms for such countries or organi-
zations from financing under this chapter. 
SEC. 4254. CASH FLOW FINANCING. 
The Secretary may approve cash flow financing for 
Israel and Egypt for the procurement of defense articles, 
defense services, or design and construction services in ex-
cess of $100,000,000. 
CHAPTER 6—INTERNATIONAL MILITARY 
EDUCATION AND TRAINING 
SEC. 4261. PURPOSE. 
The purpose of this chapter is to provide military 
education and training activities under this chapter that 
are designed— 
(1) to encourage effective and mutually bene-
ficial relations and increased understanding between 
the United States and foreign countries in further-
ance of the goals of international peace and security; 
(2) to improve the ability of foreign countries to 
utilize their resources, including defense articles and 
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defense services obtained by such countries from the 
United States, with maximum effectiveness, thereby 
contributing to greater self-reliance by such coun-
tries; and 
(3) to increase the awareness of nationals of 
foreign countries participating in such activities of 
basic issues involving respect and observance of 
internationally recognized human rights, the impor-
tance of civilian oversight and authority over secu-
rity and national defense forces, and of account-
ability of defense personnel to civilian governments 
and courts. 
SEC. 4262. MILITARY EDUCATION AND TRAINING FOR FOR-
EIGN MILITARY AND DEFENSE PERSONNEL. 
(a) AUTHORITY.—The Secretary is authorized to pro-
vide, on such terms and conditions as the Secretary may 
determine, military education and training to foreign mili-
tary and defense personnel. 
(b) REQUIREMENTS.—Professional military edu-
cation and training provided under subsection (a) shall be 
designed to— 
(1) contribute to greater cooperation between 
the United States and the government of such for-
eign military and defense personnel on United States 
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counternarcotics, counterterrorism, or counterpro-
liferation efforts; and 
(2) foster greater respect for, and under-
standing of— 
(A) democracy and the rule of law, includ-
ing the principle of civilian control of the mili-
tary; and 
(B) 
internationally 
recognized 
human 
rights. 
(c) SELECTION OF PARTICIPANTS.—The selection of 
foreign military and defense personnel for training under 
this chapter shall be made in consultation with the Sec-
retary of Defense. 
(d) FOREIGN MILITARY AND DEFENSE PERSONNEL 
DEFINED.—In this section, the term ‘‘foreign military and 
defense personnel’’ means members of the armed forces 
and civilian personnel of the defense ministry of a foreign 
country. 
SEC. 4263. MILITARY EDUCATION AND TRAINING FOR FOR-
EIGN CIVILIAN PERSONNEL. 
(a) AUTHORITY.—The Secretary is authorized to pro-
vide, on such terms and conditions as the Secretary may 
determine, military education and training to foreign civil-
ian personnel, if such military education and training 
would contribute to— 
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(1) civilian, democratic control of the military; 
(2) responsible defense resource management; 
(3) cooperation between military and law en-
forcement personnel with respect to counter-
narcotics, counterterrorism, or counterproliferation 
activities; or 
(4) improved military justice systems and pro-
cedures in accordance with internationally recog-
nized human rights. 
(b) FOREIGN CIVILIAN PERSONNEL DEFINED.—In 
this section, the term ‘‘foreign civilian personnel’’ includes 
legislators, representatives of civil society, and foreign gov-
ernmental personnel of ministries other than ministries of 
defense. 
SEC. 4264. LOCATIONS OF INSTRUCTION. 
Military education and training activities carried out 
under this chapter may be provided through— 
(1) attendance at military educational and 
training facilities in the United States (other than 
Service academies) and abroad; 
(2) attendance in special courses of instruction 
at schools and institutions of learning or research in 
the United States and abroad; and 
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