(5) Given the return of ‘‘great power competi-
tion’’ and an aggressive Russia, there is a pressing 
need to assist NATO allies to modernize their forces 
and replace their obsolete Soviet military equipment. 
(6) The United States does provide some mili-
tary equipment to NATO allies through the foreign 
military financing program and other grant assist-
ance, but that assistance is insufficient to meet al-
lies’ needs. 
(7) To supplement existing grant assistance, 
providing foreign military financing loans to allies— 
at rates competitive with those already available on 
commercial markets—to purchase NATO interoper-
able military equipment supports allies’ moderniza-
tion requirements. 
(8) As described in Article 2 of the North At-
lantic Treaty, in addition to providing security to al-
lies, NATO was established to promote democratic 
institutions and values ‘‘by strengthening their free 
institutions, by bringing about a better under-
standing of the principles upon which these institu-
tions are founded, and by promoting conditions of 
stability and well-being’’. 
SEC. 3. STATEMENT OF POLICY. 
It is the policy of the United States to— 
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(1) deter aggression against North Atlantic 
Treaty Organization (NATO) allies by Russia or any 
other adversary; 
(2) assist NATO allies in acquiring and deploy-
ing modern, NATO interoperable military equipment 
and reducing their dependence on Russian or former 
Soviet-era defense articles; 
(3) ensure that NATO allies meet alliance de-
fense commitments, including through adequate in-
vestments in national defense; and 
(4) work to maintain and strengthen the demo-
cratic institutions and practices of all NATO allies, 
in accordance with the goals of Article 2 of the 
North Atlantic Treaty. 
SEC. 4. FOREIGN MILITARY LOAN AUTHORITY. 
(a) IN GENERAL.—Subject to the notification re-
quirements under subsection (b), the President, acting 
through the Secretary of State, is authorized— 
(1) to make direct loans under section 23 of the 
Arms Export Control Act (22 U.S.C. 2763) to mem-
ber countries of the North Atlantic Treaty Organiza-
tion (NATO) that joined after March 1, 1999, not-
withstanding the minimum interest rate required by 
subsection (c)(1) of such section; and 
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(2) to charge fees for such loans under para-
graph (1), which shall be collected from borrowers in 
accordance with section 502(7) of the Congressional 
Budget Act of 1974, and which may be used to 
cover the costs of such loans as defined in section 
502 of the Congressional Budget Act of 1974. 
(b) NOTIFICATION.—A loan may not be made under 
the authority provided by subsection (a) unless the Sec-
retary of State submits to the appropriate congressional 
committees a certification, not fewer than fifteen days be-
fore entering into an agreement to make such loan, that— 
(1) the recipient country is making demon-
strable progress toward meeting its spending com-
mitments in accordance with the 2014 NATO Wales 
Summit Declaration; 
(2) the government of such recipient country is 
respecting that country’s constitution and upholds 
democratic values such as freedom of religion, free-
dom of speech, freedom of the press, the rule of law, 
and the rights of minorities; and 
(3) the recipient country has demonstrated fis-
cal stability, a commitment to a free market econ-
omy, and the financial capacity to meet the terms of 
the loan proposed to be provided by the United 
States. 
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(c) REPAYMENT.—A loan made under the authority 
provided by subsection (a) shall be repaid in not more than 
12 years, but may include a grace period of up to one 
year on the repayment of the principal. 
(d) APPROPRIATE
CONGRESSIONAL
COMMITTEES 
DEFINED.—In this Act, the term ‘‘appropriate congres-
sional committees’’ means— 
(1) the Committee on Foreign Affairs and the 
Committee on Appropriations of the House of Rep-
resentatives; and 
(2) the Committee on Foreign Relations and 
the Committee on Appropriations of the Senate. 
Æ 
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