H. R. 3121
One Hundred Fourth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, one thousand nine hundred and ninety-six
An Act
To amend the Foreign Assistance Act of 1961 and the Arms Export Control Act
to make improvements to certain defense and security assistance provisions under
those Acts, to authorize the transfer of naval vessels to certain foreign countries,
and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Table of contents.
TITLE I—DEFENSE AND SECURITY ASSISTANCE
CHAPTER 1—MILITARY AND RELATED ASSISTANCE
Sec. 101. Terms of loans under the Foreign Military Financing program.
Sec. 102. Additional requirements under the Foreign Military Financing program.
Sec. 103. Drawdown special authorities.
Sec. 104. Transfer of excess defense articles.
Sec. 105. Excess defense articles for certain European countries.
CHAPTER 2—INTERNATIONAL MILITARY EDUCATION AND TRAINING
Sec. 111. Assistance for Indonesia.
Sec. 112. Additional requirements.
CHAPTER 3—ANTITERRORISM ASSISTANCE
Sec. 121. Antiterrorism training assistance.
Sec. 122. Research and development expenses.
CHAPTER 4—INTERNATIONAL NARCOTICS CONTROL ASSISTANCE
Sec. 131. Additional requirements.
Sec. 132. Notification requirement.
Sec. 133. Waiver of restrictions for narcotics-related economic assistance.
CHAPTER 5—OTHER PROVISIONS
Sec. 141. Standardization of congressional review procedures for arms transfers.
Sec. 142. Standardization of third country transfers of defense articles.
Sec. 143. Increased standardization, rationalization, and interoperability of assist-
ance and sales programs.
Sec. 144. Definition of significant military equipment.
Sec. 145. Elimination of annual reporting requirement relating to the Special De-
fense 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 de-
preciation for leased defense articles.
H. R. 3121—2
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 Preven-
tion 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 FINANC-
ING 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 MILI-
TARY 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 serv-
ices 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 accord-
ance with the procedures applicable to reprogramming notifications
under that section.
‘‘(2) For purposes of this subsection, the term ‘cash flow financ-
ing’ 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
H. R. 3121—3
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 PRO-
GRAM.—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, cred-
its, guarantees, or any other form of assistance furnished by
the United States to each country and international organiza-
tion, including payments to the United Nations, during the
preceding fiscal year for the detection and clearance of land-
mines, including activities relating to the furnishing of edu-
cation, 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
H. R. 3121—4
‘‘(II) to ensure the safety of United States Govern-
ment 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 para-
graph—
‘‘(i) not more than $75,000,000 of which may be pro-
vided from the drawdown from the inventory and resources
of the Department of Defense;
‘‘(ii) not more than $75,000,000 of which may be pro-
vided pursuant to clause (i)(I) of such subparagraph; and
‘‘(iii) not more than $15,000,000 of which may be pro-
vided to Vietnam, Cambodia, and Laos pursuant to clause
(ii) of such subparagraph.’’; and
(3) in subsection (b)(1), by adding at the end the following:
‘‘In the case of drawdowns authorized by subclauses (I) and
(III) of subsection (a)(2)(A)(i), notifications shall be provided
to those committees at least 15 days in advance of the
drawdowns in accordance with the procedures applicable to
reprogramming notifications under section 634A.’’.
(c) NOTICE TO CONGRESS OF EXERCISE OF SPECIAL AUTHORI-
TIES.—Section 652 of such Act (22 U.S.C. 2411) is amended by
striking ‘‘prior to the date’’ and inserting ‘‘before’’.
SEC. 104. TRANSFER OF EXCESS DEFENSE ARTICLES.
(a) IN GENERAL.—Section 516 of the Foreign Assistance Act
of 1961 (22 U.S.C. 2321j) is amended to read as follows:
‘‘SEC. 516. AUTHORITY TO TRANSFER EXCESS DEFENSE ARTICLES.
‘‘(a) AUTHORIZATION.—The President is authorized to transfer
excess defense articles under this section to countries for which
receipt of such articles was justified pursuant to the annual congres-
sional 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 trans-
fer 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 connec-
tion 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 tech-
nology and industrial base and, particularly, will not reduce
H. R. 3121—5
the opportunities of entities in the national technology and
industrial base to sell new or used equipment to the countries
to which such articles are transferred; and
‘‘(F) the transfer of such articles is consistent with the
policy framework for the Eastern Mediterranean established
under section 620C of this Act.
‘‘(2) Accordingly, for the four-year period beginning on October
1, 1996, the President shall ensure that excess defense articles
offered to Greece and Turkey under this section will be made
available consistent with the manner in which the President made
available such excess defense articles during the four-year period
that began on October 1, 1992, pursuant to section 573(e) of the
Foreign Operations, Export Financing, and Related Programs
Appropriations Act, 1990.
‘‘(c) TERMS OF TRANSFERS.—
‘‘(1) NO COST TO RECIPIENT COUNTRY.—Excess defense arti-
cles 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 coun-
tries.
‘‘(d) WAIVER OF REQUIREMENT FOR REIMBURSEMENT OF DEPART-
MENT OF DEFENSE EXPENSES.—Section 632(d) shall not apply with
respect to transfers of excess defense articles (including transpor-
tation 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 Mili-
tary 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
H. R. 3121—6
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 speci-
fied 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, particu-
larly, the impact on opportunities of entities in the national
technology and industrial base to sell new or used equip-
ment 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 para-
graph (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 pro-
vided on a grant or sale basis.
‘‘(i) EXCESS COAST GUARD PROPERTY.—For purposes of this
section, the term ‘excess defense articles’ shall be deemed to include
excess property of the Coast Guard, and the term ‘Department
of Defense’ shall be deemed, with respect to such excess property,
to include the Coast Guard.’’.
(b) CONFORMING AMENDMENTS.—
(1) ARMS EXPORT CONTROL ACT.—Section 21(k) of the Arms
Export Control Act (22 U.S.C. 2761(k)) is amended by striking
‘‘the President shall’’ and all that follows and inserting the
following: ‘‘the President shall determine that the sale of such
articles will not have an adverse impact on the national tech-
nology 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).