H. R. 3121—15
‘‘(1) designating a country as a major non-NATO ally for
purposes of this Act and the Arms Export Control Act (22
U.S.C. 2751 et seq.); or
‘‘(2) terminating such a designation.
‘‘(b) INITIAL DESIGNATIONS.—Australia, Egypt, Israel, Japan,
the Republic of Korea, and New Zealand shall be deemed to have
been so designated by the President as of the effective date of
this section, and the President is not required to notify the Congress
of such designation of those countries.’’.
(2) DEFINITION.—Section 644 of such Act (22 U.S.C. 2403)
is amended by adding at the end the following:
‘‘(q) ‘Major non-NATO ally’ means a country which is designated
in accordance with section 517 as a major non-NATO ally for
purposes of this Act and the Arms Export Control Act (22 U.S.C.
2751 et seq.).’’.
(3) EXISTING DEFINITIONS.—(A) The last sentence of section
21(g) of the Arms Export Control Act (22 U.S.C. 2761(g)) is
repealed.
(B) Section 65(d) of such Act (22 U.S.C. 2796d(d)) is
amended—
(i) by striking ‘‘or major non-NATO’’; and
(ii) by striking out ‘‘or a’’ and all that follows through
‘‘Code’’.
(b) COOPERATIVE TRAINING AGREEMENTS.—Section 21(g) of the
Arms Export Control Act (22 U.S.C. 2761(g)) is amended in the
first sentence by striking ‘‘similar agreements’’ and all that follows
through ‘‘other countries’’ and inserting ‘‘similar agreements with
countries’’.
SEC. 148. ANNUAL MILITARY ASSISTANCE REPORT.
Section 655 of the Foreign Assistance Act of 1961 (22 U.S.C.
2415) is amended to read as follows:
‘‘SEC. 655. ANNUAL MILITARY ASSISTANCE REPORT.
‘‘(a) REPORT REQUIRED.—Not later than February 1 of each
year, the President shall transmit to the Congress an annual report
for the fiscal year ending the previous September 30.
‘‘(b) INFORMATION RELATING TO MILITARY ASSISTANCE AND MILI-
TARY EXPORTS.—Each such report shall show the aggregate dollar
value and quantity of defense articles (including excess defense
articles), defense services, and international military education and
training authorized by the United States, excluding that which
is pursuant to activies reportable under title V of the National
Security Act of 1947, to each foreign country and international
organization. The report shall specify, by category, whether such
defense articles—
‘‘(1) were furnished by grant under chapter 2 or chapter
5 of part II of this Act or under any other authority of law
or by sale under chapter 2 of the Arms Export Control Act;
or
‘‘(2) were licensed for export under section 38 of the Arms
Export Control Act.
‘‘(c) INFORMATION RELATING TO MILITARY IMPORTS.—Each such
report shall also include the total amount of military items manufac-
tured outside the United States that were imported into the United
States during the fiscal year covered by the report. For each country
of origin the report shall show the type of item being imported
and the total amount of the items.’’.
H. R. 3121—16
SEC. 149. DEPLETED URANIUM AMMUNITION.
Chapter 1 of part III of the Foreign Assistance Act of 1961
(22 U.S.C. 2370 et seq.), is amended by adding at the end the
following new section:
‘‘SEC. 620G. DEPLETED URANIUM AMMUNITION.
‘‘(a) PROHIBITION.—Except as provided in subsection (b), none
of the funds made available to carry out this Act or any other
Act may be made available to facilitate in any way the sale of
M–833 antitank shells or any comparable antitank shells containing
a depleted uranium penetrating component to any country other
than—
‘‘(1) a country that is a member of the North Atlantic
Treaty Organization;
‘‘(2) a country that has been designated as a major non-
NATO ally (as defined in section 644(q)); or
‘‘(3) Taiwan.
‘‘(b) EXCEPTION.—The prohibition contained in subsection (a)
shall not apply with respect to the use of funds to facilitate the
sale of antitank shells to a country if the President determines
that to do so is in the national security interest of the United
States.’’.
SEC. 150. END-USE MONITORING OF DEFENSE ARTICLES AND DEFENSE
SERVICES.
(a) IN GENERAL.—The Arms Export Control Act (22 U.S.C.
2751 et seq.) is amended by inserting after chapter 3 the following
new chapter:
‘‘CHAPTER 3A—END-USE MONITORING OF DEFENSE
ARTICLES AND DEFENSE SERVICES
‘‘SEC. 40A. END-USE MONITORING OF DEFENSE ARTICLES AND
DEFENSE SERVICES.
‘‘(a) ESTABLISHMENT OF MONITORING PROGRAM.—
‘‘(1) IN GENERAL.—In order to improve accountability with
respect to defense articles and defense services sold, leased,
or exported under this Act or the Foreign Assistance Act of
1961 (22 U.S.C. 2151 et seq.), the President shall establish
a program which provides for the end-use monitoring of such
articles and services.
‘‘(2) REQUIREMENTS
OF
PROGRAM.—To the extent prac-
ticable, such program—
‘‘(A) shall provide for the end-use monitoring of defense
articles and defense services in accordance with the stand-
ards that apply for identifying high-risk exports for regular
end-use verification developed under section 38(g)(7) of this
Act (commonly referred to as the ‘Blue Lantern’ program);
and
‘‘(B) shall be designed to provide reasonable assurance
that—
‘‘(i) the recipient is complying with the require-
ments imposed by the United States Government with
respect to use, transfers, and security of defense arti-
cles and defense services; and
‘‘(ii) such articles and services are being used for
the purposes for which they are provided.
H. R. 3121—17
‘‘(b) CONDUCT OF PROGRAM.—In carrying out the program estab-
lished under subsection (a), the President shall ensure that the
program—
‘‘(1) provides for the end-use verification of defense articles
and defense services that incorporate sensitive technology,
defense articles and defense services that are particularly
vulnerable to diversion or other misuse, or defense articles
or defense services whose diversion or other misuse could have
significant consequences; and
‘‘(2) prevents the diversion (through reverse engineering
or other means) of technology incorporated in defense articles.
‘‘(c) REPORT
TO CONGRESS.—Not later than 6 months after
the date of the enactment of this section, and annually thereafter
as a part of the annual congressional presentation documents
submitted under section 634 of the Foreign Assistance Act of 1961,
the President shall transmit to the Congress a report describing
the actions taken to implement this section, including a detailed
accounting of the costs and number of personnel associated with
the monitoring program.
‘‘(d) THIRD COUNTRY TRANSFERS.—For purposes of this section,
defense articles and defense services sold, leased, or exported under
this Act or the Foreign Assistance Act of 1961 (22 U.S.C. 2151
et seq.) includes defense articles and defense services that are
transferred to a third country or other third party.’’.
(b) EFFECTIVE DATE.—Section 40A of the Arms Export Control
Act, as added by subsection (a), applies with respect to defense
articles and defense services provided before or after the date of
the enactment of this Act.
SEC. 151. BROKERING ACTIVITIES RELATING TO COMMERCIAL SALES
OF DEFENSE ARTICLES AND SERVICES.
(a) IN GENERAL.—Section 38(b)(1)(A) of the Arms Export Con-
trol Act (22 U.S.C. 2778(b)(1)(A)) is amended—
(1) in the first sentence, by striking ‘‘As prescribed in
regulations’’ and inserting ‘‘(i) As prescribed in regulations’’;
and
(2) by adding at the end the following new clause:
‘‘(ii)(I) As prescribed in regulations issued under this section,
every person (other than an officer or employee of the United
States Government acting in official capacity) who engages in the
business of brokering activities with respect to the manufacture,
export, import, or transfer of any defense article or defense service
designated by the President under subsection (a)(1), or in the busi-
ness of brokering activities with respect to the manufacture, export,
import, or transfer of any foreign defense article or defense service
(as defined in subclause (IV)), shall register with the United States
Government agency charged with the administration of this section,
and shall pay a registration fee which shall be prescribed by such
regulations.
‘‘(II) Such brokering activities shall include the financing,
transportation, freight forwarding, or taking of any other action
that facilitates the manufacture, export, or import of a defense
article or defense service.
‘‘(III) No person may engage in the business of brokering activi-
ties described in subclause (I) without a license, issued in accordance
with this Act, except that no license shall be required for such
H. R. 3121—18
activities undertaken by or for an agency of the United States
Government—
‘‘(aa) for use by an agency of the United States Government;
or
‘‘(bb) for carrying out any foreign assistance or sales pro-
gram authorized by law and subject to the control of the Presi-
dent by other means.
‘‘(IV) For purposes of this clause, the term ‘foreign defense
article or defense service’ includes any non-United States defense
article or defense service of a nature described on the United
States Munitions List regardless of whether such article or service
is of United States origin or whether such article or service contains
United States origin components.’’.
(b) EFFECTIVE DATE.—Section 38(b)(1)(A)(ii) of the Arms Export
Control Act, as added by subsection (a), shall apply with respect
to brokering activities engaged in beginning on or after 120 days
after the enactment of this Act.
SEC. 152. RETURN AND EXCHANGES OF DEFENSE ARTICLES PRE-
VIOUSLY 
TRANSFERRED 
PURSUANT 
TO 
THE 
ARMS
EXPORT CONTROL ACT.
(a) REPAIR OF DEFENSE ARTICLES.—Section 21 of the Arms
Export Control Act (22 U.S.C. 2761) is amended by adding at
the end the following new subsection:
‘‘(l) REPAIR OF DEFENSE ARTICLES.—
‘‘(1) IN GENERAL.—The President may acquire a repairable
defense article from a foreign country or international organiza-
tion if such defense article—
‘‘(A) previously was transferred to such country or
organization under this Act;
‘‘(B) is not an end item; and
‘‘(C) will be exchanged for a defense article of the
same type that is in the stocks of the Department of
Defense.
‘‘(2) LIMITATION.—The President may exercise the authority
provided in paragraph (1) only to the extent that the Depart-
ment of Defense—
‘‘(A)(i) has a requirement for the defense article being
returned; and
‘‘(ii) has available sufficient funds authorized and
appropriated for such purpose; or
‘‘(B)(i) is accepting the return of the defense article
for subsequent transfer to another foreign government or
international organization pursuant to a letter of offer and
acceptance implemented in accordance with this Act; and
‘‘(ii) has available sufficient funds provided by or on
behalf of such other foreign government or international
organization pursuant to a letter of offer and acceptance
implemented in accordance with this Act.
‘‘(3) REQUIREMENT.—(A) The foreign government or inter-
national organization receiving a new or repaired defense article
in exchange for a repairable defense article pursuant to para-
graph (1) shall, upon the acceptance by the United States
Government of the repairable defense article being returned,
be charged the total cost associated with the repair and replace-
ment transaction.
H. R. 3121—19
‘‘(B) The total cost charged pursuant to subparagraph (A)
shall be the same as that charged the United States Armed
Forces for a similar repair and replacement transaction, plus
an administrative surcharge in accordance with subsection
(e)(1)(A) of this section.
‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVISIONS OF LAW.—
The authority of the President to accept the return of a repair-
able defense article as provided in subsection (a) shall not
be subject to chapter 137 of title 10, United States Code,
or any other provision of law relating to the conclusion of
contracts.’’.
(b) RETURN OF DEFENSE ARTICLES.—Section 21 of such Act
(22 U.S.C. 2761), as amended by this Act, is further amended
by adding at the end the following new subsection:
‘‘(m) RETURN OF DEFENSE ARTICLES.—
‘‘(1) IN GENERAL.—The President may accept the return
of a defense article from a foreign country or international
organization if such defense article—
‘‘(A) previously was transferred to such country or
organization under this Act;
‘‘(B) is not significant military equipment (as defined
in section 47(9) of this Act); and
‘‘(C) is in fully functioning condition without need of
repair or rehabilitation.
‘‘(2) LIMITATION.—The President may exercise the authority
provided in paragraph (1) only to the extent that the Depart-
ment of Defense—
‘‘(A)(i) has a requirement for the defense article being
returned; and
‘‘(ii) has available sufficient funds authorized and
appropriated for such purpose; or
‘‘(B)(i) is accepting the return of the defense article
for subsequent transfer to another foreign government or
international organization pursuant to a letter of offer and
acceptance implemented in accordance with this Act; and
‘‘(ii) has available sufficient funds provided by or on
behalf of such other foreign government or international
organization pursuant to a letter of offer and acceptance
implemented in accordance with this Act.
‘‘(3) CREDIT
FOR
TRANSACTION.—Upon acquisition and
acceptance by the United States Government of a defense article
under paragraph (1), the appropriate Foreign Military Sales
account of the provider shall be credited to reflect the trans-
action.
‘‘(4) RELATIONSHIP TO CERTAIN OTHER PROVISIONS OF LAW.—
The authority of the President to accept the return of a defense
article as provided in paragraph (1) shall not be subject to
chapter 137 of title 10, United States Code, or any other provi-
sion of law relating to the conclusion of contracts.’’.
(c) REGULATIONS.—Under the direction of the President, the
Secretary of Defense shall promulgate regulations to implement
subsections (l) and (m) of section 21 of the Arms Export Control
Act, as added by this section.
H. R. 3121—20
SEC. 153. NATIONAL SECURITY INTEREST DETERMINATION TO WAIVE
REIMBURSEMENT 
OF 
DEPRECIATION 
FOR 
LEASED
DEFENSE ARTICLES.
(a) IN GENERAL.—Section 61(a) of the Arms Export Control
Act (22 U.S.C. 2796(a)) is amended—
(1) in the second sentence, by striking ‘‘, or to any defense
article which has passed three-quarters of its normal service
life’’; and
(2) by inserting after the second sentence the following
new sentence: ‘‘The President may waive the requirement of
paragraph (4) for reimbursement of depreciation for any defense
article which has passed three-quarters of its normal service
life if the President determines that to do so is important
to the national security interest of the United States.’’.
(b) EFFECTIVE DATE.—The third sentence of section 61(a) of
the Arms Export Control Act, as added by subsection (a)(2), shall
apply only with respect to a defense article leased on or after
the date of the enactment of this Act.
SEC. 154. ELIGIBILITY OF PANAMA UNDER THE ARMS EXPORT CON-
TROL ACT.
The Government of the Republic of Panama shall be eligible
to purchase defense articles and defense services under the Arms
Export Control Act (22 U.S.C. 2751 et seq.), except as otherwise
specifically provided by law.
SEC. 155. PUBLICATION OF ARMS SALES CERTIFICATIONS.
Section 36 of the Arms Export Control Act (22 U.S.C. 2776)
is amended by adding at the end the following new subsection:
‘‘(e) The President shall cause to be published in the Federal
Register, upon transmittal to the Speaker of the House of Represent-
atives and to the chairman of the Committee on Foreign Relations
of the Senate, the full unclassified text of each numbered certifi-
cation submitted pursuant to subsection (b) and each notification
of a proposed commercial sale submitted under subsection (c).’’.
SEC. 156. RELEASE OF INFORMATION.
Section 38(e) of the Arms Export Control Act (22 U.S.C. 2778(e))
is amended by inserting in the first sentence before the period
at the end the following: ‘‘, except that the names of the countries
and the types and quantities of defense articles for which licenses
are issued under this section shall not be withheld from public
disclosure unless the President determines that the release of such
information would be contrary to the national interest’’.
SEC. 157. REPEAL OF TERMINATION OF PROVISIONS OF THE NUCLEAR
PROLIFERATION PREVENTION ACT OF 1994; PRESI-
DENTIAL DETERMINATIONS.
(a) REPEAL.—Part D of the Nuclear Proliferation Prevention
Act of 1994 (part D of title VIII of the Foreign Relations Authoriza-
tion Act, Fiscal Years 1994 and 1995; Public Law 103–236; 108
Stat. 525) is hereby repealed.
(b) JUDICIAL REVIEW.—Section 824 of the Nuclear Proliferation
Prevention Act of 1994 (22 U.S.C. 3201 note) is amended—
(1) in subsection (c), by striking ‘‘in writing after oppor-
tunity for a hearing on the record’’;
(2) by striking subsection (e); and
H. R. 3121—21
(3) by redesignating subsections (f) through (k) as sub-
sections (e) through (j), respectively.
TITLE II—TRANSFER OF NAVAL VES-
SELS TO CERTAIN FOREIGN COUN-
TRIES
SEC. 201. AUTHORITY TO TRANSFER NAVAL VESSELS.
(a) EGYPT.—The Secretary of the Navy is authorized to transfer
to the Government of Egypt the ‘‘OLIVER HAZARD PERRY
CLASS’’ frigate GALLERY. Such transfer shall be on a sales basis
under section 21 of the Arms Export Control Act (22 U.S.C. 2761;
relating to the foreign military sales program).
(b) MEXICO.—The Secretary of the Navy is authorized to trans-
fer to the Government of Mexico the ‘‘KNOX’’ class frigates STEIN
(FF 1065) and MARVIN SHIELDS (FF 1066). Such transfers shall
be on a sales basis under section 21 of the Arms Export Control
Act (22 U.S.C. 2761; relating to the foreign military sales program).
(c) NEW ZEALAND.—The Secretary of the Navy is authorized
to transfer to the Government of New Zealand the ‘‘STALWART’’
class ocean surveillance ship TENACIOUS. Such transfer shall
be on a sales basis under section 21 of the Arms Export Control
Act (22 U.S.C. 2761; relating to the foreign military sales program).
(d) PORTUGAL.—The Secretary of the Navy is authorized to
transfer to the Government of Portugal the ‘‘STALWART’’ class
ocean surveillance ship AUDACIOUS. Such transfer shall be on
a grant basis under section 516 of the Foreign Assistance Act
of 1961 (22 U.S.C. 2321j; relating to transfers of excess defense
articles).
(e) TAIWAN.—The Secretary of the Navy is authorized to trans-
fer to the Taipei Economic and Cultural Representative Office in
the United States (which is the Taiwan instrumentality designated
pursuant to section 10(a) of the Taiwan Relations Act) the following:
(1) The ‘‘KNOX’’ class frigates AYLWIN (FF 1081),
PHARRIS (FF 1094), and VALDEZ (FF 1096). Such transfers
shall be on a sales basis under section 21 of the Arms Export
Control Act (22 U.S.C. 2761; relating to the foreign military
sales program).
(2) The ‘‘NEWPORT’’ class tank landing ship NEWPORT
(LST 1179). Such transfer shall be on a lease basis under
section 61 of the Arms Export Control Act (22 U.S.C. 2796).
(f) THAILAND.—The Secretary of the Navy is authorized to
transfer to the Government of Thailand the ‘‘KNOX’’ class frigate
OUELLET (FF 1077). Such transfer shall be on a sales basis
under section 21 of the Arms Export Control Act (22 U.S.C. 2761;
relating to the foreign military sales program).
SEC. 202. COSTS OF TRANSFERS.
Any expense of the United States in connection with a transfer
authorized by this title shall be charged to the recipient.
SEC. 203. EXPIRATION OF AUTHORITY.
The authority granted by section 201 shall expire at the end
of the 2-year period beginning on the date of the enactment of
this Act.
H. R. 3121—22
SEC. 204. REPAIR AND REFURBISHMENT OF VESSELS IN UNITED
STATES SHIPYARDS.
The Secretary of the Navy shall require, to the maximum
extent possible, as a condition of a transfer of a vessel under
this title, that the country to which the vessel is transferred have
such repair or refurbishment of the vessel as is needed, before
the vessel joins the naval forces of that country, performed at
a shipyard located in the United States, including a United States
Navy shipyard.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.