366 
SEC. 4285. AUTHORITY IN ADDITION TO OTHER AUTHORI-
TIES. 
The authority under this chapter is in addition to the 
authority under sections 4311 and 4312 and under any 
other provision of law. 
Subtitle C—Arms Sales and 
Related Assistance 
SEC. 4301. CONTROL OF ARMS EXPORTS AND IMPORTS. 
(a) IN GENERAL.—The President is authorized to 
control the import and the export of defense articles and 
defense services and to provide foreign policy guidance to 
persons of the United States involved in the export and 
import of such articles and services. 
(b) COMPOSITION OF UNITED STATES MUNITIONS 
LIST.— 
(1) IN GENERAL.—The President is authorized 
to designate those items that shall be considered as 
defense articles and defense services for the purposes 
of this section and to promulgate regulations for the 
import and export of such articles and services. The 
items so designated shall constitute the United 
States Munitions List. 
(2) FACTORS.—The President shall designate a 
defense article or defense service if it— 
(A) provides a critical military or intel-
ligence advantage to the United States; or 
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(B) would provide a military or intelligence 
advantage to countries other than the United 
States or to non-state actors to the detriment 
of the national security of United States friends 
and allies, or to the achievement of the foreign 
policy and national security objectives of the 
United States. 
(c) PURPOSES FOR WHICH UNITED STATES MILI-
TARY SALES ARE AUTHORIZED.—Defense articles and de-
fense services shall be sold or leased by the United States 
Government under this title to countries solely to meet the 
goals of assistance under section 4003. 
(d) FACTORS.—Decisions on issuing export licenses 
under this section shall ensure that the export of a defense 
article or defense service— 
(1) is justified in terms of its military utility re-
lated to the actual security threat by the recipient 
country; and 
(2) will not— 
(A) contribute to an arms race or regional 
instability; 
(B) aid in the development of weapons of 
mass destruction; 
(C) support domestic or international ter-
rorism; 
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(D) increase the possibility of outbreak or 
escalation of conflict, either within or across the 
borders of the recipient country; 
(E) prejudice the development of bilateral 
or multilateral arms control arrangements; 
(F) adversely affect the arms control or 
nonproliferation policy of the United States; 
(G) conflict with any international agree-
ments, treaties or arrangements to which the 
United States is a party or adherent; 
(H) support blackmarket or greymarket 
trade in arms, either those transferred or obso-
lete arms to be replaced by the arms sale; or 
(I) undermine the objectives and purposes 
to promote and protect human rights and de-
mocracy under title III. 
(e) SALE REQUIREMENT.—In exercising the authori-
ties conferred by this section, the President may require 
that any defense article or defense service be sold under 
this title as a condition of its eligibility for export, and 
may require that persons engaged in the negotiation for 
the export of defense articles and defense services keep 
the President fully and currently informed of the progress 
and future prospects of such negotiations. 
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369 
CHAPTER 1—FOREIGN MILITARY SALES 
AND COOPERATION 
SEC. 4311. GENERAL AUTHORITY. 
(a) SALES FROM DEFENSE ARTICLES AND DEFENSE 
SERVICES.—The President may sell defense articles and 
defense services from the stocks of the Department of De-
fense and the Coast Guard, or design and construction 
services, to a foreign country or international organization 
if the country or international organization agrees to pay 
in United States dollars— 
(1) in the case of a defense article not intended 
to be replaced at the time such agreement is entered 
into, not less than the actual value thereof; 
(2) in the case of a defense article intended to 
be replaced at the time such agreement is entered 
into, the estimated cost of replacement of such arti-
cle, including the contract or production costs less 
any depreciation in the value of such article; or 
(3) in the case of a defense service (other than 
training covered in subsection (b)), or design and 
construction services, the full cost to the United 
States Government of providing such service. 
(b) TRAINING.— 
(1) IN GENERAL.—In the case of training sold 
to a foreign country or international organization 
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that is concurrently receiving international military 
education and training assistance under this title, 
the country or international organization agrees to 
pay in United States dollars only those additional 
costs that are incurred by the United States Govern-
ment in providing such assistance. 
(2) OTHER
COUNTRIES.—The President may 
provide training to a foreign country not receiving 
assistance under chapter 6 of subtitle B if the Presi-
dent determines and so notifies the appropriate con-
gressional committees in each fiscal year for which 
such training is to be provided that providing such 
training to the country is in the national interest of 
the United States and the reasons for such deter-
mination. 
SEC. 4312. PROCUREMENT FOR FOREIGN MILITARY CASH 
SALES. 
(a) IN GENERAL.— 
(1) CONTRACTS.—Except as otherwise provided 
in this section, the President may, without require-
ment for charge to any appropriation or contract au-
thorization otherwise provided, enter into contracts 
for the procurement of defense articles or defense 
services or design and construction services for sale 
for United States dollars to any foreign country or 
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international organization if such country or inter-
national organization provides the United States 
Government with a dependable undertaking— 
(A) to pay the full amount of such contract 
which will assure the United States Government 
against any loss on the contract; and 
(B) to make funds available in such 
amounts and at such times as may be required 
to meet the payments required by the contract 
and any damages and costs that may accrue 
from the cancellation of such contract, in ad-
vance of the time such payments, damages, or 
costs are due. 
(2) INTEREST.—Interest shall be charged on 
any net amount by which any such country or inter-
national organization is in arrears under all of its 
outstanding unliquidated dependable undertakings, 
considered collectively. The rate of interest charged 
shall be a rate not less than a rate determined by 
the Secretary of the Treasury taking into consider-
ation the current average market yield on out-
standing short-term obligations of the United States 
as of the last day of the month preceding the net ar-
rearage and shall be computed from the date of net 
arrearage. 
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(b) LETTERS OF OFFER.— 
(1) IN GENERAL.—The President may, if the 
President determines it to be in the national interest 
of the United States, issue letters of offer under this 
section that provide for billing upon delivery of the 
defense article or rendering of the defense service 
and for payment within 120 days after the date of 
billing. 
(2) REQUIREMENT.—The authority of para-
graph (1) may be exercised only if the President de-
termines that the emergency requirements of the 
purchaser for acquisition of such defense articles 
and defense services exceed the ready availability to 
the purchaser of funds sufficient to make payments 
on a dependable undertaking basis and submits both 
determinations to Congress together with a special 
emergency request for authorization and appropria-
tion of additional funds to finance such purchases 
under this Act. 
(3) APPROPRIATIONS.—Appropriations available 
to the Department of Defense may be used to meet 
the payments required by the contracts for the pro-
curement of defense articles and defense services 
and shall be reimbursed by the amounts subse-
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quently received from the country or international 
organization to whom articles or services are sold. 
(c) RENEGOTIATION ACT OF 1951.—The provisions 
of the Renegotiation Act of 1951 do not apply to procure-
ment contracts entered into under this section or prede-
cessor provisions of law before, on, or after the date of 
the enactment of this Act. 
(d) COMPETITIVE PRICING.— 
(1) PROCUREMENT CONTRACTS.—Procurement 
contracts made in implementation of sales under this 
section for defense articles and defense services 
wholly paid for from funds made available on a non-
repayable basis shall be priced on the same costing 
basis with regard to profit, overhead, independent 
research and development, bid and proposal, and 
other costing elements, as is applicable to procure-
ments of like items purchased by the Department of 
Defense for its own use. 
(2) DIRECT
COSTS.—Direct costs associated 
with meeting additional or unique requirements of 
the purchaser shall be allowable under contracts de-
scribed in paragraph (1). Loadings applicable to 
such direct costs shall be permitted at the same 
rates applicable to procurement of like items pur-
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chased by the Department of Defense for its own 
use. 
SEC. 4313. PAYMENTS. 
(a) IN GENERAL.—Except as provided in subsection 
(b), payment for defense articles or defense services under 
this chapter shall be made in advance or, if the President 
determines it to be in the national interest of the United 
States, upon delivery of the defense article or rendering 
of the defense service. 
(b) EXCEPTION.—If the President determines it to 
be in the national interest of the United States pursuant 
to subsection (a), billings for sales made under letters of 
offer issued under this section after the date of the enact-
ment of this subsection may be dated and issued upon de-
livery of the defense article or rendering of the defense 
service and shall be due and payable upon receipt thereof 
by the purchasing country or international organization. 
(c) INTEREST.— 
(1) IN GENERAL.—Interest shall be charged on 
any net amount due and payable which is not paid 
within 60 days after the date of such billing. The 
rate of interest charged shall be a rate not less than 
a rate determined by the Secretary of the Treasury 
taking into consideration the current average market 
yield on outstanding short-term obligations of the 
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United States as of the last day of the month pre-
ceding the billing and shall be computed from the 
date of billing. 
(2) EXTENSION.—The President may extend 
such 60-day period to 120 days if the President de-
termines that emergency requirements of the pur-
chaser for acquisition of such defense articles or de-
fense services exceed the ready availability to the 
purchaser of funds sufficient to pay the United 
States in full for such articles or services within 
such 60-day period and submits that determination 
to the Congress together with a special emergency 
request for the authorization and appropriation of 
additional funds to finance such purchases under 
this Act. 
SEC. 4314. CHARGES. 
(a) IN GENERAL.—Letters of offer for the sale of de-
fense articles or defense services that are issued pursuant 
to section 4311 or 4312 shall include appropriate charges 
for— 
(1) administrative services, calculated on an av-
erage percentage basis to recover the full estimated 
costs (excluding a pro rata share of fixed base oper-
ations costs) of administration of sales made under 
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this Act to all purchasers of such articles and serv-
ices as specified in section 4402(b) and (c); 
(2) a proportionate amount of any nonrecurring 
costs of research, development, and production of 
major defense equipment (except for equipment 
wholly paid for either from funds transferred under 
section 4211(b)(3) or from funds made available on 
a nonrepayable basis under section 4251; and 
(3) the recovery of ordinary inventory losses as-
sociated with the sale from stock of defense articles 
that are being stored at the expense of the purchaser 
of such articles. 
(b) WAIVER.— 
(1) ADMINISTRATIVE CHARGES.—The President 
may waive the charges for administrative services 
that would otherwise be required by— 
(A) subsection (a)(1) in connection with 
any sale to a foreign country, if the President 
determines that a waiver— 
(i) is in the national security interests 
of the United States; and 
(ii) will facilitate the ability of that 
country to detect, deter, prevent, defeat, or 
counter terrorist activities, or participate 
in, or support, military operations, coali-
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tion operations, or stability operations of 
the United States; or 
(B) subsection (a)(2) in connection with 
any sale to the Maintenance and Supply Agency 
of the North Atlantic Treaty Organization in 
support of— 
(i) a weapon system partnership 
agreement; or 
(ii) a NATO/SHAPE project. 
(2) MAJOR DEFENSE EQUIPMENT.—The Presi-
dent may reduce or waive the charge or charges that 
would otherwise be considered appropriate under 
subsection (a)(2) for a particular sale or for sales if 
the President determines that— 
(A) the reduction or waiver would signifi-
cantly advance United States Government inter-
ests in standardization with the armed forces of 
a foreign country that is a strategic United 
States ally, or would promote foreign procure-
ment in the United States under coproduction 
arrangements; 
(B) imposition of the charge or charges 
likely would result in the loss of the sale; or 
(C) in the case of a sale of major defense 
equipment that is also being procured for the 
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use of the United States Armed Forces, the 
waiver of the charge or charges would (through 
a resulting increase in the total quantity of the 
equipment purchased from the source of the 
equipment that causes a reduction in the unit 
cost of the equipment) result in a savings to the 
United States on the cost of the equipment pro-
cured for the use of the United States Armed 
Forces that substantially offsets the revenue 
foregone by reason of the waiver of the charge 
or charges. 
(3) INCREASE
IN
CHARGES.—The President 
may waive, for particular sales of major defense 
equipment, any increase in a charge or charges pre-
viously considered appropriate under paragraph (2) 
of subsection (a) if the increase results from a cor-
rection of an estimate (reasonable when made) of 
the production quantity base that was used for cal-
culating the charge or charges for purposes of such 
paragraph. 
SEC. 4315. NON-COMBAT DUTIES OF UNITED STATES PER-
SONNEL SUPPORTING FOREIGN MILITARY 
SALES. 
(a) IN GENERAL.—United States personnel per-
forming defense services sold under this title may not per-
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379 
form any duties of a combatant nature, including any du-
ties related to training and advising that may engage 
United States personnel in combat activities, outside the 
United States in connection with the performance of those 
defense services. 
(b) REPORT.—Within 48 hours of the existence of, 
or a change in status of significant hostilities or terrorist 
acts or a series of such acts, that may endanger lives or 
property of United States personnel, involving a country 
in which United States personnel are performing defense 
services pursuant to this title, the President shall submit 
to the Speaker of the House of Representatives and to 
the President pro tempore of the Senate a report, in writ-
ing, classified if necessary, setting forth— 
(1) the identity of such country; 
(2) a description of such hostilities or terrorist 
acts; and 
(3) the number of members of the United 
States Armed Forces and the number of United 
States civilian personnel that may be endangered by 
such hostilities or terrorist acts. 
SEC. 4316. PUBLIC INFORMATION. 
Any contract entered into between the United States 
and a foreign country under the authority of section 4311 
or section 4312 shall be prepared in a manner that will 
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380 
permit the contract to be made available for public inspec-
tion to the fullest extent possible consistent with the na-
tional security of the United States. Such information 
shall be posted on the Internet website of the Department 
of State in a timely fashion. 
SEC. 4317. STANDARDIZATION AGREEMENTS. 
(a) IN GENERAL.—The President may enter into 
North Atlantic Treaty Organization standardization 
agreements in carrying out section 814 of the Department 
of Defense Appropriation Authorization Act, 1976 (Public 
Law 94–106), and may enter into similar agreements with 
a country that is a strategic United States ally, for the 
cooperative furnishing of training on a bilateral or multi-
lateral basis, if the financial principles of such agreements 
are based on reciprocity. 
(b) REIMBURSEMENT.—Each agreement shall in-
clude reimbursement for all direct costs but may exclude 
reimbursement for indirect costs, administrative sur-
charges, and costs of billeting of trainees (except to the 
extent that members of the United States Armed Forces 
occupying comparable accommodations are charged for 
such accommodations by the United States). 
(c) CONGRESSIONAL NOTIFICATION.—Each agree-
ment shall be transmitted promptly to— 
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381 
(1) the appropriate congressional committees; 
and 
(2) the Committees on Appropriations and the 
Committees on Armed Services of the House of Rep-
resentatives and the Senate. 
SEC. 4318. QUALITY ASSURANCE AND RELATED SERVICES. 
(a) IN GENERAL.—The President is authorized to 
provide, without charge, quality assurance, inspection, 
contract administration services, and contract audit de-
fense services under this chapter— 
(1) in connection with the placement or admin-
istration of any contract or subcontract for defense 
articles, defense services, or design and construction 
services entered into under this Act on behalf of, a 
government that is a strategic United States ally, if 
such government provides such services in accord-
ance with an agreement on a reciprocal basis, with-
out charge, to the United States Government; or 
(2) in connection with the placement or admin-
istration of any contract or subcontract for defense 
articles, defense services, or design and construction 
services pursuant to the North Atlantic Treaty Or-
ganization’s Security Investment program in accord-
ance with an agreement under which the foreign 
governments participating in such program provide 
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382 
such services, without charge, in connection with 
similar contracts or subcontracts. 
(b) CATALOGING DATA
AND CATALOGING SERV-
ICES.—In carrying out the objectives of this section, the 
President is authorized to provide, without charge, cata-
loging data and cataloging services to the North Atlantic 
Treaty Organization or to any strategic United States ally 
if that Organization or ally provides such data and serv-
ices in accordance with an agreement on a reciprocal basis, 
without charge, to the United States Government. 
SEC. 4319. RESTRICTION ON SALE OF DEFENSE ARTICLES 
AND DEFENSE SERVICES THAT WOULD AD-
VERSELY AFFECT UNITED STATES COMBAT 
READINESS. 
(a) RESTRICTION.—The President may not sell de-
fense articles and defense services if the sale of such arti-
cles or services would have significant adverse effect on 
the combat readiness of the United States Armed Forces. 
(b) WAIVER AND CONGRESSIONAL NOTIFICATION.— 
(1) IN
GENERAL.—The President may waive 
the restriction in subsection (a) if the President de-
termines that the possible significant adverse effect 
on the combat readiness of the United States Armed 
Forces is outweighed by the benefits to United 
States national security and transmits such deter-
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383 
mination to the appropriate congressional commit-
tees and to the Committees on Armed Services of 
the House of the Representatives and the Senate. 
(2) STATEMENT.—Each such determination 
shall be accompanied with a statement that shall in-
clude the following information: 
(A) The country or international organiza-
tion to which the sale is proposed to be made. 
(B) The amount of the proposed sale. 
(C) A description of the defense article or 
service proposed to be sold. 
(D) A full description of the impact which 
the proposed sale will have on the United States 
Armed Forces. 
(E) A justification for such proposed sale, 
including an explanation as to why, in the 
President’s judgment, benefits to United States 
national security from the sale outweighs the 
adverse impact on the readiness of the United 
States Armed Forces. 
SEC. 4320. ACQUISITION OF FOREIGN-UNITED STATES ORI-
GIN DEFENSE ARTICLES. 
(a) IN GENERAL.—The President may acquire a re-
pairable defense article from a foreign country or inter-
national organization if such defense article— 
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(1) previously was transferred to such country 
or organization under this Act or predecessor Act 
(as in effect on the day before the date of the enact-
ment of this Act); 
(2) is not an end item; and 
(3) will be exchanged for a defense article of 
the same type that is in the stocks of the Depart-
ment of Defense. 
(b) LIMITATION.—The President may exercise the 
authority provided in subsection (a) only to the extent that 
the Department of Defense— 
(1)(A) has a requirement for the defense article 
being returned; and 
(B) has available sufficient funds authorized 
and appropriated for such purpose; or 
(2)(A) is accepting the return of the defense ar-
ticle for subsequent transfer to another foreign gov-
ernment or international organization pursuant to a 
letter of offer and acceptance implemented in ac-
cordance with this Act or predecessor Act (as in ef-
fect on the day before the date of the enactment of 
this Act); and 
(B) has available sufficient funds provided by 
or on behalf of such other foreign government or 
international organization pursuant to a letter of 
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offer and acceptance implemented in accordance 
with this Act or predecessor Act (as in effect on the 
day before the date of the enactment of this Act). 
(c) REQUIREMENT.— 
(1) IN GENERAL.—The foreign government or 
international organization receiving a new or re-
paired defense article in exchange for a repairable 
defense article pursuant to subsection (a) 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 
replacement transaction. 
(2) COST.—The total cost charged pursuant to 
paragraph (1) shall be the same as that charged the 
United States Armed Forces for a similar repair and 
replacement transaction, plus an administrative sur-
charge in accordance with section 4314(a)(1). 
(d) RELATIONSHIP TO CERTAIN OTHER PROVISIONS 
OF LAW.—The authority of the President to accept the 
return of a repairable defense article as provided in sub-
section (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. 
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SEC. 4321. RETURN OF DEFENSE ARTICLES. 
(a) IN GENERAL.—The President may accept the re-
turn of a defense article from a foreign country or inter-
national organization if such defense article— 
(1) previously was transferred to such country 
or organization under this Act or predecessor Act 
(as in effect on the day before the date of the enact-
ment of this Act); 
(2) is not significant military equipment (as de-
fined in section 4411); and 
(3) is in fully functioning condition without 
need of repair or rehabilitation. 
(b) LIMITATION.—The President may exercise the 
authority provided in subsection (a) only to the extent that 
the Department of Defense— 
(1)(A) has a requirement for the defense article 
being returned; and 
(B) has available sufficient funds authorized 
and appropriated for such purpose; or 
(2)(A) is accepting the return of the defense ar-
ticle for subsequent transfer to another foreign gov-
ernment or international organization pursuant to a 
letter of offer and acceptance implemented in ac-
cordance with this Act or predecessor Act (as in ef-
fect on the day before the date of the enactment of 
this Act); and 
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(B) 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 or predecessor Act (as in effect on the 
day before the date of the enactment of this Act). 
(c) CREDIT FOR TRANSACTION.—Upon acquisition 
and acceptance by the United States Government of a de-
fense article under subsection (a), the appropriate Foreign 
Military Sales account of the provider shall be credited 
to reflect the transaction. 
(d) RELATIONSHIP TO CERTAIN OTHER PROVISIONS 
OF LAW.—The authority of the President to accept the 
return of a 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. 
SEC. 4322. SALE OF OBSOLETE NAVAL VESSELS. 
For purposes of section 4311(a), the actual value of 
a naval vessel of 3,000 tons or less and 20 years or more 
of age shall be considered to be not less than the greater 
of the scrap value or fair value (including conversion costs) 
of such vessel, as determined by the Secretary of Defense. 
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388 
SEC. 4323. ANNUAL ESTIMATE AND JUSTIFICATION FOR 
SALES PROGRAM. 
(a) REPORT.—Except as provided in subsection (d), 
not later than February 1 of each year, the President shall 
transmit to the appropriate congressional committees, as 
a part of the annual presentation materials for security 
assistance programs proposed for the next fiscal year, a 
report which sets forth— 
(1) an Arms Sales Proposal covering all sales 
and licensed commercial exports under this title of 
major weapons or weapons-related defense equip-
ment for $7,000,000 or more, or of any other weap-
ons or weapons-related defense equipment for 
$25,000,000 or more, which are considered eligible 
for approval during the current calendar year and 
are deemed most likely actually to result in the 
issuance of a letter of offer or of an export license 
during such year; 
(2) an estimate of the total amount of sales and 
licensed commercial exports expected to be made to 
each foreign country from the United States; 
(3) the United States national security consid-
erations involved in expected sales or licensed com-
mercial exports to each country, an analysis of the 
relationship between anticipated sales to each coun-
try and arms control efforts concerning such country 
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389 
and an analysis of the impact of such anticipated 
sales on the stability of the region that includes such 
country; 
(4) an estimate with regard to the international 
volume of arms traffic to and from countries pur-
chasing arms as set forth in paragraphs (1) and (2), 
together with best estimates of the sale and delivery 
of weapons and weapons-related defense equipment 
by all major arms suppliers to all major recipient 
countries during the preceding calendar year; 
(5)(A) an estimate of the aggregate dollar value 
and quantity of defense articles and defense services, 
military education and training, grant military as-
sistance, and credits and guarantees, to be furnished 
by the United States to each foreign country and 
international organization in the next fiscal year; 
and 
(B) for each country that is proposed to be fur-
nished credits or guaranties under this Act in the 
next fiscal year and that has been approved for cash 
flow financing in excess of $100,000,000 as of Octo-
ber 1 of the current fiscal year— 
(i) the amount of such approved cash flow 
financing; 
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390 
(ii) a description of administrative ceilings 
and controls applied, and 
(iii) a description of the financial resources 
otherwise available to such country to pay such 
approved cash flow financing; 
(6) an analysis and description of the services 
performed during the preceding fiscal year by offi-
cers and employees of the United States Government 
carrying out functions on a full-time basis under this 
Act for which reimbursement is provided under sec-
tion 4402(b) or section 4311(a), including the num-
ber of personnel involved in performing such serv-
ices; 
(7) the status of— 
(A) each loan and each contract of guar-
anty or insurance theretofore made under this 
title, predecessor Acts, or any Act authorizing 
international security assistance, with respect to 
which there remains outstanding any unpaid 
obligation or potential liability; and 
(B) each extension of credit for the pro-
curement of defense articles or defense services, 
and of each contract of guaranty in connection 
with any such procurement, theretofore made 
under this title or predecessor Acts with respect 
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391 
to which there remains outstanding any unpaid 
obligation or potential liability; 
(8)(A) a detailed accounting of all articles, serv-
ices, credits, guarantees, or any other form of assist-
ance furnished by the United States to each country 
and international organization, including payments 
to the United Nations, during the preceding fiscal 
year for the detection and clearance of landmines, 
including activities relating to the furnishing of edu-
cation, training, and technical assistance for the de-
tection 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 un-
dertaken during the preceding fiscal year, including 
the number of personnel involved in performing such 
activities; 
(9) a list of weapons systems that are signifi-
cant military equipment, and numbers thereof, that 
are believed likely to become available for transfer as 
excess defense articles during the next 12 months; 
and 
(10) such other information as the President 
may deem necessary. 
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393 
(B) procure or manufacture and sell de-
fense articles at not less than their contract or 
manufacturing cost to the United States Gov-
ernment, to any United States company for in-
corporation into end items (and for concurrent 
or follow-on support) to be sold by such a com-
pany either— 
(i) on a direct commercial basis to a 
foreign country or international organiza-
tion pursuant to an export license or ap-
proval under section 4301; or 
(ii) in the case of ammunition parts 
subject to subsection (b), using commercial 
practices which restrict actual delivery di-
rectly to a foreign country or international 
organization pursuant to approval under 
section 4301. 
(2) ADDITIONAL
AUTHORITY.—The President 
may also sell defense services in support of such 
sales of defense articles, subject to the requirements 
of this chapter. Such services may be performed only 
in the United States. The amount of reimbursement 
received from such sales shall be credited to the cur-
rent applicable appropriation, fund, or account of 
the selling agency of the United States Government. 
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394 
(b) ADDITIONAL REQUIREMENTS.—Defense articles 
and defense services may be sold, procured and sold, or 
manufactured and sold, pursuant to subsection (a) only 
if— 
(1) the end item to which the articles apply is 
to be procured for the armed forces of a country or 
international organization; 
(2) the articles would be supplied to the prime 
contractor as government-furnished equipment or 
materials if the end item were being procured for the 
use of the United States Armed Forces; and 
(3) the articles and services are available only 
from United States Government sources or are not 
available to the prime contractor directly from 
United States commercial sources at such times as 
may be required to meet the prime contractor’s de-
livery schedule. 
SEC. 4325. FISCAL PROVISIONS RELATING TO FOREIGN 
MILITARY SALES CREDITS. 
(a) IN GENERAL.—Cash payments received under 
sections 4311 and funds received under section 4324 shall 
be available solely for payments to suppliers (including the 
military departments) and refunds to purchasers and shall 
not be available for financing credits. 
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395 
(b) REPAYMENTS
FOR CREDITS, DISPOSITION
OF 
CERTAIN INSTRUMENTS, AND OTHER COLLECTIONS.— 
Amounts received from foreign governments and inter-
national organizations as repayments for any credits ex-
tended pursuant to section 4251, and other collections (in-
cluding fees and interest) shall be transferred to the mis-
cellaneous receipts of the United States Treasury. 
CHAPTER 2—ARMS EXPORT CONTROLS 
SEC. 4331. LICENSING REQUIREMENT FOR EXPORTING OR 
IMPORTING DEFENSE ARTICLES AND DE-
FENSE SERVICES. 
(a) IN GENERAL.—Except as otherwise specifically 
provided in regulations issued under section 4301, defense 
articles, defense services, and design and construction 
services designated by the President under section 4301 
may only be licensed for export or import in accordance 
with this title and regulations issued under this title. 
(b) EXCEPTIONS.—No license may be required for ex-
ports or imports made by or for a Federal agency— 
(1) for official use by personnel of a Federal 
agency; or 
(2) for carrying out any foreign assistance or 
sales program authorized by law and subject to the 
control of the President by other means. 
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396 
SEC. 4332. IMPACT OF MILITARY EXPENDITURES ON DE-
VELOPMENT. 
(a) REVIEW.—The Secretary shall conduct a review 
of the military expenditures of developing countries to— 
(1) identify those countries which the Secretary 
has credible evidence to believe— 
(A) are diverting official development as-
sistance from any source to military purposes; 
(B) are devoting budgetary resources to 
arms purchases to a degree that materially 
interferes with the development of such coun-
tries; or 
(C) are accumulating unsustainable levels 
of debt to finance arms purchases; 
(2) take such action as the Secretary deems ap-
propriate, including cessation of United States arms 
sales and working with other countries to do like-
wise, to reduce the impact of the military activities 
of the countries identified under paragraph (1) and 
acquisition of arms on the economic and political de-
velopment of such countries. 
(b) TIMING
OF REVIEW
AND REPORT
TO CON-
GRESS.—The Secretary shall complete the first review re-
quired under subsection (a) and submit to the appropriate 
congressional committees not later than one year after the 
enactment of this Act a report on all elements of sub-
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397 
section (a), including the actions the Secretary will take 
under subsection (a)(2), and the results of any such ac-
tions taken since the submission of the prior report to 
such committees. Subsequent reviews shall be conducted 
on a quadrennial basis, and reported to the appropriate 
congressional committees on the quadrennial anniversary 
of the first report. 
SEC. 4333. REQUIREMENT FOR REGISTRATION BY EXPORT-
ERS. 
(a) IN GENERAL.—As prescribed in regulations 
issued under section 4301, every person (other than an 
officer or employee of the United States Government act-
ing in an official capacity) who engages in the business 
of manufacturing, exporting, or importing defense articles 
or defense services designated by the President under sec-
tion 4301 shall register with the Department of State, and 
shall pay a registration fee which shall be prescribed by 
such regulations. 
(b) PROHIBITION.— 
(1) IN GENERAL.—Such regulations shall pro-
hibit the return to the United States for sale in the 
United States (other than for the United States 
Armed Forces or its allies or for any State for local 
law enforcement agency) of any military firearms or 
ammunition of United States manufacture furnished 
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398 
to foreign governments by the United States under 
this Act, or predecessor Act, or any other foreign as-
sistance or sales program of the United States, 
whether or not enhanced in value or improved in 
condition in a foreign country. 
(2) EXCEPTION.—The prohibition in paragraph 
(1) shall not extend to similar firearms that have 
been so substantially transformed as to become, in 
effect, articles of foreign manufacture. 
SEC. 4334. IDENTIFICATION OF ALL CONSIGNEES AND 
FREIGHT FORWARDERS. 
The President shall require that each applicant for 
a license to export an item on the United States Munitions 
List identify in the application all consignees and freight 
forwarders involved in the proposed export. 
SEC. 4335. BROKERING ACTIVITIES. 
(a) IN GENERAL.—As prescribed in regulations 
issued under this section, every person (other than an offi-
cer or employee of the United States Government acting 
in an official capacity) who engages in the business of 
brokering activities with respect to the manufacture, ex-
port, import, or transfer of any defense article or defense 
service designated by the President under section 4301, 
or in the business of brokering activities with respect to 
the manufacture, export, import, or transfer of any foreign 
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399 
defense article or defense service (as defined in subsection 
(c)), 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. 
(b) BROKERING
ACTIVITIES
DESCRIBED.—Such 
brokering activities shall include the financing, transpor-
tation, freight forwarding, or taking of any other action 
that facilitates the sale, manufacture, export, or import 
of a defense article or defense service. 
(c) LICENSING REQUIREMENT.—No person may en-
gage in the business of brokering activities described in 
subsection (a) without a license, issued in accordance with 
this title, except that no license shall be required for such 
activities undertaken by or for a Federal agency— 
(1) for use by a Federal agency; or 
(2) for carrying out any foreign assistance or 
sales program authorized by law and subject to the 
control of the President by other means. 
(d) REVIEW OF REGISTRATION.—A copy of each reg-
istration made under this section shall be transmitted to 
the Secretary of the Treasury for review regarding law en-
forcement concerns. The Secretary shall report to the 
President regarding such concerns as necessary. 
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400 
SEC. 4336. FOREIGN PERSONS. 
(a) IN GENERAL.—A license to export an item on the 
United States Munitions List may not be issued to a for-
eign person (other than a foreign government or inter-
national organization). 
(b) LICENSE REQUIREMENT.—The President may re-
quire a license or other form of authorization before any 
item on the United States Munitions List is sold or other-
wise transferred to the control or possession of a foreign 
person or a person acting on behalf of a foreign person. 
SEC. 4337. REVIEW OF UNITED STATES MUNITIONS LIST. 
(a) IN GENERAL.—The President shall periodically 
review the items on the United States Munitions List to 
determine what items, if any, no longer warrant export 
controls under this title. The results of such reviews shall 
be reported to the appropriate congressional committees. 
(b) CONGRESSIONAL NOTIFICATION AND REVIEW.— 
The President may not remove any item from the United 
States Munitions List until 45 days after the date on 
which the President has provided notice of the proposed 
removal to the appropriate congressional committees in ac-
cordance with the procedures applicable to reprogramming 
notifications under section 9401, consistent with sub-
section (c) of this section. Such notice shall describe the 
nature of any controls to be imposed on that item under 
any other provision of law, and should provide a descrip-
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401 
tion of the item to be removed such that the appropriate 
congressional committees can fully assess the capabilities 
of the item and the potential impact on United States na-
tional security and foreign policy from its removal from 
the Munitions List. If the President proposes to remove 
classes or categories of items from the United States Mu-
nitions List, without enumerating individual items, then 
the President shall provide the appropriate congressional 
committees with a listing of items approved for export dur-
ing the previous five years that would no longer be re-
quired for licenses under this title by virtue of being re-
moved from the Munitions List. 
(c) CONGRESSIONAL DISAPPROVAL.—The President 
may not remove any item from the United States Muni-
tions List if, during the 45 days required under subsection 
(b), Congress enacts a joint resolution of disapproval of 
the removal of such item, according to the procedures 
under section 4384(c) for consideration of a joint resolu-
tion. 
SEC. 4338. LICENSING OF MISSILES AND MISSILE EQUIP-
MENT OR TECHNOLOGY. 
(a) ESTABLISHMENT
OF LIST
OF CONTROLLED 
ITEMS.—The Secretary, in consultation with the Secretary 
of Defense and the heads of other appropriate Federal 
agencies, shall establish and maintain, as part of the 
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402 
United States Munitions List, a list of all items on the 
MTCR Annex the export of which is not controlled under 
section 6(l) of the Export Administration Act of 1979 (as 
continued in effect under the International Emergency 
Economic Powers Act) or similar provisions of any suc-
cessor Act. 
(b) REFERRAL OF LICENSE APPLICATIONS.— 
(1) IN GENERAL.—A determination of the Sec-
retary to approve a license for the export of an item 
on the list established under subsection (a) may be 
made only after the license application is referred to 
the Secretary of Defense. 
(2) REFERRAL.—Within 10 days after a license 
is issued for the export of an item on the list estab-
lished under subsection (a), the Secretary shall pro-
vide to the Secretary of Defense and the Secretary 
of Commerce the license application and accom-
panying documents issued to the applicant, to the 
extent that the relevant Secretary indicates the need 
to receive such application and documents. 
(c) INFORMATION SHARING.—The Secretary shall es-
tablish a procedure for sharing information with appro-
priate officials of the intelligence community, as deter-
mined by the Director of National Intelligence, and with 
other appropriate Federal agencies, that will ensure effec-
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403 
tive monitoring of transfers of MTCR equipment or tech-
nology and other missile technology. 
(d) EXPORTS
TO SPACE LAUNCH VEHICLE PRO-
GRAMS.— 
(1) IN
GENERAL.—Within 15 days after the 
issuance of a license (including any brokering li-
cense) for the export of items valued at less than 
$50,000,000 that are controlled under this Act pur-
suant to United States obligations under the MTCR 
and are goods or services that are intended to sup-
port the design, utilization, development, or produc-
tion of a space launch vehicle system listed in Cat-
egory I of the MTCR Annex, the Secretary shall 
transmit to Congress a report describing the licensed 
export and rationale for approving such export, in-
cluding the consistency of such export with United 
States missile nonproliferation policy. 
(2) APPLICABILITY.—The requirement con-
tained in paragraph (1) shall not apply to licenses 
for exports to countries that are members of the 
MTCR as of as of the date of the enactment of this 
Act. 
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404 
SEC. 4339. SPECIAL LICENSING AUTHORIZATION FOR CER-
TAIN 
EXPORTS 
TO 
STRATEGIC 
UNITED 
STATES ALLIES. 
(a) AUTHORIZATION.—The President may provide 
for special licensing authorization for exports of United 
States-manufactured spare and replacement parts or com-
ponents listed in an application for such special licensing 
authorization in connection with defense items previously 
exported to a strategic United States ally. A special licens-
ing authorization issued pursuant to this subsection shall 
be effective for a period not to exceed 5 years. 
(b) CERTIFICATION.—An authorization may be 
issued under subsection (a) only if the applicable govern-
ment of the country described in subsection (a), acting 
through the applicant for the authorization, certifies 
that— 
(1) the export of spare and replacement parts 
or components supports a defense item previously 
lawfully exported; 
(2) the spare and replacement parts or compo-
nents will be transferred to a defense agency of the 
country that is a previously approved end-user of the 
defense item and not to a distributor or a foreign 
consignee of the defense item; 
(3) the spare and replacement parts or compo-
nents will not to be used to materially enhance, opti-
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405 
mize, or otherwise modify or upgrade the capability 
of the defense item; 
(4) the spare and replacement parts or compo-
nents relate to a defense item that is owned, oper-
ated, and in the inventory of the armed forces of the 
country; 
(5) the export of spare and replacement parts 
or components will be effected using the freight for-
warder designated by the purchasing country’s diplo-
matic mission as responsible for handling transfers 
as required under regulations; and 
(6) the spare and replacement parts or compo-
nents to be exported under the special licensing au-
thorization are specifically identified in the applica-
tion. 
(c) LIMITATION.—An authorization may not be 
issued under subsection (a) for purposes of establishing 
offshore procurement arrangements or producing defense 
articles offshore. 
(d) DEFINITION.— 
(1) IN
GENERAL.—In this section, the term 
‘‘United States-manufactured spare and replacement 
parts or components’’ or ‘‘spare and replacement 
parts or components’’ means spare and replacement 
parts or components— 
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406 
(A) with respect to which— 
(i) United States-origin content costs 
constitute at least 85 percent of the total 
content costs; 
(ii) United States manufacturing costs 
constitute at least 85 percent of the total 
manufacturing costs; and 
(iii) foreign content, if any, is limited 
to content from countries eligible to receive 
exports of items on the United States Mu-
nitions List (other than de minimis foreign 
content); 
(B) that were last substantially trans-
formed in the United States; and 
(C) that are not— 
(i) classified as significant military 
equipment; or 
(ii) listed on the MTCR Annex. 
(2) ADDITIONAL RULE.—For purposes of para-
graph (1)(A)(i) and (ii), the costs of non-United 
States-origin content and the costs of non-United 
States manufacturing shall be determined using the 
final price or final cost associated with the non- 
United States-origin content and non-United States 
manufacturing. 
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407 
(e) INAPPLICABILITY PROVISIONS.— 
(1) IN GENERAL.—The provisions of this sec-
tion shall not apply with respect to re-exports or re- 
transfers of spare and replacement parts or compo-
nents and related services of defense items described 
in subsection (a). 
(2) CONGRESSIONAL NOTIFICATION.—The con-
gressional notification requirements contained in this 
title shall not apply with respect to an authorization 
issued under subsection (a). 
CHAPTER 3—LEASES OF DEFENSE 
ARTICLES 
SEC. 4351. LEASING AUTHORITY. 
(a) IN GENERAL.—The President may lease defense 
articles in the stocks of the Department of Defense to a 
foreign country or international organization if— 
(1) the President determines that there are 
compelling foreign policy and national security rea-
sons for providing such articles on a lease basis 
rather than on a sales basis under this subtitle; 
(2) the President determines that the articles 
are not for the time needed for public use; 
(3) the President first considers the effects of 
the lease of the articles on the national technology 
and industrial base, particularly the extent, if any, 
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408 
to which the lease reduces the opportunities of enti-
ties in the national technology and industrial base to 
sell new equipment to the country or countries to 
which the articles are leased; and 
(4) the country or international organization 
has agreed to pay in United States dollars all costs 
incurred by the United States Government in leasing 
such articles, including reimbursement for deprecia-
tion of such articles while leased, the costs of res-
toration or replacement if the articles are damaged 
while leased, and, if the articles are lost or destroyed 
while leased— 
(A) in the event the United States intends 
to replace the articles lost or destroyed, the re-
placement cost (less any depreciation in the 
value) of the articles; or 
(B) in the event the United States does 
not intend to replace the articles lost or de-
stroyed, an amount not less than the actual 
value (less any depreciation in the value) speci-
fied in the lease agreement. 
(b) EXCEPTIONS.— 
(1) IN
GENERAL.—The requirement of sub-
section (a)(4) shall not apply to leases entered into 
for purposes of cooperative research or development, 
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409 
military exercises, or communications or electronics 
interface projects. 
(2) WAIVERS.—The President may waive the 
requirement of subsection (a)(4)— 
(A) for reimbursement of depreciation for 
any defense article which has passed three- 
quarters of its normal service life if the Presi-
dent determines that to do so is important to 
the national security interest of the United 
States; 
(B) with respect to a lease which is made 
in exchange with the lessee for a lease on sub-
stantially reciprocal terms of defense articles 
for the Department of Defense, except that this 
waiver authority— 
(i) may be exercised only if the Presi-
dent submits to the appropriate congres-
sional committees, and in addition the 
Committees on Appropriations of the 
House of Representatives and the Senate, 
a detailed notification for each lease with 
respect to which the authority is exercised; 
and 
(ii) may be exercised only— 
(I) on a fiscal year basis; and 
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410 
(II) with respect to one country 
or international organization for each 
lease. 
(3) RULE OF CONSTRUCTION.—Paragraph (2) 
does not constitute authorization of appropriations 
for payments by the United States for leased arti-
cles. 
(c) DURATION.— 
(1) IN GENERAL.—Each lease agreement under 
this section shall be for a fixed duration which may 
not exceed— 
(A) 5 years; and 
(B) a specified period of time required to 
complete major refurbishment work of the 
leased articles to be performed prior to the de-
livery of the leased articles, of not to exceed 5 
years. 
(2) 
TERMINATION.—Each 
lease 
agreement 
under this section shall provide that, at any time 
during the duration of the lease, the President may 
terminate the lease and require the immediate re-
turn of the leased articles. 
(3) DEFINITION.—In this subsection, the term 
‘‘major refurbishment work’’ means work for which 
the period of performance is 6 months or more. 
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(d) LIMITATION.—Defense articles in the stocks of 
the Department of Defense may be leased or loaned to 
a foreign country or international organization only under 
the authority of this chapter or chapter 3 of subtitle B, 
and may not be leased to a foreign country or inter-
national organization under the authority of section 2667 
of title 10, United States Code. 
SEC. 4352. CERTIFICATION FOR LEASING. 
(a) IN GENERAL.—Before entering into or renewing 
any agreement with a foreign country or international or-
ganization to lease any defense article under this chapter, 
or to loan any defense article this title for a period of 1 
year or longer, the President shall transmit to the appro-
priate congressional committees and the Committees on 
Armed Services of the House of Representatives and the 
Senate, a written certification which specifies— 
(1) the country or international organization to 
which the article is to be leased or loaned; 
(2) the type, quantity, and value (in terms of 
replacement cost) of the article to be leased or 
loaned; 
(3) the terms and duration of the lease or loan; 
and 
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412 
(4) a justification for the lease or loan, includ-
ing an explanation of why the article is being leased 
rather than sold under this subtitle. 
(b) WAIVER.— 
(1) IN
GENERAL.—The President may waive 
the requirements of this section (and in the case of 
an agreement described in section 4353, may waive 
the provisions of that section) if the President states 
in the certification required by subsection (a) that 
an emergency exists which requires that it is in the 
national security interests of the United States to 
enter into the lease or loan immediately. 
(2) JUSTIFICATION.—If the President states in 
the certification that such an emergency exists, the 
President shall set forth in the certification a de-
tailed justification for the President’s determination, 
including a description of the emergency cir-
cumstances that necessitate that the lease be entered 
into immediately and a discussion of the national se-
curity interests involved. 
(c) DEADLINE.—The certification required by sub-
section (a) shall be transmitted— 
(1) not less than 15 calendar days before the 
agreement is entered into or renewed in the case of 
an agreement with a strategic United States ally; or 
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413 
(2) not less than 30 calendar days before the 
agreement is entered into or renewed in the case of 
an agreement with any other country or organiza-
tion. 
SEC. 4353. CONGRESSIONAL REVIEW AND DISAPPROVAL. 
(a) CONGRESSIONAL REVIEW AND DISAPPROVAL.— 
(1) IN GENERAL.—Subject to paragraph (2), in 
the case of any agreement involving the lease or loan 
under this title, to any foreign country or inter-
national organization for a period of 1 year or longer 
of any defense articles that are either— 
(A) major defense equipment valued (in 
terms of its replacement cost less any deprecia-
tion in its value) at $14,000,000 or more, or 
(B) defense articles valued (in terms of 
their replacement cost less any depreciation in 
their value) at $50,000,000 or more, 
the agreement may not be entered into or renewed 
if Congress, within the 15-day or 30-day period 
specified in section 4384(a)(1) or (2), as the case 
may be, enacts a joint resolution prohibiting the pro-
posed lease or loan. 
(2) CERTAIN AGREEMENTS.—In the case of an 
agreement described in paragraph (1) that is en-
tered into with a strategic United States ally, the 
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414 
limitations in paragraph (1) shall apply only if the 
agreement involves a lease or loan of— 
(A) major defense equipment valued (in 
terms of its replacement cost less any deprecia-
tion in its value) at $25,000,000 or more; or 
(B) defense articles valued (in terms of 
their replacement cost less any depreciation in 
their value) at $100,000,000 or more. 
(b) SENATE PROCEDURES.—Any joint resolution 
under subsection (a) shall be considered in the Senate in 
accordance with the provisions of section 601(b) of the 
International Security Assistance and Arms Export Con-
trol Act of 1976. 
(c) HOUSE PROCEDURES.—For the purpose of expe-
diting the consideration and enactment of joint resolutions 
under subsection (a), a motion to proceed to the consider-
ation of any such resolution after it has been reported by 
the appropriate committee shall be treated as highly privi-
leged in the House of Representatives. 
SEC. 4354. APPLICATION OF OTHER PROVISIONS OF LAW. 
Any reference to sales of defense articles under this 
subtitle in any provision of law restricting the countries 
or organizations to which such sales may be made shall 
be deemed to include a reference to leases of defense arti-
cles under this chapter. 
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415 
SEC. 4355. LOAN OF MATERIALS, SUPPLIES, AND EQUIP-
MENT FOR RESEARCH AND DEVELOPMENT 
PURPOSES. 
(a) AUTHORITY TO LOAN.— 
(1) IN GENERAL.—Except as provided in sub-
section (c), the Secretary of Defense, with the con-
currence of the Secretary, may loan to a country 
that is a strategic United States ally or a major 
United States ally materials, supplies, or equipment 
for the purpose of carrying out a program of cooper-
ative research, development, testing, or evaluation. 
The Secretary of Defense may accept as a loan or 
a gift from a country that is a strategic United 
States ally or a major United States ally materials, 
supplies, or equipment for such purpose. 
(2) AGREEMENT.—Each loan or gift trans-
action entered into by the Secretary of Defense 
under this section shall be provided for under the 
terms of a written agreement between the Secretary 
of Defense and the country concerned. 
(3) TESTING OR EVALUATION.—A program of 
testing or evaluation for which the Secretary of De-
fense may loan materials, supplies, or equipment 
under this section includes a program of testing or 
evaluation conducted solely for the purpose of stand-
ardization, interchangeability, or technical evaluation 
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416 
if the country to which the materials, supplies, or 
equipment are loaned agrees to provide the results 
of the testing or evaluation to the United States 
without charge. 
(b) MATERIALS, SUPPLIES, OR EQUIPMENT.—The 
materials, supplies, or equipment loaned to a country 
under this section may be expended or otherwise consumed 
in connection with any testing or evaluation program with-
out a requirement for reimbursement of the United States 
if the Secretary of Defense— 
(1) determines that the success of the research, 
development, test, or evaluation depends upon ex-
pending or otherwise consuming the materials, sup-
plies, or equipment loaned to the country; and 
(2) approves of the expenditure or consumption 
of such materials, supplies, or equipment. 
(c) STRATEGIC
AND CRITICAL MATERIALS.—The 
Secretary of Defense may not loan to a country under this 
section any material if the material is a strategic and crit-
ical material and if, at the time the loan is to be made, 
the quantity of the material in the National Defense 
Stockpile (provided for under section 3 of the Strategic 
and Critical Materials Stock Piling Act (50 U.S.C. 98b)) 
is less than the quantity of such material to be stockpiled, 
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417 
as determined by the President under section 3(a) of such 
Act. 
SEC. 4356. SPECIAL LEASING AUTHORITY. 
The authority of section 4251 may be used to provide 
financing to Israel and Egypt for the procurement by leas-
ing (including leasing with an option to purchase) of de-
fense articles from United States commercial suppliers, 
other than major defense equipment (other than heli-
copters and other types of aircraft having possible civilian 
application), if the President determines that there are 
compelling foreign policy or national security reasons for 
the articles to be provided by commercial lease rather than 
by government-to-government sale under this subtitle. 
CHAPTER 4—RETRANSFERS OF UNITED 
STATES DEFENSE ARTICLES 
SEC. 4361. AUTHORITY TO APPROVE RETRANSFERS. 
(a) IN GENERAL.—Subject to subsection (b), the Sec-
retary is authorized, consistent with the provisions of this 
chapter, to approve a retransfer of any defense article or 
defense service transferred to a foreign country pursuant 
to the authority of this Act to another country. 
(b) ADDITIONAL
REQUIREMENT.—The Secretary 
may not give consent to a retransfer of a defense article 
or defense service to a foreign country under subsection 
(a) if the United States is prohibited from transferring 
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418 
the defense article or defense service to the country, or 
would not license the export of such defense article or de-
fense service to such country. 
SEC. 4362. DEMILITARIZATION FOR RETRANSFER OF SIG-
NIFICANT DEFENSE ARTICLES. 
The Secretary may not give consent to the retransfer 
of any significant defense articles on the United States 
Munitions List or successor list for controlling the export 
of United States munitions and related items, unless the 
foreign country requesting consent to retransfer— 
(1) agrees to demilitarize the defense articles 
prior to transfer; or 
(2) commits in writing to the United States 
Government that it will not transfer the defense ar-
ticles if not demilitarized to any other foreign coun-
try or person without first obtaining the consent of 
the Secretary. 
SEC. 4363. PROCEEDS OF SALE OF RETRANSFERRED DE-
FENSE ARTICLES. 
The Secretary may not provide any defense article to 
a foreign country or international organization on a grant 
basis unless the country or organization has agreed that 
in disposing or transferring the defense article— 
(1) the disposition or transfer will be made on 
a sales basis; and 
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(2) the net proceeds of the sale will be provided 
to the United States Government. 
SEC. 4364. CERTIFICATION. 
(a) IN GENERAL.—The Secretary may not give con-
sent to a retransfer of a defense article or defense service 
that would be, if it were a sale, subject to the requirements 
of section 4382 (regarding congressional certification of 
sensitive foreign military sales and agreements), unless 
the Secretary submits to the appropriate congressional 
committees a written certification with respect to such 
proposed retransfer containing— 
(1) the name of the country or organization 
proposing to make such retransfer; 
(2) a description of such article or service pro-
posed to be retransferred, including its acquisition 
cost; 
(3) the name of the proposed recipient of such 
article or service; 
(4) the reasons for such proposed retransfer; 
and 
(5) the date on which such retransfer is pro-
posed to be made. 
(b) FORM.—Any certification submitted to the appro-
priate congressional committees pursuant to paragraph 
(1)— 
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(1) shall be submitted in unclassified form, ex-
cept that information regarding the dollar value and 
number of defense articles or defense services pro-
posed to be retransferred may be submitted in clas-
sified form if public disclosure thereof would be 
clearly detrimental to the security of the United 
States; and 
(2) shall be subject to the requirements of sec-
tions 4384. 
(c) EXCEPTION.—Paragraph (1) shall not apply to 
an export that has been exempted from the licensing re-
quirements of this title pursuant to an agreement pursu-
ant to section 4341. 
CHAPTER 5—ENFORCEMENT AND 
MONITORING OF ARMS SALES 
SEC. 4371. GENERAL AUTHORITY. 
(a) IN GENERAL.—Except as provided in subsection 
(b), in carrying out functions under this Act with respect 
to the export of defense articles and defense services, the 
President is authorized to exercise the same powers con-
cerning violations and enforcement that are conferred 
upon departments, agencies and officials by subsections 
(c), (d), (e), and (g) of section 11 of the Export Adminis-
tration Act of 1979 and by subsections (a) and (c) of sec-
tion 12 of such Act (as continued in effect under the Inter-
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421 
national Emergency Economic Powers Act), subject to the 
same terms and conditions as are applicable to such pow-
ers under such Act. 
(b) EXCEPTION.—Section 11(c)(2)(B) of the Export 
Administration Act of 1979 (as continued in effect under 
the International Emergency Economic Powers Act) shall 
not apply, and instead, as prescribed in regulations issued 
under this section, the Secretary may assess civil penalties 
for violations of this Act and regulations prescribed there-
under and further may commence a civil action to recover 
such civil penalties, and except further that the names of 
the countries and the types and quantities of defense arti-
cles for which licenses are issued under this section shall 
not be withheld from public disclosure unless the Presi-
dent determines that the release of such information would 
be contrary to the national interest. 
(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed as authorizing the withholding of 
information from Congress. 
SEC. 4372. CRIMINAL AND CIVIL PENALTIES. 
(a) IN GENERAL.—Any person who willfully violates 
any provision of this Act relating to the export of defense 
articles and defense services, or any rule or regulation 
issued thereunder, or who willfully, in a registration or li-
cense application or required report, makes any untrue 
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value) and the actual sale price at 
each step in the transaction (or if the 
items are transferred by other than 
sale, the manner in which they will be 
provided); 
(III) the reasons why the pro-
posed transaction is essential to the 
national security interests of the 
United States and the justification for 
such proposed transaction; 
(IV) the date on which the pro-
posed transaction is expected to occur; 
and 
(V) the name of each United 
States Government department, agen-
cy, or other entity involved in the pro-
posed transaction, every foreign gov-
ernment involved in the proposed 
transaction, and every private party 
with significant participation in the 
proposed transaction. 
(2) FORM.—To the extent possible, the infor-
mation specified in paragraph (1)(B)(ii) shall be 
provided in unclassified form, with any classified in-
formation provided in an addendum to the report. 
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