Source: https://www.govinfo.gov/content/pkg/USCODE-2011-title22/html/USCODE-2011-title22-chap39-subchapII-sec2761.htm
Timestamp: 2019-04-25 18:13:36+00:00

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(C) in the case of the sale of a defense service, the full cost to the United States Government of furnishing such service, except that in the case of training sold to a purchaser who is concurrently receiving assistance under chapter 5 of part II of the Foreign Assistance Act of 1961 [22 U.S.C. 2347 et seq.] or to any high-income foreign country (as described in that chapter), only those additional costs that are incurred by the United States Government in furnishing such assistance.
(2) For purposes of subparagraph (A) of paragraph (1), 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.
Except as provided by subsection (d) of this section, payment shall be made in advance or, if the President determines it to be in the national interest, upon delivery of the defense article or rendering of the defense service.
(1) Personnel performing defense services sold under this chapter may not perform any duties of a combatant nature, including any duties 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.
(C) 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.
If the President determines it to be in the national interest pursuant to subsection (b) of this section, billings for sales made under letters of offer issued under this section after June 30, 1976, may be dated and issued upon delivery 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. Interest shall be charged on any net amount due and payable which is not paid within sixty 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 United States as of the last day of the month preceding the billing and shall be computed from the date of billing. The President may extend such sixty-day period to one hundred and twenty days if he determines that emergency requirements of the purchaser for acquisition of such defense articles or defense services exceed the ready availability to the purchaser of funds sufficient to pay the United States in full for them within such sixty-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 chapter.
(C) the recovery of ordinary inventory losses associated with the sale from stock of defense articles that are being stored at the expense of the purchaser of such articles.
(2)(A) The President may reduce or waive the charge or charges which would otherwise be considered appropriate under paragraph (1)(B) for particular sales that would, if made, significantly advance United States Government interests in North Atlantic Treaty Organization standardization, standardization with the Armed Forces of Japan, Australia, the Republic of Korea, Israel, or New Zealand in furtherance of the mutual defense treaties between the United States and those countries, or foreign procurement in the United States under coproduction arrangements.
(ii) in the case of a sale of major defense equipment that is also being procured for the use of the 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 procured for the use of the Armed Forces that substantially offsets the revenue foregone by reason of the waiver of the charge or charges.
(C) The President may waive, for particular sales of major defense equipment, any increase in a charge or charges previously considered appropriate under paragraph (1)(B) if the increase results from a correction of an estimate (reasonable when made) of the production quantity base that was used for calculating the charge or charges for purposes of such paragraph.
(B) The Secretary of Defense may reimburse the fund established to carry out section 2792(b) of this title in the amount of the charges waived under subparagraph (A) of this paragraph. Any such reimbursement may be made from any funds available to the Department of Defense.
(ii) the term “NATO/SHAPE project” means a common-funded project supported by allocated credits from North Atlantic Treaty Organization bodies or by host nations with NATO Infrastructure funds.
Any contracts entered into between the United States and a foreign country under the authority of this section or section 2762 of this title shall be prepared in a manner which will permit them to be made available for public inspection to the fullest extent possible consistent with the national security of the United States.
The President may enter into North Atlantic Treaty Organization standardization agreements in carrying out section 814 of the Act of October 7, 1975 (Public Law 94–106), and may enter into similar agreements with countries which are major non-NATO allies, for the cooperative furnishing of training on bilateral or multilateral basis, if the financial principles of such agreements are based on reciprocity. Such agreements shall include reimbursement for all direct costs but may exclude reimbursement for indirect costs, administrative surcharges, 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). Each such agreement shall be transmitted promptly to the Speaker of the House of Representatives and the Committees on Appropriations, Armed Services, and Foreign Relations of the Senate.
(B) in connection with the placement or administration of any contract or subcontract for defense articles, defense services, or design and construction services pursuant to the North Atlantic Treaty Organization Security Investment program in accordance with an agreement under which the foreign governments participating in such program provide such services, without charge, in connection with similar contracts or subcontracts.
(2) In carrying out the objectives of this section, the President is authorized to provide cataloging data and cataloging services, without charge, to the North Atlantic Treaty Organization, to any member government of that Organization, or to the Governments of the Republic of Korea, Australia, New Zealand, Japan, or Israel if that Organization, member government, or the Governments of the Republic of Korea, Australia, New Zealand, Japan, or Israel provides such data and services in accordance with an agreement on a reciprocal basis, without charge, to the United States Government.
(E) a justification for such proposed sale, including a certification that such sale is important to the security of the United States.
A certification described in subparagraph (E) shall take effect on the date on which such certification is transmitted and shall remain in effect for not to exceed one year.
(2) No delivery may be made under any sale which is required to be reported under paragraph (1) of this subsection unless the certification required to be transmitted by paragraph 1 (E) of paragraph (1) is in effect.
Before entering into the sale under this chapter of defense articles that are excess to the stocks of the Department of Defense, the President shall determine that the sale of such articles will not have an adverse impact on the national technology 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.
(C) will be exchanged for a defense article of the same type that is in the stocks of the Department of Defense.
(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 chapter.
(A) The foreign government or international organization receiving a new or repaired defense article in exchange for a repairable defense article pursuant to paragraph (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 replacement transaction.
(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.
The authority of the President to accept the return of a repairable defense article as provided in subsection (a) of this section shall not be subject to chapter 137 of title 10 or any other provision of law relating to the conclusion of contracts.
(C) is in fully functioning condition without need of repair or rehabilitation.
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 transaction.
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 or any other provision of law relating to the conclusion of contracts.
This chapter, referred to in text, was in the original “this Act”, meaning Pub. L. 90–629, Oct. 22, 1968, 82 Stat. 1321, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 2751 of this title and Tables.
The Foreign Assistance Act of 1961, referred to in subsecs. (a)(1)(C) and (c)(2), is Pub. L. 87–195, Sept. 4, 1961, 75 Stat. 424, as amended, which is classified principally to chapter 32 (§2151 et seq.) of this title. Chapter 5 of part II of such Act is classified generally to part V of subchapter II (§2347 et seq.) of chapter 32 of this title. For complete classification of this Act to the Code, see Short Title note set out under section 2151 of this title and Tables.
Section 814 of the act of October 7, 1975 (Public Law 94–106), referred to in subsec. (g), is not classified to the Code.
Amendment by Pub. L. 98–473 is based on section 102 of S. 2346, Ninety-eighth Congress, as introduced in the Senate Feb. 27, 1984, which was enacted into permanent law by Pub. L. 98–473.
2010—Subsec. (e)(2)(A). Pub. L. 111–266 inserted “Israel,” before “or New Zealand”.
2008—Subsec. (e)(2)(A). Pub. L. 110–429, §203(b)(1), inserted “the Republic of Korea,” before “or New Zealand”.
Subsec. (h)(1)(A). Pub. L. 110–429, §203(b)(3), inserted “the Republic of Korea,” before “or Israel”.
Subsec. (h)(2). Pub. L. 110–429, §203(b)(4), substituted “, to any member government of that Organization, or to the Governments of the Republic of Korea, Australia, New Zealand, Japan, or Israel if that Organization, member government, or the Governments of the Republic of Korea, Australia, New Zealand, Japan, or Israel” for “or to any member government of that Organization if that Organization or member government”.
2005—Subsec. (h)(1)(A). Pub. L. 109–102, §534(l)(1), inserted “or the Governments of Australia, New Zealand, Japan, or Israel” after “North Atlantic Treaty Organization”.
Subsec. (h)(2). Pub. L. 109–102, §534(l)(2), which directed the substitution of “, to any member of that Organization, or to the Governments of Australia, New Zealand, Japan, or Israel if that Organization, member government, or the Governments of Australia, New Zealand, Japan, or Israel” for “or to any member government that Organization if that Organization or member government”, could not be executed because the phrase “or to any member government that Organization if that Organization or member government” does not appear in text.
1999—Subsec. (a)(1). Pub. L. 106–113 inserted “and the Coast Guard” after “Department of Defense” in introductory provisions.
1996—Subsec. (a)(1)(C). Pub. L. 104–164, §112(c)(2), inserted “or to any high-income foreign country (as described in that chapter)”.
Subsec. (e)(2). Pub. L. 104–106, §4303(a), designated existing provisions as subpar. (A) and added subpars. (B) and (C).
Subsec. (h)(1)(B). Pub. L. 104–201 substituted “Security Investment program” for “Infrastructure Program”.
“(1) Funds received from the sale of tanks under this section shall be available for the upgrading of tanks for fielding to the Army.
“(2) Funds received from the sale of infantry fighting vehicles or armored personnel carriers under this section shall be available for the upgrading of infantry fighting vehicles or armored personnel carriers for fielding to the Army.
“(3) Paragraphs (1) and (2) apply only to the extent provided in advance in appropriations Acts.
Subsec. (l). Pub. L. 104–164, §152(a), added subsec. (l).
Subsec. (m). Pub. L. 104–164, §152(b), added subsec. (m).
1994—Subsec. (k). Pub. L. 103–236 added subsec. (k).
1992—Subsec. (j). Pub. L. 102–484 added subsec. (j).
1991—Subsec. (g). Pub. L. 102–25 substituted “section 2350a(i)(3) of title 10” for “section 2767a of this title”.
1989—Subsec. (e)(1)(A). Pub. L. 101–165, §9104(c)(1), inserted reference to section 2792(b) and (c) of this title.
Subsec. (e)(1)(B). Pub. L. 101–165, §9104(c)(2), (3), redesignated subpar. (C) as (B) and inserted exception for equipment wholly paid for from funds transferred under the Foreign Assistance Act of 1961 or from funds made available under section 2763 of this title. Former subpar. (B), which included charges for any use of plant and production equipment in connection with defense articles, was struck out.
Subsec. (e)(1)(C), (D). Pub. L. 101–165, §9104(c)(3), redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).
Subsec. (e)(2). Pub. L. 101–165, §9104(c)(4), substituted reference to par. (1)(B) for reference to pars. (1)(B) and (1)(C).
1988—Subsec. (e)(3). Pub. L. 100–456 added par. (3).
1987—Subsec. (g). Pub. L. 100–202 inserted “and with other countries which are major non-NATO allies,” after “New Zealand,” and inserted last sentence defining “major non-NATO allies”.
1985—Subsec. (a)(1). Pub. L. 99–83, §107(a)(1), (2), designated existing provisions as par. (1), and substituted “(A)”, “(B)”, and “(C)” for “(1)”, “(2)”, and “(3)”, respectively.
Subsec. (a)(1)(C). Pub. L. 99–83, §108(a), inserted provisions relating to training sold to a purchaser receiving assistance under chapter 5 of part II of the Foreign Assistance Act of 1961.
Subsec. (a)(2). Pub. L. 99–83, §107(a)(3), added par. (2).
Subsec. (e)(1)(A). Pub. L. 99–83, §109, inserted provisions excluding pro rata share of fixed base operation costs.
Subsec. (g). Pub. L. 99–83, §108(b), added subsec. (g).
Subsec. (h)(1). Pub. L. 99–83, §§110, 111(1), (2), designated existing provisions as par. (1), inserted applicability to contract administrative services, and substituted “(A)” and “(B)” for “(1)” and “(2)”, respectively.
Subsec. (h)(2). Pub. L. 99–83, §111(3), added par. (2).
1984—Subsec. (a)(3). Pub. L. 98–473 struck out “sold to a purchaser who is concurrently receiving assistance under chapter 5 of part II of the Foreign Assistance Act of 1961” after “in the case of training”.
Subsec. (g). Pub. L. 98–473 struck out subsec. (g) which related to NATO standardization agreements and similar agreements with Japan, Australia, and New Zealand.
1982—Subsec. (i)(1). Pub. L. 97–392 inserted reference to proposals to sell under the authority of subchapter II–B.
1981—Subsec. (c)(2). Pub. L. 97–113, §103, substituted provision for a report within forty-eight hours of existence of or change in status of significant hostilities or terrorist acts or series of such acts, which may endanger American lives or property for provision for a report within 48 hours after outbreak of significant hostilities and omitted provision for statement of relation between the defense services and hostilities in the country, the location and precise nature of personnel activities, and likelihood of personnel engagement in the hostilities.
Subsec. (e)(2). Pub. L. 97–113, §104, authorized reduction or waiver of charges for use and nonrecurring research, development, and production costs respecting sales significantly advancing United States interests in standardization with Armed Forces of Japan, Australia, or New Zealand in furtherance of the mutual defense treaties between the United States and those countries.
1980—Subsec. (a)(3). Pub. L. 96–533, §115(b)(2), included payment, in case of training sold to a purchaser currently receiving international military education and training assistance, of additional costs incurred by the United States Government in furnishing the training.
Subsec. (c). Pub. L. 96–533, §102, designated existing provision as par. (1), substituted “training and advising that may engage United States personnel in combat activities” for “training, advising, or otherwise providing assistance regarding combat activities”, and added par. (2).
Subsec. (g). Pub. L. 96–533, §103, authorized the President to enter into standardization agreements with Japan, Australia, and New Zealand.
Subsec. (h). Pub. L. 96–533, §105(b)(1), substituted “defense articles, defense services, or design and construction services” for “defense articles or defense services” in two places.
1979—Subsecs. (h), (i). Pub. L. 96–92 added subsec. (h) and redesignated former subsec. (h) as (i).
1978—Subsec. (e)(1)(D). Pub. L. 95–384 added subpar. (D).
1976—Subsec. (a). Pub. L. 94–329, §205, designated existing provisions as subsec. (a) and substituted provisions authorizing President to sell defense articles and defense services from Department of Defense stocks to eligible countries and international organizations who agree to pay specified values for such articles and services in United States dollars, for provisions requiring that payment for defense articles and defense services from stocks be made in advance, or if in the best interest of the United States as determined by the President, within a reasonable period not to exceed 120 days after delivery of the articles or rendering of the services.
Subsecs. (b) to (h). Pub. L. 94–329, §§205, 206, added subsecs. (b) to (h).
“(2) there is enacted qualifying offsetting legislation.
“(c) Effective Date.—If the conditions in subsection (b) are met, then the amendments made by subsection (a) shall take effect on the date of the enactment of qualifying offsetting legislation [Sept. 23, 1996].
“(C) are included in full on the PayGo scorecard.
Functions of President under this section, except the last sentence of subsec. (d) and subsec. (i), delegated to Secretary of Defense by section 1(c) of Ex. Ord. No. 11958, Jan. 18, 1977, 42 F.R. 4311, as amended, set out as a note under section 2751 of this title.
1 So in original. Probably should be “subparagraph”.

References: §203
 §203
 §203
 §534
 §534
 §112
 §4303
 §152
 §152
 §9104
 §9104
 §9104
 §9104
 §107
 §108
 §107
 §109
 §108
 §111
 §103
 §104
 §115
 §102
 §103
 §105
 §205