To amend the Foreign Assistance Act of 1961 and the Arms Export Control Act to make improvements to certain defense and security assistance provisions under those Acts, to authorize the transfer of naval vessels to certain foreign countries, and for other purposes.
PL 104-164 (H.R.3121), enacted 07/21/1996

PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1421 
Public Law 104-164 
104th Congress 
An Act 
To amend the Foreign Assistance Act of 1961 and the Arms Export Control Act 
to make improvements to certain defense and security assistance provisions under 
July 21, 1996 
those Acts, to authorize the transfer of naval vessels to certain foreign countries, 
[H.R. 3121] 
and for other purposes. 
Be it enacted by the Senate and House of Representatives 
of 
the United States of America in Congress assembled, 
SECTION 1. TABLE OF CONTENTS. 
The table of contents of this Act is as follows: 
Sec. 1. Table of contents. 
TITLE I—DEFENSE AND SECURITY ASSISTANCE 
CHAPTER 1—MILITARY AND RELATED ASSISTANCE 
Sec. 101. Terms of loans under the Foreign Military Financing program. 
Sec. 102. Additional requirements under the Foreign Military Financing program. 
Sec. 103. Drawdown special authorities. 
Sec. 104. Transfer of excess defense articles. 
Sec. 105. Excess defense articles for certain European countries. 
CHAPTER 2—INTERNATIONAL MILITARY EDUCATION AND TRAINING 
Sec. 111. Assistance for Indonesia. 
Sec. 112. Additional requirements. 
CHAPTER 3—ANTITERRORISM ASSISTANCE 
Sec. 121. Antiterrorism training assistance. 
Sec. 122. Research and development expenses. 
CHAPTER 4—INTERNATIONAL NARCOTICS CONTROL ASSISTANCE 
Sec. 131. Additional requirements. 
Sec. 132. Notification requirement. 
Sec. 133. Waiver of restrictions for narcotics-related economic assistance. 
CHAPTER 5—OTHER PROVISIONS 
Sec. 141. Standardization of congressional review procedures for arms transfers. 
Sec. 142. Standardization of third country transfers of defense articles. 
Sec. 143. Increased standardization, rationalization, and interoperability of assist-
ance and sales programs. 
Sec. 144. Definition of significant militairy equipment. 
Sec. 145. Elimination of annual reporting requirement relating to the Special De-
fense Acquisition Fund. 
Sec. 146. Cost of leased defense articles that have been lost or destroyed. 
Sec. 147. Designation of major non-NATO allies. 
Sec. 148. Annual military assistance report. 
Sec. 149. Depleted uranium ammunition. 
Sec. 150. End-use monitoring of defense articles and defense services. 
Sec. 151. Brokering activities relating to commercial sales of defense articles and 
services. 
Sec. 152. Return and exchanges of defense articles previously transferred pursuant 
to the Arms Export Control Act. 
Sec. 153. National security interest determination to waive reimbursement of de-
preciation for leased defense articles. 
110 STAT. 1422 
PUBLIC LAW 104-164—JULY 21, 1996 
Sec. 154. Eligibility of Panama under the Arms Export Control Act. 
Sec. 155. Publication of arms sales certifications. 
Sec. 156. Release of information. 
Sec. 157. Repeal of termination of provisions of the Nuclear Proliferation Preven-
tion Act of 1994; Presidential determinations. 
TITLE II—TRANSFER OF NAVAL VESSELS TO CERTAIN FOREIGN 
COUNTRIES 
Sec. 201. Authority to transfer naval vessels. 
Sec. 202. Costs of transfers. 
Sec. 203. Expiration of authority. 
Sec. 204. Repair and refurbishment of vessels in United States shipyards. 
TITLE I—DEFENSE AND SECURITY 
ASSISTANCE 
CHAPTER 1—MILITARY AND RELATED ASSISTANCE 
SEC. 101. TERMS OF LOANS UNDER THE FOREIGN MILITARY FINANC-
ING PROGRAM. 
Section 31(c) of the Arms Export Control Act (22 U.S.C. 2771(c)) 
is amended to read as follows: 
"(c) Loans available under section 23 shall be provided at 
rates of interest that are not less than the current average market 
yield on outstanding marketable obligations of the United States 
of comparable maturities.". 
SEC. 102. ADDITIONAL REQUIREMENTS UNDER THE FOREIGN MILL 
TARY FINANCING PROGRAM. 
(a) AUDIT OF CERTAIN PRIVATE FIRMS.—Section 23 of the Arms 
Export Control Act (22 U.S.C. 2763) is amended by adding at 
the end the following new subsection: 
"(f) For each fiscal year, the Secretary of Defense, as requested 
by the Director of the Defense Security Assistance Agency, shall 
conduct audits on a nonreimbursable basis of private firms that 
have entered into contracts with foreign governments under which 
defense articles, defense services, or design and construction serv-
ices are to be procured by such firms for such governments from 
financing under this section.". 
(b) NOTIFICATION REQUIREMENT WITH RESPECT TO CASH FLOW 
FINANCING.—Section 23 of such Act (22 U.S.C. 2763), as amended 
by this Act, is further amended by adding at the end the following 
new subsection: 
"(g)(1) For each country and international organization that 
has been approved for cash flow financing under this section, any 
letter of offer and acceptance or other purchase agreement, or 
any amendment thereto, for a procurement of defense articles, 
defense services, or design and construction services in excess of 
$100,000,000 that is to be financed in whole or in part with funds 
made available under this Act or the Foreign Assistance Act of 
1961 shall be submitted to the congressional committees specified 
in section 634A(a) of the Foreign Assistance Act of 1961 in accord-
ance with the procedures applicable to reprogramming notifications 
under that section. 
"(2) For purposes of this subsection, the term 'cash flow financ-
ing* has the meaning given such term in subsection (d) of section 
25, as added by section 112(b) of Public Law 99-83.". 
(c) LIMITATIONS ON USE OF FUNDS FOR DIRECT COMMERCIAL 
CONTRACTS.—Section 23 of such Act (22 U.S.C. 2763), as amended 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1423 
by this Act, is further amended by adding at the end the following 
new subsection: 
"(h) Of the amounts made available for a fiscal year to carry 
out this section, not more than $100,000,000 for such fiscal year 
may be made available for countries other than Israel and Eg3^t 
for the purpose of financing the procurement of defense articles, 
defense services, and design and construction services that are 
not sold by the United States Government under this Act.". 
(d) ANNUAL ESTIMATE AND JUSTIFICATION FOR SALES PRO-
GRAM.—Section 25(a) of such Act (22 U.S.C. 2765(a)) is amended— 
(1) by striking the "and" at the end of paragraph (11); 
(2) by redesignating paragraph (12) as paragraph (13); 
and 
(3) by inserting after paragraph (11) the following: 
"(12)(A) a detailed accounting of all articles, services, cred-
its, guarantees, or any other form of assistance furnished by 
the United States to each country and international organiza-
tion, including pajnnents to the United Nations, during the 
preceding fiscal year for the detection and clearance of land-
mines, including activities relating to the furnishing of edu-
cation, training, and technical assistance for the detection and 
clearance of landmines; and 
"(B) for each provision of law making funds available or 
authorizing appropriations for demining activities described in 
subparagraph (A), an analysis and description of the objectives 
and activities undertaken during the preceding fiscal year, 
including the number of personnel involved in performing such 
activities; and". 
SEC. 103. DRAWDOWN SPECIAL AUTHORITIES. 
(a) UNFORESEEN EMERGENCY DRAWDOWN.—Section 506(a)(1) of 
the Foreign Assistance Act of 1961 (22 U.S.C. 2318(a)(1)) is amended 
by striking "$75,000,000" and inserting "$100,000,000". 
(b) ADDITIONAL DRAWDOWN.—Section 506 of such Act (22 U.S.C. 
2318) is amended— 
(1) in subsection (a)(2)(A), by striking "defense articles 
fi-om the stocks" and all that follows and inserting the following: 
"articles and services from the inventory and resources of Einy 
agency of the United States Government and military education 
and training fi'om the Department of Defense, the President 
may direct the drawdown of such articles, services, and military 
education and training— 
"(i) for the purposes and under the authorities of— 
"(I) chapter 8 of part I (relating to international 
narcotics control assistance); 
"(II) chapter 9 of part I (relating to international 
disaster assistance); or 
"(III) the Migration and Refugee Assistance Act 
of 1962; or 
"(ii) for the purpose of providing such articles, services, 
and military education and training to Vietnam, Cambodia, 
and Laos as the President determines are necessary— 
"(I) to support cooperative efforts to locate and 
repatriate members of the United States Armed Forces 
and civilieins employed directly or indirectly by the 
United States Government who remain unaccounted 
for from the Vietnam War; Euid 
110 STAT. 1424 
PUBLIC LAW 1 0 4 - 1 6 4 - J U L Y 21, 1996 
"(11) to ensure the safety of United States Govern-
ment personnel engaged in such cooperative efforts 
and to support Department of Defense-sponsored 
humanitarian projects associated with such efforts."; 
(2) in subsection (a)(2)(B), by striking "$75,000,000" and 
all that follows and inserting "$150,000,000 in any fiscal year 
of such articles, services, and military education and training 
may be provided pursuant to subparagraph (A) of this para-
graph— 
"(i) not more than $75,000,000 of which may be pro-
vided from the drawdown from the inventory and resources 
of the Department of Defense; 
"(ii) not more than $75,000,000 of which may be pro-
vided pursuant to clause (i)(I) of such subparagraph; and 
"(iii) not more than $15,000,000 of which may be pro-
vided to Vietnam, Cambodia, and Laos pursuant to clause 
(ii) of such subparagraph."; and 
(3) in subsection (bXl), by adding at the end the following: 
"In the case of drawdowns authorized by subclauses (I) and 
(III) of subsection (a)(2)(A)(i), notifications shall be provided 
to those committees at least 15 days in advance of the 
drawdowns in accordance with the procedures applicable to 
reprogramming notifications under section 634A.". 
(c) NOTICE TO CONGRESS OF EXERCISE OF SPECIAL AUTHORI-
TIES.—Section 652 of such Act (22 U.S.C. 2411) is amended by 
striking "prior to the date" and inserting "before". 
SEC. 
1
0
4
. 
TRANSFER 
OF 
EXCESS 
DEFENSE 
ARTICLES. 
(a) IN GENERAL.—Section 516 of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2321J) is amended to read as follows: 
"SEC. 516. AUTHORITY TO TRANSFER EXCESS DEFENSE ARTICLES. 
"(a) AUTHORIZATION.—The President is authorized to transfer 
excess defense articles under this section to countries for which 
receipt of such articles was justified pursuant to the annual congres-
sional presentation documents for military assistance programs, 
or for programs under chapter 8 of part I of this Act, submitted 
under section 634 of this Act, or for which receipt of such articles 
was separately justified to the Congress, for the fiscal year in 
which the transfer is authorized. 
"(b) LIMITATIONS ON TRANSFERS.—(1) The President may trans-
fer excess defense articles under this section only if— 
"(A) such articles are drawn from existing stocks of the 
Department of Defense; 
"(B) funds available to the Department of Defense for the 
procurement of defense equipment are not expended in connec-
tion with the transfer; 
"(C) the transfer of such articles will not have an adverse 
impact on the military readiness of the United States; 
"(D) with respect to a proposed transfer of such articles 
on a grant basis, such a transfer is preferable to a transfer 
on a sales basis, after taking into account the potential proceeds 
from, and likelihood of, such sales, and the comparative foreign 
policy benefits that may accrue to the United States as the 
result of a transfer on either a grant or sales basis; 
"(E) the President determines that the transfer of such 
articles will not have an adverse impact on the national tech-
nology and industrial base and, particularly, will not reduce 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1425 
the opportunities of entities in the national technology and 
industrial base to sell new or used equipment to the countries 
to which such articles are transferred; and 
"(F) the transfer of such articles is consistent with the 
policy framework for the Eastern Mediterranean established 
under section 620C of this Act. 
"(2) Accordingly, for the four-year period beginning on October Effective date. 
1, 1996, the President shall ensure that excess defense articles President, 
offered to Greece and Turkey under this section will be made 
available consistent with the manner in which the President made 
available such excess defense articles during the four-year period 
that began on October 1, 1992, pursuant to section 573(e) of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 1990. 
"(c) TERMS OF TRANSFERS.— 
"(1) No COST TO RECIPIENT COUNTRY.—Excess defense arti-
cles may be transferred under this section without cost to 
the recipient country. 
"(2) PRIORITY.—Notwithstanding any other provision of law, 
the delivery of excess defense articles under this section to 
member countries of the North Atlantic Treaty Organization 
(NATO) on the southern and southeastern flank of NATO £ind 
to major non-NATO allies on such southern and southeastern 
flank shall be given priority to the maximum extent feasible 
over the delivery of such excess defense articles to other coun-
tries. 
"(d) WAIVER OF REQUIREMENT FOR REIMBURSEMENT OF DEPART-
MENT OF DEFENSE EXPENSES.—Section 632(d) shall not apply with 
respect to transfers of excess defense articles (including transpor-
tation and related costs) imder this section. 
"(e) TRANSPORTATION AND RELATED COSTS.— 
"(1) IN GENERAL.—Except as provided in paragraph (2), 
funds avedlable to the Department of Defense may not be 
expended for crating, paclmig, handling, and transportation 
of excess defense articles transferred under the authority of 
this section. 
"(2) EXCEPTION.—The President may provide for the 
transportation of excess defense articles without charge to a 
country for the costs of such transportation if— 
"(A) it is determined that it is in the national interest 
of the United States to do so; 
"(B) the recipient is a developing country receiving 
less than $10,000,000 of assistance under chapter 5 of 
this part of this Act (relating to international military 
education and training) or section 23 of the Arms Export 
Control Act (22 U.S.C. 2763; relating to the Foreign Mih-
tary Financing progrsim) in the flscal year in which the 
transportation is provided; 
"(C) the total weight of the transfer does not exceed 
25,000 pounds; and 
"(D) such tr£insportation is accomplished on a space 
available basis. 
"(f) ADVANCE NOTIFICATION TO CONGRESS FOR TRANSFER OF 
CERTAIN EXCESS DEFENSE ARTICLES.— 
"(1) IN GENERAL.—The President may not transfer excess 
defense articles that are significant military equipment (as 
defined in section 47(9) of the Arms Export Control Act) or 
110 STAT. 1426 
PUBLIC LAW 104-164—JULY 21, 1996 
excess defense articles valued (in terms of original acquisition 
cost) at $7,000,000 or more, under this section or under the 
Arms Export Control Act (22 U.S.C. 2751 et seq.) until 30 
days after the date on which the President has provided notice 
of the proposed transfer to the congressional committees speci-
fied in section 634A(a) in accordance with procedures applicable 
to reprogramming notifications under that section. 
"(2) CONTENTS.—Such notification shall include— 
"(A) a statement outlining the purposes for which the 
article is being provided to the coimtry, including whether 
such girticle has been previously provided to such country; 
"(B) an assessment of the impact of the transfer on 
the military readiness of the United States; 
"(C) an assessment of the impact of the transfer on 
the national technology and industrial base and, particu-
larly, the impact on opportunities of entities in the national 
technology and industrial base to sell new or used equip-
ment to the countries to which such articles are to be 
transferred; and 
"(D) a statement describing the current value of such 
article and the value of such article at acquisition. 
"(g) AGGREGATE ANNUAL LIMITATION.— 
"(1) IN GENERAL.—The aggregate value of excess defense 
articles transferred to countries under this section in any fiscal 
year may not exceed $350,000,000. 
"(2) EFFECTIVE DATE.—^The limitation contained in para-
graph (1) shall apply only with respect to fiscal years beginning 
after fiscal year 1996. 
"(h) CONGRESSIONAL PRESENTATION DOCUMENTS.—Documents 
described in subsection (a) justifying the transfer of excess defense 
articles shall include an explanation of the general purposes of 
providing excess defense articles as well as a table which provides 
an aggregate annual total of transfers of excess defense articles 
in the preceding year by country in terms of offers and actual 
deliveries and in terms of acquisition cost and current value. Such 
table shall indicate whether such excess defense articles were pro-
vided on a grant or sale basis. 
"(i) EXCESS COAST GUARD PROPERTY.—For purposes of this 
section, the term 'excess defense articles' shall be deemed to include 
excess property of the Coast Guard, and the term 'Depeirtment 
of Defense' shall be deemed, with respect to such excess property, 
to include the Coast Guard.". 
(b) CONFORMING AMENDMENTS.— 
(1) ARMS EXPORT CONTROL ACT.—Section 21(k) of the Arms 
Export Control Act (22 U.S.C. 2761(k)) is amended by striking 
"the President shall" and all that follows and inserting the 
President. 
following: "the President shedl determine that the sale of such 
articles will not have an adverse impact on the national tech-
nology and industrial base and, particularly, will not reduce 
the opportunities of entities in the national technology £ind 
industrial base to sell new or used equipment to the countries 
to which such articles are transferred.". 
(2) REPEALS.—^The following provisions of law are hereby 
repealed: 
(A) Section 502A of the Foreign Assistance Act of 1961 
(22 U.S.C. 2303). 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1427 
(B) Sections 517 through 520 of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2321k through 2321n). 
(C) Section 31(d) of the Arms Export Control Act (22 
U.S.C. 2771(d)). 
SEC. 105. EXCESS DEFENSE ARTICLES FOR CERTAIN EUROPEAN COUN-
TRIES. 
Notwithstanding section 516(e) of the Foreign Assistance Act 
of 1961, as added by this Act, during each of the fiscal years 
1996 and 1997, funds available to the Department of Defense may 
be expended for crating, packing, handling, and transportation of 
excess defense articles transferred under the authority of section 
516 of such Act to countries that are eligible to paurticipate in 
the Partnership for Peace and that are eligible for assistance under 
the Support for East European Democracy (SEED) Act of 1989. 
CHAPTER 2—INTERNATIONAL MILITARY EDUCATION 
AND TRAINING 
SEC. 111. ASSISTANCE FOR INDONESIA. 
Funds made available for fiscal years 1996 and 1997 to carry 
out chapter 5 of part II of the Foreign Assistsince Act of 1961 
(22 U.S.C. 2347 et seq.) may be obligated for Indonesia only for 
expanded military and education training that meets the require-
ments of clauses (i) through (iv) of the second sentence of section 
541 of such Act (22 U.S.C. 2347). 
SEC. 112. ADDITIONAL REQUIREMENTS. 
(a) GENERAL AUTHORITY.—Section 541 of the Foreign Assistance 
Act of 1961 (22 U.S.C. 2347) is amended in the second sentence 
in the matter preceding clause (i) by inserting "and individuals 
who are not members of the government" after "legislators". 
(b) EXCHANGE TRAINING.—Section 544 of such Act (22 U.S.C. 
2347c) is amended— 
(1) by striking "In carrying out this chapter" and inserting 
"(a) In carrying out this chapter"; and 
(2) by adding at the end the following new subsection: 
"(b) The President may provide for the attendance of foreign 
military and civilian defense personnel at flight training schools 
and programs (including test pilot schools) in the United States 
without charge, and without charge to funds available to carry 
out this chapter (notwithstanding section 632(d) of this Act), if 
such attendance is pursuEint to an agreement providing for the 
exchange of students on a one-for-one basis each fiscal year between 
those United States flight training schools and programs (including 
test pilot schools) and comparable flight training schools and pro-
grams of foreign countries.". 
(c) ASSISTANCE FOR CERTAIN HIGH-INCOME FOREIGN COUN-
TRIES.— 
(1) AMENDMENT TO THE FOREIGN ASSISTANCE ACT OF 1961.— 
Chapter 5 of part II of such Act (22 U.S.C. 2347 et seq.) 
is amended by adding at the end the following new section: 
"SEC. 546. PROHIBITION ON GRANT ASSISTANCE FOR CERTAIN fflGH 22 USC 2347c. 
INCOME FOREIGN COUNTRIES. 
"(a) IN GENERAL.—None of the funds made available for a 
fiscal yesir for assisteuice under this chapter may be made available 
for assisteince on a grant basis for any of the high-income foreign 
110 STAT. 1428 
PUBLIC LAW 104-164-^ULY 21, 1996 
countries described in subsection (b) for military education £ind 
training of military and related civiliEmi personnel of such country. 
"(b) HIGH-INCOME FOREIGN COUNTRIES DESCRIBED.—The high-
income foreign countries described in this subsection are Austria, 
Finland, the Republic of Korea, Singapore, and Spain.". 
(2) AMENDMENT TO THE ARMS EXPORT CONTROL ACT.—Sec-
tion 21(a)(1)(C) of the Arms Export Control Act (22 U.S.C. 
2761(a)(1)(C)) is amended by inserting "or to any high-income 
foreign country (as described in that chapter)" after "Foreign 
Assistance Act of 1961". 
CHAPTER 3—ANTITERRORISM ASSISTANCE 
SEC. 121. ANTITERRORISM TRAINING ASSISTANCE. 
(a) IN GENERAL.—Section 571 of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2349aa) is amended by striking "Subject to 
the provisions of this chapter" sind inserting "Notwithstanding any 
other provision of law that restricts assistance to foreign countries 
(other than sections 502B and 620A of this Act)". 
(b) LIMITATIONS.—Section 573 of such Act (22 U.S.C. 2349aa-
2) is amended— 
(1) in the heading, by striking "SPECIFIC AUTHORITIES AND"; 
(2) by striking subsection (a); 
(3) by redesignating subsections (b) through (f) as sub-
sections (a) through (e), respectively; and 
(4) in subsection (c) (as redesignated)— 
(A) by striking paragraphs (1) and (2); 
(B) by redesignating paragraphs (3) through (5) as 
paragraphs (1) through (3), respectively; and 
(C) by amending paragraph (2) (as redesignated) to 
read as follows: 
"(2XA) Except as provided in subparagraph (B), funds made 
available to carry out this chapter shall not be made available 
for the procurement of weapons and ammunition. 
"(B) Subparagraph (A) shall not apply to small arms and 
ammunition in categories I and III of the United States Munitions 
List that are integradly and directly related to antiterrorism training 
provided under this chapter if, at least 15 days before obligating 
those funds, the President notifies the appropriate congressionm 
committees specified in section 634A of this Act in accordance 
with the procedures applicable to reprogramming notifications 
under such section. 
"(C) The value (in terms of original acquisition cost) of all 
equipment and commodities provided under this chapter in any 
fiscal year may not exceed 25 percent of the funds made available 
to carry out this chapter for that fiscal year.". 
(c) ANNUAL REPORT.—Section 574 of such Act (22 U.S.C. 
2349aa-3) is hereby repealed. 
(d) TECHNICAL CORRECTIONS.—Section 575 (22 U.S.C. 2349aa-
4) and section 576 (22 U.S.C. 2349aa-5) of such Act are redesignated 
as sections 574 and 575, respectively. 
SEC. 122. RESEARCH AND DEVELOPMENT EXPENSES. 
Funds made available for fiscal years 1996 and 1997 to carry 
out chapter 8 of part II of the Foreign Assistance Act of 1961 
(22 U.S.C. 2349aa et seq.; relating to antiterrorism assistance) 
may be made available to the Technical Support Working Group 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1429 
of the Depgirtment of State for research and development expenses 
related to contraband detection technologies or for field demonstra-
tions of such technologies (whether such field demonstrations take 
place in the United States or outside the United States). 
CHAPTER 4—INTERNATIONAL NARCOTICS CONTROL 
ASSISTANCE 
SEC. 131. ADDITIONAL REQUIREMENTS. 
(a) POLICY AND GENERAL AUTHORITIES.—Section 481(a) of the 
Foreign Assistance Act (22 U.S.C. 2291(a)) is amended— 
(1) in paragraph (1)— 
(A) by redesignating subparagraphs (D) through (F) 
as subparagraphs (E) through (G), respectively; and 
(B) by inserting after subparagraph (C) the following: 
"(D) International criminal activities, particularly inter-
national narcotics trafficking, money laimdering, and corrup-
tion, endanger political and economic stability and democratic 
development, and assistance for the prevention and suppression 
of international criminal activities should be a priority for 
the United States."; and 
(2) in paragraph (4), by adding before the period at the 
end the following: ", or for otner anticrime purposes". 
(b) CONTRIBUTIONS AND REIMBURSEMENT.—Section 482(c) of 
that Act (22 U.S.C. 2291a(c)) is amended— 
(1) by striking "CONTRIBUTION BY RECIPIENT COUNTRY.— 
To" and inserting "CONTRIBUTIONS AND REIMBURSEMENT.—(1) 
To"; and 
(2) by adding at the end the following new paragraphs: 
"(2)(A) The President is authorized to accept contributions from 
foreign governments to carry out the purposes of this chapter. 
Such contributions shall be deposited as an offsetting collection 
to the applicable appropriation account and may be used under 
the same terms and conditions as funds appropriated pursuant 
to this chapter. 
"(B) At the time of submission of the annual congressional President. 
presentation documents required by section 634(a), the President Reports. 
shall provide a detailed report on any contributions received in 
the preceding fiscal year, tne amount of such contributions, and 
the purposes for which such contributions were used. 
"(3) The President is authorized to provide assistance under 
this chapter on a reimbursable basis. Such reimbursements shall 
be deposited as an offsetting collection to the applicable appropria-
tion and may be used undfer the same terms and conditions as 
funds appropriated pursuant to this chapter.". 
(c) IMPLEMENTATION OF LAW ENFORCEMENT ASSISTANCE.—Sec-
tion 482 of such Act (22 U.S.C. 2291a) is amended by adding 
at the end the following new subsections: 
"(f) TREATMENT OF FUNDS.—Funds transferred to and consoH-
dated with funds appropriated pursuant to this chapter may be 
made available on such terms and conditions as are applicable 
to fiinds appropriated pursuant to this chapter. Funds so trans-
ferred or consolidated shall be apportioned directly to the bureau 
within the Department of State responsible for administering this 
chapter. 
"(g) EXCESS PROPERTY.—For purposes of this chapter, the Sec-
retary of State may use the authority of section 608, without regard 
110 STAT. 1430 
PUBLIC LAW 104-164-^ULY 21, 1996 
to the restrictions of such section, to receive nonlethal excess prop-
erty from any agency of the United States Government for the 
purpose of providing such property to a foreign government under 
the same terms and conditions as funds authorized to be appro-
priated for the purposes of this chapter.". 
21 use 1502 
SEC. 132. NOTIFICATION REQUIREMENT. 
(a) IN GENERAL.—The authority of section 1003(d) of the 
National Narcotics Control Leadership Act of 1988 (21 U.S.C. 
1502(d)) may be exercised with respect to funds authorized to 
be appropriated pursuant to the Foreign Assistance Act of 1961 
(22 U.S.C. 2151 et seq.) and with respect to the personnel of 
the Department of State only to the extent that the appropriate 
congressional committees have been notified 15 days in advance 
in accordance with the reprogramming procedures applicable under 
section 634A of that Act (22 U.S.C. 2394-1). 
(b) DEFINITION.—For purposes of this section, the term "appro-
priate congressional committees" means the Committee on Inter-
national Relations and the Committee on Appropriations of the 
House of Representatives and the Committee on Foreign Relations 
£ind the Committee on Appropriations of the Senate. 
22 use 2151 
SEC. 133. WAIVER OF RESTRICTIONS FOR NARCOTICS-RELATED ECO-
note. 
NOMIC ASSISTANCE. 
For each of the fiscal years 1996 and 1997, narcotics-related 
assistance under part I of the Foreign Assistance Act of 1961 
(22 U.S.C. 2151 et seq.) may be provided notwithstanding any 
other provision of law that restricts assistance to foreign countries 
(other than section 490(e) or section 502B of that Act (22 U.S.C. 
2291j(e) and 2304)) if, at least 15 days before obligating funds 
for such assistance, the President notifies the appropriate congres-
sional committees (as defined in section 481(e) of that Act (22 
U.S.C. 2291(e))) in accordance with the procedures applicable to 
reprogramming notifications under section 634A of that Act (22 
U.S.C. 2394-1). 
CHAPTER 5—OTHER PROVISIONS 
SEC. 141. STANDARDIZATION OF CONGRESSIONAL REVIEW PROCE-
DURES FOR ARMS TRANSFERS. 
(a) THIRD COUNTRY TRANSFERS UNDER F M S SALES.—Section 
3(d)(2) of the Arms Export Control Act (22 U.S.C. 2753(d)(2)) is 
amended— 
(1) in subparagraph (A), by striking ", as provided for 
in sections 36(b)(2) and 36(b)(3) of this Act"; 
(2) in subparagraph (B), by striking "law" and inserting 
"joint resolution"; and 
(3) by adding at the end the following: 
President. 
"(C) If the President states in his certification under subpara-
graph (A) or (B) that an emergency exists which requires that 
consent to the proposed transfer become effective immediately in 
the national security interests of the United States, thus waiving 
the requirements of that subparagraph, the President shall set 
forth in the certification a detailed justification for his determina-
tion, including a description of the emergency circumstances which 
necessitate immediate consent to the transfer and a discussion 
of the national security interests involved. 
PUBLIC LAW 104-164^JULY 21, 1996 
110 STAT. 1431 
"(D)(i) Any joint resolution under this paragraph shall be 
considered in the Senate in accordance with the provisions of section 
601(b) of the International Security Assistance and Arms Export 
Control Act of 1976. 
"(ii) For the purpose of expediting the consideration and enact-
ment of joint resolutions under this paragraph, a motion to proceed 
to the consideration of any such joint resolution after it has been 
reported by the appropriate committee shall be treated as highly 
privileged in the House of Representatives.". 
(b) THIRD COUNTRY TRANSFERS UNDER COMMERCIAL SALES.— 
Section 3(d)(3) of such Act (22 U.S.C. 2753(d)(3)) is amended— 
(1) by inserting "(A)" after "(3)"; 
(2) in the first sentence— 
(A) by striking "at least 30 calendar days"; and 
(B) by striking "report" and inserting "certification"; 
and 
(3) by striking the last sentence and inserting the following: 
"Such certification shall be submitted— 
"(i) at least 15 calendar days before such consent is given 
in the case of a transfer to a country which is a member 
of the North Atlantic Treaty Organization or Australia, Japan, 
or New Zealand; and 
"(ii) at least 30 CEilendar days before such consent is given 
in the case of a transfer to any other country, 
unless the President states in his certification that an emergency 
exists which requires that consent to the proposed trsmsfer become 
effective immediately in the national security interests of the United 
States. If the President states in his certification that such an President. 
emergency exists (thus waiving the requirements of clause (i) or 
(ii), as the case may be, £ind of subparagraph (B)) the President 
shall set forth in the certification a detailed justification for his 
determination, including a description of the emergency cir-
cumstances which necessitate that consent to the proposed transfer 
become effective immediately and a discussion of the national secu-
rity interests involved. 
"(B) Consent to a transfer subject to subparagraph (A) shall 
Effective date. 
become effective after the end of the 15-day or 30-day period speci-
fied in subparagraph (A)(i) or (ii), as the case may be, only if 
the Congress does not enact, within that period, a joint resolution 
prohibiting the proposed transfer. 
"(C)(i) Any joint resolution under this paragraph shall be consid-
ered in the Senate in accordance with the provisions of section 
601(b) of the International Security Assistance Eind Arms Export 
Control Act of 1976. 
"(ii) For the purpose of expediting the consideration and enact-
ment of joint resolutions under this paragraph, a motion to proceed 
to the consideration of any such joint resolution after it has been 
reported by the appropriate committee shall be treated as highly 
privileged in the House of Representatives.". 
(c) COMMERCIAL SALES.—Section 36(c)(2) of such Act (22 U.S.C. 
2776(c)(2)) is amended by amending subparagraphs (A) and (B) 
to read as follows: 
"(A) in the case of a license for an export to the North 
Atlantic Treaty Organization, any member country of that 
Organization or Australia, Japan, or New Zealand, shall not 
be issued until at least 15 calendar days after the Congress 
receives such certification, and shall not be issued then if 
110 STAT. 1432 
PUBLIC LAW 104-164-JULY 21, 1996 
the Congress, within that 15-day period, enacts a joint resolu-
tion prohibiting the proposed export; and 
"(B) in the case of any other license, shall not be issued 
until at least 30 calendar days after the Congress receives 
such certification, and shall not be issued then if the Congress, 
within that 30-day period, enacts a joint resolution prohibiting 
the proposed export.". 
(d) COMMERCIAL MANUFACTURING AGREEMENTS.—Section 36(d) 
of such Act (22 U.S.C. 2776(d)) is amended— 
(1) by inserting "(1)" after "(d)"; 
(2) by striking "for or in a country not a member of the 
North Atlantic Treaty Organization"; and 
(3) by adding at the end the following: 
"(2) A certification under this subsection shall be submitted— 
"(A) at least 15 days before approval is given in the case 
of an agreement for or in a country which is a member of 
the North Atlantic Treaty Organization or Australia, Japan, 
or New Zealand; and 
"(B) at least 30 days before approval is given in the case 
of an agreement for or in any other country; 
unless the President states in his certification that an emergency 
exists which requires the immediate approval of the agreement 
in the national security interests of the United States. 
President. 
"(3) If the President states in his certification that an emergency 
exists which requires the immediate approval of the agreement 
in the national security interests of the United States, thus waiving 
the requirements of paragraph (4), he shall set forth in the certifi-
cation a detailed justification for his determination, including a 
description of the emergency circumstances which necessitate the 
immediate approval of the agreement and a discussion of the 
national security interests involved. 
"(4) Approval for an agreement subject to paragraph (1) may 
not be given under section 38 if the Congress, within the 15-
day or 30-day period specified in paragraph (2)(A) or (B), as the 
case may be, enacts a joint resolution prohibiting such approval. 
"(5)(A) Any joint resolution under paragraph (4) shall be consid-
ered in the Senate in accordance with the provisions of section 
601(b) of the International Security Assistance and Arms Export 
Control Act of 1976. 
"(B) For the purpose of expediting the consideration and enact-
ment of joint resolutions under paragraph (4), a motion to proceed 
to the consideration of any such joint resolution after it has been 
reported by the appropriate committee shall be treated as highly 
privileged in the House of Representatives.". 
(e) GOVERNMENT-TO-GOVERNMENT LEASES.— 
(1) CONGRESSIONAL REVIEW PERIOD.—Section 62 of such 
Act (22 U.S.C. 2796a) is amended— 
(A) in subsection (a), by striking "Not less than 30 
days before" and inserting "Before"; 
(B) in subsection (b)-— 
(i) by striking "determines, and immediately 
reports to the Congress" and inserting "states in his 
certification"; and 
(ii) by adding at the end of the subsection the 
President. 
following: "If the President states in his certification 
that such an emergency exists, he shall set forth in 
the certification a detailed justification for his deter-
PUBLIC LAW 104-164-JULY 21, 1996 
110 STAT. 1433 
mination, including a description of the emergency cir-
cumstances which necessitate that the lease be entered 
into immediately and a discussion of the national secu-
rity interests involved."; and 
(C) by adding at the end of the section the following: 
"(c) The certification required by subsection (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 
the North Atlantic Treaty Organization, any member country 
of that Organization or Australia, Japan, or New Zealand; 
and 
"(2) not less than 30 calendar days before the agreement 
is entered into or renewed in the case of an agreement with 
any other organization or country.". 
(2) CONGRESSIONAL DISAPPROVAL.—Section 63(a) of such 
Act (22 U.S.C. 2796b(a)) is amended— 
(A) by striking "(a)(1)" and inserting "(a)"; 
(B) by striking "30 calendar days after receiving the 
certification with respect to that proposed agreement pursu-
ant to section 62(a)," and inserting "the 15-day or 30-
day period specified in section 62(c) (1) or (2), as the case 
may be,"; and 
(C) by striking paragraph (2). 
(f) EFFECTIVE DATE.—The amendments made by this section 22 use 2753 
apply with respect to certifications required to be submitted on ^°^-
or after the date of the enactment of this Act. 
SEC. 142. STANDARDIZATION OF THIRD COUNTRY TRANSFERS OF 
DEFENSE ARTICLES. 
Section 3 of the Arms Export Control Act (22 U.S.C. 2753) 
is amended by inserting after subsection (a) the following new 
subsection: 
"(b) The consent of the President under paragraph (2) of sub-
section (a) or under paragraph (1) of section 505(a) of the Foreign 
Assistance Act of 1961 (as it relates to subparagraph (B) of such 
paragraph) shall not be required for the transfer by a foreign 
country or international organization of defense articles sold by 
the United States under this Act if— 
"(1) such articles constitute components incorporated into 
foreign defense articles; 
"(2) the recipient is the government of a member country 
of the North Atlantic Treaty Organization, the Government 
of Australia, the Government of Japan, or the Government 
of New Zealand; 
"(3) the recipient is not a country designated under section 
620A of the Foreign Assistance Act of 1961; 
"(4) the United States-origin components are not— 
"(A) significant military equipment (as defined in sec-
tion 47(9)); 
"(B) defense articles for which notification to Congress 
is required under section 36(b); and 
"(C) identified by regulation as Missile Technology Con-
trol Regime items; and 
"(5) the foreign country or international organization pro-
vides notification of the transfer of the defense articles to 
-194 O - 96 - 21 : QL 3 Part 2 
110 STAT. 1434 
PUBLIC LAW 1 0 4 - 1 6 4 - J U L Y 21, 1996 
the United States Grovemment not later than 30 days after 
the date of such transfer.". 
SEC. 143. INCREASED STANDARDIZATION, RATIONALIZATION, AND 
INTEROPERABILITY OF ASSISTANCE AND SALES PRO-
GRAMS. 
Paragraph (6) of section 515(a) of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2321i(a)(6)) is amended by striking "among 
members of the North Atlantic Treaty Organization and with the 
Armed Forces of Japan, Australia, and New Zealand". 
SEC. 144. DEFINITION OF SIGNIFICANT MILITARY EQUIPMENT. 
Section 47 of the Arms Export Control Act (22 U.S.C. 2794) 
is amended— 
(1) in paragraph (7), by striking "and" at the end; 
(2) in paragraph (8), by striking the period at the end 
and inserting "; and"; £ind 
(3) by adding at the end the following new paragraph: 
"(9) 'significant militsiry equipment' means articles— 
"(A) for which special export controls are warranted because 
of the capacity of such articles for substantial military utility 
or capability; and 
"(B) identified on the United States Munitions List.". 
SEC. 
146. ELIMINATION OF ANNUAL REPORTING REQUIREMENT 
RELATING TO THE SPECIAL DEFENSE ACQUISITION 
FUND. 
(a) IN GENERAL.—Section 53 of the Arms Export Control Act 
(22 U.S.C. 2795b) is hereby repealed. 
(b) CONFORMING AMENDMENT.—Section 51(a)(4) of such Act 
(22 U.S.C. 2795(a)(4)) is amended— 
(1) by striking "(A)"; and 
(2) by striking subparagraph (B). 
SEC. 146. COST OF LEASED DEFENSE ARTICLES THAT HAVE BEEN 
LOST OR DESTROYED. 
Section 61(a)(4) of the Arms Export Control Act (22 U.S.C. 
2796(a)(4)) is amended by striking "and the replacement cost" and 
all that follows and inserting the following: "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 replacement 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 destroyed, an amount not 
less than the actual value (less any depreciation in the 
value) specified in the lease agreement.". 
SEC. 147. DESIGNATION OF MAJOR NON-NATO ALLIES. 
(a) DESIGNATION.— 
(1) NOTICE TO CONGRESS.—Chapter 2 of part II of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2311 et seq.), as 
amended by this Act, is further amended by adding at the 
end the following new section: 
22 use 2321k. 
"SEC. 517. DESIGNATION OF MAJOR NON-NATO ALLIES. 
President. 
"(a) NOTICE TO CONGRESS.—The President shall notify the Con-
gress in writing at least 30 days before— 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1435 
"(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 
(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 President, 
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 dolleir 
value and quantity of defense sirticles (including excess defense 
articles), defense services, £uid 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 coimtry 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.". 
110 STAT. 1436 
PUBLIC LAW 104-164-^ULY 21, 1996 
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: 
22 use 2378a. 
"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 
thein— 
"(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 
President. 
"SEC. 40A. END-USE MONITORING 
OF DEFENSE ARTICLES 
AND 
22 use 2785. 
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 estabUsh 
a program which provides for the end-use monitoring of such 
articles £ind 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 
t h a t -
'll) 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. 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1437 
"(b) CONDUCT OF PROGRAM.—In canying 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 £ind defense services that are 
transferred to a third country or other third party.". 
(b) EFFECTIVE DATE.—Section 40A of the Arms Export Control 
22 use 2785 
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. Regulations. 
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 shgJl 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. 
"(Ill) 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 
110 STAT. 1438 
PUBLIC LAW 104-164-^ULY 21, 1996 
activities underteiken 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.". 
22 use 2778 
(b) EFFECTIVE DATE.—Section 38(b)(l)(A)(ii) of the Arms Export 
note. 
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: 
"(1) 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 £in end item; £ind 
"(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 £ind 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 euid replace-
ment transaction. 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1439 
"(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 £md 
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 fimds 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 
acceptguice 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 
22 use 2761 
Secretary of Defense shall promulgate regulations to implement note, 
subsections (1) and (m) of section 21 of the Arms Export Control 
Act, as added by this section. 
110 STAT. 1440 
PUBLIC LAW 104-164—JULY 21, 1996 
22 use 2796 
note. 
22 use 2751 
note. 
President. 
Federal Register, 
publication. 
President. 
22 use 3201 
note. 
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 fiiU 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. 166. 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 fi*om 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 
PUBLIC LAW 104-164-^ULY 21, 1996 
110 STAT. 1441 
(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 Secreteoy 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.—'Hie 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. 
110 STAT. 1442 
PUBLIC LAW 104-164-^ULY 21, 1996 
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 LFnited States 
Navy shipyard. 
Approved July 21, 1996. 
LEGISLATIVE HISTORY—H.R. 3121: 
HOUSE REPORTS: No. 104-519, Pt. 1 (Comm. on International Relations). 
CONGRESSIONAL RECORD, Vol. 142 (1996): 
Apr. 16, considered and passed House. 
June 27, considered and passed Senate, amended. 
July 9, House concurred in Senate amendments.