SUBCHAPTER II—FOREIGN MILITARY SALES AUTHORIZATIONS

§2761. Sales from stocks

(a) Eligible countries or international organizations; basis of payment; valuation of certain defense articles

(1) The President may sell defense articles and defense services from the stocks of the Department of Defense and the Coast Guard to any eligible country or international organization if such country or international organization agrees to pay in United States dollars—

(A) 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;

(B) 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 article, including the contract or production costs less any depreciation in the value of such article; or

(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.

(b) Time of payment

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.

(c) Personnel performing defense services sold as prohibited from performing combat activities

(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.

(2) Within forty-eight hours of the existence of, or a change in status of significant hostilities or terrorist acts or a series of such acts, which may endanger American lives or property, involving a country in which United States personnel are performing defense services pursuant to this chapter or the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.], the President shall submit to the Speaker of the House of Representatives and to the President pro tempore of the Senate a report, in writing, classified if necessary, setting forth—

(A) the identity of such country;

(B) a description of such hostilities or terrorist acts; and

(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.

(d) Billings; interest after due date, rates of interest and extension of due date

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.

(e) Charges; reduction or waiver

(1) After September 30, 1976, letters of offer for the sale of defense articles or for the sale of defense services that are issued pursuant to this section or pursuant to section 2762 of this title shall include appropriate charges for—

(A) administrative services, calculated on an average percentage basis to recover the full estimated costs (excluding a pro rata share of fixed base operation costs) of administration of sales made under this chapter to all purchasers of such articles and services as specified in section 2792(b) of this title and section 2792(c) of this title;

(B) 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 503(a)(3) of the Foreign Assistance Act of 1961 [22 U.S.C. 2311(a)(3)] or from funds made available on a nonrepayable basis under section 2763 of this title); and

(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.

(B) The President may waive the charge or charges which would otherwise be considered appropriate under paragraph (1)(B) for a particular sale if the President determines that—

(i) imposition of the charge or charges likely would result in the loss of the sale; or

(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.

(3)(A) The President may waive the charges for administrative services that would otherwise be required by paragraph (1)(A) in connection with any sale to the North Atlantic Treaty Organization (NATO) Support and Procurement Organization and its executive agencies in support of—

(i) a support or procurement partnership agreement; or

(ii) a NATO/SHAPE project.

(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.

(C) As used in this paragraph—

(i) the term "support or procurement partnership agreement" means an agreement between two or more member countries of the North Atlantic Treaty Organization (NATO) Support and Procurement Organization and its executive agencies that—

(I) is entered into pursuant to the terms of the charter of that organization; and

(II) is for the common logistic support of activities common to the participating countries; and

(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.

(f) Public inspection of contracts

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.

(g) North Atlantic Treaty Organization standardization agreements, similar agreements; reimbursement for costs; transmittal to Congress

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, the Committee on Foreign Affairs of the House of Representatives, and the Committees on Appropriations, Armed Services, and Foreign Relations of the Senate.

(h) Reciprocal quality assurance, inspection, contract administrative services, and contract audit defense services; catalog data and services

(1) The President is authorized to provide (without charge) quality assurance, inspection, contract administration services, and contract audit defense services under this section—

(A) in connection with the placement or administration of any contract or subcontract for defense articles, defense services, or design and construction services entered into after October 29, 1979, by, or under this chapter on behalf of, a foreign government which is a member of the North Atlantic Treaty Organization or the Governments of Australia, New Zealand, Japan, the Republic of Korea, or Israel, if such government provides such services in accordance with an agreement on a reciprocal basis, without charge, to the United States Government; or

(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.

(i) Sales affecting combat readiness of Armed Forces; statement to Congress; limitation on delivery

(1) Sales of defense articles and defense services which could have significant adverse effect on the combat readiness of the Armed Forces of the United States shall be kept to an absolute minimum. The President shall transmit to the Speaker of the House of Representatives, the Committees on Foreign Affairs and Armed Services of the House of Representatives, and the Committees on Armed Services and Foreign Relations of the Senate on the same day a written statement giving a complete explanation with respect to any proposal to sell, under this section or under authority of subchapter II–B, any defense articles or defense services if such sale could have a significant adverse effect on the combat readiness of the Armed Forces of the United States. Each such statement shall be unclassified except to the extent that public disclosure of any item of information contained therein would be clearly detrimental to the security of the United States. Any necessarily classified information shall be confined to a supplemental report. Each such statement shall include an explanation relating to only one such proposal to sell and shall set forth—

(A) the country or international organization 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 Armed Forces of the United States; and

(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.

(j) Repealed. Pub. L. 104–106, div. A, title I, §112, Feb. 10, 1996, 110 Stat. 206

(k) Effect of sales of excess defense articles on national technology and industrial base

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.

(l) Repair of defense articles

(1) In general

The President may acquire a repairable defense article from a foreign country or international organization if such defense article—

(A) previously was transferred to such country or organization under this chapter;

(B) is not an end item; and

(C) will be exchanged for a defense article of the same type that is in the stocks of the Department of Defense.

(2) Limitation

The President may exercise the authority provided in paragraph (1) only to the extent that the Department 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 chapter; and

(ii) has available sufficient funds provided by or on behalf of such other foreign government or international organization pursuant to a letter of offer and acceptance implemented in accordance with this chapter.

(3) Requirement

(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.

(4) Relationship to certain other provisions of law

The authority of the President to accept the return of a repairable defense article as provided in subsection (a) shall not be subject to chapter 137 legacy provisions (as such term is defined in section 3016 of title 10) of title 10 or any other provision of law relating to the conclusion of contracts.

(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 chapter;

(B) is not significant military equipment (as defined in section 2794(9) of this title); 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 Department 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 chapter; and

(ii) has available sufficient funds provided by or on behalf of such other foreign government or international organization pursuant to a letter of offer and acceptance implemented in accordance with this chapter.

(3) Credit for transaction

Upon acquisition and acceptance by the United States Government of a defense article under paragraph (1), the appropriate Foreign Military Sales account of the provider shall be credited to reflect the transaction.

(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 legacy provisions (as such term is defined in section 3016 of title 10) of title 10 or any other provision of law relating to the conclusion of contracts.

(Pub. L. 90–629, ch. 2, §21, Oct. 22, 1968, 82 Stat. 1323; Pub. L. 94–329, title II, §§205, 206, June 30, 1976, 90 Stat. 736, 738; Pub. L. 95–384, §16, Sept. 26, 1978, 92 Stat. 740; Pub. L. 96–92, §12, Oct. 29, 1979, 93 Stat. 705; Pub. L. 96–533, title I, §§102, 103, 105(b)(1), 115(b)(2), Dec. 16, 1980, 94 Stat. 3132, 3134, 3140; Pub. L. 97–113, title I, §§103, 104, Dec. 29, 1981, 95 Stat. 1521; Pub. L. 97–392, §3, Dec. 29, 1982, 96 Stat. 1963; Pub. L. 98–473, title I, §101(1) [title III, §301], Oct. 12, 1984, 98 Stat. 1884, 1895; Pub. L. 99–83, title I, §§107(a), 108–111, Aug. 8, 1985, 99 Stat. 196, 197; Pub. L. 100–202, §101(e) [title V, §580], Dec. 22, 1987, 101 Stat. 1329–131, 1329-181; Pub. L. 100–456, div. A, title X, §1002, Sept. 29, 1988, 102 Stat. 2037; Pub. L. 101–165, title IX, §9104(c), Nov. 21, 1989, 103 Stat. 1152; Pub. L. 102–25, title VII, §705(d)(1), Apr. 6, 1991, 105 Stat. 120; Pub. L. 102–484, div. A, title I, §114, Oct. 23, 1992, 106 Stat. 2333; Pub. L. 103–236, title VII, §731(d), Apr. 30, 1994, 108 Stat. 503; Pub. L. 104–106, div. A, title I, §112, div. D, title XLIII, §4303(a), Feb. 10, 1996, 110 Stat. 206, 658; Pub. L. 104–164, title I, §§104(b)(1), 112(c)(2), 147(a)(3)(A), (b), 152(a), (b), July 21, 1996, 110 Stat. 1426, 1428, 1435, 1438, 1439; Pub. L. 104–201, div. B, title XXVIII, §2802(d)(2), Sept. 23, 1996, 110 Stat. 2787; Pub. L. 106–113, div. B, §1000(a)(7) [div. B, title XII, §1222], Nov. 29, 1999, 113 Stat. 1536, 1501A-498; Pub. L. 109–102, title V, §534(l)(1), (2), Nov. 14, 2005, 119 Stat. 2211; Pub. L. 110–429, title II, §203(b)(1), (3), (4), Oct. 15, 2008, 122 Stat. 4845; Pub. L. 111–266, title III, §301(1), Oct. 8, 2010, 124 Stat. 2804; Pub. L. 113–66, div. A, title XII, §1250(b), Dec. 26, 2013, 127 Stat. 926; Pub. L. 113–276, title II, §208(a)(1), (2), Dec. 18, 2014, 128 Stat. 2992, 2993; Pub. L. 115–232, div. A, title XII, §1279(b), Aug. 13, 2018, 132 Stat. 2072; Pub. L. 117–81, div. A, title XVII, §1702(l)(3), Dec. 27, 2021, 135 Stat. 2160.)

Editorial Notes

References in Text

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, 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.

Codification

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.

Amendments

2021—Subsecs. (l)(4), (m)(4). Pub. L. 117–81 substituted "chapter 137 legacy provisions (as such term is defined in section 3016 of title 10)" for "chapter 137".

2018—Subsec. (e)(3)(A). Pub. L. 115–232, §1279(b)(1)(A), substituted "North Atlantic Treaty Organization (NATO) Support and Procurement Organization" for "North Atlantic Treaty Organization (NATO) Support Organization" in introductory provisions.

Subsec. (e)(3)(A)(i). Pub. L. 115–232, §1279(b)(1)(B), substituted "support or procurement partnership agreement" for "support partnership agreement".

Subsec. (e)(3)(C)(i). Pub. L. 115–232, §1279(b)(2), in introductory provisions, substituted " 'support or procurement partnership agreement' " for " 'weapon system partnership agreement' " and "North Atlantic Treaty Organization (NATO) Support and Procurement Organization" for "North Atlantic Treaty Organization (NATO) Support Organization".

2014—Subsec. (g). Pub. L. 113–276, §208(a)(1), substituted "the Speaker of the House of Representatives, the Committee on Foreign Affairs of the House of Representatives, and" for "the Speaker of the House of Representatives and".

Subsec. (i)(1). Pub. L. 113–276, §208(a)(2), inserted ", the Committees on Foreign Affairs and Armed Services of the House of Representatives," after "the Speaker of the House of Representatives" in introductory provisions.

2013—Subsec. (e)(3)(A). Pub. L. 113–66, §1250(b)(1), substituted "North Atlantic Treaty Organization (NATO) Support Organization and its executive agencies" for "Maintenance and Supply Agency of the North Atlantic Treaty Organization" in introductory provisions.

Subsec. (e)(3)(A)(i). Pub. L. 113–66, §1250(b)(2), substituted "support partnership agreement" for "weapon system partnership agreement".

Subsec. (e)(3)(C)(i). Pub. L. 113–66, §1250(b)(1), substituted "North Atlantic Treaty Organization (NATO) Support Organization and its executive agencies" for "Maintenance and Supply Agency of the North Atlantic Treaty Organization" in introductory provisions.

Subsec. (e)(3)(C)(i)(II). Pub. L. 113–66, §1250(b)(3), substituted "activities" for "a specific weapon system".

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. (g). Pub. L. 104–164, §147(a)(3)(A), (b), substituted "similar agreements with countries" for "similar agreements with Japan, Australia, and New Zealand, and with other countries" in first sentence and struck out at end "As used in this subsection, the term 'major non-NATO allies' means those countries designated as major non-NATO allies for purposes of section 2350a(i)(3) of title 10."

Subsec. (h)(1)(B). Pub. L. 104–201 substituted "Security Investment program" for "Infrastructure Program".

Subsec. (j). Pub. L. 104–106, §112, struck out heading and text of subsec. (j). Text read as follows:

"(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.

"(4) This subsection applies with respect to funds received from sales occurring after September 30, 1989."

Subsec. (k). Pub. L. 104–164, §104(b)(1), substituted "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." for "the President shall first consider the effects of the sale of the articles on the national technology and industrial base, particularly the extent, if any, to which the sale reduces the opportunities of entities in the national technology and industrial base to sell new equipment to the country or countries to which the excess defense articles are sold."

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).

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Pub. L. 104–106, div. D, title XLIII, §4303(b)–(d), Feb. 10, 1996, 110 Stat. 659, provided that:

"(b) Conditions.—Subsection (a) [amending this section] shall be effective only if—

"(1) the President, in the budget of the President for fiscal year 1997, proposes legislation that if enacted would be qualifying offsetting legislation; and

"(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].

"(d) Definitions.—For purposes of this section:

"(1) The term 'qualifying offsetting legislation' means legislation that includes provisions that—

"(A) offset fully the estimated revenues lost as a result of the amendments made by subsection (a) for each of the fiscal years 1997 through 2005;

"(B) expressly state that they are enacted for the purpose of the offset described in subparagraph (A); and

"(C) are included in full on the PayGo scorecard.

"(2) The term 'PayGo scorecard' means the estimates that are made by the Director of the Congressional Budget Office and the Director of the Office of Management and Budget under section 252(d) of the Balanced Budget and Emergency Deficit Control Act of 1985 [2 U.S.C. 902(d)]."

[Qualifying offsetting legislation was enacted by Pub. L. 104–201, §3303, listed in a Materials in the National Defense Stockpile table under section 98d of Title 50, War and National Defense.]

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

Effective Date

Section effective July 1, 1968, see section 41 of Pub. L. 90–629, set out as a note under section 2751 of this title.

Regulations

Pub. L. 104–164, title I, §152(c), July 21, 1996, 110 Stat. 1439, provided that: "Under the direction of the President, the Secretary of Defense shall promulgate regulations to implement subsections (l) and (m) of section 21 of the Arms Export Control Act [22 U.S.C. 2761(l), (m)], as added by this section."

Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

Notional Milestones and Standard Timelines for Contracts for Foreign Military Sales

Pub. L. 115–91, div. A, title VIII, §887, Dec. 12, 2017, 131 Stat. 1506, as amended by Pub. L. 116–283, div. A, title VIII, §887, Jan. 1, 2021, 134 Stat. 3791, provided that:

"(a) Establishment.—

"(1) In general.—The Secretary of Defense shall establish specific notional milestones and standard timelines for the Department of Defense to achieve such milestones in its processing of a foreign military sale (as authorized under chapter 2 of the Arms Export Control Act (22 U.S.C. 2761 et seq.)). Such milestones and timelines—

"(A) may vary depending on the complexity of the foreign military sale; and

"(B) shall cover the period beginning on the date of receipt of a complete letter of request (as described in chapter 5 of the Security Assistance Management Manual of the Defense Security Cooperation Agency) from a foreign country and ending on the date of the final delivery of a defense article or defense service sold through the foreign military sale.

"(2) Report.—Not later than 180 days after the date of the enactment of this Act [Dec. 12, 2017], the Secretary shall submit to the appropriate committees of Congress a report describing the milestones and timelines developed pursuant to paragraph (1) of this section.

"(b) Submissions to Congress.—

"(1) Quarterly notification.—During the period beginning 180 days after the date of the enactment of this Act and ending on December 31, 2022, the Secretary shall submit to the appropriate committees of Congress, on a quarterly basis, a report that includes a list of each foreign military sale with a value greater than or equal to the dollar threshold for congressional notification under section 36 of the Arms Export Control Act (22 U.S.C. 2776)—

"(A) for which the final delivery of a defense article or defense service has not been completed; and

"(B) that has not met a standard timeline to achieve a notional milestone as established under subsection (a).

"(2) Annual report.—Not later than November 1, 2019, and annually thereafter until December 31, 2022, the Secretary shall submit to the appropriate committees of Congress a report that summarizes—

"(A) the number, set forth separately by dollar value and notional milestone, of foreign military sales that met the standard timeline to achieve a notional milestone established under subsection (a) during the preceding fiscal year; and

"(B) the number, set forth separately by dollar value and notional milestone, of each foreign military sale that did not meet the standard timeline to achieve a notional milestone established under subsection (a), and a description of any extenuating factors explaining why such a sale did not achieve such milestone.

"(3) Applicability.—The requirements of this subsection apply only to foreign military sales processes within the Department of Defense.

"(c) Definitions.—In this section—

"(1) the terms 'defense article' and 'defense service' have the meanings given those terms, respectively, in section 47 of the Arms Export Control Act (22 U.S.C. 2794); and

"(2) the term 'appropriate committees of Congress' means—

"(A) the Committee on Armed Services and the Committee on Foreign Relations of the Senate; and

"(B) the Committee on Armed Services and the Committee on Foreign Affairs of the House of Representatives."

International Sales Process Improvements

Pub. L. 114–328, div. A, title XII, §1297, Dec. 23, 2016, 130 Stat. 2563, provided that:

"(a) Plan Required.—Not later than 180 days after the date of the enactment of this Act [Dec. 23, 2016], the Secretary of Defense shall develop a plan to improve the management and use of fees collected on transfer of defense articles and services via sale, lease, or grant to international customers under programs over which the Defense Security Cooperation Agency has administration responsibilities. The plan shall include options to use fees more effectively—

"(1) to improve the staffing and processes of the licensing review cycle at the Defense Technology Security Administration and other reviewing authorities; and

"(2) to maintain a cadre of contracting officers and acquisition officials who specialize in foreign military sales contracting.

"(b) Process for Gathering Input.—The Secretary of Defense shall establish a process for contractors to provide input, feedback, and adjudication of any differences regarding the appropriateness of governmental pricing and availability estimates prior to the delivery to potential foreign customers of formal responses to Letters of Request for Pricing and Availability."

Executive Documents

Delegation of Functions

For delegation of certain functions of the President under this section, see section 1(c) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by section 4 of Ex. Ord. No. 13637.

¹ So in original. Probably should be "subparagraph".

§2762. Procurement for cash sales

(a) Authority of President; dependable undertaking by foreign country or international organization; interest rates

Except as otherwise provided in this section, the President may, without requirement for charge to any appropriation or contract authorization otherwise provided, enter into contracts for the procurement of defense articles or defense services for sale for United States dollars to any foreign country or international organization if such country or international organization provides the United States Government with a dependable undertaking (1) to pay the full amount of such contract which will assure the United States Government against any loss on the contract, and (2) 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 advance of the time such payments, damages, or costs are due. Interest shall be charged on any net amount by which any such country or international 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 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 net arrearage and shall be computed from the date of net arrearage.

(b) Issuance of letters of offer under emergency determination; availability of appropriations for payment

The President may, if he determines it to be in the national interest, issue letters of offer under this section which provide for billing upon delivery of the defense article or rendering of the defense service and for payment within one hundred and twenty days after the date of billing. This authority may be exercised, however, only if the President also determines that the emergency requirements of the purchaser for acquisition of such defense articles and services exceed the ready availability to the purchaser of funds sufficient to make payments on a dependable undertaking basis and submits both determinations to the Congress together with a special emergency request for authorization and appropriation of additional funds to finance such purchases under this chapter. Appropriations available to the Department of Defense may be used to meet the payments required by the contracts for the procurement of defense articles and defense services and shall be reimbursed by the amounts subsequently received from the country or international organization to whom articles or services are sold.

(c) Applicability of Renegotiation Act of 1951

The provisions of the Renegotiation Act of 1951 do not apply to procurement contracts heretofore or hereafter entered into under this section, section 2769 of this title, or predecessor provisions of law.

(d) Competitive pricing

(1) 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 nonrepayable 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 procurements of like items purchased by the Department of Defense for its own use.

(2) Direct costs associated with meeting additional or unique requirements of the purchaser shall be allowable under contracts described in paragraph (1). Loadings applicable to such direct costs shall be permitted at the same rates applicable to procurement of like items purchased by the Department of Defense for its own use.

(Pub. L. 90–629, ch. 2, §22, Oct. 22, 1968, 82 Stat. 1323; Pub. L. 93–189, §25(3), Dec. 17, 1973, 87 Stat. 730; Pub. L. 94–329, title II, §207, June 30, 1976, 90 Stat. 738; Pub. L. 95–384, §17, Sept. 26, 1978, 92 Stat. 740; Pub. L. 96–533, title I, §105(b)(2), Dec. 16, 1980, 94 Stat. 3134; Pub. L. 104–107, title V, §531A(a), Feb. 12, 1996, 110 Stat. 731; Pub. L. 106–113, div. B, §1000(a)(7) [div. B, title XII, §1223], Nov. 29, 1999, 113 Stat. 1536, 1501A-498.)

Editorial Notes

References in Text

This chapter, referred to in subsec. (b), 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 Renegotiation Act of 1951, referred to in subsec. (c), is act Mar. 23, 1951, ch. 15, 65 Stat. 7, which was classified principally to section 1211 et seq. of the former Appendix to Title 50, War and National Defense, prior to its omission from the Code.

Amendments

1999—Subsec. (d). Pub. L. 106–113 designated existing provisions as par. (1) and added par. (2).

1996—Subsec. (d). Pub. L. 104–107 added subsec. (d).

1980—Subsec. (c). Pub. L. 96–533 substituted "procurement contracts" for "contracts for the procurement of defense articles and defense services" and inserted reference to contracts entered into under section 2769 of this title.

1978—Subsec. (c). Pub. L. 95–384 added subsec. (c).

1976—Subsec. (a). Pub. L. 94–329, §207(a), inserted provisions requiring interest to be charged on any net amount a country or international organization is in arrears and the rate of interest to be determined by the Secretary of Treasury considering current average market yield of short-term obligations of United States on a particular day.

Subsec. (b). Pub. L. 94–329, §207(b), substituted provisions authorizing President to issue letters of offer with provisions for billing on delivery of article or rendering of service and payment within 120 days after billing date where President determines that emergency conditions exist, for provisions authorizing President to accept a dependable undertaking of a foreign country or international organization with respect to sales of defense articles and services and to make payment within 120 days of delivery of article or rendering of service.

1973—Pub. L. 93–189 designated text preceding first proviso as subsec. (a) and inserted "Except as otherwise provided in this section," before "the President", designated first proviso as subsec. (b) and inserted reference to acceptance of a dependable undertaking of a foreign country or international organization, and struck out further provisions setting forth Presidential powers with respect to sales agreements with and payments by purchasing countries or international organizations.

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment; Implementing Regulations

Pub. L. 104–107, title V, §531A(b), Feb. 12, 1996, 110 Stat. 731, provided that: "Section 22(d) of the Arms Export Control Act [subsec. (d) of this section], as added by subsection (a)—

"(1) shall take effect on the 60th day following the date of the enactment of this Act [Feb. 12, 1996];

"(2) shall be applicable only to contracts made in implementation of sales made after such effective date; and

"(3) shall be implemented by revised procurement regulations, which shall be issued prior to such effective date."

Effective Date

Section effective July 1, 1968, see section 41 of Pub. L. 90–629, set out as a note under section 2751 of this title.

Similar Provisions

Provisions similar to those comprising subsec. (d)(2) of this section were contained in the following appropriation acts:

Pub. L. 106–113, div. B, §1000(a)(2) [title V, §556], Nov. 29, 1999, 113 Stat. 1535, 1501A-100.

Pub. L. 105–277, div. A, §101(d) [title V, §536], Oct. 21, 1998, 112 Stat. 2681–150, 2681-181.

Pub. L. 105–118, title V, §535, Nov. 26, 1997, 111 Stat. 2416.

Pub. L. 104–208, div. A, title I, §101(c) [title V, §533A], Sept. 30, 1996, 110 Stat. 3009–121, 3009-153.

Pub. L. 104–107, title V, §531A(c), Feb. 12, 1996, 110 Stat. 731.

Requirement To Use Firm Fixed-Price Contracts for Foreign Military Sales

Pub. L. 116–92, div. A, title VIII, §807(c), Dec. 20, 2019, 133 Stat. 1486, provided that the regulations prescribed pursuant to section 830(a) of title VIII of div. A of Pub. L. 114–328, formerly set out as a note below, would not take effect until Dec. 31, 2020.

Pub. L. 114–328, div. A, title VIII, §830, Dec. 23, 2016, 130 Stat. 2282, as amended by Pub. L. 115–91, div. A, title VIII, §812, Dec. 12, 2017, 131 Stat. 1461, which directed the Secretary of Defense to prescribe regulations to require firm fixed-price contracts for foreign military sales not later than 180 days after Dec. 23, 2016, and to establish a pilot program for acceleration of foreign military sales, was repealed by Pub. L. 116–283, div. A, title VIII, §888, Jan. 1, 2021, 134 Stat. 3791.

Executive Documents

Delegation of Functions

For delegation of functions of the President under subsec. (a) of this section, see section 1(d) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by section 4 of Ex. Ord. No. 13637.

§2763. Credit sales

(a) Financing procurement of defense articles and services, and design and construction services

The President is authorized to finance the procurement of defense articles, defense services, and design and construction services by friendly foreign countries and international organizations, on such terms and conditions as he may determine consistent with the requirements of this section. Notwithstanding any other provision of law, and subject to the regular notification requirements of the Committees on Appropriations, the authority of this section may be used to provide financing to Israel and Egypt for the procurement by leasing (including leasing with an option to purchase) of defense articles from United States commercial suppliers, not including Major Defense Equipment (other than helicopters and other types of aircraft having possible civilian application), if the President determines that there are compelling foreign policy or national security reasons for those defense articles being provided by commercial lease rather than by government-to-government sale under this chapter.

(b) Repayment period

The President shall require repayment in United States dollars within a period not to exceed twelve years after the loan agreement with the country or international organization is signed on behalf of the United States Government, unless a longer period is specifically authorized by statute for that country or international organization.

(c) Interest rate; definitions

(1) The President shall charge interest under this section at such rate as he may determine, except that such rate may not be less than 5 percent per year.

(2) For purposes of financing provided under this section—

(A) the term "concessional rate of interest" means any rate of interest which is less than market rates of interest; and

(B) the term "market rate of interest" means any rate of interest which is equal to or greater than the current average interest rate (as of the last day of the month preceding the financing of the procurement under this section) that the United States Government pays on outstanding marketable obligations of comparable maturity.

(d) Participations in credits

References in any law to credits extended under this section shall be deemed to include reference to participations in credits.

(e) Payments on account of prior credits or loans

(1) Funds made available to carry out this section may be used by a foreign country to make payments of principal and interest which it owes to the United States Government on account of credits previously extended under this section or loans previously guaranteed under section 2764 of this title, subject to paragraph (2).

(2) Funds made available to carry out this section may not be used for prepayment of principal or interest pursuant to the authority of paragraph (1).

(f) Audit of certain private firms

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 services are to be procured by such firms for such governments from financing under this section.

(g) Notification requirements with respect to cash flow financing

(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 chapter or the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.] shall be submitted to the congressional committees specified in section 634A(a) of the Foreign Assistance Act of 1961 [22 U.S.C. 2394–1(a)] in accordance with the procedures applicable to reprogramming notifications under that section.

(2) For purposes of this subsection, the term "cash flow financing" has the meaning given such term in subsection (d) of section 2765 of this title.

(h) Limitation on use of funds for direct commercial contracts

Of the amounts made available for a fiscal year to carry out this section, not more than $100,000,000 for such fiscal year may be made available for countries other than Israel and Egypt for the purpose of financing the procurement of defense articles, defense services, and design and construction services that are not sold by the United States Government under this chapter.

(Pub. L. 90–629, ch. 2, §23, Oct. 22, 1968, 82 Stat. 1324; Pub. L. 93–559, §45(a)(2), Dec. 30, 1974, 88 Stat. 1813; Pub. L. 94–329, title II, §208(a), June 30, 1976, 90 Stat. 739; Pub. L. 96–533, title I, §105(b)(3), Dec. 16, 1980, 94 Stat. 3134; Pub. L. 99–83, title I, §102, Aug. 8, 1985, 99 Stat. 195; Pub. L. 100–202, §101(e) [title V, §572], Dec. 22, 1987, 101 Stat. 1329–131, 1329-176; Pub. L. 101–513, title V, §580, Nov. 5, 1990, 104 Stat. 2045; Pub. L. 104–164, title I, §102(a)–(c), July 21, 1996, 110 Stat. 1422.)

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a), (g)(1), and (h), 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 subsec. (g)(1), is Pub. L. 87–195, Sept. 4, 1961, 75 Stat. 424, which is classified principally to chapter 32 (§2151 et seq.) 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.

Amendments

1996—Subsecs. (f) to (g). Pub. L. 104–164 added subsecs. (f) to (g).

1990—Subsec. (e). Pub. L. 101–513 added subsec. (e).

1987—Subsec. (a). Pub. L. 100–202 inserted sentence at end authorizing financing to Israel and Egypt for commercial leasing of defense articles, not including Major Defense Equipment, with exception for certain aircraft, upon a Presidential determination that there are compelling foreign policy or national defense reasons for such leasing.

1985—Pub. L. 99–83 amended section generally. Prior to amendment, section read as follows: "The President is authorized to finance procurements of defense articles, defense services, and design and construction services by friendly foreign countries and international organizations on terms requiring the payment to the United States Government in United States dollars of—

"(1) the value of such articles or services within a period not to exceed twelve years after the delivery of such articles or the rendering of such services; and

"(2) interest on the unpaid balance of that obligation for payment of the value of such articles or services, at a rate equivalent to the current average interest rate, as of the last day of the month preceding the financing of such procurement, that the United States Government pays on outstanding marketable obligations of comparable maturity, unless the President certifies to Congress that the national interest requires a lesser rate of interest and states in the certification the lesser rate so required and the justification therefor."

1980—Pub. L. 96–533 substituted "defense articles, defense services, and design and construction services" for "defense articles and defense services".

1976—Par. (1). Pub. L. 94–329 substituted "twelve years" for "ten years".

1974—Pub. L. 93–559 incorporated existing provisions in cl. (1) and added cl. (2).

Statutory Notes and Related Subsidiaries

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

Effective Date of 1976 Amendment

Pub. L. 94–329, title II, §208(b), June 30, 1976, 90 Stat. 739, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to financing under agreements entered into on or after the date of enactment of this Act [June 30, 1976] for the procurement of defense articles to be delivered, or defense services to be rendered, after such date."

Effective Date

Section effective July 1, 1968, see section 41 of Pub. L. 90–629, set out as a note under section 2751 of this title.

Similar Provisions

Provisions similar to those in last sentence of subsec. (a) of this section which were applicable to NATO and major non-NATO allies in addition to Israel and Egypt were contained in the following appropriation acts:

Pub. L. 118–47, div. F, title VII, §7035(b)(3), Mar. 23, 2024, 138 Stat. 795.

Pub. L. 117–328, div. K, title VII, §7035(b)(3), Dec. 29, 2022, 136 Stat. 5037.

Pub. L. 117–103, div. K, title VII, §7035(b)(4), Mar. 15, 2022, 136 Stat. 629.

Pub. L. 116–260, div. G, title VII, §7035(b)(4), Dec. 27, 2020, 134 Stat. 1756.

Pub. L. 116–94, div. G, title VII, §7035(b)(4), Dec. 20, 2019, 133 Stat. 2878.

Pub. L. 116–6, div. F, title VII, §7049(b)(5), Feb. 15, 2019, 133 Stat. 366.

Pub. L. 115–141, div. K, title VII, §7068, Mar. 23, 2018, 132 Stat. 950.

Pub. L. 115–31, div. J, title VII, §7068, May 5, 2017, 131 Stat. 704.

Pub. L. 114–113, div. K, title VII, §7068, Dec. 18, 2015, 129 Stat. 2811.

Pub. L. 113–235, div. J, title VII, §7068, Dec. 16, 2014, 128 Stat. 2676.

Pub. L. 113–76, div. K, title VII, §7068, Jan. 17, 2014, 128 Stat. 558.

Pub. L. 112–74, div. I, title VII, §7069, Dec. 23, 2011, 125 Stat. 1253.

Pub. L. 111–117, div. F, title VII, §7083, Dec. 16, 2009, 123 Stat. 3400.

Pub. L. 111–8, div. H, title VII, §7085, Mar. 11, 2009, 123 Stat. 912.

Pub. L. 110–161, div. J, title VI, §610, Dec. 26, 2007, 121 Stat. 2316.

Pub. L. 109–102, title V, §510, Nov. 14, 2005, 119 Stat. 2198.

Pub. L. 108–447, div. D, title V, §510, Dec. 8, 2004, 118 Stat. 2993.

Pub. L. 108–199, div. D, title V, §510, Jan. 23, 2004, 118 Stat. 170.

Pub. L. 108–7, div. E, title V, §575, Feb. 20, 2003, 117 Stat. 210.

Pub. L. 107–115, title V, §580, Jan. 10, 2002, 115 Stat. 2170.

Pub. L. 106–429, §101(a) [title V, §589], Nov. 6, 2000, 114 Stat. 1900, 1900A-59.

Pub. L. 106–113, div. B, §1000(a)(2) [title V, §528], Nov. 29, 1999, 113 Stat. 1535, 1501A-90.

Pub. L. 105–277, div. A, §101(d) [title V, §529], Oct. 21, 1998, 112 Stat. 2681–150, 2681-178.

Pub. L. 105–118, title V, §528, Nov. 26, 1997, 111 Stat. 2413.

Pub. L. 104–208, div. A, title I, §101(c) [title V, §528], Sept. 30, 1996, 110 Stat. 3009–121, 3009-149.

Pub. L. 104–107, title V, §528, Feb. 12, 1996, 110 Stat. 730.

Pub. L. 103–306, title V, §530, Aug. 23, 1994, 108 Stat. 1635.

Pub. L. 103–87, title V, §530, Sept. 30, 1993, 107 Stat. 954.

Pub. L. 102–391, title V, §558, Oct. 6, 1992, 106 Stat. 1676.

Pub. L. 101–513, title V, §561, Nov. 5, 1990, 104 Stat. 2026.

Pub. L. 101–167, title V, §571, Nov. 21, 1989, 103 Stat. 1245.

Pub. L. 100–461, title V, §580, Oct. 1, 1988, 102 Stat. 2268–48.

Eastern European Security

Pub. L. 116–332, Jan. 13, 2021, 134 Stat. 5111, provided that:

"SECTION 1. SHORT TITLE.

"This Act may be cited as the 'Eastern European Security Act'.

"SEC. 2. SENSE OF CONGRESS.

"It is the sense of Congress that it is in the national security interest of the United States to—

"(1) deter aggression against North Atlantic Treaty Organization (NATO) allies by Russia or any other adversary;

"(2) assist NATO allies in acquiring and deploying modern, NATO interoperable military equipment and reducing their dependence on Russian or former Soviet-era defense articles;

"(3) ensure that NATO allies meet alliance defense commitments, including through adequate investments in national defense;

"(4) supplement existing grant assistance to key allies through foreign military financing loans, at rates competitive with those already available on commercial markets, to purchase NATO-interoperable military equipment; and

"(5) work to maintain and strengthen the democratic institutions and practices of all NATO allies, in accordance with the goals of Article 2 of the North Atlantic Treaty.

"SEC. 3. FOREIGN MILITARY LOAN AUTHORITY.

"(a) In General.—Beginning in fiscal year 2021, subject to the notification requirements under subsection (b) and to the availability of appropriations, the President, acting through the Secretary of State, is authorized—

"(1) to make direct loans under section 23 of the Arms Export Control Act (22 U.S.C. 2763) to NATO member countries that joined the alliance after March 1, 1999, notwithstanding the minimum interest rate required by subsection (c)(1) of such section; and

"(2) to charge fees for such loans under paragraph (1), which shall be collected from borrowers in accordance with section 502(7) of the Congressional Budget Act of 1974 [2 U.S.C. 661a(7)], and which may be used to cover the costs of such loans as defined in section 502 of the Congressional Budget Act of 1974 [2 U.S.C. 661a].

"(b) Notification.—A loan may not be made under the authority provided by subsection (a) unless the Secretary of State submits to the appropriate congressional committees a certification, not fewer than fifteen days before entering into an agreement to make such loan, that—

"(1) the recipient country is making demonstrable progress toward meeting its defense spending commitments in accordance with the 2014 NATO Wales Summit Declaration; and

"(2) the government of such recipient country is respecting that country's constitution and upholds democratic values such as freedom of religion, freedom of speech, freedom of the press, the rule of law, and the rights of religious minorities.

"(c) Repayment.—A loan made under the authority provided by subsection (a) shall be repaid in not more than 12 years, but may include a grace period of up to 1 year on the repayment of the principal.

"(d) Appropriate Congressional Committees Defined.—In this Act, the term 'appropriate congressional committees' means—

"(1) the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives; and

"(2) the Committee on Foreign Relations and the Committee on Appropriations of the Senate."

Executive Documents

Delegation of Functions

For delegation of functions of the President under this section and section 7069 of div. I of Pub. L. 112–74 (see Similar Provisions note below), with certain conditions and exceptions, see section 1(e) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by section 4 of Ex. Ord. No. 13637.

§2764. Guaranties

(a) Guaranty against political and credit risks of nonpayment

The President may guarantee any individual, corporation, partnership, or other juridical entity doing business in the United States (excluding United States Government agencies other than the Federal Financing Bank) against political and credit risks of nonpayment arising out of their financing of credit sales of defense articles, defense services, and design and construction services to friendly countries and international organizations. Fees shall be charged for such guaranties.

(b) Sale of promissory notes of friendly countries and international organizations; guaranty of payment

The President may sell to any individual, corporation, partnership, or other juridical entity (excluding United States Government agencies other than the Federal Financing Bank) promissory notes issued by friendly countries and international organizations as evidence of their obligations to make repayments to the United States on account of credit sales financed under section 2763 of this title, and may guarantee payment thereof.

(c) Guaranty Reserve Fund; payment of guaranties; guaranty reserve below prescribed amount

Funds obligated under this section before December 16, 1980, which constitute a single reserve for the payment of claims under guaranties issued under this section shall remain available for expenditure for the purposes of this section on and after that date. That single reserve may, on and after August 8, 1985, be referred to as the "Guaranty Reserve Fund". Funds provided for necessary expenses to carry out the provisions of section 2763 of this title and of section 2311 of this title may be used to pay claims on the Guaranty Reserve Fund to the extent that funds in the Guaranty Reserve Fund are inadequate for that purpose. For purposes of any provision in this chapter or any other Act relating to a prohibition or limitation on the availability of funds under this chapter, whenever a guaranty is issued under this section, the principal amount of the loan so guaranteed shall be deemed to be funds made available for use under this chapter. Any guaranties issued hereunder shall be backed by the full faith and credit of the United States.

(Pub. L. 90–629, ch. 2, §24, Oct. 22, 1968, 82 Stat. 1324; Pub. L. 93–189, §25(4), Dec. 17, 1973, 87 Stat. 730; Pub. L. 93–559, §45(a)(3), (4), Dec. 30, 1974, 88 Stat. 1814; Pub. L. 96–533, title I, §§104(a), 105(b)(3), Dec. 16, 1980, 94 Stat. 3132, 3134; Pub. L. 99–83, title I, §106(b), (c), Aug. 8, 1985, 99 Stat. 196; Pub. L. 100–71, title I, July 11, 1987, 101 Stat. 409.)

Editorial Notes

References in Text

This chapter, referred to in subsec. (c), 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.

Amendments

1987—Subsec. (c). Pub. L. 100–71, which directed that the second par. be struck out and a new one-sentence par. be inserted, was executed to reflect the probable intent of Congress by substituting the new sentence for the third sentence which read as follows: "Funds authorized to be appropriated by section 2771(a) of this title to carry out this chapter which are allocated for credits at market rates of interest may be used to pay claims under such guarantees to the extent funds in the Guaranty Reserve Fund are inadequate for that purpose."

1985—Subsec. (c). Pub. L. 99–83 inserted provisions authorizing the single reserve to be termed the "Guaranty Reserve Fund", and substituted provisions relating to payment of claims under guarantees, for provisions relating to report to Congress respecting any payment of claims reducing the single reserve.

1980—Subsec. (a). Pub. L. 96–533, §105(b)(3), substituted "defense articles, defense services, and design and construction services" for "defense articles and defense services".

Subsec. (c). Pub. L. 96–533, §104(a), substituted provisions making funds obligated before Dec. 16, 1980 available for expenditure after such date for payment of guaranteed claims, requiring the President to report to Congress the reduction of the single reserve below $750,000,000 with recommendation for an appropriations authorization of additional funds and deeming the principal amount of a guaranteed loan to be funds made available for use under this chapter for purposes of any limitation on availability of funds for prior provisions for obligation of available funds in an amount equal to 10 per centum of principal amount of contractual liability related to a guaranty under this section, making such funds a single reserve for payment of guaranteed claims, and providing for transfer of any funds deobligated during any current fiscal year to the general fund of the Treasury.

1974—Subsecs. (a), (b). Pub. L. 93–559, §45(a)(3), inserted "other than the Federal Financing Bank" in parenthetical text.

Subsec. (c). Pub. L. 93–559, §45(a)(4), substituted "10" for "25" in two places.

1973—Subsec. (c). Pub. L. 93–189 substituted "to carry out this chapter" for "pursuant to section 2771 of this title" and inserted "principal amount of" before "contractual liability" wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

Effective Date of 1974 Amendment; Adjustment of Obligations Charged Against Appropriations; Credit for Fiscal Year 1975 Appropriations

Pub. L. 93–559, §45(b), Dec. 30, 1974, 88 Stat. 1815, provided that: "The amendment made by paragraph (4) of subsection (a) [amending this section] shall take effect on July 1, 1974. Obligations initially charged against appropriations made available for purposes authorized by section 31(a) of the Foreign Military Sales Act [section 2771(a) of this title] after June 30, 1974, and prior to the enactment of this section [Dec. 30, 1974] in an amount equal to 25 per centum of the principal amount of contractual liability related to guaranties issued pursuant to section 24(a) of that Act [subsec. (a) of this section] shall be adjusted to reflect such amendment with proper credit to the appropriations made available in the fiscal year 1975 to carry out that Act [this chapter]."

Effective Date

Section effective July 1, 1968, see section 41 of Pub. L. 90–629, set out as a note under section 2751 of this title.

Foreign Military Sales Debt Reform

Pub. L. 102–145, §118, as added by Pub. L. 102–266, §102, Apr. 1, 1992, 106 Stat. 93, provided that the authority and conditions provided under the heading "Foreign Military Sales Debt Reform" in H.R. 2621, One Hundred Second Congress, 1st session, as passed by the House of Representatives on June 19, 1991, shall be applicable to funds appropriated by Pub. L. 102–145 (and are hereby enacted) in lieu of the authority and conditions provided under the heading "Foreign Military Sales Debt Reform" in Pub. L. 101–513 [set out below]. Provisions under the heading "Foreign Military Sales Debt Reform" in H.R. 2621, as referred to above, provided that: "Subsection (b) under the heading 'Foreign Military Sales Debt Reform' in the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1988 [Pub. L. 100–202, §101(e) [title III, §301], set out below], is hereby repealed."

Pub. L. 101–513, title III, Nov. 5, 1990, 104 Stat. 1999, provided that: "Funds made available by the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1988 [Pub. L. 100–202, §101(e) [title III], set out below], for obligation and expenditure after October 1, 1988, subject to a Presidential budget request, under the heading 'Foreign Military Sales Debt Reform', subsection (b) 'Interest Rate Reduction' shall be available, subject to the same conditions and provisos, only after October 1, 1991." Similar provisions were contained in the following prior appropriation acts:

Pub. L. 101–167, title III, Nov. 21, 1989, 103 Stat. 1214.

Pub. L. 100–461, title III, Oct. 1, 1988, 102 Stat. 2268–18.

Pub. L. 100–202, §101(e) [title III], Dec. 22, 1987, 101 Stat. 1329–131, 1329-148, as amended by Pub. L. 101–167, title III, Nov. 21, 1989, 103 Stat. 1214; Pub. L. 102–145, §118, as added by Pub. L. 102–266, §102, Apr. 1, 1992, 106 Stat. 93, provided in part that:

"(a) Refinancing.—Notwithstanding any other provision of law, the President is authorized during fiscal years 1988 through 1991 to transfer existing United States guaranties of outstanding Foreign Military Sales (FMS) credit debt, or to issue new guaranties, either of which would be applied to loans, bonds, notes or other obligations made or issued (as the case may be) by private United States financial institutions (the private lender) to finance the prepayment at par of the principal amounts maturing after September 30, 1989 of existing FMS loans bearing interest rates of eight percent or higher, and arrearages thereon. The loans, bonds, notes or other obligations are hereinafter referred to as the 'private loan': Provided, That such guaranties which are transferred or are made pursuant to paragraph (a) shall cover no more and no less than ninety percent of the private loan or any portion or derivative thereof plus unpaid accrued interest and arrearages, if any, outstanding at the time of guaranty transfer or extension: Provided further, That the total amount of the guaranty of the private loan cannot exceed ninety percent of the outstanding principal, unpaid accrued interest and arrearages, if any, at any time: Provided further, That of the total amount of the private loan, the ninety percent guaranteed portion of the private loan cannot be separated from the private loan at any time: Provided further, That no sums in addition to the payment of the outstanding principal amounts maturing after September 30, 1989 of the loan (or advance), plus unpaid accrued interest thereon, and arrearages, if any, shall be charged by the private lender or the Federal Financing Bank as a result of such prepayment against the borrower, the guarantor, or the Guaranty Reserve Fund (GRF), except that the private lender may include, in the interest rate charged, a standard fee to cover costs, such fee which will be set at prevailing market rates, and no guaranty fee shall be charged on guarantees transferred or issued pursuant to this provision: Provided further, That the terms of guaranties transferred or issued under this paragraph shall be exactly the same as the existing loans or guarantees, except as modified by this paragraph and including but not limited to the final maturity and principal and interest payment structure of the existing loans which shall not be altered, except that the repayments of the private loan issued debt may be consolidated into two payments per year: Provided further, That the private loan or guarantees transferred or issued pursuant to this paragraph shall be fully and freely transferable, except that any guaranty transferred or extended shall cease to be effective if the private loan or any derivative thereof is to be used to provide significant support for any non-registered obligation: Provided further, That for purposes of sections 23 and 24 of the Arms Export Control Act (AECA) [22 U.S.C. 2763, 2764], the term 'defense services' shall be deemed to include the refinancing of FMS debt outstanding at the date of the enactment of this Act [Dec. 22, 1987]: Provided further, That not later than ninety days after the enactment of this Act, the Secretary of the Treasury (Secretary) shall issue regulations to carry out the purposes of this heading and that in issuing such regulations, the Secretary shall (1) facilitate the prepayment of loans and loan advances hereunder, (2) provide for full processing of each application within thirty days of its submission to the Secretary, and (3) except as provided in section 24(a) of the AECA, impose no restriction that increases the cost to borrowers of obtaining private financing for prepayment hereunder or that inhibits the ability of the borrower to enter into prepayment arrangements hereunder: Provided further, That the Secretary of State shall transmit to the Committee on Foreign Affairs of the House of Representatives, the Committee on Foreign Relations of the Senate, and the Committees on Appropriations of the House of Representatives and Senate, a copy of the text of any agreement entered into pursuant to this section not more than thirty days after its entry into force, together with a description of the transaction.

"[(b) Repealed. Pub. L. 102–145, §118, as added by Pub. L. 102–266, §102, Apr. 1, 1992, 106 Stat. 93.]

"(c) Arrearages.—(1) None of the funds provided pursuant to the Arms Export Control Act (relating to Foreign Military Sales credits) [22 U.S.C. 2751 et seq.] or pursuant to chapter 2 of part II of the Foreign Assistance Act (relating to the Military Assistance program) [22 U.S.C. 2311 et seq.] shall be made available to any country for which one or more loans is refinanced pursuant to paragraph (a) of this heading and which is in default for a period in excess of ninety days in payment of principal or interest on (A) any loan made to such country guaranteed by the United States pursuant to paragraph (a) of this heading, and (B) any other loan issued pursuant to the Arms Export Control Act outstanding on the date of enactment of this provision [Dec. 22, 1987].

"(2) In conjunction with any interest rate reduction pursuant to the authority provided in paragraph (b) of this heading, the President shall require the country to commit in writing that within two years of the effective date of the interest rate reduction it will be no more than ninety days in arrears on the repayment of principal and interest on all loans for which the interest rate is thus reduced and will remain no more than ninety days in arrears for the remaining life of all such loans. None of the funds provided pursuant to the Arms Export Control Act [22 U.S.C. 2751 et seq.] or chapter 2 of part II of the Foreign Assistance Act [22 U.S.C. 2311 et seq.] shall be made available to any country during any period in which it fails to comply with such commitment.

"(d) Purposes and Reports.—The authorities of paragraphs (a) and (b) of this heading may be utilized by the President in efforts to negotiate base rights and base access agreements, and for other bilateral foreign policy matters: Provided further, That the Secretaries of Defense, State, and Treasury shall transmit to the Committee on Foreign Affairs of the House of Representatives, the Committee on Foreign Relations of the Senate, and the Committees on Appropriations of the House of Representatives and Senate a joint report detailing the United States financial and foreign policy purposes served by implementation of this authority on a country by country basis not later than March 1, 1989, and a second joint report not later than August 1, 1989."

Executive Documents

Delegation of Functions

For delegation of functions of the President under this section, with certain conditions, see section 1(f) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by section 4 of Ex. Ord. No. 13637.

§2765. Annual estimate and justification for sales program

(a) Report to Congress; contents

Except as provided in subsection (d) ¹ of this section, no 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 chapter, as well as exports pursuant to a treaty referred to in section 2778(j)(1)(C)(i) of this title, of major weapons or weapons-related defense equipment for $7,000,000 or more, or of any other weapons or weapons-related defense equipment for $25,000,000 or more, which are considered eligible for approval during the current calendar year, together with an indication of which sales and licensed commercial exports 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, as well as exports pursuant to a treaty referred to in section 2778(j)(1)(C)(i) of this title, expected to be made to each foreign nation from the United States;

(3) the United States national security considerations involved in expected sales or licensed commercial exports to each country, an analysis of the relationship between anticipated sales to each country and arms control efforts concerning such country 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 nations purchasing arms as set forth in paragraphs (1) and (2) of this subsection, 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 fiscal year;

(5)(A) an estimate of the aggregate dollar value and quantity of defense articles and defense services, military education and training, grant military assistance, 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 furnished credits or guaranties under this chapter in the next fiscal year and that has been approved for cash flow financing (as defined in subsection (d) ¹ of this section) in excess of $100,000,000 as of October 1 of the current fiscal year—

(i) the amount of such approved cash flow financing,

(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 officers and employees of the United States Government carrying out functions on a full-time basis under this chapter for which reimbursement is provided under section 2792(b) of this title or section 2761(a) of this title, including the number of personnel involved in performing such services;

(7) the total amount of funds in the reserve under section 2764(c) of this title at the end of the fiscal year immediately preceding the fiscal year in which a report under this section is made, together with an assessment of the adequacy of such total amount of funds as a reserve for the payment of claims under guarantees issued pursuant to section 2764 of this title in view of the current debt servicing capacity of borrowing countries, as reported to the Congress pursuant to section 634(a)(5) of the Foreign Assistance Act of 1961 [22 U.S.C. 2394(a)(5)];

(8) a list of all countries with respect to which findings made by the President pursuant to section 2753(a)(1) of this title are in effect on the date of such transmission;

(9) the progress made under the program of the Republic of Korea to modernize its armed forces, the role of the United States in mutual security efforts in the Republic of Korea and the military balance between the People's Republic of Korea and the Republic of Korea;

(10) the amount and nature of Soviet military assistance to the armed forces of Cuba during the preceding fiscal year and the military capabilities of those armed forces;

(11) the status of each loan and each contract of guaranty or insurance theretofore made under the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.], predecessor Acts, or any Act authorizing international security assistance, with respect to which there remains outstanding any unpaid obligation or potential liability; the status of each extension of credit for the procurement of defense articles or defense services, and of each contract of guaranty in connection with any such procurement, theretofore made under this chapter with respect to which there remains outstanding any unpaid obligation or potential liability;

(12)(A) a detailed accounting of all articles, services, credits, guarantees, or any other form of assistance 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 education, 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;

(13) a list of weapons systems that are significant military equipment (as defined in section 2794(9) of this title), and numbers thereof, that are believed likely to become available for transfer as excess defense articles during the next 12 months; and

(14) such other information as the President may deem necessary.

(b) Congressional request for additional information

Not later than thirty days following the receipt of a request made by any of the congressional committees described in subsection (e) for additional information with respect to any information submitted pursuant to subsection (a), the President shall submit such information to such committee.

(c) Submission of information in unclassified form or classified addendum with unclassified summary

The President shall make every effort to submit all of the information required by subsection (a) or (b) wholly in unclassified form. Whenever the President submits any such information in classified form, he shall submit such classified information in an addendum and shall also submit simultaneously a detailed summary, in unclassified form, of such classified information.

(d) ² "Cash flow financing" defined

For the purposes of subsection (a)(5)(B) of this section, the term "cash flow financing" means the dollar amount of the difference between the total estimated price of a Letter of Offer and Acceptance or other purchase agreement that has been approved for financing under this chapter or under section 503(a)(3) of the Foreign Assistance Act of 1961 [22 U.S.C. 2311(a)(3)] and the amount of the financing that has been approved therefor; ³

(d) ² Transmission of information to Congress

The information required by subsection (a)(4) of this section shall be transmitted to the Congress no later than April 1 of each year.

(e) "Appropriate congressional committees" defined

As used in this section, the term "appropriate congressional committees" means the Committee on Foreign Relations and the Committee on Appropriations of the Senate and the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives.

(Pub. L. 90–629, ch. 2, §25, as added Pub. L. 94–329, title II, §209(a), June 30, 1976, 90 Stat. 739; amended Pub. L. 95–384, §18, Sept. 26, 1978, 92 Stat. 740; Pub. L. 96–92, §§13, 14, Oct. 29, 1979, 93 Stat. 706; Pub. L. 96–533, title I, §§104(c), 107(d), Dec. 16, 1980, 94 Stat. 3133, 3137; Pub. L. 97–113, title VII, §732, Dec. 29, 1981, 95 Stat. 1557; Pub. L. 99–83, title I, §§112, 113, Aug. 8, 1985, 99 Stat. 198; Pub. L. 104–164, title I, §102(d), July 21, 1996, 110 Stat. 1423; Pub. L. 105–118, title V, §519, Nov. 26, 1997, 111 Stat. 2411; Pub. L. 107–228, div. B, title XII, §1232, Sept. 30, 2002, 116 Stat. 1433; Pub. L. 111–266, title I, §104(c), Oct. 8, 2010, 124 Stat. 2799; Pub. L. 113–276, title II, §208(a)(3), Dec. 18, 2014, 128 Stat. 2993.)

Editorial Notes

References in Text

Subsection (d) of this section, referred to in subsec. (a), preceding par. (1), probably means the subsec. (d) added by section 113(2) of Pub. L. 99–83, relating to transmittal of information to Congress.

This chapter, referred to in subsecs. (a)(1), (5)(B), (6) and (d), was in the original "this Act", and this chapter, referred to in subsec. (a)(11), was in the original "the Arms Export Control Act", both of which mean 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.

Subsection (d) of this section, referred to in subsec. (a)(5)(B), probably means the subsec. (d) added by section 112(b) of Pub. L. 99–83, defining cash flow financing.

The Foreign Assistance Act of 1961, referred to in subsec. (a)(11), is Pub. L. 87–195, Sept. 4, 1961, 75 Stat. 424, which is classified principally to chapter 32 (§2151 et seq.) 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.

Amendments

2014—Subsec. (e). Pub. L. 113–276 substituted "Foreign Affairs" for "International Relations".

2010—Subsec. (a)(1). Pub. L. 111–266, §104(c)(1), inserted ", as well as exports pursuant to a treaty referred to in section 2778(j)(1)(C)(i) of this title," after "commercial exports under this chapter".

Subsec. (a)(2). Pub. L. 111–266, §104(c)(2), inserted ", as well as exports pursuant to a treaty referred to in section 2778(j)(1)(C)(i) of this title," after "commercial exports".

2002—Subsec. (a)(13), (14). Pub. L. 107–228 added par. (13) and redesignated former par. (13) as (14).

1997—Subsec. (a). Pub. L. 105–118, §519(1), substituted "appropriate congressional committees" for "Congress" in introductory provisions.

Subsec. (b). Pub. L. 105–118, §519(2), substituted "any of the congressional committees described in subsection (e)" for "the Committee on Foreign Relations of the Senate or the Committee on Foreign Affairs of the House of Representatives".

Subsec. (e). Pub. L. 105–118, §519(3), added subsec. (e).

1996—Subsec. (a)(12), (13). Pub. L. 104–164 added par. (12) and redesignated former par. (12) as (13).

1985—Subsec. (a). Pub. L. 99–83, §113(1), substituted "Except as provided in subsection (d) of this section, no" for "No".

Subsec. (a)(5). Pub. L. 99–83, §112(a), designated existing provisions as subpar. (A) and added subpar. (B).

Subsec. (d). Pub. L. 99–83, §112(b), added subsec. (d) defining "cash flow financing".

Pub. L. 99–83, §113(2), added subsec. (d) relating to transmittal of information to Congress.

1981—Subsec. (a). Pub. L. 97–113, in provision preceding par. (1), required transmission of the report no later than Feb. 1 of each year and substituted provision for annual presentation materials for programs proposed for next fiscal year for provision for presentation materials for programs proposed for each fiscal year.

Subsec. (a)(1). Pub. L. 97–113 added par. (1) which incorporated provisions of former subsec. (d)(1) of this section. See subsec. (d) amendment note. Former par. (1) covered in par. (3).

Subsec. (a)(2). Pub. L. 97–113 added par. (2). Former par. (2), which required the report to contain an estimate of amount of credits and guaranties expected to be extended to each country under sections 2763 and 2764 of this title, covered in par. (5).

Subsec. (a)(3). Pub. L. 97–113 added par. (3) which incorporated provisions of former par. (1) requiring the report to contain an estimate of amounts of expected sales to each country under sections 2761 and 2762 of this title, including detailed explanations of foreign policy and United States national security considerations in expected sales to each country, and (5) requiring inclusion of an arms control impact statement for each purchasing country, covering (A) an analysis of the relationship between expected sales to each country and arms control efforts relating to that country, and (B) the impact of such expected sales on the stability of the region that included the purchasing country. Former par. (3) redesignated (7).

Subsec. (a)(4). Pub. L. 97–113 added par. (4) which incorporated provisions of former subsec. (e), which had required executive estimates of international arms traffic, including estimates on an annual basis 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 three years. Former par. (4) covered in par. (8).

Subsec. (a)(5). Pub. L. 97–113 added par. (5) which incorporated provisions of former par. (2) requiring the report to contain an estimate of amount of credits and guaranties expected to be extended to each country under sections 2763 and 2764 of this title. Former par. (5) covered in par. (3).

Subsec. (a)(6). Pub. L. 97–113 added par. (6).

Subsec. (a)(7). Pub. L. 97–113 redesignated former par. (3) as (7).

Subsec. (a)(8). Pub. L. 97–113 added par. (8), which incorporated provisions of former par. (4), requiring the report to contain a list of all findings in effect on date of its transmission made by the President pursuant to section 2753(a)(1) of this title, together with a full and complete justification for each finding, explaining how sales to each country with respect to which findings were made would strengthen the security of the United States and promote world peace.

Subsecs. (a)(9) to (12). Pub. L. 97–113 added pars. (9) to (12).

Subsec. (b). Pub. L. 97–113 substituted "Committee on Foreign Affairs" for "Committee on International Relations", and "with respect to any information" for "with respect to any estimate".

Subsec. (c). Pub. L. 97–113 substituted "Whenever the President" for "In the event the President".

Subsec. (d). Pub. L. 97–113 incorporated in subsec. (a) introductory text and subsec. (a)(1), provisions of former subsec. (d)(1) which had required transmission to the Speaker of the House and the chairman of the Senate Foreign Relations Committee the Arms Sales Proposal covering sales and licensed commercials exports under this chapter (other than such transactions to members of North Atlantic Treaty Organization, Japan, Australia, and New Zealand) of major weapons or weapons-related defense equipment for $7,000,000 or more, or of any other weapons or similar equipment for $25,000,000 or more, which were eligible for approval during fiscal year beginning October 1 of such year and had required identification in the reports of sales and licensed commercial exports deemed most likely actually to result in issuance of a letter of offer or of an export license during such fiscal year, and subsec. (d)(2) which had required Presidential six month written notifications of Congress of any change in the Arms Sales Proposal for such fiscal year, together with reasons therefor.

Subsec. (e). Pub. L. 97–113 incorporated, in subsec. (a) introductory text and subsec. (a)(4), provisions of former subsec. (e) which had required transmission to Congress on or before Nov. 15 of each year executive estimates of international arms traffic, including estimates on an annual basis 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 three years.

1980—Subsec. (a)(3) to (5). Pub. L. 96–533, §104(c), added par. (3) and redesignated former pars. (3) and (4) as (4) and (5), respectively.

Subsec. (d)(1). Pub. L. 96–533, §107(d), included coverage of licensed commercial exports and substituted "letter of offer or of an export license" for "letter of offer".

1979—Subsec. (d). Pub. L. 96–92, §13(1)–(4), designated existing provision as par. (1), substituted "major weapons or weapons-related defense equipment" for "major defense equipment" and "weapons or weapons-related defense equipment" for "defense articles or defense services", required identification of sales likely to result in issuance of a letter of offer in the furnished reports, and added par. (2).

Subsec. (e). Pub. L. 96–92, §14, added subsec. (e).

1978—Subsec. (c). Pub. L. 95–384, §18(b), substituted "subsection (a) or (b)" for "this section".

Subsec. (d). Pub. L. 95–384, §18(a), added subsec. (d).

Statutory Notes and Related Subsidiaries

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

Executive Documents

Delegation of Functions

For delegation of functions of the President under this section, with certain conditions, see section 1(g) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by section 4 of Ex. Ord. No. 13637.

¹ See References in Text note below.

² So in original. Two subsecs. (d) have been enacted.

³ So in original. The semicolon probably should be a period.

§2766. Security assistance surveys

(a) Statement of findings and policy

The Congress finds that security assistance surveys prepared by the United States for foreign countries have had a significant impact on subsequent military procurement decisions of those countries. It is the policy of the United States that the results of security assistance surveys conducted by the United States clearly do not represent a commitment by the United States to provide any military equipment to any foreign country. Further, recommendations in such surveys should be consistent with the arms export control policy provided for in this chapter.

(b) Reporting requirements

As part of the quarterly report required by section 2776(a) of this title, the President shall include a list of all security assistance surveys authorized during the preceding calendar quarter, specifying the country with respect to which the survey was or will be conducted, the purpose of the survey, and the number of United States Government personnel who participated or will participate in the survey.

(c) Submission of surveys to Congress

Upon a request of the chairman of the Committee on Foreign Affairs of the House of Representatives or the chairman of the Committee on Foreign Relations of the Senate, the President shall submit to that committee copies of security assistance surveys conducted by United States Government personnel.

(d) "Security assistance surveys" defined

As used in this section, the term "security assistance surveys" means any survey or study conducted in a foreign country by United States Government personnel for the purpose of assessing the needs of that country for security assistance, and includes defense requirement surveys, site surveys, general surveys or studies, and engineering assessment surveys.

(Pub. L. 90–629, ch. 2, §26, as added Pub. L. 95–384, §19, Sept. 26, 1978, 92 Stat. 740; amended Pub. L. 99–83, title I, §114, Aug. 8, 1985, 99 Stat. 198; Pub. L. 103–437, §9(a)(7), Nov. 2, 1994, 108 Stat. 4588.)

Editorial Notes

References in Text

This chapter, referred to in subsec. (a), 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.

Amendments

1994—Subsec. (c). Pub. L. 103–437 substituted "Foreign Affairs" for "International Relations".

1985—Pub. L. 99–83, §114(a)(1), substituted "Security assistance" for "Defense requirement" in section catchline.

Subsecs. (a), (b). Pub. L. 99–83, §114(a)(2), substituted "security assistance" for "defense requirement" wherever appearing.

Subsec. (c). Pub. L. 99–83, §114(a)(2), (b), substituted "submit to that committee copies of security assistance surveys" for "grant that committee access to defense requirement surveys".

Subsec. (d). Pub. L. 99–83, §114(a)(3), added subsec. (d).

Statutory Notes and Related Subsidiaries

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

§2767. Authority of President to enter into cooperative projects with friendly foreign countries

(a) Authority of President

The President may enter into a cooperative project agreement with the North Atlantic Treaty Organization or with one or more member countries of that Organization.

(b) Definitions

As used in this section—

(1) the term "cooperative project", in the case of an agreement with the North Atlantic Treaty Organization or with one or more member countries of that Organization, means a jointly managed arrangement, described in a written agreement among the parties, which is undertaken in order to further the objectives of standardization, rationalization, and interoperability of the armed forces of North Atlantic Treaty Organization member countries and which provides—

(A) for one or more of the other participants to share with the United States the costs of research on and development, testing, evaluation, or joint production (including follow-on support) of certain defense articles;

(B) for concurrent production in the United States and in another member country of a defense article jointly developed in accordance with subparagraph (A); or

(C) for procurement by the United States of a defense article or defense service from another member country or for procurement by the United States of munitions from the North Atlantic Treaty Organization or a subsidiary of such organization;

(2) the term "cooperative project", in the case of an agreement entered into under subsection (j), means a jointly managed arrangement, described in a written agreement among the parties, which is undertaken in order to enhance the ongoing multinational effort of the participants to improve the conventional defense capabilities of the participants and which provides—

(A) for one or more of the other participants to share with the United States the costs of research on and development, testing, evaluation, or joint production (including follow-on support) of certain defense articles;

(B) for concurrent production in the United States and in the country of another participant of a defense article jointly developed in accordance with subparagraph (A); or

(C) for procurement by the United States of a defense article or defense service from another participant to the agreement; and

(3) the term "other participant" means a participant in a cooperative project other than the United States.

(c) Agreements for equitable share of costs; limiting nature of agreements

Each agreement for a cooperative project shall provide that the United States and each of the other participants will contribute to the cooperative project its equitable share of the full cost of such cooperative project and will receive an equitable share of the results of such cooperative project. The full costs of such cooperative project shall include overhead costs, administrative costs, and costs of claims. The United States and the other participants may contribute their equitable shares of the full cost of such cooperative project in funds or in defense articles or defense services needed for such cooperative project. Military assistance and financing received from the United States Government may not be used by any other participant to provide its share of the cost of such cooperative project. Such agreements shall provide that no requirement shall be imposed by a participant for worksharing or other industrial or commercial compensation in connection with such agreement that is not in accordance with such agreement.

(d) Contractual or other obligation; preconditions

The President may enter into contracts or incur other obligations for a cooperative project on behalf of the other participants, without charge to any appropriation or contract authorization, if each of the other participants in the cooperative project agrees (1) to pay its equitable share of the contract or other obligation, and (2) to make such funds available in such amounts and at such times as may be required by the contract or other obligation and to pay any damages and costs that may accrue from the performance of or cancellation of the contract or other obligation in advance of the time such payments, damages, or costs are due.

(e) Waiver of charges; administrative surcharges

(1) For those cooperative projects entered into on or after the effective date ¹ of the International Security and Development Cooperation Act of 1985, the President may reduce or waive the charge or charges which would otherwise be considered appropriate under section 2761(e) of this title in connection with sales under sections 2761 and 2762 of this title when such sales are made as part of such cooperative project, if the other participants agree to reduce or waive corresponding charges.

(2) Notwithstanding provisions of section 2761(e)(1)(A) and section 2792(b) of this title, administrative surcharges shall not be increased on other sales made under this chapter in order to compensate for reductions or waivers of such surcharges under this section. Funds received pursuant to such other sales shall not be available to reimburse the costs incurred by the United States Government for which reduction or waiver is approved by the President under this section.

(f) Transmission of numbered certification to Congress respecting proposed agreement; contents

Not less than 30 days before a cooperative project agreement is signed on behalf of the United States, the President shall transmit to the Speaker of the House of Representatives, the Committee on Foreign Affairs of the House of Representatives, the chairman of the Committee on Foreign Relations of the Senate, and the chairman of the Committee on Armed Services of the Senate, a numbered certification with respect to such proposed agreement, setting forth—

(1) a detailed description of the cooperative project with respect to which the certification is made;

(2) an estimate of the quantity of the defense articles expected to be produced in furtherance of such cooperative project;

(3) an estimate of the full cost of the cooperative project, with an estimate of the part of the full cost to be incurred by the United States Government, including an estimate of the costs as a result of waivers of section ² 2761(e)(1)(A) and 2792(b) of this title, for its participation in such cooperative project and an estimate of that part of the full costs to be incurred by the other participants;

(4) an estimate of the dollar value of the funds to be contributed by the United States and each of the other participants on behalf of such cooperative project;

(5) a description of the defense articles and defense services expected to be contributed by the United States and each of the other participants on behalf of such cooperative project;

(6) a statement of the foreign policy and national security benefits anticipated to be derived from such cooperative project; and

(7) to the extent known, whether it is likely that prime contracts will be awarded to particular prime contractors or that subcontracts will be awarded to particular subcontractors to comply with the proposed agreement.

(g) Reporting and certification requirements applicable

In the case of a cooperative project with a North Atlantic Treaty Organization country, section,³ 2776(b) of this title shall not apply to sales made under section 2761 or 2762 of this title and to production and exports made pursuant to cooperative projects under this section, and section 2776(c) of this title shall not apply to the issuance of licenses or other approvals under section 2778 of this title, if such sales are made, such production and exports ensue, or such licenses or approvals are issued, as part of a cooperative project.

(h) Statutory provisions applicable to sales

The authority under this section is in addition to the authority under sections 2761 and 2762 of this title and under any other provision of law.

(i) Agreements entered into before October 1, 1985

(1) With the approval of the Secretary of State and the Secretary of Defense, a cooperative agreement which was entered into by the United States before the effective date ¹ of the amendment to this section made by the International Security and Development Cooperation Act of 1985 and which meets the requirements of this section as so amended may be treated on and after such date as having been made under this section as so amended.

(2) Notwithstanding the amendment made ⁴ to this section made by the International Security and Development Cooperation Act of 1985, projects entered into under the authority of this section before the effective date ¹ of that amendment may be carried through to conclusion in accordance with the terms of this section as in effect immediately before the effective date ¹ of that amendment.

(j) Cooperative project agreements with friendly foreign countries not members of NATO

(1) The President may enter into a cooperative project agreement with any friendly foreign country not a member of the North Atlantic Treaty Organization under the same general terms and conditions as the President is authorized to enter into such an agreement with one or more member countries of the North Atlantic Treaty Organization if the President determines that the cooperative project agreement with such country would be in the foreign policy or national security interests of the United States.

(2) Omitted.

(Pub. L. 90–629, ch. 2, §27, as added Pub. L. 96–92, §15, Oct. 29, 1979, 93 Stat. 706; amended Pub. L. 99–83, title I, §115(a), Aug. 8, 1985, 99 Stat. 199; Pub. L. 99–145, title XI, §1102(a)(1), (5), Nov. 8, 1985, 99 Stat. 708, 710; Pub. L. 99–661, div. A, title XI, §1103(a), title XIII, §1342(e), Nov. 14, 1986, 100 Stat. 3962, 3991; Pub. L. 100–180, div. A, title X, §1022, Dec. 4, 1987, 101 Stat. 1144; Pub. L. 102–484, div. A, title VIII, §843(a), Oct. 23, 1992, 106 Stat. 2468; Pub. L. 113–276, title II, §208(a)(4), Dec. 18, 2014, 128 Stat. 2993.)

Editorial Notes

References in Text

The effective date of the International Security and Development Cooperation Act of 1985 and the effective date of the amendment to this section made by the International Security and Development Cooperation Act of 1985, referred to in subsecs. (e)(1) and (i), respectively, is October 1, 1985, see section 1301 of Pub. L. 99–83, set out as an Effective Date of 1985 Amendment note under section 2151–1 of this title.

This chapter, referred to in subsec. (e)(2), 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 amendment made to this section made by the International Security and Development Cooperation Act of 1985, referred to in subsec. (i), means the general amendment of this section by section 115(a) of Pub. L. 99–83. See 1985 Amendment note below.

Codification

Subsec. (j)(2) of this section, which required the President to submit to certain committees of Congress an annual report specifying countries eligible, and criteria used to determine eligibility, for participation in cooperative project agreements under subsec. (j)(1) of this section, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance. See, also, page 39 of House Document No. 103–7.

Amendments

2014—Subsec. (f). Pub. L. 113–276 inserted "the Committee on Foreign Affairs of the House of Representatives," after "the Speaker of the House of Representatives," in introductory provisions.

1992—Subsec. (c). Pub. L. 102–484 substituted "costs, administrative costs, and costs of claims" for "and administrative costs".

1987—Subsec. (b)(1)(C). Pub. L. 100–180 inserted "or for procurement by the United States of munitions from the North Atlantic Treaty Organization or a subsidiary of such organization" after "member country".

1986—Pub. L. 99–661, §1342(e), repealed section 1102(a)(1) of Pub. L. 99–145 and the amendments made by that section, and provided that this section shall apply as if that section had never been enacted. See 1985 Amendments note below.

Pub. L. 99–661, §1103(a)(2), substituted "Authority of President to enter into cooperative projects with friendly foreign countries" for "North Atlantic Treaty Organization cooperative projects" in section catchline.

Subsec. (b)(1). Pub. L. 99–661, §1103(a)(1)(A)(i), inserted ", in the case of an agreement with the North Atlantic Treaty Organization or with one or more member countries of that Organization," in introductory provisions.

Subsec. (b)(2), (3). Pub. L. 99–661, §1103(a)(1)(A)(ii)–(iv), added par. (2) and redesignated former par. (2) as (3).

Subsec. (f)(3). Pub. L. 99–661, §1103(a)(1)(B), inserted ", including an estimate of the costs as a result of waivers of section 2761(e)(1)(A) and 2792(b) of this title,".

Subsec. (g). Pub. L. 99–661, §1103(a)(1)(C), substituted "In the case of a cooperative project with a North Atlantic Treaty Organization country, section," for "Section".

Subsec. (j). Pub. L. 99–661, §1103(a)(1)(D), added subsec. (j).

1985—Pub. L. 99–83 amended section generally, substituting in subsec. (a) provisions relating to authority of the President, for provisions defining "cooperative project", substituting in subsec. (b) provisions defining "cooperative project" and "other participant", for provisions relating to reduction or waiver of charges, sales not subject to compensatory increases in administrative surcharges, and contribution requirements, substituting in subsec. (c) provisions relating to agreements for equitable share of costs and limiting the nature of such agreements, for provisions relating to transmission of numbered certification of proposed agreement, contents of such certification, and statutory provisions applicable to sales, and adding subsecs. (d) to (i).

Pub. L. 99–145, §1102(a)(1), which enacted a general amendment of this section similar to that provided in Pub. L. 99–83 was repealed. See 1986 Amendments note above and former section 1105(a)(5) of Pub. L. 99–145 set out as a Repeals; Effective Date note under section 2752 of this title.

Statutory Notes and Related Subsidiaries

Effective Date of 1985 Amendment

Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

Assessment of Risk Associated With Development of Major Weapon Systems To Be Procured Under Cooperative Projects With Friendly Foreign Countries

Pub. L. 112–81, div. A, title VIII, §836, Dec. 31, 2011, 125 Stat. 1508, as amended by Pub. L. 116–92, div. A, title IX, §902(84), Dec. 20, 2019, 133 Stat. 1553, provided that:

"(a) Assessment of Risk Required.—

"(1) In general.—Not later than two days after the President transmits a certification to Congress pursuant to section 27(f) of the Arms Export Control Act (22 U.S.C. 2767(f)) regarding a proposed cooperative project agreement that is expected to result in the award of a Department of Defense contract for the engineering and manufacturing development of a major weapon system, the Secretary of Defense shall submit to the Chairmen of the Committees on Armed Services of the Senate and the House of Representatives a report setting forth a risk assessment of the proposed cooperative project.

"(2) Preparation.—The Secretary shall prepare each report required by paragraph (1) in consultation with the Under Secretary of Defense for Acquisition and Sustainment, the Under Secretary of Defense for Research and Engineering, and the Director of Cost Assessment and Program Evaluation of the Department of Defense.

"(b) Elements.—The risk assessment on a cooperative project under subsection (a) shall include the following:

"(1) An assessment of the design, technical, manufacturing, and integration risks associated with developing and procuring the weapon system to be procured under the cooperative project.

"(2) A statement identifying any termination liability that would be incurred under the development contract to be entered into under subsection (a)(1), and a statement of the extent to which such termination liability would not be fully funded by appropriations available or sought in the fiscal year in which the agreement for the cooperative project is signed on behalf of the United States.

"(3) An assessment of the advisability of incurring any unfunded termination liability identified under paragraph (2) given the risks identified in the assessment under paragraph (1).

"(4) A listing of which, if any, requirements associated with the oversight and management of a major defense acquisition program (as prescribed under Department of Defense Instruction 5000.02 or related authorities) will be waived, or in any way modified, in carrying out the development contract to be entered into under [subsection] (a)(1), and a full explanation why such requirements need to be waived or modified.

"(c) Definitions.—In this section:

"(1) The term 'engineering and manufacturing development' has the meaning given that term in Department of Defense Instruction 5000.02.

"(2) The term 'major weapon system' has the meaning given that term in section 2379(f) of title 10, United States Code [now 10 U.S.C. 3455(f)]."

[Pub. L. 116–92, §902(84), which directed the amendment of section 836(a)(2) of Pub. L. 112–81, set out above, by substituting "the Under Secretary of Defense for Acquisition and Sustainment, the Under Secretary of Defense for Research and Engineering," for "the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Assistant Secretary of Defense for Research,", was executed by making the substitution for "the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Assistant Secretary of Defense for Research and Engineering," to reflect the probable intent of Congress.]

Executive Documents

Delegation of Functions

For delegation of functions of the President under this section, with certain conditions, see section 1(f) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16129, set out as a note under section 2751 of this title. Functions were previously delegated by Ex. Ord. No. 11958, which was formerly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by section 4 of Ex. Ord. No. 13637.

¹ See References in Text note below.

² So in original. Probably should be "sections".

³ So in original. The comma probably should not appear.

⁴ So in original. The word "made" probably should not appear.

§2767a. Repealed. Pub. L. 101–189, div. A, title IX, §931(d)(2), Nov. 29, 1989, 103 Stat. 1535

Section, Pub. L. 99–661, div. A, title XI, §1105, Nov. 14, 1986, 100 Stat. 3965; Pub. L. 100–456, div. A, title X, §1007, Sept. 29, 1988, 102 Stat. 2040, related to cooperative research and development with major non-NATO allies. See section 2350a of Title 10, Armed Forces.

§2768. Repealed. Pub. L. 104–106, div. A, title X, §1064(a), Feb. 10, 1996, 110 Stat. 445

Section, Pub. L. 90–629, ch. 2, §28, as added Pub. L. 96–92, §16(a), Oct. 29, 1979, 93 Stat. 708; amended Pub. L. 97–113, title I, §101(b), Dec. 29, 1981, 95 Stat. 1520; Pub. L. 100–461, title V, §588(a), Oct. 1, 1988, 102 Stat. 2268–51, related to reports on price and availability estimates.