country ensures that those excess defense articles will be used primarily 544 in support of antinarcotics activities.

(d) ROLE OF THE SECRETARY OF STATE.-The Secretary of State shall determine the eligibility of countries to receive excess defense articles under subsection (a). In accordance with section 481(b) of this Act,545 the Secretary shall ensure that the transfer of excess defense articles under subsection (a) is coordinated with other antinarcotics enforcement programs assisted by the United States Government.

(e) DOLLAR LIMITATION.-The aggregate value of excess defense articles transferred to a country under subsection (a) in any fiscal year may not exceed $10,000,000,546

(f) CONDITIONS ON TRANSFERS.-The President may transfer excess defense articles under this section only if—

(1) they are drawn from existing stocks of the Department of Defense;

(2) funds available to the Department of Defense for the procurement of defense equipment are not expended in connection with the transfer; and

(3) the President determines that the transfer of the excess defense articles will not have an adverse impact on the military readiness of the United States.

(g) TERMS OF TRANSFERS.-Excess defense articles may be transferred under this section without cost to the recipient country.

(h) WAIVER OF REQUIREMENT FOR REIMBURSEMENT OF DOD ExPENSES-Section 632(d) does not apply with respect to transfers of excess defense articles under this section.

(D) NOTIFICATION TO CONGRESS.—

(D) ADVANCE NOTICE-The President may not transfer excess defense articles under this section until 15 547 days after the President has provided notice of the proposed transfer to the committees specified in paragraph (2). This notification shall include

(A) a certification of the need for the transfer,

(B) an assessment of the impact of the transfer on the military readiness of the United States; and

(C) a statement of the value of the excess defense articles to be transferred.

(2) COMMITTERS TO BE NOTIFIED-Notice shall be provided pursuant to paragraph (1) to the Committee on Armed Servions, the Committee on Foreign Affairs, and the Committee on Appropriations of the House of Representatives and the Com

548

mittee on Armed Services, the Committee on Foreign Relations, and the Committee on Appropriations of the Senate. (j) LIMITATION ON USE OF OTHER AUTHORITIES TO TRANSFER EXCESS DEFENSE ARTICLES.-The transfer authority provided in sections 518 and 519 may not be exercised with respect to any major illicit drug producing_country or major drug-transit country in Latin America or the Caribbean.

(k) 548 EXCESS COAST GUARD PROPERTY.—As used in this section, the term "excess defense articles" shall be deemed to include excess property of the Coast Guard, and the term "Department of Defense" shall be deemed, with respect to such excess property, to include the Coast Guard.

Sec. 518.549 Natural Resources and Wildlife Management.

(a) AUTHORITY TO TRANSFER NONLETHAL EXCESS DEFENSE ARTICLES AND SMALL ARMS.-Subject to the limitations in this section, the President may transfer nonlethal excess defense articles and small arms to friendly countries and to international organizations and private and voluntary organizations for the purposes contained in section 119 of this Act.

(b) LIMITATION ON TRANSFERS.-Transfers under this section shall be subject to the limitations contained in section 516(b).

(c) TRANSPORTATION.-The Department is authorized to transport nonlethal excess defense articles and small arms made available pursuant to this section without charge on a space available basis.

(d) WAIVER OF REQUIREMENTS FOR REIMBURSEMENT OF DOD ExPENSES.-Section 632(d) shall not apply with respect to transfers of nonlethal excess defense articles and small arms under this section or the transportation of such articles as authorized by subsection (c).

(e) NOTIFICATION TO COMMITTEES OF CONGRESS.-The President may not transfer nonlethal excess defense articles and small arms under this section until 30 days after he has notified the Committees on Appropriations of the proposed transfer. This notification shall include a certification of the need for the transfer and an assessment of the impact of the transfer on the military readiness of the United States. Transfers under this section shall also be subject to the notification requirements of section 516(c) of this Act.

Sec. 519.550 Additional Authorities Relating to Modernization of Military Capabilities. (a) AUTHORITY TO TRANSFER EXCESS

548 Sec. 9(a)(6) of the International Narcotics Control Act of 1992 (Public Law 102-583; 106 Stat. 4934) added subsecs. (j) and (k).

549 22 U.S.C. 23211. Sec. 533(f) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991 (Public Law 101-513; 104 Stat. 2015), added sec. 518.

550 22 U.S.C. 2321m. Sec. 596 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991 (Public Law 101-513; 104 Stat. 2061), added a new sec. 519.

Sec. 578 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 (Public Law 102-391; 106 Stat. 1685), provided the following:

"MEDITERRANEAN EXCESS DEFENSE ARTICLES

"SEC. 578. (a) Section 573(e) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990, is amended by striking out three year period beginning on October 1, 1989' and inserting in lieu thereof 'four-year period beginning on October 1, 1992'.

"(b) During fiscal year 1993, the provisions of section 573(e) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990, (as amended by subsection (a) of this section) shall be applicable, for the period specified therein, to excess defense articles made available under sections 516 and 519 of the Foreign Assistance Act of 1961.".

For sec. 573 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1990, see page 705.

DEFENSE ARTICLES.-Notwithstanding any other provision of law (except title V of the National Security Act of 1947) and subject to subsection (b), the President may transfer to countries for whom a foreign military financing program was justified for the fiscal year in which the transfer is authorized, such nonlethal excess defense articles as the President determines necessary to help modernize the defense capabilities of such countries, in accordance with the provisions of this section.

(b) LIMITATIONS ON TRANSFERS.-The President may transfer nonlethal excess defense articles under this section only if—

(1) the equipment is drawn from existing stocks of the Department of Defense:

(2) no funds available to the Department of Defense for the procurement of defense equipment are expended in connection with the transfer;

(3) the President determines that the transfer of the nonlethal excess defense articles will not have an adverse impact on the military readiness of the United States; and

(4) the President determines that transferring the articles under the authority of this section is preferable to selling them, after taking into account the potential proceeds from, and likelihood of, such sales, and the comparative foreign policy benefits that may accrue to the United States as the result of either a transfer or sale.

(c) NOTIFICATION TO CONGRESS.-The President shall notify the Committees on Appropriations, Armed Services, and Foreign Relations of the Senate, and the Committees on Appropriations, Armed Services, and Foreign Affairs of the House of Representatives fifteen days before transferring nonlethal excess defense articles under subsection (a), in accordance with the regular notification procedures of those committees.

(d) WAIVER Of RequiremenT FOR REIMBURSEMENT OF DOD ExPENSES.-Section 632(d) shall not apply with respect to transfers of nonlethal excess defense articles under this section.

(e) ANNUAL REPORT.-Commencing in 1991, not later than December 15 of each year, the President shall transmit to the committees described in subsection (c) a report with respect to the previous fiscal year which contains

(1) a list of the countries to which the President has furnished nonlethal excess defense articles under the authority of this section; and

(2) the value of the excess nonlethal defense articles that were furnished to each such country.

(f) TRANSPORTATION AND RELATED COSTS. (1) Except as provided in paragraph (2), funds available to the Department of Defense shall not be expended for crating, packing, handling and transportation of nonlethal excess defense articles transferred under the authority of this section.

(2) Notwithstanding section 632(d) or any other provision of law, the President may direct the crating, packing, handling and transport of nonlethal excess defense articles without charge to a country if

(A) that country has an agreement providing the United States with base rights in that country;

(B) that country is eligible for assistance from the International Development Association; and

(C) the nonlethal excess defense articles are being provided to that country under the authority of this section.

Chapter 3-Foreign Military Sales 551

Sec. 521.552 Administration of Sales Programs Involving Defense Articles and Services.-* * * [Repealed-1968] Sec. 522.552 Sales from Stock.—* *

[Repealed-1968]

Sec. 523.552 Procurement of Sales. [Repealed-1968]

Sec. 524.553 Reimbursements.—(a) 554 Whenever funds made available for use under this part have been or 555 are used to furnish military assistance on cash or credit terms, United States dollar repayments, including dollar proceeds derived from the sale of foreign currency repayments to any agency or program of the United States Government, receipts received from the disposition of evidences of indebtedness and charges (including fees and premiums) or interest collected 556 shall be credited to a separate fund account 557 and, shall be available until expended solely for the purposes of financing sales and guaranties, including the overhead costs thereof,558 and, notwithstanding any provision of law relating to receipts and credits accruing to the United States Government, repayment in foreign currency may be used to carry out this part. Such amounts of the appropriations made available under this part (including unliquidated balances of funds heretofore obligated for financing sales and guarantees) as may be determined by the President shall be transferred to, and merged with the separate fund account. 559

(b)(1) The special fund account established under subsection (a) of this section shall terminate as of the end of June 30, 1968, or on such earlier date as may be selected by the President.

(2) Upon the termination of such fund account pursuant to paragraph (1), all of the assets of such fund account (including loans and other payments receivable) shall be transferred to a special account in the Treasury, which special account shall be available solely for the purpose of discharging outstanding liabilities and obligations of the United States arising out of credit sales agreements entered into, and guaranties issued, under this part, prior to June

551 The new chapter heading was added by sec. 201(0X2) of the FA Act of 1967.

552 Secs. 521, 522, and 523 were repealed by sec. 45(a) of the Foreign Military Sales Act (Public Law 90-629). $53 22 U.S.C. 2344. Former sec. 508 was redesignated sec. 524 by sec. 201(h)(1) of the FA Act of 1967. 554 Subsection designation "(a)” and a new subsec. (b) were added by sec. 201(h)2) of the FA Act of 1967.

555 The words “have been or" were added by sec. 201(e)(1) of the FA Act of 1965.

556 The words to this point, beginning with "receipts received from", were added by sec. 201(ex2) of the FA Act of 1965.

$57 Sec. 201(e)(3) of the FA Act of 1965 inserted "a separate fund account" in lieu of "the current applicable appropriation".

558 Sec. 201(ex1) of the FA Act of 1965 inserted “financing sales and guaranties, including the overhead costs thereof" in lieu of "furnishing further military assistance on cash or credit terms".

559 The last sentence was added by sec. 201(c) of the FA Act of 1966.

30, 1968. Any moneys in such special account in excess of the aggregate United States dollar amount of such liabilities and obligations shall be transferred from time to time to the general fund of the Treasury. (3) 560 *

*

*

[Repealed-1968]

Sec. 525.560 Guaranties.—*

Chapter 4-Economic Support Fund 561

NOTE.-Section 202 of the Foreign Assistance Act of 1971 transferred the former Chapter 4 of Part I governing supporting assistance to its present location as Chapter 4 of Part II of the Act. Section 202(b) of the Foreign Assistance Act of 1971 provides as follows:

"Chapter 4 of part I of the Foreign Assistance Act of 1961 is hereby repealed. References to such chapter or any sections thereof shall hereafter be deemed to be references to chapter 4 of part II of the Foreign Assistance Act of 1961, as added by subsection (a) of this section, or to appropriate sections thereof. All references to part I of the Foreign Assistance Act of 1961 shall hereafter be deemed to be references also to chapter 4 of part II, and all references to part II of such Act shall be deemed not to include chapter 4 of such Part II.".

In changing the title of chapter 4 from Security Supporting Assistance to Economic Support Fund, Sec. 10(b)(6) of the International Security Assistance Act of 1978 (92 Stat. 735) stated that, after September 30, 1978, any reference to security supporting assistance shall be deemed a reference to assistance provided under chapter 4 of part II of this Act.

560 Par. (3) of sec. 524, and sec. 525 were repealed by sec. 45(a) of the Foreign Military Sales Act (Public Law 90-629). The subject matter of par. (3), relating to arms sales credits, is now covered in sec. 23 of the Arms Export Control Act.

561 Chapter 4, as added by the FA Act of 1971, was titled "Security Supporting Assistance," was retitled "Economic Support Fund" and comprehensively amended and restated by sec. 10(a) of the International Security Assistance Act of 1978 (Public Law 95-384; 92 Stat. 733). Sec. 10(b)(6) of the same Act stated that, after September 30, 1978, any reference in any act to security supporting assistance shall be considered to be a reference to this chapter.

Sec. 201 of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 210), replaced secs. 531 and 532, amended and redesignated secs. 535 as 533, and repealed all other sections regarding earmarking of funds for specific regions or purposes. See page 415 for Public Law 99-83 (99 Stat. 210), relating to ESF for the Middle East, Cyprus, Portugal, agricultural commodities under commodity import programs, tied aid credit program, and restriction on use of funds for nuclear facilities.

See also secs. 644-647 of the Export-Import Bank Act Amendments of 1983 (title VI of Public Law 98-166) which establishes a tied aid credit program in the U.S. Export-Import Bank in order to promote U.S. exports. This program is to be carried out in cooperation with AID and permits the AID Administrator to draw on ESF allocated for Commodity Import Programs to finance a tied aid credit activity. See Legislation on Foreign Relations Through 1992, vol. III, sec. I for complete text of secs. 644-647.

See also sec. 206 of the International Security and Development Cooperation Act of 1985 (page 419) which authorizes not less than $50 million in fiscal year 1986 and not less than $100 million in fiscal year 1987 out of the commodity import program portion of the Economic Support Fund for use in a tied aid credit program.