(A) assistance under chapter 2 (military assistance) or chapter 4 (economic support fund) 481 or chapter 5 (military education and training) or chapter 6 (peacekeeping operations) or chapter 8 (antiterrorism assistance) of this part;

482

(B) sales of defense articles or services, extensions of credits (including participations in credits), 483 and guaranties of loans under the Arms Export Control Act; or

(C) any license in effect with respect to the export of defense articles or defense services to or for the armed forces, police, intelligence, or other internal security forces of a foreign country under section 38 of the Arms Export Control Act.

(e) 484 Notwithstanding any other provision of law, funds authorized to be appropriated under part I of this Act may be made available for the furnishing of assistance to any country with respect to which the President finds that such a significant improvement in its human rights record has occurred as to warrant lifting the prohibition on furnishing such assistance in the national interest of the United States.

(f) 485 In allowing the funds authorized to be appropriated by this Act and the Arms Export Control Act, the President shall take into account significant improvements in the human rights records of recipient countries, except that such allocations may not contravene any other provision of law.

(g) 486 Whenever the provisions of subsection (e) or (f) of this section are applied, the President shall report to the Congress before making any funds available pursuant to those subsections. The report shall specify the country involved, the amount and kinds of assistance to be provided, and the justification for providing the assistance, including a description of the significant improvements which have occurred in the country's human rights record.

Chapter 2-Military Assistance

Sec. 503.487 General Authority. (a) The President is authorized to furnish military assistance, on such terms and conditions as he

481 The words "economic support fund" were inserted in lieu of "security supporting assistance" by sec. 10(b)(1) of the International Security Assistance Act of 1978 (Public Law 95-384; 92 Stat. 735).

482 Sec. 12(b) of the International Security Assistance Act of 1978 (Public Law 95-384; 92 Stat. 737) added the words "or chapter 6 (peacekeeping operations)" and struck the words "or part VI (assistance to the Middle East) of this Act" which had previously been the final phrase of this paragraph.

The International Security and Development Assistance Authorizations Act of 1983 (sec. 101(b)(2) of the Further Continuing Appropriations Act, 1984; Public Law 98-151) added the words "or chapter 8 (antiterrorism assistance)". Pursuant to Public Law 98-151, this amendment was enacted as stated in title II of H.R. 2992, as reported by the House Committee on Foreign Affairs on May 17, 1983.

483 While the printed slip law did not include a close parentheses in subpar. (B), it is interpreted that such a mark was intended to be inserted at this point.

484 Subsec. (e) was added by sec. 511 of the International Development Cooperation Act of 1979 (Public Law 96-53; 93 Stat. 380).

485 Subsec. (f) was added by sec. 4 of the International Security Assistance Act of 1979 (Public Law 96-92; 93 Stat. 702).

486 Subsec. (g) was added by sec. 1201 of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 276).

487 22 U.S.C. 2311. Sec. 12(b)(1) of the FA Act of 1973 amended sec. 503, which formerly read as follows:

Continued

may determine,488 to any friendly country or international organization, the assisting of which the President finds will strengthen the security of the United States and promote world peace and which is otherwise eligible to receive such assistance, by

(1) acquiring from any source and providing (by loan or grant) any defense article or defense service;

(2) assigning or detailing members of the Armed Forces of the United States and other personnel of the Department of Defense to perform duties of a non- combatant nature; or

(3) 489 transferring such of the funds appropriated or otherwise made available under this chapter as the President may determine for assistance to a recipient country,490 to the account in which funds for the procurement of defense articles and defense services under section 21 and section 22 of the Arms Export Control Act have been deposited for such recipient, to be merged with such deposited funds, and to be used solely to meet obligations of the recipient for payment for sales under that Act. Sales which are wholly paid from funds transferred under paragraph (3) or from funds made available on a non-repayable basis under section 23 of the Arms Export Control Act 491 shall be priced to exclude the costs of salaries of members of the Armed Forces of the United States (other than the Coast Guard).491

(b) In addition to such other terms and conditions as the President may determine pursuant to subsection (a), defense articles may be loaned thereunder only if

"SEC. 503. GENERAL AUTHORITY.-The President is authorized to furnish military assistance on such terms and conditions as he may determine, to any friendly country or international organization, the assisting of which the President finds will strengthen the security of the United States and promote world peace and which is otherwise eligible to receive such assistance by"(a) acquiring from any source and providing (by loan or grant) any defense article or defense service;

"(b) making financial contributions to multilateral programs for the acquisition or construction of facilities for collective defense;

"(c) providing financial assistance for expenses incident to participation by the United States Government in regional or collective defense organizations;

"(d) assigning or detailing members of the Armed Forces of the United States and other personnel of the Department of Defense to perform duties of a noncombatant nature, including those related to training or advice.".

488 In 1992, the President determined that the furnishing of defense articles and services to the Governments of the Comoros, Zambia, and to the Organization of African Unity would strengthen the security of the United States and promote world peace (respectively: Presidential Determinations 92-28 of May 28, 1992, 57 F.R. 24927; 92-38 of August 11, 1992, 57 F.R. 38577; and 92-44 of August 25, 1992, 57 F.R. 40079).

489 Par. (3) was added by sec. 112(a) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3138).

Title III of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1988 (sec. 101(e) of the Continuing Appropriations for 1988, Public Law 100-202; 101 Stat. 1329-131), stipulated: "That, after September 30, 1989, none of the funds appropriated under this heading shall be made available for the purposes of section 503(a)(3) of the Foreign Assistance Act of 1961". This proviso was subsequently repealed by title III of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1989 (Public Law 100-461; 102 Stat. 2268).

490 The word "country" was inserted in lieu of the words "specified in section 504(a)(1) of this Act, within the dollar limitations of that section" by sec. 110(c) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1536).

491 The last sentence of par. (3) was added by sec. 123(a) of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 205). The language "or from funds. Act" and "(other than the Coast Guard)" was added by Sec. 586(a) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1989 (Public Law 100461; 102 Stat. 2268), to become effective on October 1, 1989.

(1) there is a bona fide reason, other than the shortage of funds, for providing such articles on a loan basis rather than on a grant basis;

(2) there is a reasonable expectation that such articles will be returned to the agency making the loan at the end of the loan period unless the loan is then renewed;

(3) the loan period is of fixed duration not exceeding five years, during which such article may be recalled for any reason by the United States;

(4) the agency making the loan is reimbursed for the loan based on the amount charged to the appropriation for military assistance under subsection (c); and

(5) 492 the loan agreement provides that (A) if the defense article is damaged while on loan, the country or international organization to which it was loaned will reimburse the United States for the cost of restoring or replacing the defense article, and (B) if the defense article is lost or destroyed while on loan, the country or international organization to which it was loaned will pay to the United States an amount equal to the replacement cost (less any depreciation in the value) of the defense article.

(c)(1) In the case of any loan of a defense article or defense service made under this section, there shall be a charge to the appropriation for military assistance for any fiscal year while the article or service is on loan in an amount based on

(A) the out-of-pocket expenses authorized to be incurred in connection with such loan during such fiscal year; and

(B) the depreciation which occurs during such year while such article is on loan.

(2) The provisions of this subsection shall not apply

(A) to any particular defense article or defense service which the United States Government agreed, prior to the date of enactment of this subsection, to lend; and

(B) to any defense article or defense service, or portion thereof, acquired with funds appropriated for military assistance under this Act.

Sec. 504.493 Authorization. (a) 494 (1) There are authorized to be appropriated to the President to carry out the purposes of this

492 Par. (5) was amended and restated by sec. 109(c) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1536). It formerly read as follows: "(5) arrangements are made with the agency making the loan to be reimbursed in the event such article is lost or destroyed while on loan, such reimbursement being made first out of any funds available to carry out this chapter and based on the depreciated value of the article at the time of loss or destruction.".

493 22 U.S.C. 2312.

494 Subsec. (a) was amended and restated by sec. 103 of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 195).

Authorizations under sec. 504 in recent years included the following: fiscal year 1977$235,000,000; fiscal year 1978 $228,900,000; fiscal year 1979-$133,500,000; fiscal year 1980$110,200,000; fiscal year 1981-$106,100,000; fiscal year 1982-$238,500,000; fiscal year 1983$238,500,000; fiscal year 1984 $639,700,000; fiscal year 1985-no authorization; fiscal year 1988 no authorization; fiscal year 1989-no authorization.

Sec. 587(c) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 (Public Law 102-391; 106 Stat. 1689), provided the following:

"(c) of the funds made available (including earmarked funds) in Public Law 101-513 and prior Acts making appropriations for foreign operations, export financing, and related programs to carry out the provisions of section 23 of the Arms Export Control Act and section 503 of the Foreign Assistance Act of 1961, $45,750,000 are rescinded.".

chapter $805,100,000 for the fiscal year 1986 and $805,100,000 for the fiscal year 1987.

(2) Amounts appropriated under this subsection are authorized to remain available until expended.

(b) In order to make sure that a dollar spent on military assistance to foreign countries is as necessary as a dollar spent for the United States military establishment, the President shall establish procedures for programing and budgeting so that programs of military assistance come into direct competition for financial support with other activities and programs of the Department of Defense. Sec. 505.495 Conditions of Eligibility.—(a) In addition to such other provisions as the President may require, no defense articles or related training or other defense service 496 shall be furnished to any country on a grant basis unless it shall have agreed that— (1) it will not, without the consent of the President

(A) permit any use of such articles or related training or other defense service 496 by anyone not an officer, employee, or agent of that country,

(B) transfer, or permit any officer, employee, or agent of that country to transfer such articles or related training or other defense service 496 by gift, sale, or otherwise, or

(C) use or permit the use of such articles or related training or other defense service 496 for purposes other than those for which furnished;

(2) it will maintain the security of such articles or related training or other defense service,496 and will provide substantially the same degree of security protection afforded to such articles or related training or other defense service 496 by the United States Government;

(3) it will, as the President may require, permit continuous observation and review by, and furnish necessary information to, representatives of the United States Government with regard to the use of such articles or related training or other defense service; 496 and

(4) unless the President consents to other disposition, it will return to the United States Government for such use or disposition as the President considers in the best interests of the United States, such articles or related training or other defense service 496 which are no longer needed for the purposes for which furnished.

(b) No defense articles shall be furnished on a grant basis to any country at a cost in excess of $3,000,000 in any fiscal year unless the President determines

(1) that such country conforms to the purposes and principles of the Charter of the United Nations;

(2) that such defense articles will be utilized by such country for the maintenance of its own defensive strength, or 497 the defensive strength of the free world;

495 22 U.S.C. 2314. Former sec. 506 was redesignated sec. 505 by sec. 201(e) of the FA Act of 1967.

496 Sec. 203(b) of the International Security Assistance and Arms Export Control Act of 1976 (Public Law 94-329; 90 Stat. 735) added "or related training or other defense service". 497 Sec. 201(b) of the FA Act of 1971 substituted "or" in lieu of "and".

(3) that such country is taking all reasonable measures, consistent with its political and economic stability, which may be needed to develop its defense capacities; and

(4) that the increased ability of such country to defend itself is important to the security of the United States.

(c) 498 The President shall regularly reduce and, with such deliberate speed as orderly procedure and other relevant considerations, including prior commitments, will permit, shall terminate all further grants of military equipment and supplies to any country having sufficient wealth to enable it, in the judgment of the President, to maintain and equip its own military forces at adequate strength, without undue burden to its economy.

(d) 498. 499 (1) Assistance and deliveries of assistance under this chapter to any country shall be terminated as hereinafter provided, if such country uses defense articles or defense services furnished under this Act, the Mutual Security Act of 1954,500 or any predecessor Foreign Assistance Act, in substantial violation (either in terms of quantities or in terms of the gravity of the consequences regardless of the quantities involved) of any agreement entered into pursuant to any such Act (A) by using such articles or services for a purpose not authorized under section 502 or, if such agreement provides that such articles or services may only be used for purposes more limited than those authorized under section 502, for a purpose not authorized under such agreement; (B) by transferring such articles or services to, or permitting any use of such articles or services by, anyone not an officer, employee, or agent of the recipient country without the consent of the President; or (C) by failing to maintain the security of such articles or services.

(2)(A) Assistance and deliveries of assistance shall be terminated pursuant to paragraph (1) of this subsection if the President so determines and so states in writing to the Congress, or if the Congress so finds by joint resolution.

(B) The President shall report to the Congress promptly upon the receipt of information that a violation described in paragraph (1) of this subsection may have occurred.

(3) Assistance to a country shall remain terminated in accordance with paragraph (1) of this subsection until such time as

(A) the President determines that the violation has ceased; and

(B) the country concerned has given assurances satisfactory to the President that such violation will not recur.

(4) The authority contained in section 614(a) of this Act may not be used to waive the provisions of this section with respect to further assistance under this chapter.

*** Subsecs. (c) and (d) were added by sec. 201(a) of the FA Act of 1962.

Sec. 304(a) of the International Security Assistance and Arms Export Control Act of 1976 Public Law 94-329; 90 Stat. 751) amended subsec. (d) which formerly read as follows:

"(d) Any country which hereafter uses defense articles or defense services furnished such country under this Act, the Mutual Security Act of 1954, as amended, or any predecessor foreign assistance Act, in substantial violation of the provisions of this chapter or any agreements entered into pursuant to any of such Acts shall be immediately ineligible for further assistance.". 600 For text, see page 981.