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.

SEC. 520.590 TRANSFERS OF EXCESS DEFENSE ARTICLES FOR INTER

NATIONAL PEACEKEEPING OPERATIONS.

(a) GENERAL AUTHORITY.-The President may transfer to international and regional organizations of which the United States is a member such excess defense articles as the President determines necessary to support international peacekeeping operations and other activities and operations to maintain and restore international peace and security. Such transfers shall be on such terms and conditions as the President may determine, consistent with this section.

(b) CONDITIONALITY OF AUTHORITY.–

(1) IN GENERAL.-The authority of subsection (a) may not be exercised with respect to an international or regional organization until the United States has entered into a written agreement with that organization providing that the value of any excess defense articles transferred under this section shall be credited against United States assessed contributions to that organization. For purposes of this paragraph, the term "value" means such amount as may be agreed upon by the United States and the recipient organization, except that such amount

590 22 U.S.C. 2321n. Sec. 408 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (Public Law 103-236; 108 Stat. 452) added sec. 520.

may not be less than the value (as defined in section 644(m)(1) of this Act) of the articles transferred.

(2) CREDITING OF TRANSFERS. (A) The credit provided for pursuant to paragraph (1) shall be counted against United States assessed contributions to the recipient organization that are payable from the "Contribution to International Peacekeeping Activities" account of the Department of State, except to the extent such credit is counted, in accordance with subparagraph (B), against an assessed contribution payable from an account established within the Department of Defense. (B) If

(i) an account is established within the Department of Defense for payment of a portion of United States assessed contributions for United Nations operations,

(ii) excess defense articles are transferred under this section for a United Nations operation, and

(iii) the United States assessed contribution for that operation is payable from that account,

the credit for those excess defense articles shall be counted against the assessed contribution payable from that account, but only to the extent that the value of the excess defense articles so transferred for that operation during a fiscal year does not exceed the total United States assessed contribution payable for that operation from that account during that fiscal year.

(c) LIMITATIONS 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 (or the Coast Guard);

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

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

(4) the President has established procedures and requirements, comparable to those applicable under section 505 of this Act, to ensure that such excess defense articles will be used only for purposes that have been agreed to by the United States.

(d) NOTIFICATION TO CONGRESS.

(1) IN GENERAL.-The President shall notify the designated congressional committees regarding any transfer of excess defense articles under this section in accordance with paragraph (2). This notification shall include

(A) a discussion 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

(i) the acquisition cost and the value (as defined in section 644(m)(1) of this Act) of the excess defense articles to be transferred, and

(ii) the aggregate acquisition cost and the aggregate value (as so defined) of all excess defense articles for

which notification has been provided under this subsection during that fiscal year with respect to transfers to the same organization under this section.

(2) TIMING OF NOTICE. (A) The President shall notify the designated congressional committees pursuant to paragraph (1) at least 15 days before the excess defense articles are transferred under this section, except as provided in subparagraph (B).

(B) If the President determines that an unforeseen emergency requires the immediate transfer of excess defense articles under this section, the President

(i) may waive the requirement of subparagraph (A) that notice be provided at least 15 days in advance of the transfer; and

(ii) shall promptly notify the designated congressional committees of such waiver and transfer.

(3) DESIGNATED COMMITTEES.-As used in this subsection, the term "designated congressional committees" means the Committee on Foreign Affairs, the Committee on Armed Services, and the Committee on Appropriations of the House of Representatives and the Committee on Foreign Relations, the Committee on Armed Services, and the Committee on Appropriations of the Senate.

(e) TRANSPORTATION AND Related Costs.—

(1) IN GENERAL.-Except as provided in paragraph (2), funds available to the Department of Defense shall not be expended for crating, packing, handling, and transporting excess defense articles transferred under the authority of this section.

(2) EXCEPTION.-Notwithstanding any other provision of law, the President may direct the crating, packing, handling, and transporting of excess defense articles without charge to an international or regional organization if the President determines that waiving such costs advances the foreign policy interests of the United States.

(f) WAIVER OF REQUIREMENT FOR REIMBURSEMENT OF DOD ExPENSES. Section 632(d) shall not apply with respect to transfers of excess defense articles under this section and to any costs of crating, packing, handling, and transporting incurred under subsection (e)(2).

Chapter 3-Foreign Military Sales 591

Sec. 521.592 Administration of Sales Programs Involving Defense Articles and Services.-* * * [Repealed-1968] Sec. 522,592 Sales from Stock. *** [Repealed-1968] Sec. 523.592 Procurement of Sales.-*

**

* [Repealed-1968]

501 The new chapter heading was added by sec. 201(oX2) of the FA Act of 1967.

592 Secs. 521, 522, and 523 were repealed by sec. 45(a) of the Foreign Military Sales Act (Public Law 90-629).

Sec. 524.593 Reimbursements.-(a) 594 Whenever funds made available for use under this part have been or 595 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 596 shall be credited to a separate fund account 597 and, shall be available until expended solely for the purposes of financing sales and guaranties, including the overhead costs thereof,598 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.599

(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 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) 600 *** [Repealed-1968]

Sec. 525.600 Guaranties.-*** [Repealed-1968]

593 22 U.S.C. 2344. Former sec. 508 was redesignated sec. 524 by sec. 201(hX1) of the FA Act of 1967.

594 Subsection designation “(a)” and a new subsec. (b) were added by sec. 201(hX2) of the FA Act of 1967.

595 The words "have been or" were added by sec. 201(eX1) of the FA Act of 1965.

596 The words to this point, beginning with "receipts received from", were added by sec. 201(e)(2) of the FA Act of 1965.

597 Sec. 201(eX3) of the FA Act of 1965 inserted "a separate fund account" in lieu of "the current applicable appropriation".

598 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".

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

600 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.

Chapter 4-Economic Support Fund 601

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.

Sec. 531.602 Authority. (a) The Congress recognizes that, under special economic, political, or security conditions, the national interests of the United States may require economic support for countries in amounts which could not be justified solely under chapter 1 of part I or, in the case of countries in sub-Saharan Africa, chapter 10 of part 1.603 In such cases, the President is authorized to furnish assistance to countries and organizations, on such terms and conditions as he may determine, in order to promote economic or political stability. To the maximum extent feasible, the President shall provide assistance under this chapter consistent

001 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(bX6) 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 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 1994, vol. III. See also sec. 206 of the International Security and Development Cooperation Act of 1985, 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.

802 22 U.S.C. 2346.

603 Sec. 562 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1991 (Public Law 101-513; 104 Stat. 2026), added a new chapter 10 to part I of this Act, providing for long-term development in sub-Saharan Africa, and made a conforming amendment by inserting "or, in the case of countries in sub-Saharan Africa, chapter 10 of part I" here.