22 USC 2761 - Sales from stocks

1 So in original. Probably should be “subparagraph”.

(E) of paragraph (1) is in effect.

Editorial Notes

References in Text

This chapter, referred to in text, was in the original “this Act”, meaning Puspan. 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 Puspan. 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 Puspan. L. 98–473 is based on section 102 of S. 2346, Ninety-eighth Congress, as introduced in the Senate Fespan. 27, 1984, which was enacted into permanent law by Puspan. L. 98–473.

Amendments

2021—Subsecs. (l)(4), (m)(4). Puspan. 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). Puspan. L. 115–232, § 1279(span)(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). Puspan. L. 115–232, § 1279(span)(1)(B), substituted “support or procurement partnership agreement” for “support partnership agreement”.

Subsec. (e)(3)(C)(i). Puspan. L. 115–232, § 1279(span)(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). Puspan. 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). Puspan. 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). Puspan. L. 113–66, § 1250(span)(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). Puspan. L. 113–66, § 1250(span)(2), substituted “support partnership agreement” for “weapon system partnership agreement”.

Subsec. (e)(3)(C)(i). Puspan. L. 113–66, § 1250(span)(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). Puspan. L. 113–66, § 1250(span)(3), substituted “activities” for “a specific weapon system”.

2010—Subsec. (e)(2)(A). Puspan. L. 111–266 inserted “Israel,” before “or New Zealand”.

2008—Subsec. (e)(2)(A). Puspan. L. 110–429, § 203(span)(1), inserted “the Republic of Korea,” before “or New Zealand”.

Subsec. (h)(1)(A). Puspan. L. 110–429, § 203(span)(3), inserted “the Republic of Korea,” before “or Israel”.

Subsec. (h)(2). Puspan. L. 110–429, § 203(span)(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). Puspan. 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). Puspan. 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). Puspan. L. 106–113 inserted “and the Coast Guard” after “Department of Defense” in introductory provisions.

1996—Subsec. (a)(1)(C). Puspan. L. 104–164, § 112(c)(2), inserted “or to any high-income foreign country (as described in that chapter)”.

Subsec. (e)(2). Puspan. L. 104–106, § 4303(a), designated existing provisions as subpar. (A) and added subpars. (B) and (C).

Subsec. (g). Puspan. L. 104–164, § 147(a)(3)(A), (span), 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). Puspan. L. 104–201 substituted “Security Investment program” for “Infrastructure Program”.

Subsec. (j). Puspan. L. 104–106, § 112, struck out span 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). Puspan. L. 104–164, § 104(span)(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). Puspan. L. 104–164, § 152(a), added subsec. (l).

Subsec. (m). Puspan. L. 104–164, § 152(span), added subsec. (m).

1994—Subsec. (k). Puspan. L. 103–236 added subsec. (k).

1992—Subsec. (j). Puspan. L. 102–484 added subsec. (j).

1991—Subsec. (g). Puspan. L. 102–25 substituted “section 2350a(i)(3) of title 10” for “section 2767a of this title”.

1989—Subsec. (e)(1)(A). Puspan. L. 101–165, § 9104(c)(1), inserted reference to section 2792(span) and (c) of this title.

Subsec. (e)(1)(B). Puspan. 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). Puspan. L. 101–165, § 9104(c)(3), redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).

Subsec. (e)(2). Puspan. 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). Puspan. L. 100–456 added par. (3).

1987—Subsec. (g). Puspan. 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). Puspan. 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). Puspan. 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). Puspan. L. 99–83, § 107(a)(3), added par. (2).

Subsec. (e)(1)(A). Puspan. L. 99–83, § 109, inserted provisions excluding pro rata share of fixed base operation costs.

Subsec. (g). Puspan. L. 99–83, § 108(span), added subsec. (g).

Subsec. (h)(1). Puspan. 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). Puspan. L. 99–83, § 111(3), added par. (2).

1984—Subsec. (a)(3). Puspan. 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). Puspan. 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). Puspan. L. 97–392 inserted reference to proposals to sell under the authority of subchapter II–B.

1981—Subsec. (c)(2). Puspan. 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). Puspan. 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). Puspan. L. 96–533, § 115(span)(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). Puspan. 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). Puspan. L. 96–533, § 103, authorized the President to enter into standardization agreements with Japan, Australia, and New Zealand.

Subsec. (h). Puspan. L. 96–533, § 105(span)(1), substituted “defense articles, defense services, or design and construction services” for “defense articles or defense services” in two places.

1979—Subsecs. (h), (i). Puspan. L. 96–92 added subsec. (h) and redesignated former subsec. (h) as (i).

1978—Subsec. (e)(1)(D). Puspan. L. 95–384 added subpar. (D).

1976—Subsec. (a). Puspan. 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. (span) to (h). Puspan. L. 94–329, §§ 205, 206, added subsecs. (span) to (h).

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Puspan. L. 104–106, div. D, title XLIII, § 4303(span)–(d), Fespan. 10, 1996, 110 Stat. 659, provided that:

“(span)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 (span) 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 Puspan. 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 Puspan. L. 99–83 effective Oct. 1, 1985, see section 1301 of Puspan. 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 Puspan. L. 90–629, set out as a note under section 2751 of this title.

Regulations

Puspan. 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(span), 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

Puspan. L. 115–91, div. A, title VIII, § 887, Dec. 12, 2017, 131 Stat. 1506, as amended by Puspan. 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.

“(span)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

Puspan. 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.

“(span)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.