proved under section 38 of this Act,28 unless at least 30 calendar days before giving such consent the President submits to the Speaker of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate a report containing the information specified in subparagraphs (A) through (E) of paragraph (1).

(4)29 This subsection shall not apply

(A) to transfers of maintenance, repair, or overhaul defense services, or of the repair parts or other defense articles used in furnishing such services, if the transfer will not result in any increase, relative to the original specifications, in the military capability of the defense articles and services to be maintained, repaired, or overhauled;

(B) to temporary transfers of defense articles for the sole purpose of receiving maintenance, repair, or overhaul; or

(C) 30 to arrangements among members of the North Atlantic Treaty Organization or between the North Atlantic Treaty Organization and any of its member countries

(i) for cooperative cross servicing, or

(ii) for lead-nation procurement if the certification transmitted to the Congress pursuant to section 36(b) of this Act with regard to such lead-nation procurement identified the transferees on whose behalf the lead-nation procurement was proposed.

31***

(D) 31

[Repealed-1981]

(e) If the President receives any information that a transfer of any defense article, or related training or other defense service, has been made without his consent as required under this section or under section 505 of the Foreign Assistance Act of 1961, he shall report such information immediately to the Speaker of the House of Representatives and the Committee on Foreign Relations of the Senate.

(f) 32 (1) Unless the President finds that the national security requires otherwise, he shall terminate all sales, credits, and guaranties under this Act to any government which aids or abets, by granting sanctuary from prosecution to, any individual or group which has committed an act of international terrorism. The President may not thereafter make or extend sales, credits, or guaranties to such government until the end of the one year period begin

28 The value of the items listed in this sentence was increased from $7,000,000 and $25,000,000 to $14,000,000 and $50,000,000, respectively, by sec. 101(a)(2) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1519).

29 This paragraph, originally added as paragraph (3) by sec. 17 of the International Security Assistance Act of 1977 (Public Law 95-92; 91 Stat. 622), was redesignated as paragraph (4) by sec. 101(a) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3131).

30 Subpar. (C) was amended and restated by sec. 11 of the International Security Assistance Act of 1979 (Public Law 96-92; 93 Stat. 705). It formerly read as follows:

"(C) to cooperative cross servicing arrangements among members of the North Atlantic Treaty Organization."

31 Subpar. (D), as added by sec. 101(b) of Public Law 96-536 (94 Stat. 3131), was repealed by sec. 101(a)(3)C) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1520). Subpar. (D) had stipulated that subsec. (d) would not apply to transfers to NATO, member countries of NATO, Japan, Australia, or New Zealand of major defense equipment valued at less than $7,000,000 or defense articles or related training or other defense service valued at less than $25,000,000.

32 Subsection (f) was added by sec. 18 of the International Security Assistance Act of 1977 (Public Law 95-92; 91 Stat. 622).

ning on the date of such termination, except that if during its period of ineligibility for sales, credits, and guaranties pursuant to this section such government aids or abets, by granting sanctuary from prosecution to, any other individual or group which has committed an act of international terrorism, such government's period of ineligibility shall be extended for an additional year for each such individual or group.

(2) If the President finds that the national security justifies a continuation of sales credits, or guaranties to any government described in paragraph (1), he shall report such finding to the Speaker of the House of Representatives and the Committee on Foreign Relations of the Senate.

Sec. 4.33 Purposes for Which Military Sales by the United States Are Authorized.-Defense articles and defense services shall be sold or leased 34 by the United States Government under this Act to friendly countries solely for internal security, for legitimate self-defense, to permit the recipient country to participate in regional or collective arrangements or measures consistent with the Charter of the United Nations, or otherwise to permit the recipient country to participate in collective measures requested by the United Nations for the purpose of maintaining or restoring international peace and security, or for the purpose of enabling foreign military forces in less developed friendly countries to construct public works and to engage in other activities helpful to the economic and social development of such friendly countries. It is the sense of the Congress that such foreign military forces should not be maintained or established solely for civic action activities and that such civic action activities not significantly detract from the capability of the military forces to perform their military missions and be coordinated with and form part of the total economic and social development effort: Provided, That none of the funds contained in this authorization shall be used to guarantee, or extend credit, or participate in an extension of credit in connection with any sale of sophisticated weapons systems, such as missile systems and jet aircraft for military purposes, to any underdeveloped country other than Greece, Turkey, Iran, Israel, the Republic of China, the Philippines, and Korea unless the President determines that such financing is important to the national security of the United States and reports within thirty days each such determination to the Congress.

Sec. 5.35 Prohibition Against Discrimination.-(a) It is the policy of the United States that no sales should be made, and no credits (including participations in credits) or guaranties extended to or for any foreign country, the laws, regulations, official policies, or governmental practices of which prevent any United States person (as defined in section 7701(a)(30) of the Internal Revenue Code of 1954) from participating in the furnishing of defense articles or defense services under this Act on the basis of race, religion, national origin, or sex.

222 U.S.C. 2754.

"The words "or leased" were added by sec. 109(b)(3) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1526).

22 U.S.C. 2755. Sec. 5 was added by sec. 302(b) of the International Security Assistance and Arms Export Control Act of 1976 (Public Law 94-329; 90 Stat. 752).

(b)(1) No agency performing functions under this Act shall, in employing or assigning personnel to participate in the performance of any such function, whether in the United States or abroad, take into account the exclusionary policies or practices of any foreign government where such policies or practices are based upon race, religion, national origin, or sex.

(2) Each contract entered into by any such agency for the performance of any function under this Act shall contain a provision to the effect that no person, partnership, corporation, or other entity performing functions pursuant to such contract, shall, in employing or assigning personnel to participate in the performance of any such function, whether in the United States or abroad, take into account the exclusionary policies or practices of any foreign government where such policies or practices are based upon race, religion, national origin, or sex.

(c) The President shall promptly transmit reports to the Speaker of the House of Representatives and the chairman of the Committee on Foreign Relations of the Senate concerning any instance in which any United States person (as defined in section 7701(a)(30) of the Internal Revenue Code of 1954) is prevented by a foreign government on the basis of race, religion, national origin, or sex, from participating in the performance of any sale or licensed transaction under this Act. Such reports shall include (1) a description of the facts and circumstances of any such discrimination, (2) the response thereto on the part of the United States or any agency or employee thereof, and (3) the result of such response, if any.

(d)(1) Upon the request of the Committee on Foreign Relations of the Senate or the Committee on International Relations of the House of Representatives, the President shall, within 60 days after the receipt of such request, transmit to both such committees a statement, prepared with the assistance of the Assistant Secretary of State 36 for Human Rights and Humanitarian Affairs, with respect to the country designated in such request, setting forth

(A) all the available information about the exclusionary policies or practices of the government of such country when such policies or practices are based upon race, religion, national origin or sex and prevent any such person from participating in the performance of any sale or licensed transaction under this Act;

(B) the response of the United States thereto and the results of such response;

(C) whether, in the opinion of the President, notwithstanding any such policies or practices

(i) extraordinary circumstances exist which necessitate a continuation of such sale or licensed transaction, and, if so, a description of such circumstances and the extent to which such sale or licensed transaction should be continued (subject to such conditions as Congress may impose under this section), and

36 Sec. 109(a)6) of the Foreign Relations Authorization Act, Fiscal Year 1978 (Public Law 95105; 91 Stat. 846) substituted the words "Assistant Secretary of State" in lieu of "Coordinator."

(ii) on all the facts it is in the national interest of the United States to continue such sale or licensed transaction; and

(D) such other information as such committee may request. (2) In the event a statement with respect to a sale or licensed transaction is requested pursuant to paragraph (1) of this subsection but is not transmitted in accordance therewith within 60 days after receipt of such request, such sale or licensed transaction shall be suspended unless and until such statement is transmitted.

(3)(A) In the event a statement with respect to a sale or licensed transaction is transmitted under paragraph (1) of this subsection, the Congress may at any time thereafter adopt a joint resolution terminating or restricting such sale or licensed transaction.

(B) Any such resolution shall be considered in the Senate in accordance with the provisions of section 601(b) of the International Security Assistance and Arms Export Control Act of 1976.

(C) The term "certification", as used in section 601 of such Act, means, for the purposes of this paragraph, a statement transmitted under paragraph (1) of this subsection.

Sec. 6.37 Foreign Intimidation and Harassment of Individuals in the United States.-No letters of offer may be issued, no credits or guarantees may be extended, and no export licenses may be issued under this Act with respect to any country determined by the President to be engaged in a consistent pattern of acts of intimidation or harassment directed against individuals in the United States. The President shall report any such determination promptly to the Speaker of the House of Representatives and to the chairman of the Committee on Foreign Relations of the Senate.

Chapter 2-FOREIGN MILITARY SALES AUTHORIZATIONS Sec. 21.38 Sales From Stocks.-(a) The President may sell defense articles and defense services from the stocks of the Department of Defense to any eligible country or international organization if such country or international organization agrees to pay in United States dollars

37 22 U.S.C. 2756. Sec. 6. was added by sec. 115 of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1528).

38 22 U.S.C. 2761. Sec. 205 of the International Security Assistance and Arms Export Control Act of 1976 (Public Law 94-329; 90 Stat. 736) amended sec. 21 which formerly read as follows: "Sec. 21. Cash Sales From Stock.-The President may sell defense articles from the stocks of the Department of Defense and defense services of the Department of Defense to any friendly country or international organization if such country or international organization agrees to pay not less than the value thereof in United States dollars. Payment shall be made in advance or, as determined by the President to be in the best interests of the United States, within a reasonable period not to exceed one hundred and twenty days after the delivery of the defense articles or the rendering of the defense services."

Sec. 975 of title 10, U.S. Code, as added by sec. 815 of the Department of Defense Appropriation Authorization Act, 1979 (92 Stat. 1625), prohibits the sale of certain defense articles from Department of Defense stocks. For complete text of 10 U.S.C. 975, see page 473.

Sec. 1007 of the DOD Authorization Act, 1985 (Public Law 98-525; 98 Stat. 2583) adjusts and waives certain charges required under sec. 21 connected with the European air defense agreements and the sale of Patriot fire missile units to the Federal Republic of Germany during fiscal year 1985. For complete text of sec. 1007, see page 490.

40-730 0-85-15

(1) 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; 39

(2) 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 (3) 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, 40 only those additional costs that are incurred by the United States Government in furnishing such training.41

(b) 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)(1) 42 Personnel performing defense services sold under this Act 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, 43 outside the United States in connection with the performance of those defense services.

(2) 42 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 Act or the Foreign Assistance Act of 1961, the President shall submit to the Speaker of the House of Repre

39 Sec. 8036 of the Department of Defense Appropriations Act, 1985 (sec. 101 of the Continuing Appropriations Act, 1985; Public Law 98-473; 98 Stat. 1930) stipulated that no funds provided under that Act shall be "available for the planning or execution of programs which utilize amounts credited to Department of Defense appropriations or funds pursuant to the provisions of section 37(a) of the Arms Export Control Act representing payment for the actual value of defense articles specified in section 21(a)(1) of that Act: Provided, That such amounts shall be credited to the Special Defense Acquisition Fund, as authorized by law, or to the extent not so credited shall be deposited in the Treasury as miscellaneous receipts as provided in section 3302(b) of title 31, United States Code."

40 The words, "sold to a purchaser who is concurrently receiving assistance under chapter 5 of part II of the Foreign Assistance Act of 1961", that previously appeared at this point, were struck out by the Foreign Assistance Appropriations Act, 1985 (sec. 101 of the Continuing Ap propriations Act, 1985; Public Law 98-473; 98 Stat. 1895). This amendment had been included as sec. 102(a) of S. 2346, as introduced on February 27, 1984. Public Law 98-473 enacted sec. 102 of S. 2346.

were

"The words to this point beginning with ", except that in the case of training added by sec. 115(b)(2) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3140).

42 The paragraph designation "(1)" and a new par. (2) were added by sec. 102 of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3132). Par. (2) was subsequently amended and restated by sec. 103 of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1521). The original text of par. (2) read as follows:

"(2) Within 48 hours after the outbreak of significant hostilities involving a country in which United States personnel are performing defense services pursuant to this Act or the Foreign Assistance Act of 1961, 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, setting forth"(A) the identity of such country and a description of such hostilities; and

"(B) the number of members of the United States Armed Forces and the number of United States civilian personnel performing defense services related to such hostilities in such country, their location, the precise nature of their activities, and the likelihood of their becoming engaged in or endangered by hostilities."

43 The words "training and advising that may engage United States personnel in combat activities" were substituted in lieu of "training, advising, or otherwise providing assistance regarding combat activities" by Sec. 102(1) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3132).