STATE/AID DRAFT "INTERNATIONAL SECURITY AND DEVELOPMENT COOPERATION ACT OF 1986."

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90B01390R000801030021-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 47
• Document Creation Date: December 27, 2016
• Document Release Date: December 20, 2010
• Sequence Number: 21
• Publication Date: March 12, 1986
• Content Type: MEMO

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RECPT # f hrnntl
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
PECUtL
March 12, 1986
LEGISLATIVE REFERRAL MEMORANDUM
Legislative Liaison Officer-
Department of Defense
National Security Council
Department of the Treasury
Department of Justice
Department of Agriculture
Department of Commerce
Department of Energy
Arms Control and Disarmament Agency
United States Trade Representative
Department of Education
Central Intelligence Agency
SUBJECT:- State/AID draft "International Security and
Development Cooperation Act of 1986."
(Your prompt response is necessary as this
draft bill is in support of the President's FY
1987 Budget.)
The Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship
to the program of the President, in accordance with OMB Circular
A-19.
A response to this request for your views is needed no later than
TUESDAY, MARCH 25, 1986.
Questions should be referred to SUE THAU
the legislative analyst in this office.
k-o
ONALD K. PETERSON FOR
Assistant Director for
Legislative Reference
Enclosures
cc:
K.
J.
M.
B.
Glozer
Eisenhour
Usnick
Howard
(395-7300),
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To amend the Foreign Assistance Act of 1961 and the Arms Export
Control Act to authorize development and security
assistance programs for fiscal year 1987, and for ether
purposes.
Be it enacted by the Senate and the House of
Representatives of the United States of America in Congress
assembled,
SECTION 1. This Act may be cited as the "International
Security-and Development Cooperation Act of 19860.
TITLE I - MILITARY ASSISTANCE AND SALES
AND RELATED PROGRAMS
FOREIGN-MILITARY SALES CREDIT AUTHORIZATION
SEC. 101. (a) Section 31(a) of the Arms Export Control Act
is amended by striking out 0$5,371,000,000 for fiscal year
1987" and inserting in lieu thereof 6$5,661,000,000 for fiscal
year 1987".
(b) Section 31(b)(1) of the Arms Export Control Act is
amended by striking out 0$5,371,000,000 for fiscal year 1987"
and inserting in lieu thereof 0$5,661,000,000 for fiscal year
1987".
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TERMS OF FOREIGN MILITARY SALES CREDITS
SEC. 102. Section 23(c)(2) of the Arms Export Control Act
is amended by striking out the parenthetical phrase in
subparagraph (B).
SALES FROM STOCKS
SEC. 103. Section 21 of the Arms Export Control Act is
amended by adding the following new subsection:
In the case of a sale under subsection (a)(1)(B) of
this section, the President may contract for the procurement of
replacetttent major defense equipment if the eligible country or
international organization provides the United States
Government with a dependable undertaking as described in
section 22(a) of this Act.".
GUARANTEE RESERVE
SEC. 104. The second sentence of section 24(c) of the Arms
Export Control Act is amended to read as follows: "There are
hereby authorized to be appropriated and are appropriated from
time to time such funds as may be necessary to pay claims under
such guarantees to the extent funds in the single reserve are
inadequate therefor.".
REPORTS REGARDING SALES PROGRAM
SEC. 105. Sections 25(a)(9) and 25(a)(10) of the Arms
Export Control Act are repealed.
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QUARTERLY REPORTS
SEC. 106. Section 36(a) of the Arms Export Control Act is
amended by striking out the parenthetical clause in.the text
preceding paragraph (1) and inserting in lieu thereof "(except
that the material transmitted pursuant to paragraphs (1) and
(2) of this subsection may be contained in a classified
addendum to such report)".
DISQUALIFICATION FOR VIOLATION OF INTERNATIONAL
TRAFFIC IN ARMS REGULATIONS
SEC. 107. (a) Section 38(d) of the Arms Export Control Act
is amended to read as follows:
"(d) No contract between a foreign government and a person
convicted or debarred for a violation of this section or
section 39, or any rule or regulation issued under either
section may be approved for financing under this Act during the
twelve months following the date of such conviction or
debarment.
(b) This section shall take effect upon the date of
enactment of this Act or October 1, 1986, whichever is later.
The amendment made by this section applies with respect to
convictions or debarments occurring on or after the effective
date of this section.
MILITARY ASSISTANCE
SEC. 108. Section 504(a)(1) of the Foreign Assistance Act
of 1961 is amended by striking out 0$805,100,000 for fiscal
year 1987" and inserting in lieu thereof 0$996,450,000 for
fiscal year 1987".
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INTERNATIONAL MILITARY EDUCATION AND TRAINING
SEC. 109. Section 542 of the Foreign Assistance Act of 1961
is amended by striking out "$56,221,000 for fiscal year 1987"
and inserting in lieu thereof "$68,830,000 for fiscal year
1987".
PEACEKEEPING OPERATIONS
SEC. 110. Section 552(a) of the Foreign Assistance Act of
1961 is amended by striking out "$37,000,000 for fiscal year
1987" and inserting in lieu thereof "$39,000,000 for fiscal
year-1987".
ANTITERRORISM ASSISTANCE
SEC. 111. Section 573(a) of the Foreign Assistance Act of
1961 is amended by striking out "section 660 of this" and
inserting in lieu thereof "any other provision of this Act or
any other".
TITLE II - ECONOMIC SUPPORT FUND
AUTHORIZATION OF APPROPRIATIONS
SEC. 201. Section 532(a) of the Foreign Assistance Act of
1961 is amended to read as follows:
"(a) There are authorized to be appropriated to the
President to carry out the purposes of this chapter
$4,093,800,000 for the fiscal year 1987.".
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ACQUISITION OF AGRICULTURAL COMMODITIES
UNDER COMMODITY IMPORT PROGRAMS
SEC. 202. Section 205 of the International Security and
Development Cooperation Act of 1985 is amended by adding at the
end thereof the following new sentence: The President may use
a smaller percentage of such funds for the purchase of
agricultural commodities of United States-origin if he
determines that the use of 18 percent of such funds for such
purchases would not be consistent with the objectives of the
foreign assistance program.".
REGIONAL ASSISTANCE TO GUATEMALA
SEC. 203. (a) With respect to Guatemala's participation in
regional programs, prior year limitations (inapplicable to
current funds) on assistance made available under chapter 4 of
part II of the Foreign Assistance Act of 1961 are repealed.
(b) This provision shall take effect upon the date of
enactment of this Act.
TITLE III - DEVELOPMENT ASSISTANCE
CHILD SURVIVAL FUND
SEC. 301. Section 104(c)(2)(B) of the Foreign Assistance
Act of 1961 is amended by adding at the end thereof the
following new sentence: "Except as provided in this section and
in the paragraph entitled "Population, Development Assistance"
as contained in the Foreign Assistance and Related Programs
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Appropriations Act, 1986 (Public Law 99-190), assistance
provided under this paragraph may be made available
notwithstanding any other provision of this or any other Act.".
PRIVATE SECTOR, ENERGY, AND PRIVATE AND
VOLUNTARY ORGANIZATIONS
SEC. 302. Section 106 of the Foreign Assistance Act of 1961
is amended to read as follows:
'Sea. 106. Private Sector, Energy, and Private and
Voluntary Organizations.-(a) The Private Sector.-The Congress
finds that aprivate enterprise economy is the most efficient
means of achieving broad-based economic development, that
private enterprises that are allowed to respond to profitable
opportunities in a free market produce jobs, managerial skills
and economic growth, and that significant equity objectives can
be achieved when market forces operate to stimulate an economy.
'The Congress recognizes that many developing countries
have not relied on open, competitive markets to determine
resource allocations in many sectors of their economies.
Instead, governments have often attempted to direct essential
activity in agricultural and industrial production and trade by
centralized governmental determinations. As a consequence,
government regulations have created severe economic
distortions: limitations on the buying and selling of foreign
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exchange have often distorted foreign exchange rates in ways
which amount to a tax on exports and a subsidy on imports;
banking restrictions, particularly interest rate regulations,
frequently operate to inhibit savings and the expansion of
capital resources; price-fixing and government subsidy programs
often perpetuate inefficient production, frequently at the
expense of the agricultural sector; tax policy and
Idministration often do not serve to foster development nor to
encourage saving and investment.
'assistance provided under this section should foster the
movement of developing countries towards a free market society
and the establishment of viable, competitive markets and the
expansion of private enterprise in such countries. Such
assistance should include support for a country's efforts to
reform policies, procedures, regulations and laws affecting the
role of the private sector in the economy, and assistance to
specific projects to stimulate the growth of the indigenous
private sector and development in both rural and urban areas.
"(b) Private and Voluntary Organizations.-The Congress
recognizes that private and voluntary organizations and
cooperatives bring unique skills to bear on the development
process. By virtue of their links with private institutions in
developing countries, such organizations and cooperatives often
serve effectively to engage rural and urban poor in their
nation's development. Moreover, by virtue of their support
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within the United States, such organizations and cooperatives
are a means for mobilizing among the general public not only a
broader awareness of the pressing needs of developing
countries, but also for generating private resources for
international development. These organizations are often able
to reach and benefit sectors of the population not normally
served by other private sector institutions or direct
government programs. In order to foster the activities of
private and voluntary organizations and cooperatives (as well
as regional and international development organizations),
assistance may be provided for programs of technical
cooperation and development in conjunction with those
organizations.
"(c) Energy.-The Congress recognizes that energy
development and production are vital elements in the
development process, and that energy shortages in developing
countries greatly limit the development process in such
countries. The energy constraints faced by most developing
countries are severe. These countries, especially the poorest,
have inadequate energy supplies for economic growth and to meet
minimal domestic requirements, and must continually face the
problems of unmanageable demands on foreign exchange in order
to import oil, and environmental degradation from an
over-exploited traditional fuel resource base.
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"In order to help developing countries alleviate their
energy problems by improving their ability to use indigenous
energy resources to produce the energy needed by their
economies, assistance may be provided to enable such countries
to prepare for and undertake development of their energy
resources. Such assistance may include efforts to: help
countries analyze critical national energy issues with an
emphasis, where appropriate, on the importance of market
pricing policies and the hidden costs attached to subsidies
which-skew investment and consumption decisions; identify and
encourage the implementation of trade and investment policies
that stimulate the private sector and the operation of market
forces to allocate resources; promote policies and programs
that provide for essential energy (including biomass fuels)
requirements especially for food production, processing, and
distribution; support efforts to undertake primary data
collection and analysis; assist host government conservation
programs to improve energy efficiency; support efforts to train
personnel and establish long-term institutional relationships
between developing country institutions and United States
universities and centers for research in the public and private
sectors; and support programs that assist developing countries_
in research, particularly fuelwood research.
'(d) Special Development Problems.-The Congress recognizes
that assistance to developing countries will sometimes be
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required in order to address special development problems and
research needs. Such assistance may include programs of
research into, and evaluation of, the process of eoonomic
development in developing countries and areas, and into the
factors affecting the relative success and costs of development
activities, and into the means, techniques, and such other
aspects of development assistance in order to render such
assistance of increasing value and benefit; programs of
reconstruction following natural or manmade disasters and
programs of disaster preparedness, including the prediction of
and contingency planning for natural disasters abroad; other
programs designed to help solve special development problems
including efforts to make possible proper utilization of
infrastructure and related projects funded with earlier United
States assistance; and programs of urban development.
"(e) Authorization of Appropriations.-The President is
authorized to furnish assistance, on such terms and conditions
as he may determine, for activities to carry out the purposes
of this section to the extent that such activities are not
authorized by or funds are not made available for such
activities under sections 103, 104, and 105 of this Act. There
are authorized to be appropriated to the President for purposes
of this section, in addition to funds otherwise available for
such purposes, $231,468,000 for the fiscal year 1987. Amounts
appropriated under this section are authorized to remain
available until expended.".
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HUMAN RIGHTS
SEC. 303. Section 116(e)(1) of the Foreign Assistance Act
of 1961 is amended by adding at the end thereof the following
new sentence: "Such funds may be made available notwithstanding
any other provision of this or any other Act.".
PRIVATE AND VOLUNTARY
ORGANIZATIONS AND COOPERATIVES
IN OVERSEAS DEVELOPMENT
SEC. 304. Section 123(e) of the Foreign Assistance Act of
1961 _is amended-
(1) in the first sentence by striking out "private and
voluntary organizations and cooperatives already being
supported prior to the date such prohibition become applicable"
and inserting in lieu thereof "nongovernmental organizations";
(2) in the second sentence by striking out "continuation
of"; and
(3) by amending the third sentence to read as follows: "If
the President provides assistance through nongovernmental
organizations as provided in this subsection after the date
such prohibition becomes applicable, he shall prepare and
transmit, not later than one year after such date, to the
Speaker of the House of Representatives and to the chairman of
the Committee on Foreign Relations of the Senate a report
setting forth the reasons for the provision of such
assistance.".
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RESEARCH AND TECHNICAL FELLOWS
SEC. 305. Chapter 1 of part I of the Foreign Assistance Act
of 1961 is amended by adding at the end thereof the following
new section:
"SEC. 129. RESEARCH AND TECHNICAL FELLOWS.-(a) In order to
enable the scientific needs of developing countries to be more
fully addressed, the President is authorized to establish and
maintain Research and Technical Fellowships within the agency
primarily responsible for administering this part. Recipients
of such fellowships may spend not to exceed three years with
such agency or with institutions assisted by such agency. They
may perform research or provide technical advisory services for
such agency or for programs of technology transfer, institution
building and related assistance programs serving the purposes
of this part. Within such agency, fellows may discharge
program responsibilities in research policy or program
management positions. Recipients of such fellowships shall
receive such stipends and allowances, including travel and
subsistence expenses, as the President may deem necessary to
secure the assistance of highly qualified research or technical
fellows. Such fellows shall not be regarded as employees of
the United States Government except to the extent that the
President deems necessary to carry out this section.
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"(b) The President may maintain not to exceed 150
fellowships at any one time. Funds authorized to be
appropriated for programs under chapter 1 of part I shall be
used to carry out this section.".
TITLE IV - OTHER ASSISTANCE AND MISCELLANEOUS PROVISIONS
OPERATING EXPENSES
SEC. 401. Section 667(a)(1) of the Foreign Assistance Act
of 1961 is amended by striking out "$387,000,000 for fiscal
year-1987" and inserting in lieu thereof "$410,650,000 for
fiscil year 19870.
ADMINISTRATION OF JUSTICE
SEC. 402. Section 534 of the Foreign Assistance Act of 1961
is amended by'striking out subsections (c) and (e) and
redesignating existing subsection "(d)" as "(c)".
SUBSISTENCE PAYMENTS
SEC. 403. Section 636(a) of the Foreign Assistance Act of
1961 is amended-
(1) by striking out the period at the end of paragraph (17)
and inserting in lieu thereof a semicolon; and
(2) by adding the following new paragraph at the end
thereof:
"(18) payment of subsistence expenses of foreign officials,
and employees of the United States Government who accompany
such foreign officials, on official visits to the United
States, notwithstanding the limitations contained in section
5702 of title 5, United States Code.".
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TRAINING ASSISTANCE
SEC. 404. Section 639 of the Foreign Assistance Act of 1961
is amended to read as follows:
"SEC. 639. TRAINING ASSISTANCE.-No provision of this Act or
any other provision of law shall be construed to prohibit
assistance for any training activity which is funded under this
Act for Brazil or Argentina as long as such country continues
to have a democratically elected government and which is
consistent with sections 116, 502B, and 660 of this Act.".
SEC. 405. The first sentence of section 612(b) of the
International Security and Development Cooperation Act of 1985
is amended to read as follows: "Funds authorized to be
appropriated for fiscal year 1987 to carry out chapter 1 of
part I (relating to development assistance) of the Foreign
Assistance Act of 1961 may be made available for the project of
the Agency for International Development in the Upper Huallaga
Valley of Peru only if the Administrator of that Agency and the
Assistant Secretary of State for the Bureau of International
Narcotics Matters, after consultation with the Congress,
determine that a comprehensive review of the eradication and
alternative crop production activities in the Upper Huallaga
Valley has been completed which establishes the effectiveness
of the activities in helping to develop alternatives to coca
production and in reducing and eradicating coca leaf production,
distribution, and marketing in the Upper Huallaga Valley.".
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ASSISTANCE TO GUATEMALA
SEC. 406. Section 703 of the International Security and
Development Cooperation Act of 1985 is amended by striking out
subsections (c) and (e) thereof.
CONDITIONS ON ASSISTANCE
TO HAITI
SEC. 407. Section 705(b) of the International Security and
Development Cooperation Act of 1985 is amended by inserting
"the Government of' after 'obligated for'.
TITLE V - REPEALS AND TECHNICAL AMENDMENTS
REPEAL OF EARMARKS AND CEILINGS
SEC. 501. (a) Section 31(b)(2) of the Arms Export Control
Act is amended by striking out "and not more than $553,900,000
for fiscal year 1987".
(b) The International Security and Development Cooperation
Act of 1985 is amended-
(1) by amending section 101(c) to read as follows:
'(c) FMS FINANCING FOR ISRAEL AND EGYPT.-Israel and Egypt
shall be released from their contractual liability to repay the
United States Government with respect to credits provided
during fiscal year 1987 pursuant to section 23 of the Arms
Export Control Act.";
(2) by striking out sections 101(d), (e), and (f);
(3) in section 202-
(A) in subsection (a) by striking out 0(2)" and by
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striking out paragraph (1);
(B) in subsection (b) by striking out "(2)" and by
striking out paragraphs (1) and (3);
(4) in section 203 by striking out "(b)" and by striking
out subsection (a);
(5) by striking out sections 204 and 206;
(6) in section 702 by striking out subsection (f) and
t edesignating existing subsection "(g)" as "(f)";
17) by striking out sections 705(f), 707(b), and 720;
(8) in section 802 by striking out subsection (a) and by
redesignating existing subsections '(b)", '(c)', and "(d)",
respectively, as "(a)', "(b)", and "(c)", respectively;
(9) in section 804 by striking out '(a)" and by striking
out subsection (b);
(10) in section 805 by striking out "(a)" and by striking
out subsection (b);.
(11) in section 901 by striking out subsection (d) and
redesignating existing subsection "(e)" as '(d)';
(12) in section 904-
(A) by striking out "(a)" and by striking out
subsections (b) and (c); and
(B) in existing subsection (a) by inserting "with
respect to any fiscal year" immediately after
"appropriated"; and
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(13) by amending section 905 to read as follows:
"SEC. 905. ASSISTANCE FOR THE CAMBODIAN PEOPLE.-The
President may make available funds authorized to be
appropriated with respect to any fiscal year to carry out
chapter 2 (relating to grant military assistance) and chapter 4
(relating to the economic support fund) of part II of the
Foreign Assistance Act of 1961 for assistance for the
noncommunist resistance forces in Cambodia, notwithstanding any
other provision of law.".
(c) The Foreign Assistance Act of 1961 is amended-
(1) by amending section 103(g)(2) to read as follows:
"(2) The United States contribution to the second
replenishment of the International Fund for Agricultural
Development may be made available, by appropriation or by
transfer, from the aggregate amount authorized to be
appropriated to carry out part I of this Act. and
(2) in section 302(a)(1) by striking out the second
sentence.
TECHNICAL AMENDMENTS
SEC. 502. (a) Section 3(a) of the Arms Export Control Act
and section 505(e) of the Foreign Assistance Act of 1961 are
amended by striking out "significant defense articles" and
inserting in lieu thereof "significant military equipment".
(b) Section 36(d) of the Arms Export Control Act is amended
by striking out "combat" and inserting in lieu thereof
"military".
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TITLE VI - AUTHORIZATIONS FOR
FISCAL YEAR 1988 AND
EFFECTIVE DATE
AUTHORIZATION FOR THE FISCAL YEAR 1988
SEC. 601. There are authorized to'be appropriated for the
fiscal year 1988 such sums as may be necessary to carry out
programs and activities for which appropriations for the fiscal
year 1987 are authorized by this Act.
EFFECTIVE DATE
EEC. 602. Except where otherwise stated in this Act, this
Act shall take effect on October 1, 1986.
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SECTION-BY-SECTION ANALYSIS
OF THE PROPOSED
INTERNATIONAL SECURITY AND DEVELOPMENT
COOPERATION ACT OF 1986
The proposed International Security and Development
Cooperation Act of 1986 (the "Bill") amends the Foreign
Assistance Act of 1961 ("FAA") and the Arms Export Control Act
("AEC-A") in order to authorize appropriations to carry out
international security and development assistance programs for
the fiscal year 1987 and to make certain changes in the
substantive authorities governing those programs. The Bill
also amends certain provisions of the International Security
and Development Cooperation Act of 1985 ("ISDCA") and contains
authorizations for the fiscal year 1988 in accordance with the
requirements of the Congressional Budget Act of 1974.
The Bill is composed of six titles. Title I consists of
authorizations for military sales and related programs. Title
II contains an authorization for the economic support fund
program and amendments to the authorities relating to that
program. Title III contains an authorization for certain
development assistance programs and amends several of the
authorities contained in the FAA relating to development
assistance. Title IV contains an authorization for the
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operating expenses of the Agency for International Development
("A.I.D.") and miscellaneous amendments to the FAA and the
ISDCA. Title V contains repeals of earmarks and orther
restrictions contained in ISDCA, the FAA and the AECA on the
availability of assistance for recipient countries or programs,
and other technical amendments. Title VI provides for
authorizations for fiscal year 1988 in accordance with the
irequirements of the Congressional Budget Act of 1974 and for
the effective dates for the various provisions of the Bill.
SECTION 1. SHORT TITLE
This section provides that the Bill may be cited as the
"International Security and Development Cooperation Act of
1986".
TITLE I- MILITARY ASSISTANCE AND SALES AND RELATED PROGRAMS
SECTION 101. FOREIGN MILITARY SALES CREDIT AUTHORIZATION AND
AGGREGATE CEILINGS
This section amends section 31(a) of the AECA to authorize
$5,661,000,000 in appropriations for fiscal year 1987 to carry
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out the Foreign Military Sales (FMS) direct credit program.
Section 31(b)(1) of the AECA is amended to establish the limit
of $5,661,000,000 for fiscal year 1987 as the aggregate amount
of FMS credit which may be extended under section 23 of the
AECA.
SECTION 102. TERMS OF FOREIGN MILITARY SALES CREDITS
This section amends section 23(c)(2) of the AECA to permit
the President to set the interest rates on nonconcessional FMS
loans to be fixed at the time of each drawdown under the loan
rather than at the time the loan agreement is signed.
SECTION 103. SALES FROM STOCKS
This section amends section 21 of the AECA by adding a
provision enabling the President to use dependable undertaking
financial procedures when entering into replacement-in-kind
military sales contracts. Under these proposed procedures, the
client country could spread payments over the life of the
contract, rather than pay, as is currently the case, the entire
cost of the contract in advance. Under this proposal the
United States would incur no additional financial risk and
materials would be paid for in full before delivery to clients.
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SECTION 104. GUARANTEE RESERVE
The Guarantee Reserve Fund was created by Congress in 1980
to guarantee FMS loans extended by the Federal Financing Bank
(FFB) and commercial lending institutions. The Fund operates
as a revolving fund administered by the Department of Defense.
The act that created the Fund, the International Security and
'Development Cooperation Act of 1980 (P.L. 96-533), among other
things, allowed for the replenishment of the Fund through
annual authorizations and appropriations, and by authorizing
the use of funds received from borrowing countries to be
credited to the account.
This section amends section 24(c) of the AECA to establish
a Guarantee Reserve to pay claims based upon defaults and
reschedulings of outstanding loans guaranteed pursuant to the
provision of that Act and thus eliminates the need for yearly
authorization and appropriation. A permanent indefinite
appropriation would establish a long-term mechanism for
maintaining the fiscal integrity of the Fund. The new reserve
would permit the current guarantee reserve balance to be
depleted and, thereafter, appropriations would automatically be
made available from the General Fund of the Treasury to cover
all payments to lenders necessitated by defaults and
reschedulings. Amounts subsequently received from borrowing
countries will be credited against the new account as is now
the case with the Guarantee Reserve Fund. The annual reporting
requirement would remain.
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SECTION 105. REPORTS REGARDING SALES PROGRAM
This section amends section 25(a) of the AECA by striking
the requirement for two annual reports, concerning (1) Korean
progress in modernizing its armed forces, the role of the
United States in mutual security efforts in Korea, and the
military balance between the two Koreas, and (2) the amount and
nature of Soviet military assistance to Cuba and the
capabilities of the Cuban armed forces. These reporting
provisions stem from particular circumstances and concerns
which no longer require annual foreign assistance reports.
SECTION 106. QUARTERLY REPORTS
Section 36(a) of the AECA requires the President to submit
to the Congress quarterly information relating to letters of
offer of $1 million or more. This section amends section 36(a)
to permit information contained in these reports to be
transmitted in classified form to protect the legitimate
security interests of the purchasers.
SECTION 107. DISQUALIFICATION FOR VIOLATION OF INTERNATIONAL
TRAFFIC IN ARMS REGULATIONS
This section amends section 38 of the AECA by adding a
provision which would make ineligible for FMS financing for one
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year any commercial contracts of a firm or other person found
through judicial or administrative proceedings to have violated
the International Traffic in Arms Regulations (ITAR). This
amendment applies to those firms or persons convicted or
debarred on or after the effective date of this section for a
violation of section 38 or section 39 of the AECA, or any rule
or regulation issued under either section. It also is intended
to apply to firms that are convicted or debarred under a
'different corporate name so long as there is no substantial
change in ownership and management. This section will take
effect upon enactment of this Bill or October 1, 1986,
whichever is later.
SECTION 108. MILITARY ASSISTANCE
This section amends section 504(a)(1) of the FAA to
authorize $996,450,000 in appropriations for fiscal year 1987
to carry out the military assistance program.
SECTION 109. INTERNATIONAL MILITARY EDUCATION AND TRAINING
This section amends section 542 of the FAA to authorize
$68,830,000 in appropriations for fiscal year 1987 for the
International Military Education and Training (IMET) program.
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SECTION 110. PEACEKEEPING OPERATIONS
This section amends section 552(a) of the FAA to authorize
$39,000,000 in appropriations for fiscal year 1987 to carry out
peacekeeping operations and other programs. These programs
include the United States budgetary contribution to the
Multinational Force and Observers (MFO) for the Sinai.
SECTION 111. ANTITERRORISM ASSISTANCE
This section amends section 573(a) of the FAA to enable the
United States to provide antiterrorism assistance to other
countries "notwithstanding any provision of law'. This
amendment recognizes that the antiterrorism effort is so
important to our interests that it should not be constrained,
in law, by restrictions otherwise applicable. This amendment
would put the antiterrorism program on the same basis as the
international narcotics control and disaster assistance
programs.
TITLE II - ECONOMIC SUPPORT FUND
SECTION 201. AUTHORIZATION OF APPROPRIATIONS
Section 201 amends section 532(a) of the FAA to authorize
$4,093,800,000 to carry out the purposes of chapter 4 of part
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II of the FAA for the fiscal year 1987.
SECTION 202. ACQUISITION OF AGRICULTURAL COMMODITIES UNDER
COMMODITY IMPORT PROGRAMS
Section 202 amends section 205 of the ISDCA, which requires
the President to use at least 18 percent of the economic
support funds that are made available for commodity import
programs for the purchase of agricultural commodities of United
States-origin. Section 205 is amended by adding a provision
which authorizes the President to reduce the 18 percent
requirement if he determines that the objectives of the foreign
assistance program would not be supported through compliance
with such requirement.
SECTION 203. REGIONAL ASSISTANCE TO GUATEMALA
This section would remove prior year restrictions on
Guatemala's participation in regional programs funded under
chapter 4 of part II of the FAA, thus permitting Guatemala to
participate in multi-year regional programs which are funded in
part with prior year funds. An example of such a program is
the Administration of Justice program, established pursuant to
section 712 of the ISDCA. This provision will become effective
upon the enactment of this Bill.
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TITLE III - DEVELOPMENT ASSISTANCE
SECTION 301. CHILD SURVIVAL FUND
Section 301 amends section 104(c)(2)(A) of the FAA, which
authorizes the President to promote, encourage, and undertake
activities designed to deal directly with the special health
,needs of children and mothers. Section 104(c)(2)(A) is amended
to authorize these 'child survival' activities to be carried
out notwithstanding any other section of the FAA or any other
Act except certain provisions of the FY 1986 foreign assistance
appropriations act. This will permit Child Survival Fund
resources to be used in countries which otherwise are
prohibited by statute from receiving assistance under the FAA.
Thus, such programs as immunization, oral rehydration,
nutrition education., and promotion of child spacing could
continue in a country, notwithstanding other statutory
provisions to the contrary. The provision recognizes the
humanitarian, people-to-people nature of the child survival
program.
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SECTION 302. PRIVATE SECTOR, ENERGY, AND PRIVATE AND VOLUNTARY
ORGANIZATIONS
Section 302 amends the FAA by restating section 106
thereof. It adds no new authorities to the FAA, nor does it
remove any existing authorities. Rather, it provides an
increased focus on the role of the private sector in economic
,development.
Subsection (a) of section 106 sets forth the findings of
the congress that a private enterprise economy is the most
efficient means of achieving broad-based economic development.
Subsection (a) also sets forth the view of the Congress that
many developing countries have not relied on open, competitive
markets to determine resource allocations in many sectors of
their economies. Instead, governments have often attempted to
direct essential activity in agricultural and industrial
production and trade by centralized governmental determinations
thereby creating severe economic distortions. Subsection (a)
further states that assistance provided under this section
should foster the movement of developing countries toward a
free market society and the establishment of viable,
competitive markets and the expansion of private enterprise in
such countries, and contains examples of the types of
assistance that would help achieve this objective.
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Subsection (b) of section 106 sets forth the view of the
Congress that private and voluntary organizations and
cooperatives bring unique skills to bear on the development
process. By virtue of their links with private institutions in
developing countries, such organizations and cooperatives often
serve to engage effectively rural and urban poor in their
nation's development. In order to foster the activities of
private and voluntary organizations and cooperatives (as well
as regional and international development organizations),
assistance may be provided for programs of technical
cooperation and development in conjunction with those
organizations.
Subsection (c) of section 106 sets forth the view of the
Congress that energy development and production are vital
elements in the development process, and that energy shortages
in developing countries greatly limit the development process
in such countries. Subsection (c) goes on to state that in
order to help developing countries alleviate their energy
problems by improving their ability to use indigenous energy
resources to produce the energy needed by their economies,
assistance may be provided to enable such countries to prepare
for and undertake development of their energy resources, and
contains several examples of such assistance.
Subsection (d) of section 106 sets forth the view of the
Congress that assistance to developing countries will sometimes
be required in order to address special development problems
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and research needs. Such assistance may include programs of
research into, and evaluation of, the process of economic
development in developing countries and areas, and into the
factors affecting the relative success and costs of development
activities, and into the means, techniques, and such other
aspects of development assistance in order to render such
assistance of increasing value and benefit; programs of
reconstruction following natural or manmade disasters and
programs of disaster preparedness, including the prediction of
and contingency planning for natural disasters abroad; other
programs designed to help solve special development problems
including efforts to make possible proper utilization of
infrastructure and related projects funded with earlier United
States assistance; and programs of urban development.
Subsection (e) of section 106 authorizes the President to
furnish assistance, on such terms and conditions as he may
determine, for activities to carry out the purposes of section
106 to the extent that such activities are not authorized by or
funds are not made available for such activities under sections
103, 104, and 105 of the FAA. Subsection (e) authorizes to be
appropriated to the President for such purposes, in addition to
funds otherwise available for such purposes, $231,468,000 for
the fiscal year 1987. Amounts appropriated under section 106
are authorized to remain available until expended.
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SECTION 303. HUMAN RIGHTS
Section 303 amends section 116(e)(1) of the FAA, which
authorizes the use of development assistance funds and economic
support funds for human rights activities. Section 116(e)(1)
is amended to authorize the use of such funds for such
activities notwithstanding any other provision of the FAA or
any other Act. This will permit human rights activities to be
funded in countries which otherwise are prohibited by statute
from-receiving assistance. Thus, programs and activities which
will encourage or promote increased adherence to civil and
political rights could continue in a country, notwithstanding
other statutory provisions to the contrary.
Such programs and activities are generally carried out by
nongovernmental organizations or affiliates of public
international organizations. These programs and activities are
often regional in scope, and are usually implemented with local
or regional institutions.
By definition, the central objective of these programs and
activities is to promote human rights and democratic
practices. Individual projects have varied purposes, such as
promoting interchange among human rights activists and
democratic adherents, helping grassroots organizations work
toward self-sufficiency, effecting changes or improvements to
laws and systems, gathering and disseminating new knowledge,
and designing and conducting human rights education programs.
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SECTION 304. PRIVATE AND VOLUNTARY ORGANIZATIONS AND
COOPERATIVES IN OVERSEAS DEVELOPMENT
Section 304 amends section 123(e) of the FAA, which exempts
from prohibitions on assistance to countries assistance in
support of programs of private and voluntary organizations and
cooperatives already being supported prior to the date the
,prohibition becomes applicable. Section 123(e) is amended to
expand this exemption to be applicable to all nongovernmental
organizations, rather than just to private and voluntary
organizations and cooperatives, and to be applicable to all
activities of nongovernmental organizations, rather than just
to activities already being supported prior to the date a
prohibition becomes applicable.
Section 123(e) was enacted in order to recognize
specifically the private and independent nature of private and
voluntary organizations and cooperatives in their assistance
programs overseas. Such work is a praiseworthy effort best
characterized as "people to people" development assistance.
Section 123(e) is amended to enable other private and
independent entities, such as universities, to implement
economic assistance activities in countries where statutory
prohibitions would otherwise prevent such activities from being
funded.
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SECTION 305. RESEARCH AND TECHNICAL FELLOWS
Section 305 amends part I of the FAA by adding a new
section 129 entitled "Research and Technical Fellows". This
section addresses the need to bring the best United States
scientific and technical expertise to bear on critical
development problems addressed by technical aspects of A.I.D.'s
,program policy, strategy and project development,
implementation and evaluation activities. New mechanisms and
expanded use of existing mechanisms have increased A.I.D.'s
science and technology capacity over recent years. However,
A.I.D. has been hindered in its efforts in these areas by an
insufficient number of technically qualified staff. New section
129 authorizes the President to establish and maintain Research
and Technical Fellowships within A.I.D.
Under A.I.D. sponsorship scientists have cooperated with
institutions in both developed and developing countries, often
in direct partnership with these institutions. The rewards are
illustrated by the medical breakthroughs that have markedly
reduced infant and child mortality and, likewise, the miracle
seeds which fueled the Green Revolution in Asia and Latin
America are welcome products of science and technology. But
the current famines and associated malnutrition and illness
which plague much of Africa and other areas of the developing
world suggest that there is much yet to be done. At no time in
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history of development has there been greater need for broad
scientific input.
New section 129 would authorize recipients of these
fellowships to spend up to three years with A.I.D. or with
institutions assisted by A.I.D. They may perform research or
provide technical advisory services for A.I.D. or for programs
of technology transfer, institution building and related
'assistance programs serving the purposes of part I of the FAA.
Within A.I.D., recipients of such fellowships may discharge
program responsibilities in research policy or program
management positions. Recipients of such fellowships shall
receive such stipends and allowances, including travel and
subsistence expenses, as the President deems necessary to
secure the assistance of highly qualified research or technical
fellows. Such fellows are not to be recognized as employees of
the United States Government except to the extent that the
President deems necessary to carry out new section 129. No
more than 150 fellowships may be maintained at any one time.
Funds authorized to be appropriated for programs under part i
of the FAA are to be used to carry out section 129.
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TITLE IV - OTHER ASSISTANCE AND MISCELLANEOUS PROVISIONS
SECTION 401. OPERATING EXPENSES
Section 401 amends section 667(a) of the FAA, which
authorizes funds for operating expenses of A.I.D. Section
667(a) of the FAA is amended to authorize $410,650,000 for
operating expenses for the fiscal year 1987.
SECTION 402. ADMINISTRATION OF JUSTICE
The ISDCA amended section 534 of the FAA to enable the
President to furnish assistance to countries and organizations
in Latin America and the Caribbean to strengthen the
administration of justice. This provision amends section 534
by repealing the sunset provision contained in subsection (e)
which would terminate the program on September 30, 1987.
Removal of the termination date reassures participating
countries that our commitment to improved administration of
justice is long term, thus allowing them to plan accordingly.
This provision also repeals section 534(c), the ceiling of
$20,000,000 which may be made available for this program in any
fiscal year.
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SECTION 403. SUBSISTENCE PAYMENTS
Section 403 amends section 636(a) of the FAA, Which
provides for the uses of funds appropriated for the purposes of
the FAA. Section 403 adds a new paragraph (18) to section
636(a) of the FAA to authorize the use of funds for payment of
subsistence expenses of foreign officials, and employees of the
United States Government who accompany such foreign officials,
on official visits to the United States, notwithstanding the
limitations contained in section 5702 of title 5, United States
Code. Such limitations prevent A.I.D. from paying more than
$75 per day for subsistence expenses and lodging for foreign
dignitaries on official visits to the United States and for
employees of the United States Government who accompany such
dignitaries. Both the Department of State and the United
States Information Agency already have the authority to exceed
the subsistence rate contained in section 5702 of title 5,
United States Code. This amendment will place A.I.D. on equal
footing with the Department of State and the United States
Information Agency in this area.
SECTION 404. TRAINING ASSISTANCE
This provision amends section 639 of the FAA to permit
military and economic assistance for training to Argentina and
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Brazil, provided the recipient country retains a democratically
elected government. This amendment would not alter the
applicability of human rights and police training provisions in
the law.
SECTION 405. UPPER HUALLAGA VALLEY PROJECT
Section 405 amends section 612(b) of the ISDCA which
conditions the availability of development assistance funds in
fiscal year 1987 for the Upper Huallaga Valley project in Peru
on a determination by the Administrator of A.I.D. that the
project has been effective in reducing and eradicating coca
leaf production, distribution, and marketing in the Upper
Huallaga Valley. Section 405 is necessary because the purpose
of the United States program in the Upper Huallaga Valley is
both to eradicate coca and to help develop alternatives to coca
production. Thus, section 612(b) of the ISDCA is amended to
require the determination to be based on both purposes.
SECTION 406. ASSISTANCE TO GUATEMALA
This section amends section 703 of the ISDCA by striking
the prohibition on the use of military assistance to Guatemala
for the procurement of any weapons or ammunition. In addition,
this section strikes (1) the prohibition on the use of ESF and
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development assistance for Guatemala's rural resettlement
program and (2) the requirement that assistance be provided
through private and voluntary organizations to the maximum
extent possible. These revisions of section 703 recognize that
in 1985 Guatemalans elected a new civilian government. These
new leaders will need United States and other donor support to
resettle returning refugees and to aid those previously
displaced by rural violence. In addition, the new government
will need lethal equipment to combat Bloc-supported
guerrillas. The certification requirements of Section 703(a)
will be followed in determining whether to grant a request for
lethal equipment.
SECTION 407. CONDITIONS ON ASSISTANCE TO HAITI
Section 407 amends section 705(b) of the ISDCA, which
conditions development assistance, economic support fund
assistance and international military education and training
assistance for Haiti on a determination by the President with
respect to cooperation by the Government of Haiti in halting
illegal emigration to the United States and in implementing
United States development, food and other economic assistance
programs and with respect to progress made by the Government of
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Haiti toward improving the human rights situation in that
country. Section 407 amends section 705(b) of the ISDCA to
clarify that the assistance to which the conditions are
applicable is assistance to the Government of Haiti.
Assistance through private and voluntary organizations,
cooperatives, and other nongovernmental organizations is not
conditioned upon a positive Presidential determination.
SECTION 501. REPEAL OF EARMARKS AND CEILINGS
This section repeals earmarks and ceilings contained in the
ISDCA with respect to assistance funds authorized for fiscal
year 1987. The repeal of these restrictions is necessary to
provide the President with the flexibility to respond to
critical foreign relations needs by providing security and
development assistance, particularly during periods of
budgetary constraint.
SECTION 502. TECHNICAL AMENDMENTS
This section makes technical amendments to section 3(a) of
the AECA and section 505(e) of the FAA by replacing the term
"significant defense articles' with the term 'significant
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military equipment". This section also amends section 36(d) of
the AECA by replacing the word "combat" with the word
"military". These technical amendments conform obsolete terms
with those adopted in the recent revisions to the International
Traffic in Arms Regulations.
SECTION 601. AUTHORIZATION FOR THE FISCAL YEAR 1988
Section 601, in accordance with the requirements of section
607 of the Congressional Budget Act of 1974, authorizes
appropriations for fiscal year 1988 for all programs and
activities for which appropriations for the fiscal year 1987
are authorized by this Bill.
SECTION 602. EFFECTIVE DATE
Section 602 provides that, except where otherwise stated in
the Bill, the effective date for this Bill would be on October
1, 1986.
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DRAFT
(Identical letter would be sent to the President of the Senate)
Dear Mr. Speaker:
I herewith transmit, on behalf of the President, a bill to
amend the Foreign Assistance Act of 1961 (FAA), the Arms Export
Control Act (AECA), and the International Security and
Development Cooperation Act of 1985 to authorize security and
development assistance programs for fiscal year 1987, and for
other purposes.
As you know, the Congress last year enacted an authorization
bill for security_and development assistance programs for fiscal
years 1986 and 1987. The President has now determined that
additional authorizations are required to sustain and promote the
foreign policy and national security needs of the country. The
authorizations requested in this bill do not represent a large
increase in assistance programs, but rather approximate the level
we had requested for fiscal year 1986.
The Honorable
Thomas P. O'Neill, Jr.,
Speaker,
House of Representatives
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Although we face an extremely tight budgetary situation, I
must point out, as the President has observed, that national
security is our government's hiqhest priority. We have examined
our programs carefully and have determined that the resource
levels proposed in this authorization bill are the minimum
necessary to meet our commitments and safeguard our interests.
Any reductions would compound our risks, weaken our friends, and
add to oui dangers.
The proposed International Security and Development
Cooperation Act of 1986 authorizes appropriations for
international security and development assistance and related
programs for fiscal year 1987 and makes certain changes in the
authorities governing these programs. Included among these
proposed changes are:
-- an amendment to the FAA which would enable the United
States to provide antiterrorism assistance to' other countries
notwithstanding any provision of law, as is currently the case
with certain other programs vital to our national interests,
e.g., the international narcotics and disaster assistance
programs;
an amendment to the FAA which would emphasize the role
of the private sector in the process of economic development;
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-- an amendment to the AECA which would make ineligible for
participation in commercial contracts involving Foreign Military
Sales financing those found to have violated the International
Traffic in Arms Regulations; and
an amendment to the FAA which would permit military and
economic assistance for training to Argentina and Brazil,
provided each country retains a democratically elected government
and subject to otherwise applicable human rights and police
training legislation.
In addition, this bill would repeal FY 1987 earmarks and
ceilings contained in the International Security and Development
Cooperation Act of 1985.
I believe that our foreign assistance programs are an
efficient and cost-effective means to promote United States
objectives, and to complement a U.S. global defense posture
intended to help preserve peace and stability. I urge prompt
enactment of this bill.
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The Office of Management and Budget advises that enactment of
this legislation would be in accord with the program of the
President.
Sincerely,
George P Shultz
Enclosures:
1. FY 1987 Foreign Aid Bill
2. Section-by-Section Analysis of the Bill
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