FOREIGN MILITARY SALES AND ASSISTANCE ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000600170007-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 82
• Document Creation Date: December 9, 2016
• Document Release Date: August 24, 2001
• Sequence Number: 7
• Publication Date: June 4, 1973
• Content Type: OPEN

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93D CONGRESS 1 SENATE REPORT
1st Session J .,. 111,
YI'uiua ~id+`~
FOREIGN MILITARY SALES
AND ASSISTANCE ACT
REPORT
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
TOGETHER WITH MINORITY VIEWS
S. 1443
TO AUTHORIZE THE FURNISHING OF DEFENSE ARTICLES
AND SERVICES TO FOREIGN COUNTRIES AND
INTERNATIONAL ORGANIZATIONS
JUNE 4, 1973.-Ordered to be printed
U.S. GOVERNMENT. PRINTING OFFICE
83-010 WASHINGTON : 1973
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COMMITTEE ON FOREIGN RELATIONS
J. W. FULBRIGHT, Arkansas, Chairman
JOHN SPARKMAN, Alabama
MIKE MANSN'IELD, Montana
FRANK CHURCH, Idaho
STUART SYMINGTON, Missouri
CLAIBORNE PELL, Rhode Island
GALE W. McGEE, Wyoming
EDMUND S. MUSKIE, Maine
GEORGE MCGOVERN, South Dakoi:a
HUBERT H. HUMPHREY, Minnesota
GEORGE D. AIKEN, Vermont
CLIFFORD P. CASE, New Jersey
JACOB K. JAVITS, New York
HUGH SCOTT, Pennsylvania
JAMES B. PEARSON, Kansas
CHARLES H. PERCY, Illinois
ROBERT P. GRIFFIN, Michigan
CARy MARCY, Chief of Staff
ARTHoR At, KUHL, Chief Clerk
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CONTENTS
Principal purposes rage
--------------------------------------------------- 1
Summary of major provisions1
Authorization of Appropriations for FY 19743
Committee action3
---------------------------------
ommittee comments ------------------------------------------------- 4
Section-by-section analysis: Sec. 101. Coordination-------------------------- 10
See. 102. Definitions------------------------ - 10
Sec. 103. Prior authorizations12
Sec. 104. Eligibility----------------------- - - 12
Sec. 1101. Reduction in Government
participation __________________ 13
Sec. 1102. Cash sales from stock___________________________________ 15
Sec. 1103. Procurement for cash sales_____________________________ 15
Sec. 1104. Credit sales________________________ 16
Sec. 1105. Guaranties----------------------- - --- - ------ 17
-------------
Sec. 1.106. Authorization of appropriations_______________________ _ 18
Sec. 1301. Aggregate ceilings______________________________________ 19
Sec. 1302. Regional ceilings ------______------- _________________ 19
---
Sec. 1501. Payments received___________________________________ _ 20
Sec. 1502. Credit standards--------------------------------------- 20
Sec. 2101. General authority____________________________ 20
See. 2102. Termination of authority ---- 20
Sec. 2103. Authorization of appropriations------------------------- 20
See. 2104. Conditions of eligibility________________ ................................. 21
See. 2105. Excess defense articles_____________ 22
Sec. 2106. Special military grant assistance accounts_______________ 23
See. 2107. Military assistance information_________________________ 24
See. 2108. Special military assistance report_______________________ 24
Sec. 2109. Authorization for South Vietnam, Laos, and Cambodia---_ 24
Sec. 2110. Repeal of military grant assistance authority ------------ 28
See. 2301. General authority-------------------------------------- 28
Sec. 2302. Authorization of appropriations____________ ___________ 28
Sec. 2303. Special military training accounts ----------------------- 29
Sec. 2304. Restriction on training foreign military students--------- 30
Sec. 2501. Transfer of functions______________________ ----------------------------------- 30
See. 2502. Authorizing military assistance advisory groups and
missions - -- - - 33
Sec. 2701. General authority -------------------------------------- 33
Sec. 2702. Authorization of appropriations_________________________ 33
Sec. 3101. Transfers of military vessels and boats__________________ 35
Sec. 3102. Use of United States Armed Forces_____________________ 41
See. 3103. Failure to provide requested information____________ 41
See. 3104. Procurement
Sec. 3105. Small business 42
43
Sec. 3106. Shipping on United States vessels43
See. 3107. Termination of assistance_______________ -
See. 3108. Public Law 480__________ - 43
43
Sec. 3109. South Vietnam, Laos, and Cambodia --------------------- 44
Sec. 3110. Access to certain military bases abroad------------------ 45
See. 3301. Annual foreign assistance report------------------------
Sec. 4;
3302. Quarterly reports------------------ 47
Soc. 3303. Presidential findings and determinations----------------- 47
Sec. 3501. Effective date___________________ - 48
Sec. 3502. Laws repealed----------------------------- 48
Sec. 3503. Savings provisions---------
Sec. 3504. Statutory construction49
Changes in existing law49
Minority views of Senators Scott and Griffin ----------- --- 77
(III)
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93D CONGRESS SENATE REPORT
1st Session No. 93-189
FOREIGN MILITARY SALES AND ASSISTANCE ACT
Mr. Furimioirr, from the Committee on Foreign Relations,
submitted the following
REPORT
Together with
MINORITY VIEWS
To aceouilmny S. 1443]
The Committee on Foreign Relations, to which was referred the bill
(S. 1443) to authorize the furnishing of defense articles and services
to foreign countries and international organizations, having consid-
ered the same, reports favorably thereon with amendments, and rec-
ommends that the bill as amended do pass.
PIrNCIPAr, PuHrosrs
The principal purposes of the bill are to rewrite the statutory
framework governing the foreign military grant assistance and sales
programs and the economic supporting assistance program so as to
phase out military grants and U.S. military missions over a period of
four years, lessen government involvement in the sale of arms and
military equipment to foreign countries, and to make other changes in
policies relating to these programs.
SUMMARY OF MAJOR PROVISIONS
1. MILITARY GRANT ASSISTANCE
A. The military grant assistance would be phased out over the next
four fiscal years. (See. 2102)
B. During the phase-out period grant recipients would be required
to pay 25 percent of the amount of the grant in their own currency to
pay official U.S. costs. (Sec. 2106)
C. Grants of excess arms would be charged against appropriations
for grant aid during the phase-out period. (Sec. 2105)
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1). Military grant aid is authorized on a country-by-country basis
instead of in it lump sum which is allocated by the Executive Branch.
(Sec. 2103)
2. MILITARY SALES
~t. Credit sales could be made to current grant recipients on can-
cessiona% tearn from July 1, .1973 to June 30, 1978. For the first two
Years loans could be made u'itirout interest and be repaid in local
,?nrrenrv. and for the next three years credit could be extended at a
minimum rate of 3 percent. (Sec. 1104)
B. (iuaraiit!.es. rather than direct government credit, would be
emphasized. The Export-Import Bank would main be allowed to
make loans to developing countries for arms purchases. (Sec. 11)5,
Sec. L301)
M1IL1 Ai Y ASSISTANCE GROUPS
A. Military assistance groups would be phased out over a period
of four years. awrd their funct:i_orns assumed by military attaches in. the
embassy, (Sec. 2501)
B. After Tune 30, 1977, any military mission to a foreign country
must he specifically authorized and the country must pay the entire
costs of the orm.ration. (Sec. 2502)
A. All transfers of naval vessels to foreign countries must be made
wider the authority of the new act. (Sec. 3101)
A. Supporting assistance funds are authorized on a country-'by-
crn m t r b asis. (Sec. 2702 )
I'). Police or related training programs for foreign countries would
be prohibited. (Sec. 2702)
A. The autlroritv of the Secretary of State over the military assist-
ance and sales policy would be emphasized by appropriating fronds
directly to the Secretary rather than to the Presi(lent. (Sec. 2103;
See. 2702; Sec. 1106)
;. MILITARY Aii) ro SOUTH VIEtNAM, CAMBODIA AND LAOS
A. It authorizes one-for-one replacement. of arms and munitions
Ina both Smith Vietnam and Laos in accordance with the provisions
of the Vietnam and Laos cease.-tire agreements. Replacement would be
provided on the basis of lists previously filed with the respective inter-
)
national control commissions. (Sec. 3109(c)
11. It authorizes $150 miilion in military aid for ranahodia for
fiscal Year 1974. If a cease-fire agreement is reached in Cambodia,
any additional ? la?w. filter, 'qf rates ors direct loans, other than those
for the phase-out grant recipients, would be at the rate charged by
the Exhort-Import Bank for comparable loans or the cost to the
gm-emirent of borrowing its ~m oney. whichever is higher.
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The ultimate objective of the bill is to get. the State and Defense
Departments out of the arms sales business and get these transactions
back to a free enterprise, commercial basis, where they belong.
This bill also authorizes all grant aid and supporting assistance on
a country-by-country basis, thus ending the situation where the Pres-
ident had complete freedom to allocate the lump sums Congress
provided.
The Secretary of State's control over military aid and sales matters
is enhanced by providing that appropriations be made directly to
him.
In recent years many members of the Senate have expressed concern
over the growth in the power of the President over foreign policy. The
Senate, and Congress as an institution, has power to make policy-
foreign or domestic-only to the extent it is willing to use it. If Con-
gress is to regain its role as the fundamental source of national policy,
as the Founding Fathers intended, it must rid itself of its "what-does-
the-President-want?" mentality. It must have the courage to take the
initiative in matters like foreign aid. If not, the initiative will forever
remain with the President. In recent years the Senate has attempted
to restore a proper balance between Congress and the President in
making of foreign policy. This bill is but another initiative in that
direction and, hopefully, will lead to Congressional initiatives in other
areas as well.
The Committee hopes that the Senate will demonstrate that on mili-
tary aid and sales policy it has the will, as well as desire, to chart a
new course, one which is geared both to the realities of the world today
and the depleted state of our national pocketbook.
COST ESTIMATES
Section 252(a) (1) of the Legislative Peorganization Act of 1972
requires that committee reports on bills and joint resolutions contain :
"(A) an estimate made by such committee, of the costs which would
be incurred in carrying out such a bill or joint resolution in the fiscal
year in which it is reported and in each of the five fiscal years follow-
ing such fiscal year . . . The Act also requires that the committee's
cost estimate be compared with any estimate made by a federal agency.
The Committee estimates that the cost of carrying out the provi-
sions of this bill during fiscal year 1974 will be approximately $790
million, including the cost of military missions to be paid out of De-
fense Department funds. In addition, however, there must be added
to that appropriations subsequently made available for military aid to
South Vietnam and Laos and. such carryover funds as may be allowed
in appropriations bills.
The Committee will review this program annually to authorize ap-
propriations and is unable at this time to make any reliable estimates
of the costs over the next five years. However, it should be noted that
the military grant aid program and military missions will be phased
out over the next four years, thus eliminating the bulk of the costs in-
volved in carrying out the provisions of the Act.
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SId(1'rIC)N-rtl'-i7i?U'i'ION ANALF1?IS OF Till, PI.OL'OSP,D FOP.1,LGAT MII,I'rA.ItY
SALES AND ASSISTANCE ACT
CI[AP'I'P;IC 1.--470ORUINATION; DEFINITIONS; CERTAIN IJTIn)PIZATIONS;
EI.]0IBILITY
Secfinn .101. Coordination
Subsection (a) assigns to the Secretary of State the responsibility
for direction and continuous supervision of operations carried out
larder the Act. The Secretary shall be responsible, among other things,
for determining whether sales shall be made or assistance provided
to a country under the Act and the amoujit of the sale or assistance.
Subsection (b) directs the President to prescribe procedures to as-
sure effective direction and control by the Chief of the U.S. diplo-
Inat.ic Irussion in each country concerning all activities and programs
within that country carried out under the new Act. The chief of mis-
sion shall be responsible for submission of all recommendations per-
taining to programs under the Act.
Subsection (c) specifies that the Secretary of State may advance to
or reimburse other agenciee:, out of appropriations made available
to carry out the Act, for activities delegated to that agency in carrying
out functions under the Act. If the President, for example, delegated
certain procurement functions to the Department of Defense, the See-
rotary of State could either advance funds to the Department of De-
fense for obligations expected to be incurred or reimburse the De-
lrartnrent for its expenditures. The Secretary of State would have
broad flexibility to transfer funds to the Department of Defense or
other agencies in carrying out the purposes of the Act. The purpose of
this provision, coupled with the appropriation of fends to the Secre-
tary of State, is to insure that the Secretary of State has complete
control over the direction of the military sales, military grant aid,
and supporting assistance programs in name as well as in fact.
f ecfion, 102. Dc fi'rii,tion s
Section 102 defines certain terms used in the Act.
(1) "agency of the United States Government" includes any
agency, depart -Inept, board, wholly or partly owned corporation,
irrstrnnrentalit.y, commi ssiion, or establishment of the United
States Government;
(~-2) "armed forces" of the United States means the Army,
1\ ivy, Air Force, Marine Corps, and Coast Guard;
i) "commodity" incudes any material, article, supply, goods,
M. egnip;ment furnished for nonmilitary purposes;
I41) "defense article" includes--
(A) any weapon, weapons system, munition, aircraft,
vessel, boat, or other implement of war;
(B) any property installation, commodity, material equip-
ment, supply, or goods furnished for military purposes;
(C) any machinery, facility, tool, material, supply, or
crtiie.r item necessary for the manufacture, production, proc-
e.ssillg, repair, servicing, storage, construction, transporta-
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tion, operation, or use of any article listed in the subsection;
or
(D) any component or part of any article listed in the
subsection; but does not include merchant vessels or, as
defined by the Atomic Energy Act of 1954, as amended (42
U.S.C. 2011), source material, byproduct material, special
nuclear material, production facilities, utilization facilities,
or atomic weapons or articles involving restricted data ;
(5) "defense information" includes any document writing,
sketch, photograph, plan, model, specification, design, phototype
or other recorded or oral information relating to any defense
article or defense service, but does not include restricted data
as defined by the Atomic Energy Act of 1954, as amended, and
data removed from the restricted data category under section
142d of that Act;
(6) "defense service" includes military training, and any serv-
ice, test, inspection, repair, publication, or technical or other as-
sistance, or defense information furnished for military purposes;
(7) "excess defense articles" mean the quantity of defense
articles owned by the United States Government, and not pro-
cured in anticipation of military assistance or sales requirements,
or pursuant to a miltary assistance or sales order, which are ex-
cess to the needs of the Department of Defense for other than
military assistance purposes at the, time such articles are dropped
from inventory by the supplying agency for delivery to countries
or international organizations under this Act.
Only articles which have been declared as excess to all Depart-
ment of Defense needs, other than foreign military assistance,
could be designated as "excess defense articles" for purposes of
this Act ;
(8) "function" includes any duty, obligation, power, authority,
responsibility, right, privilege, discretion, or activity;
(9) "military training" includes formal or informal instruction,
for military purposes, or foreign students by officers or employees
of the United States, contract technicians, contractors (including
instruction at civilian institutions), or by correspondence courses,
technical, educational, or information publications and media of
all kinds, training aid, orientation, training exercise, and military
advice to foreign military units and forces ;
(10) "officer or employee" means civilian personnel and mem-
bers of the Armed Forces of the United States Government;
(11) "Services" include any service, repair, training of per-
sonnel, or personnel, or technical or other assistance or informa-
tion furnished for nonmilitary purposes ;
(12) "surplus agricultural commodity" means any agricultural
commodity or product thereof, class, kind, type, or other specifica-
tion thereof, produced in the United States, either publicly or
privately owned, which is in excess of domestic requirements,
adequate carry-over, and anticipated exports for United States
dollars, as determined by the Secretary of Agriculture; and
(13) "value" means-
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(Ak) with respect to an excess defense article, the actual
value of the article, but not less than 331,4 percent of the
acquisition cost of the article;
(13) with respect to a nonexcess defense article delivered
from inventory to foreign countries or international organiza-
tions under this Act, the acquisition cost to the United
States Government, adjusted as appropriate for condition
and market value, plus a proportional share of the adminis-
trative expenses incurred by the United States Government
in supplying such r.rt.i'Ie;
(C) with respect; to a nonexcess defense article delivered
from new procurement to foreign countries or international
organizations under this Net, the contract or production costs
of such article plus a proportional share of the administrative
expenses incurred by the United States Government, in sup-
plying such article;
'I)) with respect to a defense service, the cost to the,
Ur ited States Government of such service plus a propor-
tional share of the administrative expenses incurred by the
I'rrii ed States in providing that service.
However, military pay and allowances shall not, be included as an
administrative expense for purposes of the military grant aid pro-
gram.
Section, 103. Prior authoriza`i-on
This section is designed to insure that, appropriations for programs
under the Act cannot, be. spent unless a valid authorization exists.
Thus, its purpose is to preserve the integrity of the regular authoriza-
tion process. It is practically identical to Section 10 of Public Law
91-672, initiated in 1971) by the Committee on Foreign Relations.
Section 104. i.bilify
This section states conditions of eligibility which foreign count:?ies
must agree to before any defense articles can be provided. Some are
taken from ?xisting law, others are new requirements.
Subsection (a) (1) requires the foreign countries to agree that: it
will not,, without the consent of the President-
(A) permit anyone who is not an officer, employee or agent of
the cotrntrv to use this article;
(13) transfer, or permit the transfer of the article by gift, rule
or othervvise; or
(C) r se or permit the use of the, article for purposes other than
those for which. furnished. Subsection (A) (2) requires the recip-
ient foreign country to provide substantially the same degree of
security for defense articles furnished as the United States
would provide.
Subsection (I3) requires the President to refuse a request for a
transfer to another country of a defense article of U.S. origin unless
under current U.S. policy the article would be provided by the Unii:cd
States. It also requires the President to give prior notice to the
Speaker of the Ilouse and the Senate Committee on Foreign Rela-
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tions of his intention to consent to a request for transfer of material
of U.S. origin to a third country and to provide appropriate details
of the arrangement.
Subsection (C) requires that, before the President approves a pro-
posed transfer of any implement of war that he require that either
the item be made unsuitable for further military use or that the
transferring country obtain a cormnitment to the U.S. in writing
that it will not transfer the article to another country without the con-
sent of the President.
PART II.-MILITARY SALES, CPFDIT SALES, AND GUARANTEES
CITAPTER 1 ] . A1T1TORIZATIONS
Section, 1101. Reduction in Government participation
This section states the objective of returning U.S. arms sales trans-
actions to commercial channels. A basic purpose of this act is to get the
U.S. Government out of the arms sales business and return such trans-
actions to commercial channels. Government policy controls would
then be exercised through export licensing procedures.
The following table shows the degree the government is involved
in arms sales to foreign countries. In the current fiscal year 84 per-
cent of all arms sales abroad are to be made through government chan-
nels. In fiscal year 1974 it is estimated that 86 percent of the total
awns sales abroad will be through the government.
U.S. FOREIGN MILITARY SALES--FISCAL YEARS 1968-74
[In millions of dollars]
Fiscal year
- - - - - - - - - - - - - - - - - - -
1973 1974
1968 1969 1970 1971 1972 estimate estimate
Government arms sales________________ 995 1,409 910 2, 123 3,462 3,830 4,688
Commercial sales --------------------- 352 340 528 545 580 694 726
----- ------ --------
----------
Total --------------- ---------- - 1,347 1,749 1,438 2,668 4,042 4,524 5,414
Additional data concerning the make-up of the government arms
sales program is contained in the following table :
S. Rent 9 -]89----it
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FOREIGN MILITARY SALES BY DEVELOPED AND LESS DEVELOPED COUNTRIES
110 thousands of dollars)
F,sr ai year
1968 1969 1970 1971 1972
Total,
fiscal years Fiscal year Fiscal year
1968-72 1973 1974
Developed countries:i
FMS cash ----------------------------------------- 545,565 1,002,012 665,096 1.067,482 2,258, 976 5,540,131 2,863,800 3,663,600
FMScredit _ --------------------------------- - 130.021 104,260 1" 21T - _ - -- - --- 241,492 - - - -- -- 20,000
DOD direct _ _- - - -
----- (93,021) (25,260)--
DOD guaranty -------------- -- -- ~, --------------------------------------------- - (112,000) - - - - - - - ---- - --- --- - - - --- ---- ---
(9. 021) (29,260) (13,211)----------- ---- (135,492) ------------ --------------------
ms Cash ------- -- -_-_------------------------- 16;. i;;6 11" 4y3 139, 463 23 077
113, 685
FMS credit 132,811 17;;.900 70,000 730,201 550000
DOD direct ---------------------------------- (66, 806) (151, 900) (70, 000) (687, 833) (323:500
DOD g u a r a n t y - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (66, 005) (26, 0 0 0 ) - --------- _ _- - (42, 368) (220, 500)
Total
----------------
International organizations:
FMS cash
FMScredit (direct)---------------------------------
Total
Worldwide:
FMS cash---------
FMS credit
DOD direct______---------------------------
DOD guaranty -------------------------------
i, 330, 354 366, 500 234, 500
1,659,912 550,000 740,000
(1.305,039)-------------------------------
(354.873)_
2,990,266 916,500 974,500
123,561 50,000 30,000
1, 380, 037 2,912,426 6,993,994 3, 280, 300 3,928,100
743, 412 550, 000 1,907,4% 550:000 760, 000
(687, 833) (329, 500) (1, 417, 091)______________________________
(55,579) (220,500) (490,365)----- __
-----------
- - - - - - - - - - - - - - - - - -
2,123,494 3,462,426 8,901,450 3, 830, 300 4, 688,100
Note: Total may not add due to rounding,
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18,582 10,342 36,242 18, 578 39.765
52
18, 634 10, 342 36, 242 18, 578 39,765
732, 383 1,128.347 840, 801
262, 884 281,160 70,000
(103, 858) (225, 900) (70, 000)
(159,026) (55,260)----------------
995,268 1, 409, 508 910, 910,801
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Members of the Committee feel very strongly that the United States'
policies should be geared to restricting, not expanding, the world arms
trade.
The Committee considered imposing fixed annual ceilings on the
amounts of sales that can be made through all the various govern-
ment channels, as is now the case with the credit sales program., but
decided to hold such a requirement in abeyance for the time being.
It will follow carefully the Executive Branch's response to the stated
policy objective and will base its action on the ceiling issue next year
in accordance with that response.
Section 1102. Cas/i sales from, stocks
This section is basically the same as section 21 of the Foreign Mili-
tary Sales Act, as amended.
It authorizes the President to sell defense articles from the stocks
of the Department of Defense and defense services of the Depart-
meat of Defense to any foreign country or international organization
4 agrees to pay not less than the value thereof in United States dollars.
Payment is to 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.
Section 110.3. Procurement for cash scales
This section is based on section 22 of the Foreign Military Sales Act,
as amended.
Under this authority the U.S. Government, in effect, acts as the
agent of the buying country in dealing with the U.S. selling company.
Subsection (a) authorizes the President to enter into contracts for
the procurement of defense articles or defense services for sale for dol-
lars to any foreign corurtry or intentional organization if the country
or international organization provides the United States Government
with a dependable undertaking (1) to pay the full amount of the con-
tract which will assure the United States Government against any
loss on the contract, (2) to make funds available in amounts and at
times as may be required by the contract, and any damages and costs
that may accrue from the cancellation of the contract, in advance of
the time the pay urents, damages, or costs are due and (3) to pay the
United States Government an amount equal to" the administrative
costs incurred by the Government in procuring such defense articles
and deforse services under this section.
The principal changes from existing law are a specific requirement
that the arrangerneuts provide for payment by the foreign country of
a pro raga, base of the administrative expense for the sales program
and
repeal of a provision which allowed fixed price contracts with
foreign countries which could result in losses to American taxpayers.
Subsection (b) is based on the first proviso to section 22 of the For-
eign Military Sales Act, as amended.
When the President determines it to be in the national interest lie
may accept a dependable undertaking of a foreign country or inter-
national organization with respect to a sale, to make full payment
within one hundred and twenty days after delivery of the defense
articles, or the rendering of the defense services. Appropriations avail-
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able to the Del artnrent of De ense may be used to meet the payments
rer+uired by tiro contracts fox he procurement of defense articles and
defense services and shall be rainnbursed by the amounts later received
from the country or international organization to whom articles or
services are sold.
Some, members expressed concern over the fact that under this pro-
gram the United States, in effect, advances our taxpayers' money to
the U.S. arms seller in behalf of the buying country, while the foreign
country is not required to pay for the defense articles or services until
120 days after delivery. The Committee expects that any cost to the
U.S. taxpayer or hidden subsidy to the foreign buyer through this
means be futly recovered from the buying country.
Subsection (c) is designed to implement section 1101 by emphasiz-
ing that commercial sources for arms and equipment shall be used
whenever possible, thus minimizing the U.S. Government's role in the
sale of such material to foreign countries. It provides that sales of
defense articles shall not be made to the government of any economi-
cally developed country under the provisions of section 1103 unless the
articles are not generally available to the purchasing country from
commercial sources in the Tin ited States.
Nc(tioar 1104. Credit sales
Section 1 ] 04 authorizes the ILLS. government to finance the sale of
defense articles and defense services to less developed countries
tl rougrh direct credit ar rangeraents. Subsection (a) (1) establishes a
nraxinnrnr repayrne,rrt period of ten years after delivery, the maximum
allowed miler existing law.
Siilr-;ectiori (a) (2) requir s that the interest, rate charged on the
unpaid balan4~e be. not less thin the rate charged by the Export-Import
Bank for loans of eompareble maturity to finance procurement of
military materials or service, or the current rate for long term Treas-
ury ban.rowings, whichever is. greater.
Subsection (b) authorize, coucessional terms for financing sales of
defense articles and services to foreign countries for which military
grant aid is being phased out under Chapter 21.
ITudo,r subsection (b) (1) a foreign country which received military
grant aid in fiscal year 197 is, eligible for financing of credit sales in
fiscal M ear 1974 and fiscal year 1975 without payment of interest and
it may repay the loan in its own currency. The amount that can be
financed under these concessional terms is limited in each of the two
carry to not more than the country received in military grant assist-
.110e. other than military ti a ruing, in fiscal year 1973.
SrriiseetionL (b) (2) authorizes other concessional lending terms for
the g arnt phaseout countries during the following three fiscal years,
from July 1, 1975 through June. 30., 1978. For each year during this
period credit, can be extended to the limited list of phaseout countries,
to the extent it received military grant assistance (other than training)
during fiscal year 1973. Repayment can be made in the currency of the
country, if needed to meet '':? S local currency expenses in the country
and finatics educational an J cultural exchange activities, and interest
can he as low as 3 percent, al so payable in local currency.
The: fo1'towing table lists the amounts of outstanding credits and
gnararnties by country:
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TOTAL OUTSTANDING ON FMS CREDIT SALES AND GUARANTEES
tin thousands]
FMS credits Guarantees Principal Interest Total
Argentina---------------------------- 40,200 17,014 ----------------
Austria---------
Brazil --- ,275 -------------
488,459 23,232
Ceylon----------------------------- 103
-------------
Chile 31,519 1,140 ---------
China ----------------------1,955 1,149 124,911 ,911 70,789 --------------
Colombia ---------- ----- 21,971 ---------- -------
Ecuador------------------ - - - ---- - - 588 ----------- 441 143------- ---584
-------- -------------
------
Guatem la
a 102,496 48, 000 ----------
India - 6,350 -------- ------------
-0- ---------- ----
---------------------
------------------------------------
Iran 19,220 103,351 ____
Israel 836,658 318,321 -------- --------------------- -------
--------------
------------
Jordan 52,263 5,358 ------------------------------ ------
Lebanoranen - ----------- - - 56 200 ------------- - -------------
----------------
Le ---------- -------------------------
20,000 ---------------------------
Liberia---------
-------------
Malaysia ------
2 --------347 -----------------------------------
-------------
-- ---------- 23,857 854 686 --------------------=------------- - -
Mali -
Moreccrcce - - - - --- - ------------------ 500 -------- -
--------------
---------- 45,618 1,440 -------------------------
Pakistan---------------------------- 4,424 475 -------- ------------
Saudi ParaguaY----------------------------- 217 -------------- 217------------$s----------
Arabia ----------------------- 21,622 45,096 303
Singapore-------------- ------ -------
Tunisia 7,317 ----------------------------------------
Turkey 2,200 --------- 51
Urrgu ------- 35,000 ----------- - --------------
U ruguay 51
V -------------------- 6,139 ------------ - ----- ----- -- ----
enezuela---------------------------- 23,908 11,520 ----- ------------- -- --------------- -
----------------------
Zaire------------------
2
000 17
Total
, 721 _
,
1, 1,429 4,042
Section 1105. Guaranties
This section is based on section 24 of the Foreign Military Sales kct,
as amended and continues the authority for the President to guaranty
commercial loans to foreign countries for purchase of defense articles
or defense services. Guaranties may be issued to any individual, cor-
poration, partnership, or other juridical entity doing business iii the
United States (excluding United States Government agencies) against
political and credit risks of nonpayment arising out of their financing
of credit sales of defense articles and defense service to foreign coun-
tries. The guaranty authority shall be used wherever possible instead
of providing direct credit, in order to minimize outlays by the United
States Government. Fees shall be charged for such guaranties.
Subsection (b) is also taken from existing law. It authorizes the
President to sell to any individual, corporation, partnership,. or other
juridical entity (excluding United States Government agencies) prom-
issory notes issued by foreign countries and international organiza-
tions as evidence of their obligations to make repayments to the United
States on account of credit sales financed under section 1104 and may
guarantee payment of the notes.
Subsection (c) provides for a guaranty reserve for promissory notes
guaranteed under this section. It is also based on existing law. Twenty-
five percent of the contractual liability related to any guaranty issued
under this section shall be obligated and set aside in a reserve account
for the payment of any claims that may be made under the guaranties.
Any funds in the reserve account which are deobligated during any
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is
current fiscal year, as in excess of the amount necessary to maintain
n Tractions l reserve of 25 per centum of the contractual liability under
outstanding guaranties, must be transferred to the general fund o'' the
Treasury. Guaranties issue-. under the Act shall 1)e. backed by the full
faith surd credit of the :nited States.
~5'ectios2 1106. Atuth,ora;,;ation of appropriations
Section 7.106 authorizes the appropriation to the Secretary of State
in fise ll year 197 4 of $200,000,000 to finance sales and guaranties under
the new Act:. Through use of the guaranty autlior?ity this amount is
more. than sufficient to final c e. `he full $700,000,000 in credit and guar-
anties allowed under the ceiling established by section 1301.
Thw following tables contain con iitry-by--country data for the mili-
tary eremit, sales program in fiscal year 19'N' fiscal year 1973, and as
proposed by the Executive Branch for fiscal year 1971:
FOREIGN MILITARY CREDIT SALES
Fiscal year
1972
1973 1974
71.6
79.4 127.0
atic----------------- ----- - --- --
Nast
0
395
395.5 465.0
stt
Near taEastlSoUthAsi__------- __--------------------------- -----------
.
Ewope-- --- - --- ---- - - - -- -- -- - ---- ------ -----
21.7
16.1 18.0
Latina..________-_.--- ----------
61.8
59.0 150.0
Latin America.. ----------------------------------------------------
-------------------- ----------___
550.0
550.0 760.0
Less:
-220.5
-200.0 -313.3
Private financing-
-
fi n a n c i n g -
- - - - - - - - -- - - - - - -- - - - - - - - -- - - - - - - - - -
55
1
0 79.3
50
-
-
Guaranty of xivate financing--- ___. ______---------------
.
15.4
.
-------- ---- - ------
Unot;liHaied!lapsed______-
-----
--------- ----
Transfers from DOD___.----------
-- ---------------------
Carnrout---------------
Totaladjustrnent-------------------------
------
New obligational authority_______________________ ---------
REGIONAL DATA
East Asia and Pacil,c region:
-----------------
Ca ----------------------- ----- ----- ---------- 45
RepublicofChina__-________________-------- 46,000 ,200
- -----------
Indonesia___-.____ -
24, 200 2
------------- ------- --- ---- i71066
Korea------ -------
_ _ 8550 10, 0011 19,666
Malaysia --------------------------------- -- --- ----------------------- --- ----------- 3,000
15, 000
---------------
Vietnam --------- ------------
-- --------------
71, 550 79, 400 127,000
Regional Total, East Asia and Pacific ----- ..----- ..__. -------- -- -
Near East and South Asia: _______
60,000 58,000 65,000
Afghanistan-`------------------------- ------ -- --------------
- ---------- - --------
Greece- --- --- -----
Indua --- -
Iran- ---- 30 --7-00 300, 000
300.000 , 5
Israel ___ - - - -._ - - 10, 000000
Jordan --------------------- - ---- --- --- 10, 10,000 5,000
-
Lebanon-------------------------- L e b a n o n- - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - -- - - - --
Neaal ---------------------- ---
--
26 , oop
Pakistan--------------------------------------------
Saudi Arati2
Tu
Turkey --- ----------- 15,000 20,000 75,000
------------------------------ ----------------
Turkey-------------- - -
Re;ion.------------------- --------
395,000 East and South Asia ---------- ----- ------------- ,000 395,500 465,000
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FOREIGN MILITARY CREDIT SALES-Cotisued
Latin America:
Argentina---------------------------------------------------- 15,000
11,500
22,500
Bolivia ------------
4,000
Brazil__________________
20,000
15 000
56,000
Chile ?_____--------------------------------------------------
Colombi
10000
7,250
12,400
10,000
10,000
15,000
Dominican Republic -----------------------------------------------------------------
Ecuador---------------------------------------------------------------------------------=-----------
El Salvador----------------------------------------------------------------------------
500
Guatemala------------------------------------------------------------- 2,600
2,000
Honduras-------------------------------------------------------------- -------------------
500
Mexico-------------- ----------------------------------------------------------------
Nicaragua------------------------------------------------------------------
2,500
Panama---------------------------------------------------- ----------------------------------
ParaguaY--------------------------`---------------------------------------------------------------
Peru-------------------------------------------------- 20, 000
----------------------------
UruguaY------------------------------------------------------ 2, 000 -------------- 2,000
Venezuela--------------------------------------------------- 7,500 7,500 15,000
Regional ---------------------------------------------------------------------- ?-------------------
Total, Latin America -------------- ______________________-_- 61,750 59,000 150,000
Africa:
Ethiopia--------------------------------------------------------------------------------------------
Ghana-------------------------------------------------------------------------------------------- -----
Liberia ------------------------------------------------------- 2,000 --------------------
Mali------------------------------------------------------ 500 --------------------------
Morocco----------- ------------------------------------------ 15,000 9,800 12,000
--------------
Nigeria ------------------------------------------------------------------------------
Senegal ---------------------------------------------------- ----------------------------
Tunisia ----------------------------------------------------- 2,200 -------------- 2,500
Zaire-------------------------------------------------------- 2,000 6,300 3,500
---------------------
Region --------------------------------------------------------------------------
Total, Africa________________________________________________ 21,700 16,100 18,000
Section 1301. Aggregate ceilings
Section 1301 establishes a ceiling for fiscal year 1974 of $700,000,000
on the aggregate total of credits, or participations in credits (exclud-
ing credits covered by guaranties issued under section 1105 (b) of this
Act), the face amount of guaranties issued under section 1105 (a) and
(b), and the amount of assistance extended by the Export-Import
Bank on military sales to less developed countries. Of that amount, not
less than $300,000,000 shall be available to Israel only, consistent with
Congressional action over the last two years.
Section 1302. Regional ceilings
Latin America
Subsection (a) establishes an annual ceiling of $150,000,000 on
the amount of U.S. Government military assistance grants, credit
sales, guaranties of credits, and the value of vessels or boats that can
be provided to the nations of Latin America, excluding grants for
training. There is It ceiling of $100,000,000 under existing law which
the President can waive, to increase to a maximum of $150,000,000.
Neither existing law nor the new provision restrict the amount of sales
that may be made to Latin American countries through commercial
channels.
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Subsection (b) is a comparable ceiling on African countries and is
the same, r.i count as in existing law.
CIIAI"I'M 16.-ADMCNr:irRATIVE AND FISC1r. PROVTSIONS
Section 1501. Payments reccired
Section 1501 parallels provisions of existing law, section 37 of the
Foreign Military Sales Act, as amended. Cash payments received
under sections 1102 and 1103 and advances received under section
1104 shall be available so ely for payments to suppliers (including
the military departments) and refunds to purchasers and shall not be
available for financing credits and guaranties.
Amounts received from foreign governments as repayments for
credits extended under section 1104, amounts received from the dis-
position of instruments evidencing indebtedness, and other collections
(including lees and interesi) shall be transferred to the miscellaneous
receipts of the Treasury.
Section 1502. Credit standards
This section provides that the President shall establish standards
and criteria, for credit and guaranty transactions under sections 1104
and 1105 of this .Act.
PART III-MILITARY ASSISTANCE
CrrAPTF.R 21.-311r,ITARV GRANT ASSISTANCE
Section, 2701. General autlaorafza,
This section provides the authority for the President to furnish
military grantt, assistance to foreign countries during the four year
phase-out period. The section is a modification of section 503 of the
Foreign Assistance Act of 1961 as amended, which is being repealed.
The President is authorized to furnish military grant assistance to
any foreign country which is otherwise eligible to receive such assist-
ance, by-
(1) acquiring from anti source and providing any defense
article or defense service (other than military training) ; and
(2) assigning ordeta.i:in members of the Armed Forces of the
United States and other personnel of the Department of Defense
to U.S. missions in forei ?n -ountries to perform duties of a non-
combatant nature in carrying out duties (other than military
training) in carrying out the provisions of the Act.
Section ?10.2. /'erm,ination o l authority
This section requires the President to phase-out the grant military
assistance program so that by not later than June 30. 1977, no addi-
tional grant-assistance shall be provided. However, deliveries could
continue to be made. after that date on military grant aid for which
obligations were made prior to the cutoff date.
Section 2103. A nth orizati on 0/ appropriations
Section 2103 authorizes the appropriation to the Secretary of Stlte
of $270 million for fiscal year 1974. That amount shall be distributed to
the following countries in amorrnta not to exceed the following:
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Amount
(1)
Republic of Korea----------------------------------------
$119,000,000
(2)
Turkey --------------------------------------------------
49,000,000
(p,)
Thailand ------------------------------------------------
34,000,000
(4)
Jordan -------------------------------------------------
30,000,000
(..)
Philippines ----------------------------------------------
13,000,000
(0)
Indonesia -----------------------------------------------
13,000,000
!7)
Ethiopia -------------------------------------------------
7,000,000
(5)
Spain ---------------------------------------------------
5,000,000
Total --------------------------------------------------
270,000,000
In addition, section 2109(b) authorizes the appropriation of $150,-
000,000 in military grant aid to Cambodia in fiscal year 1974, making
a total authorization of $470,000,000 for fiscal year 1.974. Military aid
to South Vietnam and Laos is also authorized by section 2109 but not
a specific dollar amount.
The following table gives comparative data on military assistance
grants to major recipients in fiscal year 1973, proposed by the Execu-
tive Branch for fiscal year 1974, and the amounts approved by the
Committee :
Fiscal year Fiscal year
1973 1974 Committee
continuing executive recommenda-
resolution branch Lion,
rate request S. 1443
Military grant assistance:
1. South Korea---------------------------------------------- $134 $261 $119
2. Turkey--------------------------------------------------- 67 98 49
3. Thailand ----------------------------------------------- 36 58 34
4. Jordan-------------------------------------------------- 34 39 30
5. Philippines----------------------------------------------- 16 21 13
6. Indonesia------------------------------------------------- 16 23 13
7. Ethiopia-------------------------------------------------- 8 11 7
8. Spain--------------------------------------------------- 9 5 5
9. Cam bodia----------------------------------------------- 142 181 150
10. Republic of China----------------------------------------- 9 6
--------------
Total military grants------------------------------------- 1 533 1 652 420
1 Total amount of NOA for all countries, not just those listed.
Subsection (b) provides that of the funds appropriated to the
Secretary of State under subsection (a) not to exceed $25,000,000 may
be made available to provided excess defense articles to foreign coun-
tries and international organizations not referred to in subsection (a).
This provision will permit up to $25,000,000 excess defense articles to
be furnished to countries other than those specified. The value of excess
defense articles distributed to other countries must be deducted from
the funds appropriated for military grant aid and the country must
pay 25 percent of the value in its own currency, as is the case with all
other military grant assistance.
Section 2104.-Conditions of eligibility
Section 2104 imposes conditions of eligibility on recipients of
grant military assistance, in addition to those imposed under section
107. In addition to such other provisions as the President may require,
no defense article shall be furnished to any foreign country under the
grant program unless that country agrees that-
S. Rept. 93-189--4
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(1) it will permit continuous observation and review by, and
furnish necessary informatio?r to, representatives of the united
States Government with roga :.d to the use of any such article
(2) unless the President consents to other disposition, it will
return to the I nited State, Government the articles which are no
longer needed; and
(3) any funds received by rU country in disposing of any weap-
on, weapons system, munitio=r, aircraft, military boat, military
vessel, or other implement of vvar received under this chapter, will
be paid to the Iinited Stares Government and shall be available
to pay all official local curr ~ncq costs of the,United States Govern-
inent, inclining all. costs of international educational and cultural
exchange activities in that country under the programs authorized
by the Mutual Educational and Cultural Exchange Act of 1961.
Subsection. (b) provides that any foreign country which uses de-
fense articles or defense services :Frrnislned to that country under this
Act, the Mutual Security Act of 1954, as amended, or any predecessor
foreign assistance Act, in subFtart.ial violation of the provisions o-F
this chapter or any agreements entered into under any of such Acts
shall be ineligible for further assistance.
Al'ection 2105. Excess defense artietes
Subsection (a) provides that the value of any excess defense article
furnished to a foreign country o-? international organization by an
agency of the United States Goveenrnent shall be considered to be an
expenditure made from military grant assistance funds appropriated
under the Act. I nless the agency certifies to the Comptroller Genera.[
of the United States that the exces,, defense article it is ordering is riot,
to be transferred to a foreign country or international organization,
when an order is placed for a defense article whose stock status is
excess at the time. ordered, a sum equal to the value thereof shall (1)
he reserved and transferred to a suspense account, (2) remain in the
suspense account until the excess defense article is either delivered to
a foreign country or international organization or the order therefor
is cancelled, and (3) be transferred from the suspense account to (A)
the general fund of the Treasury upon delivery of such article, or
(13) to the appropriation made r.nder section 2103 for the current
fiscal year upon cancellation of the order. Such surer shall be trans.
fell red to the appropriation made under section 2103 of this Act for
the current fiscal year. upon delivery of such article, if at the time of
delivery the stock status of the arricle is determined, in accordance,
with section 102 (7) and (13) of this Act to be nonexcess.
Excess defense articles shall be provided whenever possible rather
than providing such articles by the procurement of new items.
The Committee reiterates tha the. prevailing practice in the Execu-
tive Branch of valuing all excess defense articles at 331/, percent of
acquisition cost must be stopped. The current statutory requirement.
which is retained in this bill, is that all excess articles be valued at
"actual value" but, in no case, at less than 331/3 percent of acquisition
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cost. The Committee expects full compliance with both the letter and
the spirit of this provision. The General Accounting Office is now
conducting a review of the Executive Branch's pricing policies and
practices; at the request of Senator Pearson, and the Committee.
will take appropriate corrective action after that investigation is
completed.
Section 2106. Special military grant assistance accounts
This section requires that a recipient of grant military assistance
shall agree-
(1) to deposit in a special account established by the United
States the following amounts of currency of that country:
(A) in the case of any excess defense article to be given to
the country, an amount equal. to twenty-five percent of the
value of the article, as determined by the Secretary of State,
at the time the agreement to give the article to the country is
made ; and
(B) in the case of it grant of military assistance to be made
to the country, an amount equal - to twenty-five percent of
each such grant ; and
(2) to allow the United States Government to use funds from
the special account to pay all official costs of the United States
Government payable in the currency of the country, including
all costs relating to the financing of international educational and
cultural exchange activities in which that country participates
under the programs authorized by the Mutual. Educational and
Cultural Exchange Act of 1961.
Subsection (b) is an exemption from the foreign currency payment
requirement tinder (a) for (1) any case, in which military grant assist-
ance is furnished to a country ender an agreement with which allows
the United States Government to operate a military or other similar
base in that country in exchange for grant assistance, if the Senate
has given its advice and consent to the base agreement, and (2) mili-
tary aid to South Vietnam, Cambodia, or Laos.
Subsection (c) provides a mechanism for combining the foreign cur-
rency accounts required under this section with that required for
payments for training assistance under section 2303.
The 25 percent payment requirement for military grants will re-
sult in significant savings to the taxpayers. In the last fiscal rear $387
million was spent in dollars to purchase local. currencies for official
U.S. uses in countries which are major recipients of grant aid. In
fiscal year 1914 it is estimated that $417 million will be required for
local currency purchases in these, countries, as seen on the table below.
The 25 percent requirement will not only save the U.S. taxpayers
large sums but will also force governments of grant aid and recipients
to look more carefully at its requests of its own military establishment
and weight them in terms of other national priorities.
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U.3. LOCAL CURRENCY PURCIIASES IN MAP EQUIPMENT AND TRAINING COUNTRIES'
(r millions of dollars(
For fiscal year
1972
Estimates for fiscal
year 1974
Africa:
Ethiopia------------ ---------------- -----------------------------
13.304
13.021
Latin America:
Bolivia----- ------------ ----------------- -----------------
9.645
9.416
Chile-- ------------------- ----------- --------------
-.616
.668
Dominican Republic __--__________________--- __---________-__-_---
13.008
7.167
Ecuador------ _ _-___-___--___--__
-
3.222
3.482
Guatemala-- ----
_______________
6.667
7.271
Paraguay_____._ _ --------------------------------- ----------
1.337
1.906
Uruguay--------- -----------------------------------------
1.159
.493
East Asia and Pacific:
China --------- - -----------------------------------------------
14.762
16.238
Norea_--------- - ------------------- ---------------------
79.275
87.202
Indonesia-_-.----_
.517
None
Philippines-------- -- --------- ----------- -----------------
87.353
96.083
Thailand
89.190
98.100
Near East.'South Asld:
lordan._- ------------------- ------------ - -- --- - ----------------
2.150
2.365
Turkey------------- ------ -------. ---------------------------_
5.558
8.715
Europe Soain.______----- __-._ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
------ __--------
59.710
- . 7 1 0
65.680
6
Total------ --- _ -------------- ----------------
381.473
417.807
I U.S. dollars are used to purchase goods ant sertices in Panama and Liberia. Na local currency purchases are made
in these countries.
,'rW.;Psn. 21o". 111i.1itary assi,hraf fte information
Stwt,ion 21.07 is designed to insure the full public disclosure of in-
formation concerning the grant military assistance program.
It requires that the record showing the name of any foreign country
or intarnatioual organization and the. amount of military assistance to
be provided'., or that has been provided, by the United States to such
ionntry or organization for any fiscal year under this or any other law
5111111 be made available to the public.
ti'e tinya s?IOr4, ,tirt>eai-aZ maili.ta)y assistance report
`o,f lnn '1?)~ states that not later than January 31, 1974, the Presi-
detlt shall transmit to Congress a report on all military assistance
agreements with foreign cc1nl~.tries which are in effect as of Decem-
ber 3l. 197:',. That report shr,,ll list the agreements which the President
believes should be continuec? beyond the date giant assistance is to be
terminated under the provisions of this chapter and include a detailed
justification for continuing each agreement which, in his judgment,
should be continued.
rS'r>.r,fii.r)7l 210. 4 iifhorizatiov., for South, V etnam,, Laos, and Calnabodia
(.,ce (also section g1f)9)
Section 21i)9. coupled with section 3109, authorize a program of
imilitary as6stance to South Vietnam and Laos to replace that now
provided thrrmgh annual Department of Defense authorization and
appropriatio1L bills. These sections would also authorize continuation
of nfilitarv a iii to Cambodia.
4tabsoctimi 21(19(a) (1) authorizes the appropriation to the Secre-
ttl ry of State of "such sums as nay be necessary" to provide the arma-
iitents, munitions, and war materials to South Vietnam and Laos al-
lowed under section 3109.
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Subsection (a) (2) authorizes the President to draw on the stocks
of the Defense Department to provide the aid authorized, subject to
reimbursement of the Department from subsequent appropriations.
Subsection (a) (3) authorizes $150,000,000 for military aid to Cam-
bodia in fiscal year 1974 subject to the provisions of section 3109.
Any military assistance to South Vietnam, Laos, or Cambodia shall
be furnished with the objective of bringing about peace in Indochina
and strict implementation of the cease-fire agreements in Vietnam and
Laos and any agreement that may be reached in Cambodia in the
future.
Military assistance to South Vietnam shall be furnished strictly in
accordance with Article 7 of the "Agreement on Ending the War and
Restoring Peace in Vietnam," signed in Paris on January 27, 1973,
which states.:
From the enforcement of the cease-fire to the formation of
the government provided for in Article 9(b) and 14 of this
Agreement, the two South Vietnamese parties shall not ac-
cept the introduction of troops, military advisers, and mili-
tary personnel including technical military personnel, arma-
ments, munitions, and war material into South Vietnam.
The two South Vietnamese parties shall be permitted to
make periodic replacements of .armaments, munitions and
war material which have been destroyed, damaged, worn out
or used up after the cease-fire, on the basis of piece-for-piece,
of the same characteristics and properties, under the super-
vision of the joint Military Commission of the two South
Vietnamese parties .and of the International Commission of
Control and Supervision.
Any military assistance furnished to Laos shall be in accordance
with Article 3(d) of the February 21, 1973, cease-fire agreement Lon
Laos, which states :
It is forbidden to bring into Laos all types of military per-
sonnel, regular troops and irregular troops of all kinds and
all kinds of foreign-made weapons or war material, except
for those specified in the Geneva Agreements of 1954 and
1962. In case it is necessary to replace damaged or worn-out
weapons or war materials, both sides will consult and arrive
at an agreement.
Military assistance, furnished to South Vietnam or Laos shall be
limited to that necessary to replace armaments, munitions and war
materials on a one-for-one basis that have been destroyed, damaged,
worn out, or used up. Replacement shall be based on lists previously
furnished to the International Commission of Control and Supervi-
sion for Vietnam (ICCS) and, in the case of Laos, to the International
Commission for Supervision and Control in Laos (ICSC).
The Committee expects that any armaments, munitions, or war
materials shall be furnished South Vietnam only on a basis that is in
full. compliance with terms of the cease-fire agreement, and any per-
tinent regulations that either have been or may be established by the
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 Approved For Release 2001/08/30 : CIA-RDP75B00380R000600170007-5
26
International Commission of Control and Supervision and the Joint
Militarv Commission (JMC). The aid is restricted to those materials
as defined by the ICCS as "armaments, munitions, and war material"
and shall not include genarat subsidization of the South Vietnamese
awned forces. If the ICCS or the .)MC, do not establish standards for
replacement the following lists, developed by the Department of
Defense, shall apply to aid to Vietnam :
c .~ rRMAMENTS
.NuNy device which is capable of launching a projectile or
h annnable liquid which is used for defensive or oifensiITO
aril itary operations. Complete armaments systems configured
in their entirety, which rriust be replaced on the basis of plea-1
for-l>iece, of the same characteristics and properties are:
(1) Aircraft gun armament systems
(2) Antiaircraft gun systenis
(3) Artillery pieces
(4) Flamo throwers
(:,) Grenade launchers
(h) Guided missile systems
(7) Machine gulls
(S) Mortar's
(s)) Pistols
lo) Recoiless rifles
I1) Rifles and shotguns
12) Rocket muncher systems
(I3) Shipboard ganmount systems
IMIUN 1TIONS
T lose items used with armaments as the projectile, dropped
from all aircraft, such as bombs, or thrown by band such as
"r;,rrades. It also inclides all explosives except those used for
civil ,?ontitructloll or for rnre;?gency/survivial purposes oper-
,atiorr;i. llrrrritiOns ~tilr~clr must be replaced on the basis of
piece for-piece. of the same characteristics and properties
11) Ammunition 'lor armaments listed above
(2) liombs
( Explosives excluding commercial c-xralosilcs arsed
in civil con tm uctrorr operations or for emer ge.raey/
survival operatrtils
l) Grenades
1 5) Alines
((h Missiles
i) Napalm
Rockets
WAR MATr:r,na,
hose major end items whose principal use is for combat.
1laior end items are defined as a final combination of ?nd
products, component parts, and/or materiel which is ready
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 Approved For Release 2001/08/3027CIA-RDP75B00380R000600170007-5
for its intended use. War materiel which must be replaced
on the basis of piece-for-piece, of the same characteristics
and properties are :
(1) Tanks
(2) Military aircraft
(3) Military self-propelled ships and water craft and
barges
(4) Armored tracked vehicles
(5) Military tactical wheeled vehicles and trailers
(6) Military tactical radios
(7) Landbased military tactical radars
(8) Military tactical telephones and teletypes"
Before replacement the United States shall take whatever action is
necessary to insure that the South Vietnamese Government complies
fully -,vith the provision requiring notice to the ICCS of items eligible
for replacement and shall comply with any.other conditions the Com-
mission may impose. The United States shall. insure that the ICCS
is provided in advance of delivery with lists of replacement items to
be furnished to South Vietnam. Obligations can be made in advance
of appropriations for replacement materials drawn from Department
of Defense stocks with reimbursement to the Department from subse-
quent appropriations.
The provision authorizes $150 million in military grant assistance
to Cambodia but requires that if a cease-fire comes about the aid be
provided only in accordance with the terms of the cease-fire agreement.
Military training assistance could be provided to South Vietnam and
Laos cinder chapter 23, if permitted under the. respective cease-fire
agreements as interpreted by the respective International Commission.
After any future. cease-fire agreement, military training for Cam-
bodia would, of course, be subject to the conditions and terms of that
agreement.
If there is a general outbreak of fighting in South Vietnam, the
President can provide unlimited military aid if he finds and reports
to the Congress that the Vietnam cease-fire agreement "is no longer in
effect," in other words, that it is null and void insofar as the United
States is concerned. Additional aid above the one-for-one replacement
cannot be provided, for example, merely by a Presidential declara-
tion that North Vietnam or the People's Revolutionary Government
are violating one or more articles of the agreement. Experience to
date, has proven that such charges are likely to be a common occur-
rence on both sides. To go beyond the one-for-one replacement limit
the President must assume ftill responsibility for scrapping U.S. sup-
port of the Vietnam cease-fire agreement.
In the absence of any replacement criteria being established by
the ICSC for Laos or the parties to the cease-fire agreement for Laos,
it is the Committee's intent that the list of eligible armaments, muni-
tions, and war material established by the Department of Defense for
Vietnam shall apply and replacement shall be only on a piece-for-
piece basis. General subsidization of this Laotian armed forces is not
authorized.
I+ inally, the President shall submit. a quarterly report to the Congress
on the aid furnished and the general status of the implementation of
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 Approved For Release 2001/08/30 :,f
all cease-fire ajrreernents involved in the area, including a full descrip-
tion of all types of assistant,, furnished to the three countries and the
number and types of United States personnel involved who are paid
directly or indirectly with U.S. fends.
There are of course, no fends authorized anywhere in this bill for
financing any U.S. military combat operations in Cambodia or any-
where. else. in Indochina. In this respect the bill is entirely consistent
with the Senate's action on the Second Supplemental Appropriation
Bill, ILh1. 7447, and : the Committee's action on the Case-Church
amendment to the Department of State Authorization Bill, S. 1248.
&etion 2110. Repeal of military grant assistance authority
Section 2110 repeals the portions of this bill relative to military
grant assistance effective July 1, 1977. Any special account of a for-
eign country established and r section 2106 of this bill shall continue in
existence, until the currencies in the account are expended for the
purposes specified in section 2106, ezcept that if a special account is
established for that country under section 2303 of this Act, the cur-
rencies shall be transferred to and consolidated with the currencies in
the acc.outit established uncer section 2303. The special account, of
the country established under this section shall then be closed.
&etior, 2-A)I. General authority
This ".erton authorizes tl e President to furnish military training
to any foreign country or international organization. After June 30,
1974, no such training shat be conducted outside the United States
except by specific authorization of law.
The purpose of requiring speeific authorization of training in a for-
eiga country, beginning July 1, 1974, is to require the Executive Branch
to justify to Congress next year, on a, case-by-case basis, all programs
and facilities proposed to be eased for training abroad.
b'ectriiorr. 2.30,1?. Authorization 7 f appropriations
This section authorizes the appropriation of $2.5,000.000 for fiscal
year 1974 for foreign military r ainirlg purposes. The following table
lists, on a country-by-country basis. the military training program
proposed by the Executive Branch for fiscal year 1974.
SECURITY ASSISTANCE-INTERNATIONAL MILITARY EDUCATION AND TRAINING PROGRAM
In thousands o^ dollars]
Fiscal year-
1972 1973 1974
FAST ASIA AND PACIFIC
Cambodia---- --- -- ---------------------------------1,868
Republic of China_----------------- ----------------- ------------- 1,016
Indonesia------ -..__- _ - ------ --------------- --- -------- 2,239
Korea ------------------------------------------- ------- 4'139
Malaysia------- ---------------
Philippines -: ---__------------------------------- -------- 1,078
Thailand ------------ -------------- --------------- 101
East Asia region-- -..------------------------------------------
4,715 5,806
551 500
2275 ,974
1,8?4 '2,411
180 200
992 631
1,812 1,450
267 300
12,456 13,272
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 Approved For Release 2001/08/3029CIA-RDP75B00380R000600170007-5
SECURITY ASSISTANCE-INTERNATIONAL MILITARY EDUCATION AND TRAINING PROGRAM-Continued
[In thousands of dollars]
NEAR EAST AND SOUTH ASIA
Afghanistan------------------------------------------------------
243
215
215
143
200
Jordan----------------------------------------------------------
539
618
468
Lebanon --------------------------------------------------------
204
230
150
Nepal------------------------------------------------------------
24
38
30
Pakistan --------------------------------------------------------
96
285
243
Saudi Arabia-----------------------------------------------------
474
231
200
Sri Lanka -------------------------------------------------------------------
55
50
Tarkey---------------------------------------------------------
2,114
1,733
2,499
Rrgicn--------------------------------------------------------- -
19
99
50
Prior-year program cost--------------------------------------------
1,811
859
--------------
Total------------------------------------------------------
EUROPE
Austria -----------------------------------------------
11
18
30
Finland--------------------------------------------------------
it
30
20
Portugal -------------------------------------------------------
328
458
477
Seain -----------------------------------------------------------
1,118
973
374
Region --------------------------------------------------------
49
23
50
1, 502
951
AFRICA
Ethiopia --------------------------------------------------------
1,270
764
796
Ghana-------------------------------------------------------
40
55
50
Liberia----------------------------------------------------
261
117
100
Mali-------------------------------------------------------------
44
50
50
Morocco-----------------------------------------------------
875
910
1,000
Senegal---------------------------------------------------------
1
25
20
Tunisia--------------------------------------------------------
339
349
324
Zaire------------------------------------------------------------
442
288
400
Region--------------------------------------------------------
33
93
80
Prior-year program cost-------------------------------------------
114 -------
-------
--------------
2,651
2,820
LATIN AMERICA
Argentina -------------------------------------------------------
759
550
650
Bo!ivia ----------------------------------------------------------
618
814
454
Brazil-----------------------------------------------------------
750
820
800
Chile ----------------------------------------------------------
886
950
1,000
Co!ombia --------------------------------------------------------
616
778
800
Dominican Republi------------------------------------------------
566
573
534
El Salvador -------------------------------------------------------
264
500
535
Guatemala------------------------------------------------------
276
52
3
520
Honduras-------------------------------------------------------
538
5
4
535
Mexico----------------------------------------------------------
112
87
140
Nicaragua--------------------------------------------------------
496
807
437
Panama--------------------------------------------------------
260
237
250
Paraguay-------------------------------------------------------
'428
40
500
Peru-----------------------------------------------------------
955
820
900
Uruguay---------------------------------------------------------
401
477
400
Venezuela-------------------------------------------------------
766
870
1,000
Regicn------------------------------------- -----------------____
276
2,900
1,210
Total-----------------------------------------------------
8,967
12,259
10,665
General costs-----------------------------------------------------
3,501
1,265
1,187
Section 2303. Special military training accounts
Section 2303 is comparable to section 2106. Subsection 2303 (a)
requires that in order to be eligible to receive training assistance, a
country must agree-
(1) to deposit in a special account established by the United
States Government its currency equal to 5 percent of the cost of
the military training furnished ; and
S. Rept. 93-189--5
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(2) to allow the United States I xovernment to use funds from
that account as necessary to pay all official costs of the Tlnited
States Government payahle in the currency of the country, in-
cluding a1[ costs relating to the financing of international educa-
tional and cultural exchange activities in which the country par-
ticipates under the programs authorized by the Mutual Eduea-
tionaland Cultural Exchange Act; of 1961.
Subsection (b) exempts from the foreign currency payment for
training any ease in which mi litary training is furnished to a foreign
country under an agreement which allows the United States Govern-
ment to operate. a military, or otlrer similar base in that country ii
exchange for the training, if the Senate has given its advice and con-
sent to the agreement, and training furnished South Vietnam, Cam-
bodia, and Lao:,.
Section 2304. Restriction on foreign military training students
Section 2304 restricts the nranber of foreign military students to be
trained in the United States in any fiscal year to not more than the
number of foreign civilians brought to the United States under the
Mutual Educational and Cultural Exchange Act of 1961 in the pre-
ceding fiscal year. This is taken from current law, section 510 of the
9 oreign Assista.nce Act of 1961, as amended.
LIIAP'rER 25.--=STTL,TTARY ASSISrA vOE AnyrSORv GROUPS AND ATISSTON5
Rection, X501. 5! 'rnn.cfer of functions
Subsection (a) phases out military missions and groups by not later
than Jule 30, 1977. By that date all the functions of military assiscc-
ance advisory groups or other organizations of the United States Gov-
ernment performing similar activities in a foreign country shall be
transferred to the Chief of the T'nited States Diplomatic Mission to
the country.
This provision is designed to cover the phaseout of all types of rnili-
tar'y persomlel assigned to foreign countries who are engaged in activi-
ties involving the foreign military assistance or sales programs. Many
nlembers of tl:e U.S. armed forces are now being sent abroad, on mis-
sions of limited duration, in connection with the military sales pro-
gram, who are not formally assigned to a military mission or group.
The functions performed by tlrlasc military men, in training foreigners
in the use and maintenance of norms and equipment bought in the U.S.,
could be handled in most if nct a11, cases by civilian technicians pro-
vided by the U.S. manufacturer. The net effect of the current practice
of using military instead of civilian contract technicians, is simply
to tie the U.S. (Government even more closely to the interests of the
purchasing courtry. The use of U.S. military personnel abroad in een-
nection with the sales program is to be ;phased out along with regular
military missions and groups. After July 1, 1977 the sending of such
l)ersonnel to a, foreign country must be specifically authorized.
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For a number of years, the Committee has tried to reduce the num-
ber and size of U.S. military missions and groups abroad. There are,
for example, military missions to eight countries in Western Europe
where grant aid programs were terminated years ago. The bulk of the
costs for missions and groups is paid out of the Defense Department
budget rather than from appropriations for military grants or sales.
The 46 groups and missions now in existence are also top heavy with
rank: 13 major generals, 14 brigadier generals, and 170 colonels, as
MAAG's/MISSIONS/MILGROUPS
Briga- Lieu- 1st
Major dier tenant Lieu- Warrant
general general Colonel colonel Major Captain tenant officer
08 07 06 05 04 03 02 WO
Total
3 13 1 ---------- ----------
1
19
Argentina--------------------
1
-
-------------
-
r ----------------------------------------------
Austria
----
2 1
-
g
-
-----------------------
Belgium/LUxemborg------------------ 3
3
-------------------
7 8 ---------
18
26
_
Bolivia--------------
6
2 1 _--__--
Brazil ------------ 5 12 21 5
1
4
Cambodia--------- -_ ------
3 6 2
11
Chile ----------- ---------
Colombia------------------------------- 3 3 11 1 ------------------
1 1
2
18
-
Costa Rica----------------------- --------------
3 3
6
Denmark---------------------- 5
1 4
1
Dominican Republic_____________________
- 1 7
1
0
43
El Salvador--------------------------
--- 1
Ethi
i
-
4 15 2 20 2
4
op
a -----------------
-
France-----------------------------
Germany 1 -
-
Greece
3 3 1 13 -------------------------- ----------------------
- - ------- -
6 17 9 9 3 -
9
20
36
16
-
Guatemala-----------------------------
2 2 4
------------------
1 2 3 ----------
6
Ilona--as-
- -
----------
1 2
India
a--------------------
-------------------
2 4 16 1 ------------------
23
--------2
Indooneoiesia -----------------
19 62 36 9 -
------- 7
136
1
Iran
--------
-----
3 1
-
-
8
------
Italy
-------- 1-
-
3
-
---------------------
---------
6
5
-----
Japan -------------------
---------------
-------------------------------
1
-
--------
---------
1 --
2__ __ 1 _______24 69 77 1
8
1
1
Jordan
8
210
Korea-------- ---- 1 3 5 -------------------- 2
---
11
Liberia --------- --------------------
Morocco--
--- -------------------------
1 2
----------------------
3 3
6
Netherlands-- ---------------- --------
---------
- -------
1 2 4 ------------------------------
7
Nicaragua------------------------------
1 ------------------------------
1
Nigeria ----------
3 2 -----------------------------------------
5
Noiway ---------------- , t
2
--------
1
--------------------
-------------- 1
P
4
1
1
11
anama-----------------
a
----------- ---- 1
P
6
--------------------
3.
aragu
Y---------------
------------ 1
2
------
-----------------
36
Peru---------------------
Philippines___________________ 1 6
3
1
15
2
12
2
8
---------- 4
Portugal-----------
18
30
6
1 6
66
Saudi Arabia______________
1 ---------- 6
S
ain
14
7
2
6
------------------8
102
p
--------------
1 ---------- 10
T
i
36
41
2
__________
3
145
wan
a
Thailand________--- 1 ---------- 11
1
34
2
73
4
3
1
__________
-------------------
8
Tunisia--------------------Z---------2
10
45
24
5
1 4
93
Turkey------------ 1
5
3
--------
3
Uruguay ----------
4
16
5
2
27
1
2
6
1
-
,
-------- 13 14 170
486
458
88
7 51
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Additional data. on the si:,('' of these missions and their cot is
contained in the following table :
MAAG costs (including pay and
allowance) (in thousands)
Personnel on-board, Dec. 31, 1972 Fiscal year 1973
Fiscal year 1974
U.S.
Local
(estimate)
(estimate)
ntry drganizalion
Country
Officers
En-
listed
civil-
ians
civil-
lens
Military
Total MAP Dept.
MAP
Military
Dept.
Argentina, MILGP____
Austria
OAO A
19
9
i
7
----------
36 $845.0
$910
0
,
ug. _ _
Belgium/Luxemborg, MAAG
I
5
1
1
1
--
2
50.2 ---
--------
------
.
55.2
Bolivia, MILGP______ _ _ _
17
10
2
6
8
13
$171.7 189.2
$171.0
189.2
Brazil,MILGP__
Cambodia
MEDT
27
15
6
2
73 1,474.0 __
_
1 970
0
,
---- __._
Chile
MILGP
48
29
__-----
_-_
_
77 1,101.5 1,464.6
__ __-
934
9
.
1,430
1
,
-_ -
Colombia, MILGP
_
12
15
3
1
477.0 --
.
_--_
.
511.0
__
__-__ _
Costa
Rica
MILGP
6
28
--------- 662.0 ---
615
0
,
..
Denmark, MAAG__
2
6
2
1
__ -----
1
1
6
5 ------ 93.0
14 133
6 2
-----
124-7-
.
96.0
Dominican Republic, 64AAG__
El Salvad
r
MILGP
10
4
0
3
.
399
17 153.77 212.3
147
8
212
3
,
o
_______
Ethi
pia
MAAG
9
4
1
J
3
13 256.0
- --
-
.
-------
.
2',16
0
,
-----
France
MAAG
4
43
.1
34
125
1,101.6 2,127.7
1,
042.4
.
2
0117
2
,
.___
Germany
MAAG
4
1
3
1
7
15
153.3 202.2
175.7
,
.
2'
9
0
,
__
Greece
JUSMAG
8
5
7
9
39
598.2 866.3
634.4
.
.
764
6
,
Guatemala
Ml
GP
34
21)
it
37
99
720.9 1,440.2
772.8
.
1
390
6
,
__
_
Honduras
MILGP
16
7
(1
4
27
---------- 576.0
,
.
657
0
,
____
India
008
6
4
l1
3
13
_- 273.0
----
____-
_
.
2)11
0
,
.
Indonesia
DLG
4
2
2
7
14
150.0 176.2
193.5
.
1)1
9
,
______
ran
ARMISH MAAG
1
21
2
20
64
1,113.4 849.3
790.8
.
849
3
.
_
Italy, MAAG__ __
114
7
58
4
15
2
39
3
226
16
937.9 8,350.2
1,
003.2
.
1, 124. 8
apan
MDAO
7
248.6 384.3
247.8
318.7
, __-...
J
ordan
DAO
A
0
5
6
18
168.2 279.7
283.6
1115
4
,
ug____
Korea
JUStv1AG
3
2
0
3
8
105.1 74.0
57.7
.
74
0
,
_
Liberia
LIBMISH
204
202
55
132
593
3,360.7 9,284.1
3,
008.5
.
7
118
2
,
-___
MUSLO
Morocco
12
6
C
5
23
323.4 387.2
517.6
,
.
3)8
8
___._._
,
Netherla
ds
MAAG
10
11
3
6
30
219.5 640.9
341.6
.
6i 0
4
n
,
..__ _
Ni
Ml
6
2
0
5
13
99.2 194.4
117
0
.
190
3
caragua,
l!3P
7
6
0
2
15
317
0
-----
.
.
412
0
Nigeria, DAD Aug_
-_ -.---
Narwa
MAAG
1
0
1
1
3
.
24.2
.
17
1
y,
.___
Pakistan, 006
5
4
1
3
1
0
5
6
12
13
112.5 196.5
21
110.6
.
187.9
fmama,Ml)GP____ .__
Para
u
MILGP
5
3
1
1
10
9.0 159.3
---------- 240.0
127.3
--
-
153.3
265
0
g
ay,
----- _ ___
Peru
MAAG
10
5
0
3
18
_________ 515.0
-
------
____
.
473
0
,
_
Phili
i
es
MAAG
3
3
0
3
9
73.3 315.0
______
78.3
.
315
0
pp
n
,
______-__
P
t
l
MAAG
36
13
8
6
63
368.8 979.8
369
8
.
961
6
or
uga
,
_ -__ _ . _ 8
Saudi Arabia, USMTM- --- 67
3
50
3
0
7
6
21
123
168.0 289.2
268
7
.
166.6
.
289.2
Spain, JUSMG--illAAG__30
3
15
19
72
.
2,635.6
265
6 731
1
282.2
265
3,12:3.7
Taiwan. NiAAC
nn
.
.
.4
774.6
n
Tiia,UUSNUIG__ -
Tuis
LOL
150
108
2
l
261
1,014.4 4,471.5
1,014.4
4,00:
1
a__T - ._
ey.JIISUtn7
Tur
r
key in
8
on
6
0
3
17
211.6 352.8
193.7
.
343.8
Uruguay,MILGP
9
3
0
?5
jj
nnn.u a,ooaa
1,sa/.1
3,55x..3
._ ___ -, --
Voanruela
MILGP
26
9
1
3
389.0
----------
326.0
,
__._
lave
11
on
39
,cr 899.0
949.0
Total-- - ---- - 1,2=15
828
198
578
2,849
14, 924.0 53, 210.1
15;801.2
50, 030.6
Sllbscetion (b) limits the number of military attaches that Call be
ll.ssigned to a U.S. diplomatic mission. It provides that on and a.ftE;r
July 1., 1973, the total number of military attaches assigned to the
United States diplomatic mission shall not exceed by more than 25
percent the total number of military attaches authorized to be assigned
to that miss;ioll on June 30, 1973. The purpose of this provision is to
prevent the ballooning of the size of military attache groups as the
ntiiitary missions orid groups tire phased out and their residual func-
tions assumed by attaches.
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33
Section 2502. Authorizing military assistance advisory groups and
missions
This section requires that on and after July 1, 1977, no military
assistance advisory group, military mission, or other such organiza-
tion of the United States Government in a foreign country shall be
established or continued unless the group, mission, or organization is
authorized by law specifically for that country and the country agrees
to pay the entire costs for the operation of the group or mission.
Section 2701. General authority
This section provides the general authority for the President to
provide supporting assistance to foreign countries in cases in which
important security interests of the United States are involved.
Section 2702. Authorization of appropriations
Subsection (a) authorizes the appropriation to the Secretary of
State of $95,000,000 for fiscal year 1974 for supporting assistance to
be distributed as follows :
Israel.---------------------------------------------------------
$50, 000, 000
Jordan -------------------------------------------------------
35,000,000
Thailand -----------------------------------------------------
7,000,()00
Spain
--------------------------------------------------------
3,000,000
Total---------------------------------------------------
95,000,000
This compares as follows with the fiscal year 1.973 program and
the I4'xecutive Branch request for fiscal year 1974:
Fiscal ?9 e7r
Request
fiscal yea974r
1
S.1443
Supporting assistance:
1. Is rael -----------------------------------------------------
50
25
50
2.Jordan---------- -------- -----------------------------------
50
65
35
3. Thailand-------------------------------------------------
13
15
7
4. Spain -----------------------------------------------------
3
3
3
5. Malta -----------------------------------------------------
14
9
----------- ---
6. U.N.-Cyprus----------------------------------------------
2
4
--------------
------------------
Total supporting assistance outside Indochina---------------- 149 100 95
Subsection (b) prohibits the funding of any police training or
related program for a foreign country trough appropriations made
available pursuant to this or any other act. Both training in the United
States and in foreign countries is prohibited. The prohibition is meant
to cover all advisory or training pro ;rams involving all phases of
law enforcement, including prison administration. United States par-
ticipati_on in tho highly sensitive area of public safety and police
training unavoidably invites criticism from persons who seek to iden-
tify the United States with every act of local police brutality or
oppression in any country in which this program operates. It matters
little whether the charges can be substantiated, they inevitably stigma-
tize the total United States foreign aid effort. In undeveloped areas of
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the world, the costs of public safety programs are better left to be
underwritten from local resoitrees and the United States assistance
effort directed toward less sensitive areas of social or economic
(levelopment.
We have troubles enoug:'_'1 with police/community relations in. our
awn society, The Committee believes that our government's efforts
would be better directed tc this, and our own crime problem, rt.ther
than trying to teach foreigners how to run their police departments.
The following table giv(s information concerning police training
assistance, rograms proposed for fiscal year 1974 by the Executive
Rr.u)ch:
1972 1973 1974
actual estimated Request
Supporting assistance funding _______________-______-_------- $14,077 $10,884 $4,215
Vietnam ---- --------------------------------------------------------- 8,948 6,762 -------------
Thailand____.--------- ----------------------- -_------------- 4,773 3,660 3,755
Laos- . ------------------------------ ------------ ------ 356 462 460
Nigeria------------------------------------------------------ ------ ----------- r(3,400)---------------------------
Technical ass,stance ruuding:
Asia---------------- ---------------------------------- 1,003 530 100
Korea --------------------- -------------- 2 (17)---------- -----------------
Pakistan--._-------------------------------------------- 75 ----------------- ---
Philippines --------- ------------ -------------- 958 530
Saudi Arabia-------- -------------------------------- (') (s) (3)
Latin America ---------- -_-_______ ___________________ 3,023 2,566 2162
Bolivia_ ------ ------------- ------- ----------
Brazir-_ ------------
Colonrbia-____..--------------._-_____.____ ----- -________
Costa Rica --- ------------------------ --------------
Dominican Republic __----------------------- --------------
Ecuador ----- - -------
El Salvador__ ______________________ ----------- .---- ______
Guatemala _ _ _ --------------------_..
Guyana. .-__ --- - ----------- ----------------------
Honduras _ ----- -_____________-
----------------
Jamacia - --------- - -------------
Nicaragua- - - - - - - - - - - - - - - - - - - - ------------
Venezuela ---- _ ------ ----- ------------ ----
Africa regional training. ------ ________________________. _
Ghana . _--_.------- ...------------ --------------------
Liberia-------- ---------------?
Tunisia-_ __ _.-_.------------- -_-.___.-_-___-_____
Zaire----- _.. ----- ------ ---------------- ----------
201 211 112
137 ---------- ------------ ---
347 355 375
150 123 100
282 50 --------------
192 216 190
65 57 53
456 490 289
71 -------------------------
182 125 146
94 85 90
107 210 ?00
218 189 180
252 210 200
269 245 227
206 210 200
131 195 100
178 187 --------------
131 ---------------------------
652 665 685
Grand total --------------- ________________-___- ___________ 19,516 15,237 7,462
(3,417)
I Supporting assistance loan.
Charges to mission's administrative cost.
Self-funded
Project under review for possible increase in funding.
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35
PART IV.-MISCELLANEOUS PROVISIONS CHAPTER 31
GENERAL LIMITATIONS-TRANSFERS OF VESSELS AND BOATS
Section, 3101. This section requires that no vessel or boat of the
United States Goaernment may be, sold, loaned, leased, given, or trans-
ferred by any other means to a foreign country or international or-
ganization except in accordance with the provisions of this Act. In
the case of the transfer of any battleship, aircraft carrier, cruiser, de-
stroyer, or submarine, the transfer must be specifically authorized by
law.
Under current practice ships and vessels are transferred by loan,
lease, or sale to foreign countries under a number of different au-
thorities. This provision lvill insure that all transfers are under the
authority of the new act. A recent General Accounting Office investi-
gation for the Committee revealed that many naval vessels are. leased
to foreign countries under a law not related to foreign assistance, 10
U.S.C. 2667. This statute was enacted in 1947 for the primary purpose
of authorizing the lease of defense plants to private commercial inter-
ests. The General Accounting Office recommendation on the problem
was that :
To preclude providing defense articles to foreign countries
under section 2667, we recommend that the Committee con-
sider specifying in legislation that military assistance by
grant, lease, loan, or other transfer be authorized only under
the Foreign Assistance Act or successor legislation, except
when another law expressly authorizes the transfer.
Following is a list of all naval vessels now out on loan or lease to
foreign countries and the authority under which the loan or lease was
made :
U.S. ships on loan/lease to foreign countries as of Mar. 21, 1973
Country and ship
Argentina:
lleermann (DD-532) ------------------
Doortch (DD--670)-------------------
Stembel (DD--644)---------------------
APED--23-----------------------------
YTL-426-----------------------------
YTL-441---------- -------------------
YTL-445-----------------------------
YTL-443-----------------------------
YTL-444-----------------------------
YTL-448-----------------------------
ATF-11001---------------------------
ATF-G001---------------------------
ATA-187-----------------------------
ATA-210-----------------------------
Brazil :
Plaice (SS-390)-----------------------
Guest (D-D-472) ----------------------
Bennett (DD-473) --------------------
Public Law 83-532.
Public Law 85-532.
Public Law 85-532, extended
Public Law 90-224.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
Public Law 85-532, extended
Public Law 90-224.
Public Law 85-532, extended
Public Law 88-437.
Public Law 85-532, extended
Public Law 88-437.
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U.S. ships on loan/leas.: to foreign countries as of Mar. 21, 1973
(,on nlr,j and Alp
Brazil---Continued
Cushing (Dl)-797)-------- . -
Publi
L
85
3
_ -
----------
Bailey (DD-556)------------ ---------
YFT
c
aw
-
32.
Public Law 85-632.
-903---_-_ --- --- ---------
10 U.S.C. 2667.
ARB-12_-_
10 U.S.C. 2667.
Spot (SS-413)-_-----------------------
W
Public Law 90-224.
adlei? L. (D1)-689)__.-------------- ----
R
Public Law 85-532.
eek (Dl) 804)------------------
Public Law 85-532
extended
,
Public Law 90-224.
ARD-32--_
LS ML1-444._-
AO(x-8-___
Cambodia:
10 U.S.C. 2667.
l0 U.S.C. 2667.
10 U.S.C.2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
Y1)--220--------------------- ---- 503 FAA 61.
AFDL 11_. _ _ _ 503 FAA 61.
FAA
--
6
1.
--------------- wu
YT1.
_ -------------__-- 503 FAA 61.
YI,'NI)-6. _- _
YF I4-443 - ..
---------------
ATA-209
----------
A 'A-184_-_-_-__
63-f1; hydro;ound boat (C-581;6) __ ----
Costa Rica: 524t. hvdrosound boat ((__30407)_
D
enmark:
YO--22fi-_. ---_._
YO-229
Dominican R,epu.blic:
YO-213
YO-215---------
YT1,--600_..- _ _
ATA--208_____
ATF--72__ - -
Ecuador:
AN-27_ -----
ARD-17-_._
ATF- u,-, -
YE-:4-_ - --
YW-131 _--
API) fit;
PC 1+;-846
_
----------
PCE 874_--_--
:1 Salvador: 52-ft. by drosonOd boat (C--30412)_
Ethiopia: AV13-451
Public Law 85-532.
Public Law 90--224.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
503 FAA 61.
503 FAA 61.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
MSA 1951.
MSA 1951.
10 U.S.C. 2667.
MSA 1951.
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U.S. ships on loanJlease to foreign countries as of Mar. 21, 1973
Country and ahip
Germany:
Ringgold (DD-500) --------------------
Wadsworth (DD-516) ------------------
Claxton (DD-571) ---------------------
D D-572)----------------------
Dyson (DD-572) ----------------------
Public Law 85-532.
Public
Public Law 85-532.
Public Law 85-532.
Public Law 85-532, extended
Public Law 88-437.
Greece:
Lapon (SS-260)-----------------------
Public Law 83-188, as amended
by Public Law 84-948 and ex-
tended by Public Law 90-224.
Public Law 87-387, extended
Public Law 91-682.
Charrette-----------------------------
Public Law 85-532.
Aulick (DD-569)----------------------
Public Law 85-532.
Connor (DD-582)---------------------
Public Law 85-532.
Hall (DD-583) ------------------------
Public Law 85-532, extended
Public Law 88-437.
Brown (DD-546) ----------------------
Public Law 87-387.
Bradford (DD-545)--------------------
Public Law 87-387, extended
Public Law 90-224.
LSD-20------------------------------
10 U.S.C. 2667.
LST-1076----------------------------
10 U.S.C. 2667.
A GOR-1-----------------------------
10 U.S.C. 2667.
MSL-33------------------------------
10 U.S.C. 2667.
MSL-35------------------------------
10 U.S.C. 2667.
MSL-39------------------------------
10 U.S.C. 2667.
MSL-40------------------------------
10 U.S.C. 2667.
YT M-767----------------------------
10 U.S.C. 2667.
AO G-11------------------------------
10 U.S.C. 2667.
Guatemala: YR-40-----------------------
10 U.S.C. 2667.
Haiti: AN-89------------------------------
MSA 1951.
Indonesia:
LST-601--------- -------------------
10 U.S.C. 2667.
LST-839-----------------------------
10 U.S.C. 2667.
AD-31-------------------------------
10 U.S.C. 2667.
MSC-190-----------------------------
10 U.S.C. 2667.
1VISC-191------- ----------------------
10 U.S.C. 2667.
MSC-1.92-----------------------------
10 U.S.C. 2667.
MSC-193-------------- -------------
10 U.S.C. 2667.
MSC-195-----------------------------
10 U.S.C. 2667.
MSC-196-----------------------------
10 U.S.C. 2667.
ARL-30------------------------------
503 FAA 61.
35 ft. personnel boat (C-25385)---------
10 U.S.C. 2667.
YF U 56------------------------------
503 FAA 61.
YF U 68-------------------------------
503 FAA 61.
Iceland: 52-ft. hydrosound boat (C-30411)_--
10 U.S.C. 2667.
Iran :
Ait-13-------------------------------
10 U.S.C. 2667.
ARD-29-----------------------------
10 U.S.C. 2667.
Italy :
Barb (SS-220) ------------------------
Public Law 83-188.; as amended
by 84-948 and Public Law
86-57 extended by Public Law
88-437.
Dace (SS-247) ------------------------
Lizzardfish (SS-373) -------------------
Capitaine (SS-336) --------------------
Besugo (SS-321)-----------------------
Pickerel(SS-524)----------------------
Volador (SS-490)----------------------
Extended Public Law 88-437.
Public Law 85-532, extended
Public Law 88-437.
Public Law 89-324.
Public Law 89-324.
Public Law 92-270.
Public Law 92-270.
S. Rept. 93-189-6
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Coacntry rued ship
Italy--Continued
AKA-91-:-_ ___------
ATF-SL-----------------.-
LST-1175------------------
Japan:
Leary (DD-664)--------------- .-----.---
Amick (D1?;-168) ---------._---.-----.---
Atherton (DE-169)--------------------
Korea :
Halsey Powell (DD-686) ---------------
Ilickox (DD--673)--------_.------------
Erben (I)1)-631)--------------_
Muir (DD-770)----------- ------------
Sutton (DE-771)----------------
ILilt (1)E-706)------------------------
AK L-10------------------------------
AKL-35._- - _ -----
AKL-170---------- --
AP D-128----------- -----------------
A1(,L-15-------------------------------
LSM-17------------------------------
LSM-19- - ----------------------------
LSM-30--------------------------- ---
LSM-54------------------------ ------
LSM-57----------- ------------------
LSM-84--... -----------------
LSM-96--.----------------------------
LSM-268---------------------- - -----
LSM-316'------------------------------
LSM-462- ----------------- ----
LSM-546---------------------- -------
LST-218--------------- -----
LST-227-- --------?---------------- ---
LST-288------------------------------
LST-1010--------------------- -------
MSCO-8_--___________________________
MSCO--22 _
MSCO-27----------------------------
PCE-873_ ---------------------------
P('],;--892 - ----- - ------- ---
PCE-896------------------ ---- ---- ----
PC1i?-898- - -------------------------
YO-~59 -------- ----------------- ---
Chevalier (D1)-805)-----------_
PP3.----------------------
AKI-28------ - -----------
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
Public Law 85--532, extended
Public Law 88-437.
Public Law 85-532, extended
Public Law 88--437.
Public Law 83-188, extended
Public Law 88--437.
Extended Public Law 88-437.
Public Law 90-224.
Public Law 90-224.
Public Law 87-387, extended
Public Law 90--224.
Public Law 83- 188, extended
Public Law 90224.
Public Law 83-188, extended
Public Law 90 -224.
Public Law 87-397, extended
Public Law 90--224.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
Public Law 92-270.
Public Law 92-270.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
Sec Def Memo, 1 Sep 50.
10 U.S.C. 2667.
10 U.S.C. 2667.
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U.S. ships on loan/lease to foreign countries as of Mar. 21, 1973
Country and ship Authority
Malaysia: LST-838------------------------ 10 U.S.C. 2667.
Malta :
PCF-C6823--------------------------- 10 U.S.C. 2667.
PCF-C6824--------------------------- 10 U.S.C. 2667.
Mauritius: 26-ft patrol boat----------------- 10 U.S.C. 2667.
Mexico :
YPD-43----------------------------- 10 U.S.C. 2667.
YD-180------------------------------ 10 U.S.C. 2667.
YD-203------------------------------ 10 U.S.C. 2667.
YD-156------------------------------ 10 U.S.C. 2667.
YD-157------------------------------ 10 U.S.C. 2667.
YD-183------------------------------ 10 U.S.C. 2667.
ARD-15----------------------------- 10 U.S.C. 2667.
LST-1077---------------------------- 10 U.S.C. 2667.
AFDL-28---------------------------- 10 U.S.C. 2667.
Nicaragua:
T-AGOR-5-------------------------- 10 U.S.C. 2667.
52-ft hydrosound boat (C-30408) -------- 10 U.S.C. 2667.
30-ft motor whale boat (30N3701)-_----- 10 U.S.C. 2667.
Pakistan: AO-132------------------------- 503 FAA 61.
Paraguay:
AFDL-262--------------------------- 10 U.S.C. 2667.
YR-37------------------------------- 10 U.S.C. 2667.
YTL-211----------------------------- 10 U.S.C. 2667.
YFB-82------------------------------ 10 U.S.C. 2667.
YFB-86------------------------------ 10 U.S.C. 2667.
Peru:
Benham (DD-796) -------------------- Public Law 85-532, extended
Public Law 88-437.
Isherwood (DD-520)------------------- Public Law 85-532, extended
Public Law 90-224.
AFDL-33---------------------------- MSA 1951.
MSF-380----------------------------- MSA 1951.
MSF-382----------------------------- MSA 1951.
ARD-8------------------------------ 10 U.S.C. 2667.
ATF-90------------------------------ 10 U.S.C. 2667.
YW-122------------------------------ 10 U.S.C. 2667.
YR-59------------------------------- 10 U.S.C. 2667.
Philippines:
Booth (DE-170) ---------------------- Public Law 89-324.
AFDL-20 ----------------------------- 503 FAA 61.
LST-222----------------------------- 503 FAA 61.
LST-488----------------------------- 503 FAA 61.
LST-546----------------------------- 503 FAA 61.
ARL-38------------------------------ 10 U.S.C. 2667.
AFDL-44_____---- _------------------ 10 U.S.C. 2667.
AKL-AA (USCGS Nettle) ------------- 10 U.S.C. 2667.
YO G-73----------------------------- 10 U.S.C. 2667.
YCV-7------------------------------- 10 U.S.C. 2667.
LST-515----------------------------- 10 U.S.C. 2667.
LST-825----------------------------- 10 U.S.C. 2667.
LST-905----------------------------- 10 U.S.C. 2667.
YTL-427----------------------------- 10 U.S.C. 2667.
WAK-186---------------------------- 10 U.S.C. 2667.
MSO-444----------------------------- 10 U.S.C. 2667.
MSO-436----------------------------- 10 U.S.C. 2667.
YD-191------------------------------ 10 U.S.C. 2667.
Portugal: T-AGS-25 ----------------------- 503 FAA 61.
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Coopi.rd eaad ship
Republic of China:
Benson (I)D-421)---------------------
11. P. Jones (DD-427)- --------------
Rodman (.I)D-456)__---------_--_-__-
Plunkett (DD-431)__-____--_-__-__-___
Kinberh (DI)-521)___-______________
Yarnall (DD-541)_____________________
Riley (DE-579_)
---------------------
AOG-57-------------------------------
LSD-8 ------------------
LST-735_:----------------- -----
PC 1087-----------------------------
P(' 1142_-- -------------------
I'C 1169-----------------------------
ATA-196 -,-----------------------------
AKL 12-----------------------------
AKL-35- ---------------------------
A IA-186_.-___________________________
Ali0--22-----------------------------
A(-(>-53- ---------------------------
A0G--7_- -----------------------------
Singapore: LST-836------------------------
Spain:
Iira.ken (SS-370)______________________
Fur-e+ (DD-882)_______________________
J J. A. Greene (DD-711)________________
Baaig (SS-385)------------------------
i11SO--432-----------------------------
!ISO--491-----------------------------
LST-1168------------------- ----------
LST--1156----------------------------
MS(_1--473-----------------------------
LS'1`-1151----- ------------------------
LS1)-25------------------------------
LC1J-1471----------------------------
LCIT-1491----------------------------
St. Kitt--Nevis-Anguilla: LCU-1609----------
Thailand:
lleminger(DE-746)--------------------
1. 1141 ---------------------------
P( NI-79-----------------------------
Turkey:
bda()iro (55-376)--------------------
11cro (SES-378)______________.--
Pomfret ;SS-391)__-______-_--_________
Thornbaek (SS-418)_-_______.-_________
I?nternedor (SS--340)--_-___-_.--_____--_
Threadfin (SS-410)---____--_.-_________
P(:--97----.---------------------------
AIID-12-----------------------------
ATF-75__.----------------------------
APL-47__..----------------------------
Public Law 83-188, amended
by Public Law 86-57.
Public Law 83--188, extended
by Public Law 88-437.
Public Law 83-183, amended
by Public Law 86-482, ex-
tended by Public Law 88-437.
Public Law 85-532, extended
by Public Law 88-437.
Public Law 89-398.
Public Law 90-224.
Public Law 89-398.
503 FAA 61.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
MSA 1951.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
Public Law 85-532, extended
Public Law 88-437.
Public Law 92-270.
Public Law 92-270.
Public Law 92-270.
10 U.S.C. 2667.
10 U.S.C. 2667.
503 FAA 61.
503 FAA 61.
503 FAA 61.
503 FAA 61.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
Public Law 85-532, extended
Public Law 88-437.
10 U.S.C. 2667.
10 U.S.C. 2667.
Public Law 85-532.
Public Law 85-532, extended
Public Law 88-437.
Public Law 91-682.
Public Law 91-682.
Public Law 92-270.
Public Law 92-270.
503 FAA 61.
10 U.S.C. 2667.
10 U.S.C. 2667.
10 U.S.C. 2667.
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41
U.S. ships on. loan/lease to foreign countries as of Mar. 21,1973
Country and ship Authority
Uruguay:
MSF-59------------------------------ 1.0 U.S.C. 2667.
LC M-6------------------------------ 10 U.S.C. 2667.
LCM-6----------------------------- 10 U.S.C. 2667.
Venezuela:
AN-82------------------------------- 10 U.S.C. 2667.
AN-90------------------------------- 10 U.S.C. 2667.
AN-91 ------------------------------- 10 U.S.C. 2667.
YR-48------------------------------- 10 U.S.C. 2667.
YTB-515----------------------------- 10 U.S.C. 2667.
YTM-193---------------------------- 10 U.S.C. 2667.
ARD-13----------------------------- 10 U.S.C. 2667.
YT M-385---------------------------- 10 U.S.C. 2667.
ARL-39----------------------------- 10 U.S.C. 2667.
ATF-163----------------------------- 10 U.S.C. 2667.
Vietnam :
Camp (DER-251)--------------------- Public Law 91-682.
Forester (DER-334) ------------------- Public Law 91-682.
LST-603----------------------------- 10 U.S.C. 2667.
LST-509----------------------------- 10 U.S.C. 2667.
LST-848----------------------------- 10 U.S.C. 2667.
LST-786----------------------------- 10 U.S.C. 2667.
LST-821 ---------------------------- 10 U.S.C. 2667.
ARL-23------------------------------ 10 U.S.C. 2667.
PCER-853--------------------------- 10 U.S.C. 2667.
IX-305------------------------------ 10 U.S.C. 2667.
YD-230------------------------------ 10 U.S C. 2667.
Section 3102. Use of United States Armed Forces
This section states that the making of any sales, credit sale, or
guaranty, or the furnishing of any assistance, under the Act shall not
be construed as creating .a new commitment or as affecting any exist-
ing commitment to use the Armed Forces of the United States for the
defense of any foreign country.
This provision is a restatement of section 650 of the Foreign Assist-
ance Act of 1961, as amended.
Section 3103. Failure to pro vide requested in formation
Section 3103 requires that information concerning the programs
carried out under this Act be provided, upon request, to appropriate
committees of Congress or the General Accounting Office or funds for
the program or activity involved will be cut off. It is a modification of
section 634(c) of the Foreign Assistance Act of 1961, as amended. Its
purpose is to insure that Congress has available to it, from the Execu-
tive Branch, sufficient information on which. to make rational judg-
ments concerning the funding and operation of programs under the
Act.
Specifically, it requires that no funds appropriated under the Act
shall be available after the expiration of a 35-day period which begins
on the date the General Accounting Office or a committee of the Con-
gress charged with considering legislation, appropriations or expendi-
tures under this Act has delivered to the office of the head of any
agency carrying out that provision a written request that it be fur-
nished any document or other material in its enstody or control relat-
ing to programs under the Act until there has been furnished to the
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Cou-unittee or the General ~,ecounting Office the document or other
material so requested.
The provision shall not apply to any commrurication that is directed
by the President to an officer or employee of any agency concerned
or to any coanmintication directed by an officer or employee to the
President. This exemption, however, is intended strictly for private
and colllidential communication; between the President and officials
ini?olVed in administering the programs authorized by this Act and
shall trot, be used as a device to avoid a Congressional or General
Accounting Office request :tor information simply by labeling the
material sought as a communication to or from the President.
Sect-;.'o'n 3101'. Pr?ocurem-e'lit
Section 3104 is adopted from the existing provisions of the Foreign
Assistance Act of 1961, as amended, pertaining to procurements.
Subsection (a) provides Cult, funds made available may be used for
procutcnneilt outside the United States only if the President deter-
mines that such procurement uill not result in adverse effects upon
the economy of the United States or the industrial mobilization base,
with special reference to my areas of labor surplus or to the net
position of the United States Ill its balance of payments with the rest
of the world, which outweigh the economic or other advantages to the
United Suites of less costly procurement outside the United States,
and only if the price of any commodity procured in bulk is lower than
the market price, prevailing in the united States at the time of pro-
curement, adjusted for differences in the cost of transportation to
destination. quality, and terms of payment.
Sut,eci.ion (b) provides that no funds made available under the. Act
shall be used for the purchase in bulk of any commodities at prices
higher than the market price prevailing in the United States at the
tune of purchase, adjusted for differences in the cost of transportation
to destination, quality, and'erms of payment.
Subsection (c) states that in providing for the procurement of any
agricultural commodity or product available for disposition under the
Ag,ricriltural Trade Development and Assistance Act; of 1954, as
amended, for transfer by grant under the new act to any recipient
(omitry in accordance with its requirements, the President shall,
insofar as practicable, authorize the procurement of the commodity
only within the United States except to the extent that the commodity
is not ivailable in the United States in sufficient, quantities to supply
elnei ency requirerne.lits of recipients under this Act.
Subsection (d) relates to marine insurance. In >rovidin!Lr assistance
in the i:rocument of commodities in the United States, dollars shall
be ioade available for nnarnte insurance on such commodities ;where
such irisuriance is O aced on
Sec. 650. Use of United States. Armed Forces.-The furnishing
of economic, military, or other assistance under this .Act, shall not be
construed as creating it new commitment or as affecting any existing
commitment to use Armed Forces of the United States for the defense
of any foreign country.
*
Sec. 654. Presidential Findings and Determinations.--(a) In
any case in which the President is required to make a, report to the
Congress, or to any committee or officer of either House of Congress,
concerning any finding or deter mi~natiou under any provision of this
Act, the Foreign Military Salei Act, or the Foreign Assistance and
Related Programs Appropriation Act for each fiscal year that, finding
or determination shall be reduced to writing and signed by the;
President.
(b) No action shall be taken pursuant to any such finding or deter-
ndnation prior to the date on which that finding or determination has
been reduced (c., writing and sigrced_ by the President.
(c) Each such finding or determination shall be published in the
Federal Register as soon as pi rctic-able. after it. has been reduced to
writing and signed by the President. In any case in which the Presi-
dent concludes that such publicati(n would be harmful to the, national
security o'. theUnited States, only a statement that a determination of
finding has been made by the Pi esrdent, including the name and section
of the Act under which it. was made. shall be published.
(d) No committee or officer of either House of Congress shall ba
denied any requested information relating to any finding or determina
tion which the President is required to report to the Congress, or to
any committee. or officer of either house of Congress, under any pro-
Vision of this Act, the Foreign -.Y ilitary Sales Act, or the Foreign
Assistance and Related Programs Appropriation Act for each fiscal
year, even. though such report has not yet been transmitted to the ap-
propria.te. committee or officer of either house, of Congress.
Sec. 657. Annual Foreign Assistance Report.-(a) In order
that the Congress and the American people may be better and more
currently informed regarding tli volmne and cost of assistance es-
tended by the United States Government to foreign countries and
international organizations, and in order that the Congress and the
American people may be better informed regarding the sale of arms
to foreign countries and international organizations by private in-
dustrv of the United States, not i_ater than December 31 of each year
the President shall transmit. to the Congress an annual report, for the
fiscal year ending prior to the fiscal year in which the report is trans-
initted, showing-
(1) the aggregate dollar v ahre of all foreign assistance pro-
vided by the Crated States Government by any means to all for-
eign corurtries and irrternhLtional organizations, and the aggregate
dollar value, of such assist wee by category provided by the United
States GoN'ernrnent to eac'i such country and organization, during
that fiscal year;
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(2) the total amounts of foreign currency paid by each foreign
country or international organization to the United States Gov-
ernment in such fiscal year, what each payment was made for,
whether any portion of such payment was returned by the United
States Government to the country or organization from which
the payment was obtained or whether any such portion was trans-
ferred by the United States Government to another foreign coun-
try or international organization, and, if so returned or trans-
ferred, the kind of assistance obtained by that country or organi-
zation with those foreign currencies and the dollar value of such
kind of assistance;
(3) the aggregate dollar value of all arms, ammunitions, and
other implements of war, and the aggregate dollar value of each
category of such arms, ammunitions, and implements of war, ex-
ported under any export license, to all foreign countries and inter-
national organizations, and to each such country and organiza-
tion, during that fiscal year ; and
(4) such other matters relating to foreign assistance provided
by the United States Government as the President considers ap-
propriate, including explanations of the information required
under cl arses (l)-(3) of this subsection.
(b) All information contained in any report transmitted under this
section shall be public information. However, in the case of any item
of information to be included in any such report that the President,
on an extraordinary basis, determines is clearly detrimental to the
security of the United States, he shall explain in a supplemental re-
port why publication of each specific item would be, detrimental to the
security of the United States. A supplement to any report shall be
transmitted to the Congress at the same time the report is transmitted.
(c) If the Congress is not in session at the time a report or supple-
ment is transmitted to the. Congress, the Secretary of the Senate and
the Clerk of the House of Representatives shall accept the report or
supplement on behalf of their respective House of Congress and pre-
sent the report or supplement to the two Houses immediately upon
their convening.
(d) For purposes of this section-
(I) "foreign assistance" means any tangible or intangible item
provided by the United States Government under this or any
other law to a foreign country or international organization, in-
cluding, but not linuted to, any training, service, or technical ad-
vice, any item of real, personal, or mixed property, any agricul-
tural commodity, United States dollars, and any currencies owned
by the United States Government of any foreign country;
(2) "provided by the U-iited States Government" includes, but
is not limited to, foreign assistance provided by means of gift,
loan, sale, credit sale, or guaranty; and
(3) "value" means value at the time of transfer except that in
no ease shall any commodity or article of equipment or material
be considered to have a value less than one-third of the amount
the United States Government paid at the time the commodity or
article was acquired by the United States Government.
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The Foreign Military Sales Act, as amended
Public Law 90429 [H.R. 15681], 82 Stat. 1320, approved October 22, 1968, as
amended by Public Law 91-672 [H.R. 156281, 84 Stat. 2053, approved January 12,
1971, and Public Law 92-226 [Foreign Assistance Act of 1971; S. 2819], 86 Stat.
20, 32, approved February 7, 1972
AN ACT To ci'n iidate and revise foreign assistance legislation relating to
reimbursable muitir;y exports.
it " or,-IPd hq the rSenafe and Idou$e of l? pve.tieretat yes of 6'w
united ~titate.a Of A;aea era in. !!oiJgre,eti (Jnemh7ed, That this Act rnEev
cited as "'1'hc Foreign Military Sales Act".
Chapter l--Foreign and National Security Policy Objectives
and Restraints
Sec. 1. The Need for IntE?rnational Defense Cooperation and
Military Export Controls. -rAs declared by the Congress in the .arms
Control and Disarnia,ment Acr, an ultimate goal of the l.7nited States
continues to be a world which is free from the scourge of war and the
dangers and burdens of arman cnfss; in which the use of force has been
subordinated to the. rule of law:, and in which international adjrrsl"
bents to ,L changing world are achieved. peacefully. In furtherance of
that goal, it -remains the policy of the United States to encourage
regional arms control and disarmament agreements and to discourage
:trims races.
The Congress recognizes, however, that the United States and other
lice ;rnd independent countries continue to have valid requirements for
effective. and mutually beneficial defense relationships in order to
maintain and foster the env:irolm-nt of international peace and seen-
rty essential to social. economic, and political progress. Because of the
-,rowing cost and complexity of d 4ensc equipment, it is illcreasingrly
difficult and uneconomic for any country, particularly adevelopiug
cornrt.ry, to till all of its legitimate defense requirements from its own
design and production base. TI e need for international defense coop..
elation among the t Joined States and those friendly countries to which
Ii is allied by mutual defense treaticesis especially important, since the
c ts'ec tiveru?ss of their armed forces to act in concert to doter or defeat
aggression is d-in.ctly related to the operational compatibility= of their
defense egnipme.t.
_lccordingtly, it remains the polit" of the United States to facilitate
tine common defense by entering irrfo international arrangements with
friendly countries which further tll., objective of applying agreed re-
s