§ 2763. — Credit sales.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC2763]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 39--ARMS EXPORT CONTROL
SUBCHAPTER II--FOREIGN MILITARY SALES AUTHORIZATIONS
Sec. 2763. Credit sales
(a) Financing procurement of defense articles and services, and design
and construction services
The President is authorized to finance the procurement of defense
articles, defense services, and design and construction services by
friendly foreign countries and international organizations, on such
terms and conditions as he may determine consistent with the
requirements of this section. Notwithstanding any other provision of
law, and subject to the regular notification requirements of the
Committees on Appropriations, the authority of this section may be used
to provide financing to Israel and Egypt for the procurement by leasing
(including leasing with an option to purchase) of defense articles from
United States commercial suppliers, not including Major Defense
Equipment (other than helicopters and other types of aircraft having
possible civilian application), if the President determines that there
are compelling foreign policy or national security reasons for those
defense articles being provided by commercial lease rather than by
government-to-government sale under this chapter.
(b) Repayment period
The President shall require repayment in United States dollars
within a period not to exceed twelve years after the loan agreement with
the country or international organization is signed on behalf of the
United States Government, unless a longer period is specifically
authorized by statute for that country or international organization.
(c) Interest rate; definitions
(1) The President shall charge interest under this section at such
rate as he may determine, except that such rate may not be less than 5
percent per year.
(2) For purposes of financing provided under this section--
(A) the term ``concessional rate of interest'' means any rate of
interest which is less than market rates of interest; and
(B) the term ``market rate of interest'' means any rate of
interest which is equal to or greater than the current average
interest rate (as of the last day of the month preceding the
financing of the procurement under this section) that the United
States Government pays on outstanding marketable obligations of
comparable maturity.
(d) Participations in credits
References in any law to credits extended under this section shall
be deemed to include reference to participations in credits.
(e) Payments on account of prior credits or loans
(1) Funds made available to carry out this section may be used by a
foreign country to make payments of principal and interest which it owes
to the United States Government on account of credits previously
extended under this section or loans previously guaranteed under section
2764 of this title, subject to paragraph (2).
(2) Funds made available to carry out this section may not be used
for prepayment of principal or interest pursuant to the authority of
paragraph (1).
(f) Audit of certain private firms
For each fiscal year, the Secretary of Defense, as requested by the
Director of the Defense Security Assistance Agency, shall conduct audits
on a nonreimbursable basis of private firms that have entered into
contracts with foreign governments under which defense articles, defense
services, or design and construction services are to be procured by such
firms for such governments from financing under this section.
(g) Notification requirements with respect to cash flow financing
(1) For each country and international organization that has been
approved for cash flow financing under this section, any letter of offer
and acceptance or other purchase agreement, or any amendment thereto,
for a procurement of defense articles, defense services, or design and
construction services in excess of $100,000,000 that is to be financed
in whole or in part with funds made available under this chapter or the
Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.] shall be
submitted to the congressional committees specified in section 634A(a)
of the Foreign Assistance Act of 1961 [22 U.S.C. 2394-1(a)] in
accordance with the procedures applicable to reprogramming notifications
under that section.
(2) For purposes of this subsection, the term ``cash flow
financing'' has the meaning given such term in subsection (d) of section
2765 of this title.
(h) Limitation on use of funds for direct commercial contracts
Of the amounts made available for a fiscal year to carry out this
section, not more than $100,000,000 for such fiscal year may be made
available for countries other than Israel and Egypt for the purpose of
financing the procurement of defense articles, defense services, and
design and construction services that are not sold by the United States
Government under this chapter.
(Pub. L. 90-629, ch. 2, Sec. 23, Oct. 22, 1968, 82 Stat. 1324; Pub. L.
93-559, Sec. 45(a)(2), Dec. 30, 1974, 88 Stat. 1813; Pub. L. 94-329,
title II, Sec. 208(a), June 30, 1976, 90 Stat. 739; Pub. L. 96-533,
title I, Sec. 105(b)(3), Dec. 16, 1980, 94 Stat. 3134; Pub. L. 99-83,
title I, Sec. 102, Aug. 8, 1985, 99 Stat. 195; Pub. L. 100-202,
Sec. 101(e) [title V, Sec. 572], Dec. 22, 1987, 101 Stat. 1329-131,
1329-176; Pub. L. 101-513, title V, Sec. 580, Nov. 5, 1990, 104 Stat.
2045; Pub. L. 104-164, title I, Sec. 102(a)-(c), July 21, 1996, 110
Stat. 1422.)
References in Text
The Foreign Assistance Act of 1961, referred to in subsec. (g)(1),
is Pub. L. 87-195, Sept. 4, 1961, 75 Stat. 424, as amended, which is
classified principally to chapter 32 (Sec. 2151 et seq.) of this title.
For complete classification of this Act to the Code, see Short Title
note set out under section 2151 of this title and Tables.
Amendments
1996--Subsecs. (f) to (g). Pub. L. 104-164 added subsecs. (f) to
(g).
1990--Subsec. (e). Pub. L. 101-513 added subsec. (e).
1987--Subsec. (a). Pub. L. 100-202 inserted sentence at end
authorizing financing to Israel and Egypt for commercial leasing of
defense articles, not including Major Defense Equipment, with exception
for certain aircraft, upon a Presidential determination that there are
compelling foreign policy or national defense reasons for such leasing.
1985--Pub. L. 99-83 amended section generally. Prior to amendment,
section read as follows: ``The President is authorized to finance
procurements of defense articles, defense services, and design and
construction services by friendly foreign countries and international
organizations on terms requiring the payment to the United States
Government in United States dollars of--
``(1) the value of such articles or services within a period not
to exceed twelve years after the delivery of such articles or the
rendering of such services; and
``(2) interest on the unpaid balance of that obligation for
payment of the value of such articles or services, at a rate
equivalent to the current average interest rate, as of the last day
of the month preceding the financing of such procurement, that the
United States Government pays on outstanding marketable obligations
of comparable maturity, unless the President certifies to Congress
that the national interest requires a lesser rate of interest and
states in the certification the lesser rate so required and the
justification therefor.''
1980--Pub. L. 96-533 substituted ``defense articles, defense
services, and design and construction services'' for ``defense articles
and defense services''.
1976--Par. (1). Pub. L. 94-329 substituted ``twelve years'' for
``ten years''.
1974--Pub. L. 93-559 incorporated existing provisions in cl. (1) and
added cl. (2).
Effective Date of 1985 Amendment
Amendment by Pub. L. 99-83 effective Oct. 1, 1985, see section 1301
of Pub. L. 99-83, set out as a note under section 2151-1 of this title.
Effective Date of 1976 Amendment
Section 208(b) of Pub. L. 94-329 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply with respect to
financing under agreements entered into on or after the date of
enactment of this Act [June 30, 1976] for the procurement of defense
articles to be delivered, or defense services to be rendered, after such
date.''
Delegation of Functions
Functions of President under this section and section 580 of Pub. L.
100-461, see Similar Provisions note below, except those functions
relating to determinations of a rate of interest which is less than the
market rate, delegated to Secretary of Defense, to be exercised in
consultation with Secretary of State and Secretary of the Treasury, by
section 1(e) of Ex. Ord. No. 11958, Jan. 18, 1977, 42 F.R. 4311, as
amended, set out as a note under section 2751 of this title.
Similar Provisions
Provisions similar to those in last sentence of subsec. (a) of this
section which were applicable to NATO and major non-NATO allies in
addition to Israel and Egypt were contained in the following
appropriation acts and were not repeated in subsequent appropriation
acts:
Pub. L. 106-113, div. B, Sec. 1000(a)(2) [title V, Sec. 528], Nov.
29, 1999, 113 Stat. 1535, 1501A-90.
Pub. L. 105-277, div. A, Sec. 101(d) [title V, Sec. 529], Oct. 21,
1998, 112 Stat. 2681-150, 2681-178.
Pub. L. 105-118, title V, Sec. 528, Nov. 26, 1997, 111 Stat. 2413.
Pub. L. 104-208, div. A, title I, Sec. 101(c) [title V, Sec. 528],
Sept. 30, 1996, 110 Stat. 3009-121, 3009-149.
Pub. L. 104-107, title V, Sec. 528, Feb. 12, 1996, 110 Stat. 730.
Pub. L. 103-306, title V, Sec. 530, Aug. 23, 1994, 108 Stat. 1635.
Pub. L. 103-87, title V, Sec. 530, Sept. 30, 1993, 107 Stat. 954.
Pub. L. 102-391, title V, Sec. 558, Oct. 6, 1992, 106 Stat. 1676.
Pub. L. 101-513, title V, Sec. 561, Nov. 5, 1990, 104 Stat. 2026.
Pub. L. 101-167, title V, Sec. 571, Nov. 21, 1989, 103 Stat. 1245.
Pub. L. 100-461, title V, Sec. 580, Oct. 1, 1988, 102 Stat. 2268-48.
Section Referred to in Other Sections
This section is referred to in sections 2291c, 2305, 2311, 2321j,
2360, 2761, 2764, 2771, 2774, 2775, 2776, 2777, 2791, 5854, 7432, 7536
of this title.
