Order Code RL30982
CRS Report for Congress
Received through the CRS Web
U.S. Defense Articles and Services Supplied to
Foreign Recipients: Restrictions on Their Use
Updated March 14, 2005
Richard F. Grimmett
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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U.S. Defense Articles and Services Supplied to Foreign
Recipients: Restrictions on Their Use
Summary
In accordance with United States law, the U.S. Government places conditions
on the use of defense articles and defense services transferred by it to foreign
recipients. Violation of these conditions can lead to the suspension of deliveries or
termination of the contracts for such defense items, among other things. On occasion,
the President has indicated that such violations by foreign countries “may” have
occurred, raising the prospect that termination of deliveries to or imposition of other
penalties on such nations might take place. Section 3(a) of the Arms Export Control
Act (AECA) sets the general standards for countries or international organizations
to be eligible to receive United States defense articles and defense services provided
under this act. It also sets express conditions on the uses to which these defense
items may be put. Section 4 of the Arms Export Control Act states that U.S. defense
articles and defense services shall be sold to friendly countries “solely” for use in
“internal security,” for use in “legitimate self-defense,” to enable the recipient to
participate in “regional or collective arrangements or measures consistent with the
Charter of the United Nations,” to enable the recipient to participate in “collective
measures requested by the United Nations for the purpose of maintaining or restoring
international peace and security,” and to enable the foreign military forces “in less
developed countries to construct public works and to engage in other activities
helpful to the economic and social development of such friendly countries.”
Section 3(c)(2) of the Arms Export Control Act requires the President to report
promptly to the Congress upon the receipt of information that a “substantial
violation” described in section 3(c)(1) of the AECA “may have occurred.” This
Presidential report need not reach any conclusion regarding the possible violation or
provide any particular data other than that necessary to illustrate that the President
has received information indicating a specific country may have engaged in a
“substantial violation” of an applicable agreement with the United States that governs
the sale of U.S. defense articles or services. Should the President determine and
report in writing to Congress or if Congress determines through enactment of a joint
resolution pursuant to section 3(c)(3)(A) of the Arms Export Control Act that a
“substantial violation” by a foreign country of an applicable agreement governing an
arms sale has occurred, then that country becomes ineligible for further U.S. military
sales under the AECA. This action would terminate provision of credits, loan
guarantees, cash sales, and deliveries pursuant to previous sales. Since the major
revision of U.S. arms export law in 1976, neither the President nor the Congress have
actually determined that a violation did occur thus necessitating the termination of
deliveries or sales or other penalties set out in section 3 of the Arms Export Control
Act. The United States Government has other options under the Arms Export
Control Act to prevent transfer of defense articles and services for which valid
contracts exist short of finding a foreign country in violation of an applicable
agreement with the United States. These options include suspension of deliveries of
defense items already ordered and refusal to allow new arms orders. The United
States has utilized at least one such option against Argentina, Israel, Indonesia, and
Turkey.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Arms Export Control Act (AECA): Basic Conditions on Use of
U.S.-Supplied Defense Articles and Services . . . . . . . . . . . . . . . . . . . . 1
Purposes for Which Military Sales by the United States Are
Authorized (Section 4 of the Arms Export Control Act) . . . . . . . 2
Presidential Report to Congress on Possible Violations . . . . . . . . . . . . 3
Procedures for Making Foreign Countries Ineligible for Receipt of
U.S. Defense Articles and Services . . . . . . . . . . . . . . . . . . . . . . . 3
Restoration of Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Suspension or Cancellation of Contracts and/or Deliveries by
the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Illustrative Responses of the United States Government to Possible
Violations of Agreements on Use of U.S.- Provided Defense Articles . 5
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indonesia and East Timor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Turkey and the Congressionally-Imposed Embargo . . . . . . . . . . . . . . . 6

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U.S. Defense Articles and Services Supplied
to Foreign Recipients:
Restrictions on Their Use
Introduction
In accordance with United States law, the U.S. Government places conditions on
the use of defense articles and defense services transferred by it to foreign recipients.
Violation of these conditions can lead to the suspension of deliveries or termination
of the contracts for such defense items, among other things. On occasion, the President
has indicated that such violations by foreign countries “may” have occurred, raising
the prospect that termination of deliveries to or imposition of other penalties on such
nations might take place. However, since the major revision of U.S. arms export law
in 1976, neither the President nor the Congress have actually determined that a
“substantial violation” did occur thus necessitating the termination of deliveries or
sales or other penalties set out in section 3 of the Arms Export Control Act. This report
reviews the pertinent sections of U.S. law governing permissible uses of U.S.-origin
defense equipment and services by foreign nations, Presidential and congressional
options for dealing with such violations, and illustrative actions previously taken by
the United States in response to possible violations.
Arms Export Control Act (AECA): Basic Conditions on Use of
U.S.-Supplied Defense Articles and Services
The Arms Export Control Act (AECA), as amended, authorizes the transfer by
sale or lease of United States origin defense articles and services through the
government-to-government foreign military sales (FMS) program or through the
licensed commercial sales process.1 Section 3(a) of the Arms Export Control Act sets
the general standards for countries or international organizations to be eligible to
receive United States defense articles and defense services provided under this act. It
also sets express conditions on the uses to which these defense items may be put.
Section 3(a)(2) of the AECA specifically provides that to be eligible to purchase
defense articles and services from the United States:
...[a] country or international organization shall have agreed not ... to use or permit
the use of [a defense] article or related training or other defense service for
1 The International Security Assistance and Arms Export Control Act of 1976 (P.L. 94-329),
enacted on June 30, 1976, changed the title of the Foreign Military Sales Act (FMSA) of
1968 (P.L. 90-629), as amended, to its present one — the Arms Export Control Act. (22
U.S.C. 2751 et. seq.) All references to the predecessor statute, the FMSA, are legally
deemed to be references to the AECA.

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CRS-2
purposes other than those for which furnished, unless the consent of the President
has first been obtained....
Section 3(c) of the Arms Export Control Act further sets out the circumstances under
which a nation may lose (a) its U.S. Foreign Military Financing, (b) its loan guarantees
for purchases of U.S. defense articles and services, (c) its rights to have previously
purchased U.S. defense articles or services delivered, (d) its rights to have previously
made agreements for the sale of U.S. defense articles or services carried out. Section
3(c)(1)(A) of the Arms Export Control Act stipulates, in part, that:
No credits (including participations in credits) may be issued and no guarantees
may be extended for any foreign country under this Act as hereinafter provided,
if such country uses defense articles or defense services furnished under this Act,
or any predecessor Act, in substantial violation (either in terms of the quantities
or in terms of the gravity of the consequences regardless of the quantities involved)
of any agreement entered into pursuant to any such Act2...by using such articles
or services for a purpose not authorized under section 4 or, if such agreement
provides that such articles and services may only be used for purposes more
limited than those authorized under section 4 for a purpose not authorized under
such agreement....
Section 3(c)(1)(B) of the AECA adds that, under the above conditions: “[n]o cash sales
or deliveries pursuant to previous sales may be made....” Section 3(g) of the Arms
Export Control Act, enacted in November 1999, further requires that:
Any agreement for the sale or lease of any article on the United States Munitions
List entered into by the United States Government after the date of enactment of
this subsection [November 29, 19993] shall state that the United States
Government retains the right to verify credible reports that such article has been
used for a purpose not authorized under section 4 or, if such agreement provides
that such article may only be used for purposes more limited than those authorized
under section 4, for a purpose not authorized under such agreement.
Purposes for Which Military Sales by the United States Are
Authorized (Section 4 of the Arms Export Control Act). The purposes for
which sales of defense articles and services by the United States are authorized are
detailed in section 4 of the Arms Export Control Act. This section of the act states that
defense articles and defense services shall be sold to friendly countries “solely for”:
! “internal security”
! “legitimate self-defense”
! enabling the recipient to participate in “regional or collective
arrangements or measures consistent with the Charter of the United
Nations”
2 Emphasis added. The statute makes clear that any sanctions that may be applied are for
“substantial violation” of an agreement entered into with the United States pursuant to the
AECA or any predecessor Act, and not for a violation of the AECA itself or its
predecessors.
3 Added by Section 1225 of the Security Assistance Act of 1999 (Title XII of H.R. 3427),
enacted by reference in section 1000(a)(7) of P.L. 106-113; 113 Stat. 1526.

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CRS-3
! enabling the recipient to participate in “collective measures requested
by the United Nations for the purpose of maintaining or restoring
international peace and security”
! enabling the foreign military forces “in less developed countries to
construct public works and to engage in other activities helpful to the
economic and social development of such friendly countries.”
It should be stressed that the Arms Export Control Act as amended, the Foreign
Assistance Act of 1961 as amended, and predecessor acts do not define such critical
terms as “internal security” and “legitimate self-defense.” It remains for the President
or the Congress, as the case may be, to define the meaning of such terms as they may
apply to the question of a possible violation by a foreign country of an applicable
agreement governing the sale of U.S. defense articles or defense services.
Presidential Report to Congress on Possible Violations. Section
3(c)(2) of the Arms Export Control Act requires the President to report promptly to the
Congress upon the receipt of information that a “substantial violation” described in
section 3(c)(1) of the AECA “may have occurred.” This Presidential report need not
reach any conclusion regarding the possible violation or provide any particular data
other than that necessary to illustrate that the President has received information
indicating a specific country may have engaged in a “substantial violation” of an
applicable agreement with the United States that governs the sale of U.S. defense
articles or services.
Procedures for Making Foreign Countries Ineligible for Receipt of
U.S. Defense Articles and Services. Should the President determine and report
in writing to Congress or if Congress determines by joint resolution pursuant to section
3(c)(3)(A) of the Arms Export Control Act that a “substantial violation” by a foreign
country of an applicable agreement governing an arms sale has occurred, then that
country becomes ineligible for further U.S. military sales under the AECA. This action
would terminate provision of credits, loan guarantees, cash sales, and deliveries
pursuant to previous sales. The President could, under section 3(c)(3)(B) of the AECA,
continue to permit “cash sales and deliveries pursuant to previous sales” by certifying
in writing to Congress that termination of such sales and deliveries would have a
“significant adverse impact on United States security.” Such a Presidential waiver
could not be invoked, however, if Congress, under section 3(c)(3)(A), had adopted or
were to adopt a joint resolution finding that country ineligible. The President retains
the prerogative of vetoing any such joint resolution. Congress would then have to
override the veto in order to impose its will. Congress also has the option of adopting
regular legislation imposing varying degrees of penalties upon any country for
violations of the conditions of an applicable agreement regarding use of U.S.-supplied
defense equipment. Such legislation would also be subject to the veto process.4
4 It should be noted that the obligations, restrictions, and possible penalties set out in section
3 of the Arms Export Control Act also apply to the re-transfer by foreign recipients of U.S.
supplied defense articles, defense services, and related technical data to another nation.
Should such a re-transfer occur, in the absence of prior approval by the President of the
United States to do so, then the nation making such a transfer could be determined to be in
(continued...)

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CRS-4
Restoration of Eligibility. Once a country is made ineligible for sales or
deliveries under the Arms Export Control Act provisions, it can regain its eligibility
only when: (1) Under section 3(c)(4) of the act, the President “determines that the
violation has ceased” (the violation which led to the status of ineligibility in the first
place), and (2) the country involved “has given assurances satisfactory to the President
that such violation will not recur.” Alternatively, Congress could pass regular
legislation that would exempt the particular country from specific sanctions imposed
through AECA procedures, although that legislation would be subject to a Presidential
veto.
Suspension or Cancellation of Contracts and/or Deliveries by the
United States. It should be noted that the United States has additional options to
prevent transfer of defense articles and services for which valid contracts exist short
of finding a foreign country in violation of an applicable agreement with the United
States. Authority for suspension of deliveries or defense items or cancellation of
military sales contracts is found in sections 2(b), 42(e)(1) and 42(e)(2) of the AECA.
Section 2(b) of the Arms Export Control Act permits the Secretary of State, under the
President’s direction, to, among other things, determine “whether there shall be
delivery or other performance” regarding sales or exports under the AECA in order
that “the foreign policy of the United States is best served thereby.”
Section 42(e)(1) of the Arms Export Control Act states that:
Each contract for sale entered into under sections 21, 22, 29 and 30 of this Act,
and each contract entered into under section 27(d) of the Act, shall provide that
such contract may be canceled in whole or in part, or its execution suspended, by
the United States at any time under unusual or compelling circumstances if the
national interest so requires.
Section 42(e)(2)(A) of the Arms Export Control Act further states that:
Each export license issued under section 38 of this Act shall provide that such
license may be revoked, suspended, or amended by the Secretary of State, without
prior notice, whenever the Secretary deems such action to be advisable.
Thus, all government-to-government agreements or licensed commercial contracts for
the transfer of defense articles or defense services may be halted, modified, or
terminated by the Executive branch should it determine it is appropriate to do so.
Use of this authority does not prejudice the larger question of whether a
“substantial violation” of an applicable agreement governing use of U.S. arms did in
fact occur. That question can still be answered affirmatively or negatively, or left
unanswered, depending on how the President or the Congress chooses to deal with it.
To date, the President has never taken the next step and actually determined that a
4 (...continued)
violation of its agreement with the United States not to take such an action without prior
consent from the U.S., and therefore could be subject to the penalties provided for such a
violation set out in section 3 of the AECA. See section 3(a)(2) of the AECA where the re-
transfer prior consent obligation is set out (22 USC 2753 (a)(2)).

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CRS-5
violation did occur thus necessitating the termination of deliveries or sales or other
penalties set out in section 3 of the Arms Export Control Act.
Illustrative Responses of the United States Government to
Possible Violations of Agreements on Use of U.S.- Provided
Defense Articles
Argentina. On April 30, 1982, Powell A. Moore, Assistant Secretary of State
for Congressional Relations, reported to Congress that the President had determined
that Argentina — through its use of U.S.-supplied military equipment in its occupation
of the Falkland Islands (Islas Malvinas) on April 2, 1982 — “may” have substantially
violated the applicable agreements with the United States governing use of this
equipment. In his April 30 report, Assistant Secretary Moore noted that in light of
these circumstances the United States was “suspending until further notice all
deliveries to Argentina of defense articles and services for which commitments were
made prior to October 1, 1978.” Other restrictions on military aid to Argentina were
already in place. The Reagan Administration removed the suspension on September
24, 1982.
Israel. Questions raised regarding the use of U.S.-supplied military equipment
by Israel in Lebanon in June and July 1982, led the Reagan Administration to
determine on July 15, 1982, that Israel “may” have violated its July 23, 1952, Mutual
Defense Assistance Agreement with the United States (TIAS 2675). Concerns centered
on whether or not Israel had used U.S.-supplied anti-personnel cluster bombs against
civilian targets during its military operations in Lebanon and the siege of Beirut.5 The
pertinent segment of that 1952 agreement between Israel and the United States reads
as follows:
The Government of Israel assures the United States Government that such
equipment, materials, or services as may be acquired from the United States ... are
required for and will be used solely to maintain its internal security, its legitimate
self-defense, or to permit it to participate in the defense of the area of which it is
a part, or in United Nations collective security arrangements and measures, and
that it will not undertake any act of aggression against any other state.
It should be noted that none of the critical terms such as “internal security,” “legitimate
self-defense,” or “act of aggression” are defined within this 1952 U.S.-Israeli
agreement. The House Foreign Affairs Committee held hearings on this issue in July
and August 1982. On July 19, 1982, the Reagan Administration announced that it
would prohibit new exports of cluster bombs to Israel. This prohibition was lifted by
the Reagan Administration in November 1988.6
5 See U.S. Congress. House. Committee on Foreign Affairs, The Use of United States
Supplied Military Equipment in Lebanon. Hearings before the Committee on Foreign
Affairs and its Subcommittees on International Security and Scientific Affairs and on
Europe and the Middle East. 97th Congress, 2nd sess. July 15 and August 4, 1982. 68p. These
hearings were held in open and closed sessions.
6 Facts on File. Annual Yearbook 1982, p. 518; Associated Press, July 19, 1982.
(continued...)

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In light of the Israeli attack on the Iraqi nuclear reactor on June 7, 1981, Secretary
of State Alexander M. Haig, Jr., reported to Congress on June 10, 1981, that the Israeli
use of American-supplied military equipment in this raid “may” have constituted a
substantial violation of the applicable 1952 U.S.-Israeli agreement. As a consequence
— and pending review of the facts of the case — the President chose to exercise the
authority set forth in sections 2 (b) and 42(e)(1) of the Arms Export Control Act to
suspend “for the time being” the shipment of four F-16 aircraft that had been scheduled
for delivery to Israel. As the result of this decision, the subsequent delivery of 10 F-16
and 2 F-15 aircraft to Israel was also suspended. However, on August 17, 1981, the
Reagan Administration lifted its suspension on deliveries to Israel and all of the planes
were transferred.
On two other occasions — April 5, 1978, and August 7, 1979 — the Carter
Administration chose to find that the Israelis “may” have violated their 1952
agreement with the United States through the use of American-origin military
equipment in operations conducted in Lebanon. However, the U.S. did not suspend or
terminate any Israeli arms sales, credits, or deliveries in either of these cases.
In two notable instances, questions concerning the improper use by Israel of U.S.
weapons were raised, but the President expressly concluded that a violation of the
agreement regarding use of U.S. supplied equipment did not occur. On October 1,
1985, Israel used U.S.-supplied aircraft to bomb Palestine Liberation Organization
(PLO) headquarters in Tunis, Tunisia. The Reagan Administration subsequently stated
that the Israeli raid was “understandable as an expression of self-defense,” although
the bombing itself “cannot be condoned.” On July 14, 1976, following the Israeli
rescue mission at Entebbe, Uganda in early July 1976, the Department of State
declared that Israel’s use of U.S.-supplied military equipment during that operation
was in accordance with the 1952 U.S.-Israeli agreement.
Indonesia and East Timor. Following the military intervention of Indonesia
in East Timor on December 7, 1975, the Ford Administration initiated a “policy
review” in connection with the U.S. military assistance program with Indonesia.
Because of the possible conflict between the Indonesian use of U.S.-origin equipment
in East Timor and the provisions of U.S. law and U.S.-Indonesian bilateral agreements,
the Ford Administration placed a “hold” on the issuance of new letters of offer
(contracts) and Military Assistance Program (MAP) orders to Indonesia. However,
military equipment already in the pipeline continued to be delivered to the Indonesians.
The “policy review” was completed in late May 1976. Military assistance and sales
resumed in July 1976. No formal finding of “substantial violation” of applicable
U.S.-Indonesian agreements involving use of U.S.-origin military equipment,
conditional or otherwise, was made by the administration or by the Congress.
Turkey and the Congressionally-Imposed Embargo. In July 1974,
Turkey used U.S.-origin equipment during its intervention on Cyprus. The President
and Congress disagreed on whether Turkey had “substantially violated” the applicable
1947 agreement with the United States governing the use of U.S.-supplied military
6 (...continued)
Washington Post, December 7, 1988, p.A36; Associated Press, December 6, 1988.

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CRS-7
equipment during its Cyprus operations. The President independently suspended the
issuance of new Foreign Military Sales credits and guarantees and major new cash
sales for Turkey from late July until October 17, 1974. The President did permit
routine cash sales of spare parts and components for items already purchased by
Turkey during this same period. The Congress imposed an embargo on military sales,
credits, assistance, and deliveries to Turkey with the enactment of H.J.Res. 1167 (the
Continuing Appropriations Resolution for FY75, P.L. 93-448). However, section 6 of
H.J.Res. 1167 gave the President the option to waive the effect of the embargo until
December 10, 1974. President Ford exercised this waiver authority on October 17,
1974. On December 10, 1974, the Turkish arms embargo went into effect.
Subsequently, the Foreign Assistance Act of 1974, enacted on December 30,
1974, continued the Turkish embargo and made it part of permanent law. Yet it also
gave the President the option of temporarily waiving the embargo’s effect until
February 5, 1975. President Ford used this waiver to suspend the embargo from
December 30, 1974, until February 5, 1975, at which time the Turkish embargo was
restored. On October 6, 1975, President Ford signed into law P.L. 94-104, which
partially lifted the arms embargo on Turkey. Successive statutes modified military aid
and sales levels for Turkey while a partial embargo remained in effect. Finally, on
September 26, 1978, President Carter signed into law P.L. 95-384, which authorized
him to end the arms embargo against Turkey. The President exercised this authority
on September 26, 1978.

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