Modifying or Ending Sales of U.S.-Origin Defense Articles

Modifying or Ending Sales of U.S.-Origin Defense Articles

May 4, 2020
Modifying or Ending Sales of U.S.-Origin Defense Articles
The U.S. government has in law a number of mechanisms
participation in collective measures requested by the United
by which it can alter or end the sales of U.S.-origin defense
Nations or comparable organizations.
articles when foreign countries misuse such items.
Section 614, FAA (22 U.S.C. 2364), permits the President
Arms Export Control Act and Foreign
to engage in FMS transactions up to a value of $750 million
Assistance Act of 1961
in any fiscal year without regard to any AECA provisions,
The Arms Export Control Act (AECA; P.L. 90-629, as
“any Act authorizing or appropriating funds for use under”
amended; 22 U.S.C. 2751 et seq.) and the Foreign
the AECA, or “any law relating to receipts and credits
Assistance Act of 1961 (FAA; P.L. 87-195, as amended; 22
accruing to the United States.” Such transactions must be
U.S.C. 2151 et seq.) establish the statutory foundations
“in furtherance of any” AECA purpose; the President must
governing Foreign Military Sales (FMS) and Direct
also determine that engaging in a particular such transaction
Commercial Sales (DCS) to foreign consumers, including
“is vital to the national security interests of the United
foreign governments. FMS refers to the sale of U.S.-origin
States.” This section, which does not apply to export
defense articles, equipment, services, and training
licenses for DCS, requires the President to notify and
(hereinafter referred to as “defense articles”) on a
consult with Congress if and when the President chooses to
government-to-government basis. DCS refers to the sale of
exercise this authority.
U.S. government-licensed defense articles and services
directly from U.S. firms to eligible foreign governments
Other Defense Article Transfer
and international organizations.
Mechanisms
The U.S. government transfers U.S.-origin defense articles
These laws require that such sales be for specific authorized
via other mechanisms. Section 516, FAA (22 U.S.C. 2321j),
military purposes and establish eligibility prerequisites for
for example, authorizes the President to transfer excess
potential foreign customers. Prospective recipients of FMS
defense articles to foreign governments. Executive Order
must agree to refrain from transferring title or possession of
(E.O.) 12163 (September 29, 1979, 22 U.S.C. 2381 note)
the articles to unauthorized persons, as well as from
delegates this function to the Secretary of State. In addition,
diverting articles for unauthorized purposes or end-use.
the U.S. government transfers U.S.-origin defense articles
Recipients must also agree to maintain security of U.S.-
pursuant to Defense Department-led programs that build
origin defense articles (Section 3(a), AECA (22 U.S.C.
foreign partner government capacity. The U.S. government
2753(a)). The International Traffic in Arms Regulations
may also transfer such articles as part of a covert action.
(ITAR; 22 CFR Parts 120-130) contain comparable
provisions for DCS transfers.
End-Use Monitoring
U.S.-origin defense articles are subject to end-use
The Department of State’s Office of Regional Security and
monitoring (EUM) for the purpose of verifying that
Arms Transfers, in the Bureau of Political-Military Affairs,
recipients use such articles only for permitted purposes (see
administers FMS transactions. The department’s
Sections 38(g)(7) and 40A(a), AECA (22 U.S.C. 2778(g)(7)
Directorate of Defense Trade Controls, also in the Political-
and 2785(a)). EUM also applies to defense articles
Military Affairs Bureau, administers licenses for
retransferred to other parties. The standard terms and
commercial sales. The ITAR implements the AECA and
conditions of a Letter of Offer and Acceptance (LOA),
state licensing policy for the export of defense articles.
which itemizes the defense articles offered by the U.S.
government for a particular FMS transfer, contain the
The AECA and FAA also prohibit the sale or delivery of
AECA-mandated restrictions described above, as well as
U.S.-origin defense articles if either the President (by
provisions permitting EUM; Section 3(g), AECA, requires
determining such and reporting to Congress) or Congress
this language. According to State Department guidance, an
(by passing a joint resolution) finds that a recipient country
export license application must include written
has used such articles “for a purpose not authorized” by
confirmation from the proposed recipient “regarding the
Section 4, AECA (22 U.S.C. 2754), Section 502, FAA (22
specific end-user and end use.” Export licenses for U.S.-
U.S.C. 2302), or in substantial violation of other limitations
origin defense articles specify that licensed transactions
contained in an agreement with the United States governing
may be subject to EUM.
the articles’ provision (Section 3(c)(1)(B), AECA (22
U.S.C. 2753(c)(1)(B), and Section 505(d), FAA (22 U.S.C.
Terminating or Prohibiting Transfers
2314(d)). Section 4, AECA, and Section 502, FAA, state
The United States does not have the legal authority to
that defense articles may be sold only for certain purposes,
compel the return of items exported via either the FMS or
including internal security, legitimate self-defense,
DCS processes. Both the executive branch and Congress
impeding weapons of mass destruction proliferation, and
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Modifying or Ending Sales of U.S.-Origin Defense Articles
have options for terminating planned or ongoing sales, as
Selected AECA- and FAA-Mandated
well as prohibiting future FMS and DCS transfers.
Notifications and Reports
The AECA requires the President to notify Congress about
Executive Branch Options
violations of the requirements described above. Section
As noted, Section 3(c)(1)(B), AECA (22 U.S.C.
3(e), AECA (22 U.S.C. 2753(e)), requires the President to
2753(c)(1)(B)) prohibits the sale or delivery of U.S.-origin
notify the relevant House and Senate committees
defense articles if the President finds that a recipient
“immediately” upon receiving “any information” that a
country has used such articles for unauthorized purposes.
recipient has transferred a defense article to an unauthorized
Sections 3(c)(3) and 3(c)(4), AECA (22 U.S.C. 2753(c)(3)
destination; E.O. 13637 delegated this function to the
and (c)(4)) stipulate that such countries would, absent a
Secretary of State. In addition, the President, pursuant to
presidential waiver, be ineligible for future U.S. arms sales
Section 3(c)(1)(B)(2), AECA (22 U.S.C.
until the President determines the violation has ceased and
2753((c)(1)(B)(2)), must notify Congress “promptly” after
recipients assure violations will not recur. E.O. 13637,
receiving information that a recipient has used U.S.-origin
“Administration of Reformed Export Controls,” (March 8,
defense articles for unauthorized purposes described in
2013, 22 U.S.C. 2751 note) delegates this AECA function
Section 3(c)(1)(B), AECA, discussed above. Section
to the Secretary of State. The law does not provide for such
505(d)(2)(B), FAA (22 U.S.C. 2314(d)(2)(B)) contains a
a waiver if Congress has adopted a joint resolution, which
similar requirement.
would be subject to presidential veto.
Section 3(c)(3)(A), AECA (22 U.S.C. 2753(c)(3)(A)),
The executive branch also has wide-ranging authority to
requires the President to notify Congress if a foreign entity
cancel an FMS transaction prior to the articles’ delivery.
has misused U.S.-origin defense articles (see above
The standard LOA terms and conditions permit the U.S.
discussion concerning Section 3(c)(1)(B), AECA). Section
government, under “unusual and compelling circumstances,
505(d)(2)(A), FAA (22 U.S.C. 2314(d)(2)(A), contains a
when the national interest of the U.S. requires,” to “cancel
similar requirement. Section 40A(c), AECA (22 U.S.C.
or suspend all or part” of such a letter “at any time prior to
2785(c)), requires the President to submit an annual report
the delivery of defense articles.” This provision applies
to Congress “describing the actions taken to implement” the
even if the United States has delivered some of the LOA-
EUM provisions under Section 40A(a), AECA, described
covered items.
above. E.O. 13637 delegated this function to the Secretaries
of Defense and State for monitoring concerning FMS and
The U.S government similarly has extensive authority to
DCS, respectively.
cancel or modify export licenses for U.S.-origin defense
articles. Section 126.7 of the ITAR states that such licenses
Congressional Requests for Additional Information
“may be revoked, suspended, or amended without prior
The FAA provides a mechanism for Congress to request
notice whenever” the State Department “believes that” the
information about any findings and determinations that the
recipient has violated “the terms of any U.S. Government
President is required to report to Congress under AECA and
export authorization.” The department may also take these
FAA. Section 654(d), FAA (22 U.S.C. 2414(d)) says no
actions if it deems them to be “in furtherance of world
“committee or officer of either” the Senate or House of
peace, the national security or the foreign policy of the
Representatives “shall be denied any requested information
United States, or is otherwise advisable.” The preceding
relating to” such findings or determinations, regardless of
reasons are also grounds for the department to deny export
whether the President has already provided them.
license applications.
Other Statutory Limitations
Congressional Options
The AECA, FAA, and other U.S. laws state prohibitions
As noted, Section 3(c)(1)(B), AECA (22 U.S.C.
and limitations on FMS and DCS transactions for a range of
2753(c)(1)(B)) prohibits the sale or delivery of U.S.-origin
foreign policy reasons. For example, such restrictions can
defense articles if a joint resolution of Congress finds that a
be applied to foreign governments that engage in a
recipient country has used such articles for unauthorized
consistent pattern of gross violations of internationally
purposes. If found to be in violation by joint resolution of
recognized human rights. Governments that engage in
Congress, Sections 3(c)(3) and 3(c)(4), AECA (22 U.S.C.
certain other activities, such as providing support for
2753(c)(3)) stipulate that such countries would be ineligible
terrorism; failing to adhere to international drug control
for future U.S. arms sales until the President determines the
commitments; recruiting and/or using child soldiers;
violation has ceased and recipients assure violations will
developing or obtaining certain nuclear weapons
not recur.
capabilities; discriminating against or harassing people in
the United States; or discriminating against a U.S. person
Congress may prohibit certain FMS and DCS transfers by
on the basis of race, religion, national origin, or sex, may be
adopting a joint resolution of disapproval within a time
subject to restrictions on arms trade under AECA, FAA,
period prescribed by Section 36, AECA (22 U.S.C. 2776).
and other statutes. Certain U.S. country-specific limitations
Congress can also prohibit or modify a proposed sale of
on arms sales also exist.
defense articles via the regular legislative process. (For
details, CRS Report RL31675, Arms Sales: Congressional
Paul K. Kerr, Specialist in Nonproliferation
Review Process, by Paul K. Kerr).
Liana W. Rosen, Specialist in International Crime and
Narcotics
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Modifying or Ending Sales of U.S.-Origin Defense Articles

IF11533

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