(c) 74 Funds obligated under this section before the date of enactment of the International Security and Development Cooperation Act of 1980 which constitute a single reserve for the payment of claims under guaranties issued under this section shall remain available for expenditure for the purposes of this section on and after that date. That single reserve may, on and after the date of enactment of the International Security and Development Cooperation Act of 1985, be referred to as the "Guaranty Reserve Fund." Funds provided for necessary expenses to carry out the provisions of section 23 of the Arms Export Control Act and of section 503 of the Foreign Assistance Act of 1961, as amended, may be used to pay claims on the Guaranty Reserve Fund to the extent that funds in the Guaranty Reserve Fund are inadequate for that purpose. 75

For purposes of any provision in this Act or any other Act relating to a prohibition or limitation on the availability of funds under this Act, whenever a guaranty is issued under this section, the principal amount of the loan so guaranteed shall be deemed to be

74 Subsec. (c), as amended by the FA Act of 1973 and the FA Act of 1974, was further amended and restated by sec. 104(a) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3132). It formerly read as follows:

"(c) Funds made available to carry out this Act shall be obligated in an amount equal to 10 per centum of the principal amount of contractual liability related to any guaranty issued under this section, and all the funds so obligated shall constitute a single reserve for the payment of claims under such guaranties. Any funds so obligated which are deobligated from time to time during any current fiscal year as being in excess of the amount necessary to maintain a fractional reserve of 10 per centum in the principal amount of contractual liability under outstanding guaranties shall be transferred to the general fund of the Treasury. Any guaranties issued hereunder shall be backed by the full faith and credit of the United States."

75 Sec. 106 (b) and (c) of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 196) amended subsec. (c) by deleting the following text:

"The President shall report promptly to the Congress whenever the payment of a claim under any such guaranty reduces the total amount of funds in the single reserve under this subsection to an amount less than $750,000,000, together with his recommendations for the authorization of appropriations of additional funds for such reserve.'

It also added the text beginning with "That single reserve" in the first paragraph of subsec. (c) and continuing with a second paragraph as follows:

"Funds authorized to be appropriated by section 31(a) to carry out this Act which are allocated for credits at market rates of interest may be used to pay claims under such guarantees to the extent funds in the Guaranty Reserve Fund are inadequate for that purpose.'

Public Law 100-71, 101 Stat. 409 (Supplemental Appropriations Act, 1987) deleted the second paragraph and replaced it with the present language.

The Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1989 (Public Law 100-461, 102 Stat. 2268) provided the following:

"GUARANTY RESERVE FUND

"If during fiscal year 1989 the funds available in the Guaranty Reserve Fund (Fund) are insufficient to enable the Secretary of Defense (Secretary) to discharge his responsibilities, as guarantor of loans guaranteed pursuant to section 24 of the Arms Export Control Act (AECA) or pursu ant to the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1988, under the heading 'Foreign Military Sales Debt Reform', the Secretary shall issue to the Secretary of the Treasury notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions, as may be prescribed by the Secretary of the Treasury. Such notes or obligations may be redeemed by the Secretary from appropriations and other funds available, including repayments by the borrowers of amounts paid pursuant to guarantees issued under section 24 of the AECA. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The Secretary of the Treasury shall purchase any notes or other obligations issued hereunder and for that purpose he is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, and the purposes for which securities may be issued under the Second Liberty Bond Act are extended to include any purchase of such notes or obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this heading. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States."

funds made available for use under this Act. Any guaranties issued hereunder shall be backed by the full faith and credit of the United States.

Sec. 25. 76 Annual Estimate and Justification for Sales Program. (a) Except as provided in subsection (d) of this section,77 no later than February 1 of each year, the President shall transmit to the Congress, as a part of the annual presentation materials for security assistance programs proposed for the next fiscal year, a report which sets forth

(1) an Arms Sales Proposal covering all sales and licensed commercial exports under this Act of major weapons or weapons-related defense equipment for $7,000,000 or more, or of any other weapons or weapons-related defense equipment for $25,000,000 or more, which are considered eligible for approval during the current calendar year, together with an indication of which sales and licensed commercial exports are deemed most likely actually to result in the issuance of a letter of offer or of an export license during such year;

(2) an estimate of the total amount of sales and licensed commercial exports expected to be made to each foreign nation from the United States;

(3) the United States national security considerations involved in expected sales or licensed commercial exports to each country, an analysis of the relationship between anticipated sales to each country and arms control efforts concerning such country and an analysis of the impact of such anticipated sales on the stability of the region that includes such country;

(4) an estimate with regard to the international volume of arms traffic to and from nations purchasing arms as set forth in paragraphs (1) and (2) of this subsection, together with best estimates of the sale and delivery of weapons and weapons-related defense equipment by all major arms suppliers to all major recipient countries during the preceding fiscal year;

(5)(A) 78 an estimate of the aggregate dollar value and quantity of defense articles and defense services, military education and training, grant military assistance, and credits and guarantees, to be furnished by the United States to each foreign country and international organization in the next fiscal year; and

(B) 78 for each country that is proposed to be furnished credits or guaranties under this Act in the next fiscal year and

76 22 U.S.C. 2765. Sec. 25, as added by sec. 209(a) of Public Law 94-329 (90 Stat. 739) and amended by sec. 18 of Public Law 95-384 (92 Stat. 740), secs. 13 and 14 of Public Law 96-92 (93 Stat. 706), and by secs. 104 and 107 of Public Law 96-533 (94 Stat. 3183), was amended and restated by sec. 732 of the International Security and Development Cooperation Act of 1981 (Public Law 97-113, 95 Stat. 1557). The previous text of sec. 25 required information similar to that specified in new paragraphs (1) through (4), (7), and (8). Much of the remaining information now required by sec. 25, was formerly required by other statutes as follows: par. (6)-sec. 43(c) of the Arms Export Control Act; par. (9) sec. 668 of the Foreign Assistance Act of 1961; par. (10)— sec. 714 of the International Security and Development Cooperation Act of 1980; and par. (11)— sec. 634(a)(4) of the Foreign Assistance Act of 1961.

77 Subsec. (d) and the reference to it at the beginning of subsec. (a) were added by secs. 113 (1) and (2) of the International Security and Development Cooperation Act of 1985 (Public Law 9983, 99 Stat. 198).

78 Subparagraph (B) and the designation for subpara. (A) were added by sec. 112(a) of the International Security and Development Cooperation Act of 1985 (Public Law 99-83, 99 Stat.

that has been approved for cash flow financing (as defined in subsection (d) 79 of this section) in excess of $100,000,000 as of October 1 of the current fiscal year

(i) the amount of such approved cash flow financing,

(ii) a description of administrative ceilings and controls applied, and

(iii) a description of the financial resources otherwise available to such country to pay such approved cash flow financing;

(6) an analysis and description of the services performed during the preceding fiscal year by officers and employees of the United States Government carrying out functions on a fulltime basis under this Act for which reimbursement is provided under section 43(b) or section 21(a) of this Act, including the number of personnel involved in performing such services;

(7) the total amount of funds in the reserve under section 24(c) at the end of the fiscal year immediately preceding the fiscal year in which a report under this section is made, together with an assessment of the adequacy of such total amount of funds as a reserve for the payment of claims under guaranties issued pursuant to section 24 in view of the current debt servicing capacity of borrowing countries, as reported to the Congress pursuant to section 634(a)(5) of the Foreign Assistance Act of 1961;

(8) a list of all countries with respect to which findings made by the President pursuant to section 3(a)(1) of this Act are in effect on the date of such transmission;

(9) the progress made under the program of the Republic of Korea to modernize its armed forces, the role of the United States in mutual security efforts in the Republic of Korea and the military balance between the People's Republic of Korea and the Republic of Korea;

(10) the amount and nature of Soviet military assistance to the armed forces of Cuba during the preceding fiscal year and the military capabilities of those armed forces;

(11) the status of each loan and each contract of guaranty or insurance theretofore made under the Foreign Assistance Act of 1961, predecessor Acts, or any Act authorizing international security assistance, with respect to which there remains outstanding any unpaid obligation or potential liability; the status of each extension of credit for the procurement of defense articles or defense services, and of each contract of guaranty in connection with any such procurement, theretofore made under the Arms Export Control Act with respect to which there remains outstanding any unpaid obligation or potential liability; and

(12) such other information as the President may deem necessary.

(b) Not later than thirty days following the receipt of a request made by the Committee on Foreign Relations of the Senate or the

79 Subsec. (d), which probably should read subsec. (e), was added to the end of sec. 25 by sec. 112(b) of the International Security and Development Cooperation Act of 1985 (Public Law 9983, 99 Stat. 198). It should probably end with a period instead of a semicolon.

Committee on Foreign Affairs of the House of Representatives for additional information with respect to any information submitted pursuant to subsection (a), the President shall submit such information to such committee.

(c) The President shall make every effort to submit all of the information required by subsection (a) or (b) wholly in unclassified form. Whenever the President submits any such information in classified form, he shall submit such classified information in an addendum and shall also submit simultaneously a detailed summary, in unclassified form, of such classified information.

(d) 77 The information required by subsection (a)(4) of this section shall be transmitted to the Congress no later than April 1 of each year.

(d) 79 For the purposes of subsection (a)(5)(B) of this section, the term "cash flow financing" means the dollar amount of the difference between the total estimated price of a Letter of Offer and Acceptance or other purchase agreement that has been approved for financing under this Act or under section 503(a)(3) of the Foreign Assistance Act of 1961 and the amount of the financing that has been approved therefor;

Sec. 26.80 Security Assistance 81 Surveys.-(a) The Congress finds that surveys prepared by the United States for foreign countries have had a significant impact on subsequent military procurement decisions of those countries. It is the policy of the United States that the results of security assistance 81 surveys conducted by the United States clearly do not represent a commitment by the United States to provide any military equipment to any foreign country. Further, recommendations in such surveys should be consistent with the arms export control policy provided for in this Act. (b) As part of the quarterly report required by section 36(a) of this Act, the President shall include a list of all security assistance surveys authorized during the preceding calendar quarter, specifying the country with respect to which the survey was or will be conducted, the purpose of the survey, and the number of United States Government personnel who participated or will participate in the survey.

(c) Upon a request of the chairman of the Committee on International Relations of the House of Representatives or the chairman of the Committee on Foreign Relations of the Senate, the President shall submit to that committee copies of 82 security assistance 81 surveys conducted by United States Government personnel.

(d) 83 As used in this section, the term "security assistance surveys" means any survey or study conducted in a foreign country by United States Government personnel for the purpose of assessing the needs of that country for security assistance, and includes de

80 22 U.S.C. 2765. Sec. 26 was added by sec. 19 of the International Security Assistance Act of 1978 (Public Law 95-384, 92 Stat. 740).

81 The term "security assistance" was substituted in lieu of "defense requirement" by secs. 114 (a)(1) and (2) of the International Security and Development Cooperation Act of 1985 (Public Law 99-83, 99 Stat. 198).

82 Sec. 114(b) of Public Law 99-83, 99 Stat. 199, inserted the words "submit to that committee copies of", in lieu of "grant that committee access to".

83 Sec. 114(a)(3) of Public Law 99-83, 99 Stat. 198, added subsec. (d).

fense requirement surveys, site surveys, general surveys or studies, and engineering assessment surveys.

Sec. 27. 84 Authority of President to Enter into Cooperative Projects with Friendly Foreign Countries. (a) The President may enter into a cooperative project agreement with the North Atlantic Treaty Organization or with one or more member countries of that Organization.

(b) As used in this section

(1) the term "cooperative project" 85 in the case of an agreement with the North Atlantic Treaty Organization or with one or more member countries of that Organization, means a jointly managed arrangement, described in a written agreement among the parties, which is undertaken in order to further the objectives of standardization, rationalization, and interoperability of the armed forces of North Atlantic Treaty Organization member countries forces and which provides

(A) for one or more of the other participants to share with the United States the costs of research on and development, testing, evaluation, or joint production (including follow-on support) of certain defense articles;

(B) for concurrent production in the United States and in another member country of a defense article jointly developed in accordance with subparagraph (A); or

(C) for procurement by the United States of a defense article or defense service from another member country or for procurement by the United States of munitions from the North Atlantic Treaty Organization or a subsidiary of such organization;86

(2) 87 the term "cooperative project", in the case of an agreement entered into under subsection (j), means a jointly managed arrangement, described in a written agreement among the parties, which is undertaken in order to enhance the ongoing multinational effort of the participants to improve the conventional defense capabilities of the participants and which provides

"(A) for one or more of the other participants to share with the United States the costs of research on and development, testing, evaluation, or joint production (including follow-on support) of certain defense articles;

(B) for concurrent production in the United States and in the country of another participant of a defense article jointly developed in accordance with subparagraph (A); or

84 22 U.S.C. 2767. Sec. 27 was added by sec. 15 of the International Security Assistance Act of 1979 (Public Law 96-92, 93 Stat. 706). It was amended and restated by sec. 115 of the International Security and Development Cooperation Act of 1985 (Public Law 99-83, 99 Stat. 199), at which time it was titled "North Atlantic Treaty Organization Cooperative Projects." Its current heading was added by sec. 1103(a)(2) of Public Law 99-661, 100 Stat. 3816.

85 The words beginning at this point with "in the case of" and ending with “Organization" were added by sec. 1103(a)(1)(A)(i) of Public Law 99-661, 100 Stat. 3816.

86 The words to this point beginning with "or for procurement" were added by sec. 1022 of Public Law 100-180, 101 Stat. 1144.

87 Sec. 1103(a)(1)AXiv) of Public Law 99-661, 100 Stat. 3816, added par. (2) and redesignated the previous par. (2) as par. (3).