Authorizes sales from stock, including the sale of defense articles that are excess to DoD stocks.

Requires an annual report to Congress listing weapons systems that are Significant Military Equipment (SME) and numbers thereof, forecasted to be available for transfer as EDA during the next calendar year.

Sense of the Congress resolution that there should be more use of the authority to sell excess defense articles under AECA section 21(a) (22 U.S.C. 2761) by using the flexibility afforded by AECA section 47(2) (22 U.S.C. 2794(2) to ascertain their market value.

Establishes conditions of eligibility, transfers, use and security of grant EDA transfers.

Authority, limitations, terms of grant EDA transfers.

EDA transfers will not adversely impact the U.S. national technology and industrial base nor reduce the opportunities of U.S. industry to sell new or used equipment to the proposed country. The Director, DSCA, determines the impact to industry with input from the Department of Commerce (DoC).

Requires priority delivery of grant EDA to NATO members, major non-NATO allies on the south and southeastern flank of NATO (currently Egypt, Greece, Israel, Jordan, Portugal, and Turkey) and to the Philippines to the maximum extent feasible.

EDA recipients are responsible for Packaging, Crating, Handling and Transportation (PCH&T) costs, as well as refurbishment work and follow-on support. These services may be purchased from DoD through the FMS program. DoD funds may be expended for the transportation of grant EDA by exception if it is in the U.S. national interest, the transportation is on a Space Available basis, the total weight of the transfer does not exceed 50,000 lbs., and the recipient is a developing country receives less than $10M in International Military Education and Training (IMET) or FMF in the fiscal year the transportation is provided. Implementing Agencies must request Space Available authorization with the EDA request. Requests must include the total weight, proposed method and route of Space Available, and time frames or constraints. DSCA (Programs Directorate) seeks the required national interest determination (delegated to the Director, DSCA) and, when approved, notes Space Available transportation may be used in the EDA transfer authorization message.

A 30-day Congressional Notification is required prior to any EDA grant or transfer under the AECA of EDA that is SME or had an original acquisition value of $7M or more.

The aggregate current market value of grant EDA may not exceed $425,000,000 in any fiscal year. Congress may exclude the value of naval vessel transfers from this limit when it enacts legislation authorizing the transfer of such vessels. DSCA (Programs Directorate) assures the ceiling limit is not exceeded.

EDA includes excess property of the USCG, and the term ‘Department of Defense’ includes the USCG with respect to such excess property.

Limitation on assistance under FAA to countries in default on U.S. loans in excess of six months. When this sanction is enacted, all grant EDA transactions for the affected country are held until the sanction is lifted.

The statutory definition of EDA excludes construction equipment (including tractors, scrapers, loaders, graders, bulldozers, dump trucks, generators and compressors). These items CANNOT be transferred under the EDA program.

Construction and fire equipment (tractors, scrapers, loaders, graders, bulldozers, dump trucks, generators, pumpers, fuel and water tankers, crash trucks, utility vans, rescue trucks, ambulances, hook and ladder units, compressors, and miscellaneous firefighting equipment) can be transferred only if the President declares an emergency or if no other Federal Agency, State Government, person or entity eligible to receive the items submits a request for these items to the Defense Logistics Agency (DLA) Disposition Services. DLA Disposition Services performs the appropriate screening.

May require a 30-day Congressional Notification prior to any EDA grant of Significant Military Equipment (SME) or any transfer with an original acquisition value of $7M or more. May contain Brooke Amendment, which limits assistance to countries in default on U.S. Loans in excess of one year.

May authorize the use of funds appropriated to the DoD to pay PCH&T for EDA transfers for certain countries

Requires priority delivery of grant EDA for Poland, Hungary, the Czech Republic, and Slovenia.

Requires all reasonable efforts to be made to refurbish excess UH-1 Huey and AH-1 Cobra helicopters prior to export to foreign countries unless transferred solely as a source for spare parts

Requires enactment of authorizing legislation to transfer naval vessels less than 20 years old or more than 3,000 tons. The value of these transfers is not normally included in the EDA ceiling limit (dependent upon current authorization language).

All grant EDA items transferred by ocean carriers must follow U.S. cargo preference requirements. IAs must consider cargo preference requirements when drafting Letter of Offer and Acceptance (LOAs). Recipient countries must use U.S. flag vessels unless a non-availability waiver has been issued by Maritime Administration (MARAD) (Administrator, Maritime Administration, Attn: Office of Cargo Preference (MAR591), Washington, DC 20590-0001).

Annual legislation may specify certain countries for which DoD funds for EDA PCH&T may be expended. SCOs and/or IAs must request funding of such transfers. Requests should identify the proposed source of DoD funds and the estimated PCH&T cost. DSCA is required to notify Congress of the use of this authority and of the estimated funds to be spent for each transfer that meets congressional notification requirements under FAA, section 516(f) (22 U.S.C. 2321j). Requests for such funding should accompany the EDA approval request. DSCA determines which transfers are funded based on budget constraints and priorities associated with the source of DoD funds. As these exceptions are authorized for a limited time period, they must be renewed.

Prior to the end of a fiscal year, the IAs forward a list of available EDA assets (type and quantity, not to include secondary items) to DSCA and a list of assets that are forecasted to become EDA during the next calendar year in accordance with AECA, section 25(a) (22 U.S.C. 2765(a)). DSCA provides this information to the DoS. The Executive Branch informs Congress in the annual Javits Report.

IAs use survey messages to advise potential recipients of present or future availability of EDA and to gather information to evaluate country requirements. Survey messages normally include item(s) description, condition, rough order of magnitude cost/value of end items, costs and lead-times for support items, supportability dates and other information as appropriate. To the extent feasible, survey messages should allow a 45-day response time.

• Survey messages for non-SME are drafted by the IAs and addressed to the SCOs for action, with DSCA, DoS, DoC, the Joint Chiefs of Staff (J-5) and the CCDRs as information addressees.

• Survey messages for SME are drafted by the IAs and forwarded to DSCA for coordination and approval with the Joint Chiefs of Staff (J-5), the DoC, and the DoS before release to the SCOs for action.

The issued survey message is sent only to the SCOs in countries approved to receive copies by the coordination process with information copies to DSCA, DoS, DoC, the Joint Chiefs of Staff (J-5), and the CCDRs.

A foreign country or international organization identifies a requirement for EDA by:

• Responding to a survey message. SCO responses to these surveys should include a transfer justification as well as an assessment of the proposed recipient’s capabilities to fund follow-on operational, maintenance, and training requirements. SCO responses are provided to the IA with a copy to the CCDR, the Joint Chiefs of Staff (J-5), and DSCA; or

• Submitting a Letter of Request (LOR); or

• Visiting DLA Disposition Services location or locating items via the DLA Disposition Services website.

IAs must respond to an EDA request within 20 days. Responses should state which items are available as EDA and which items are currently not available. They should also indicate, if known, the fiscal year when such items may become available. An information copy of this response is sent to DSCA (Operations Directorate). No offer may be made at this time unless the appropriate approvals/notifications have been completed. The IAs must screen all EDA for items subject to the Missile Technology Control Regime (MTCR). See Chapter 3.

• If the item is not currently available, the IA shall keep the request on-hand until the items become available or the request is withdrawn.

• If enough assets are currently available, the IA submits the required information to DSCA (Programs Directorate) within 30 days of LOR receipt for coordination, approval and notification (if required) prior to offer. Figure C11.F3. illustrates the standard memorandum and attachment that must be completed for each proposed EDA transfer. A detailed justification, based on country requirements, must be included in each memorandum. Additionally, the national stock number and the Military Articles and Services List (MASL) of the item(s) proposed as EDA must be included in the information provided to DSCA to facilitate acceptance and delivery reporting by the IAs at the end of each fiscal year. Go to Step #9.

• If not enough assets are available, go to Step #5.

If requests exceed available assets, the IA submits a proposed allocation plan to DSCA (Programs Directorate) within 30 days of LOR receipt. The IA should consider the CCDR’s regional EDA allocation priorities when developing its recommendations. Figure C11.F6. illustrates the standard format for requests for allocation plans.

DSCA (Programs Directorate) works with Office of the Secretary of Defense (OSD) regional offices and the Joint Chiefs of Staff to develop a DoD position on which country(ies) should receive the asset(s). Concurrently, the DoS works with its offices to determine a DoS position on allocation of the assets. When possible, interested parties are notified 30 days in advance to prepare papers and justify their proposed allocation plans.

When requirements exceed assets DSCA (Programs Directorate) and the DoS co-chair an EDA Coordinating Committee (CORCOM) meeting to develop a coordinated plan to allocate EDA assets to potential recipients. The EDA CORCOM also consists of members from the Joint Chiefs of Staff (J-5) and the DoC. DSCA consolidates and represents the input of each of the regional offices within OSD. The EDA CORCOM considers the following criteria:

• Arms transfer criteria specified by the President’s Conventional Arms Transfer Policy

• Combatant Command (CCMD) priorities

• Regional balancing as dictated in legislation or to achieve maximum benefit for the United States

• Potential impact on the ability of U.S. Industry to sell new or used equipment

• Matches of country requirements with items available

• Ability of the country to effectively use and support the items

• Item location and transportation requirements

• Ability of the country to afford refurbishment of the items

If the EDA CORCOM finalizes an allocation plan, the Director, DSCA, signs and sends the allocation plan to the relevant IA for action.

If the EDA CORCOM cannot finalize an allocation plan, a recommended allocation plan is staffed for approval within OSD Policy before submission to the DoS for final approval. This coordination process takes approximately 30 to 45 days. After DoS approval, the Director, DSCA, signs and sends the allocation plan to the relevant IA so that it can begin preparing the individual cases.

If the proposed transfer does not meet Congressional Notification requirements, go to Step #10.

If the proposed transfer requires Congressional Notification, DSCA assembles a Congressional Notification package. DSCA (Programs Directorate) coordinates the package with the Under Secretary of Defense for Policy (USD(P)) regional office, DSCA (Operations and Strategy Directorates, Office of the General Counsel (OGC), and Legislative and Public Affairs(LPA)), DoC and DoS Bureau of Political-Military Affairs, Office of Regional Security and Arms Transfers (DoS (PM/RSAT)). The Congressional Notification period is 30 days. Go to Step #11.

For transfers that do not require Congressional Notification, a DSCA Determination is required before items can be authorized for transfer. DSCA prepares this Determination and coordinates it with the USD(P) regional office, DSCA (Operations Directorate and the Office of the General Counsel), DoC and DoS (PM/RSAT).

For EDA sales or grant transfers, DSCA (Programs Directorate) sends a message to the IA authorizing the offer and transfer of items to the proposed country. An information copy is sent to the SCO, DoS, the CCDR, the Joint Chiefs of Staff (J-5), and MARAD. Each message contains a Record Control Number (RCN) associated with the grant transfer that is used for requisitions. IAs should not submit LOAs for EDA grants, sales, or associated services to DSCA prior to their receipt of DSCA’s authorization message.

The IA prepares an LOA for the grant EDA items, any EDA items being sold, and/or any supporting services or non-EDA articles associated with the transfer. For cases in which EDA is not the primary item being transferred, normal case writing rules apply. For cases in which EDA is the primary item being transferred, the following three steps apply:

1. Case nickname: “EDA Grant” or “EDA Sale.”

2. Term of Sale: If the EDA transfer is a grant item, the term of sale should reflect “EDA Grant.” If there are non-EDA grant items on the LOA, the LOA must include a dollar breakout for each term of sale used.

3. Case Description:

   1. For an EDA grant transfer the case description should include the statement “is for the EDA grant transfer of [quantity] of [material nomenclature] under Section 516 of the Foreign Assistance Act of 1961 as amended…”

   2. For an EDA sale, the case description should include the statement, “is for the EDA sale of [quantity] of [material nomenclature] under Section 21 of the Arms Export Control Act as amended…”

The following additional rules apply for any line of any case in which EDA is being transferred by grant or sale:

4. Line Item Description: For both EDA grants and sales, including amendments or modifications when an EDA grant or sales line item is added or changed, the line item description must include the EDA original acquisition value.

5. Source Code: “E” for “Excess.”

6. Type of Assistance Code

   1. For an EDA grant transfer: “A – FAA Excess Defense Articles - non-reimbursable”

   2. For an EDA sale: “3 – Cash Sale from Stock-payment in advance” or appropriate code for corresponding Term of Sale.

7. If the EDA transfer is a grant, offer release code and delivery term code may remain blank if special shipping instructions apply.

8. If the EDA transfer is a grant, unit and total price should reflect $0 value. EDA sales follow normal LOA writing rules for inclusion of unit and total price.

9. Line item description note: Each line for an EDA grant or sale item must include a line item description note that includes the equipment being transferred, item nomenclature, quantity, original acquisition value, and current estimated value at the time of transfer, location, condition code and RCN. If the EDA transfer is a grant, include the phrase “Grant Value is $0” to correspond with the $0 value in the line.

10. Special EDA notes must be included as standalone notes on the LOA. See Appendix 6 for exact wording.

The Implementing Agency is required to complete a DD 1348-1a, “Issue Release/Receipt Document;” DD 1149, “Requisition and Invoice/Shipping Document;” or other equivalent form, such as a DD 250 “Material Inspection and Receiving Report,” as official documentation of delivery.

IAs notify DSCA (Programs Directorate) when offers have been accepted/rejected and items have been delivered. Not later than 45 days following the end of the fiscal year, the IAs provide DSCA a year-end report of accepted/delivered offers from each IA. IAs provide this data in the format required by DSCA (Programs Directorate).