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10 U.S.C. § 4851 — Defense memoranda of understanding and

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10 U.S.C. § 4851 — Defense memoranda of understanding and

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Page 2885 TITLE 10—ARMED FORCES § 4851 Editorial Notes AMENDMENTS 2021—Pub. L. 116–283, § 1869(d)(1), as added by Pub. L. 117–81, § 1701(p)(1)(A), (B), renumbered section 2522 of this title as this section. 2018—Pub. L. 115–232 substituted ‘‘chapter 764’’ for ‘‘chapter 434’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by Pub. L. 117–81 applicable as if in- cluded in the enactment of title XVIII of Pub. L. 116–283 as enacted, see section 1701(a)(2) of Pub. L. 117–81, set out in a note preceding section 3001 of this title and note below. Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title. EFFECTIVE DATE OF 2018 AMENDMENT Amendment by Pub. L. 115–232 effective Feb. 1, 2019, with provision for the coordination of amendments and special rule for certain redesignations, see section 800 of Pub. L. 115–232, set out as a note preceding section 3001 of this title. CHAPTER 385—OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS Subchapter Sec. I. Defense Trade Reciprocity and Offset Policy ................................................. 4851 II. Limitations on Procurement of Certain Items from Foreign Sources ............... 4861 III. Limitations on Procurement from Cer- tain Foreign Sources .......................... 4871 IV. Defense Industrial Reserve and Indus- trial Mobilization ............................... 4881 V. Other Matters ........................................ 4891 Editorial Notes PRIOR PROVISIONS A prior chapter 385 ‘‘PROCUREMENT TECHNICAL ASSISTANCE COOPERATIVE AGREEMENT PRO- GRAM’’, consisting of reserved section 4881, was re- pealed by Pub. L. 116–283, div. A, title XVIII, § 1872(a)(1)(A), Jan. 1, 2021, 134 Stat. 4287. SUBCHAPTER I—DEFENSE TRADE RECIPROCITY AND OFFSET POLICY Sec. 4851. Defense memoranda of understanding and re- lated agreements. 4852. Offset policy; notification. § 4851. Defense memoranda of understanding and related agreements (a) CONSIDERATIONS IN MAKING AND IMPLE- MENTING MOUS AND RELATED AGREEMENTS.—In the negotiation, renegotiation, and implementa- tion of any existing or proposed memorandum of understanding, or any existing or proposed agreement related to a memorandum of under- standing, between the Secretary of Defense, act- ing on behalf of the United States, and one or more foreign countries (or any instrumentality of a foreign country) relating to research, devel- opment, or production of defense equipment, or to the reciprocal procurement of defense items, the Secretary of Defense shall— (1) consider the effects of such existing or proposed memorandum of understanding or re- lated agreement on the defense technology and industrial base of the United States; and (2) regularly solicit and consider comments and recommendations from the Secretary of Commerce with respect to the commercial im- plications of such memorandum of under- standing or related agreement and the poten- tial effects of such memorandum of under- standing or related agreement on the inter- national competitive position of United States industry. (b) INTER-AGENCY REVIEW OF EFFECTS ON UNITED STATES INDUSTRY.—Whenever the Sec- retary of Commerce has reason to believe that an existing or proposed memorandum of under- standing or related agreement has, or threatens to have, a significant adverse effect on the inter- national competitive position of United States industry, the Secretary may request an inter- agency review of the memorandum of under- standing or related agreement. If, as a result of the review, the Secretary determines that the commercial interests of the United States are not being served or would not be served by ad- hering to the terms of such existing memo- randum or related agreement or agreeing to such proposed memorandum or related agree- ment, as the case may be, the Secretary shall recommend to the President the renegotiation of the existing memorandum or related agree- ment or any modification to the proposed memorandum of understanding or related agree- ment that he considers necessary to ensure an appropriate balance of interests. (c) LIMITATION ON ENTERING INTO MOUS AND RELATED AGREEMENTS.—A memorandum of un- derstanding or related agreement referred to in subsection (a) may not be entered into or imple- mented if the President, taking into consider- ation the results of the inter-agency review, de- termines that such memorandum of under- standing or related agreement has or is likely to have a significant adverse effect on United States industry that outweighs the benefits of entering into or implementing such memo- randum or agreement. (Added Pub. L. 100–456, div. A, title VIII, § 824, Sept. 29, 1988, 102 Stat. 2019, § 2504; amended Pub. L. 101–189, div. A, title VIII, § 815(a), Nov. 29, 1989, 103 Stat. 1500; Pub. L. 101–510, div. A, title XIV, § 1453, Nov. 5, 1990, 104 Stat. 1694; renumbered § 2531 and amended Pub. L. 102–484, div. D, title XLII, §§ 4202(a), 4271(c), Oct. 23, 1992, 106 Stat. 2659, 2696; renumbered § 4851, Pub. L. 116–283, div. A, title XVIII, § 1870(b), Jan. 1, 2021, 134 Stat. 4284.) Editorial Notes AMENDMENTS 2021—Pub. L. 116–283 renumbered section 2531 of this title as this section. 1992—Pub. L. 102–484, § 4202(a), renumbered section 2504 of this title as section 2531. Subsec. (a)(1). Pub. L. 102–484, § 4271(c), substituted ‘‘defense technology and industrial base’’ for ‘‘defense industrial base’’. 1990—Subsec. (a). Pub. L. 101–510 inserted ‘‘or to the reciprocal procurement of defense items,’’ after ‘‘de- fense equipment,’’ in introductory provisions. Page 2886 TITLE 10—ARMED FORCES § 4852 1989—Pub. L. 101–189 inserted ‘‘and related agree- ments’’ after ‘‘understanding’’ in section catchline and amended text generally. Prior to amendment, text read as follows: ‘‘In the negotiation and renegotiation of each memorandum of understanding between the Sec- retary of Defense, acting on behalf of the United States, and one or more foreign countries (or any in- strumentality of a foreign country) relating to re- search, development, or production of defense equip- ment, the Secretary of Defense shall— ‘‘(1) consider the effect of such proposed memo- randum of understanding on the defense industrial base of the United States; and ‘‘(2) regularly solicit and consider information or recommendations from the Secretary of Commerce with respect to the effect on the United States indus- trial base of such memorandum of understanding.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title. DEFENSE TRADE RECIPROCITY Pub. L. 108–375, div. A, title VIII, § 831, Oct. 28, 2004, 118 Stat. 2017, provided that: ‘‘(a) POLICY.—It is the policy of Congress that pro- curement regulations used in the conduct of trade in defense articles and defense services should be based on the principle of fair trade and reciprocity consistent with United States national security, including the need to ensure comprehensive manufacturing capa- bility in the United States defense industrial base. ‘‘(b) REQUIREMENT.—The Secretary of Defense shall make every effort to ensure that the policies and prac- tices of the Department of Defense reflect the goal of establishing an equitable trading relationship between the United States and its foreign defense trade part- ners, including ensuring that United States firms and United States employment in the defense sector are not disadvantaged by unilateral procurement practices by foreign governments, such as the imposition of offset agreements in a manner that undermines the United States defense industrial base. In pursuing this goal, the Secretary shall— ‘‘(1) develop a comprehensive defense acquisition trade policy that provides the necessary guidance and incentives for the elimination of any adverse effects of offset agreements in defense trade; and ‘‘(2) review and make necessary modifications to existing acquisition policies and strategies, and re- view and seek to make necessary modifications to ex- isting memoranda of understanding, cooperative project agreements, or related agreements with for- eign defense trade partners, to reflect this goal. ‘‘(c) REGULATIONS.—The Secretary shall prescribe regulations to implement this section in the Depart- ment of Defense supplement to the Federal Acquisition Regulation. ‘‘(d) DEFINITIONS.—In this section: ‘‘(1) The term ‘foreign defense trade partner’ means a foreign country with respect to which there is— ‘‘(A) a memorandum of understanding or related agreement described in section 2531(a) of title 10, United States Code [now 10 U.S.C. 4851(a)]; or ‘‘(B) a cooperative project agreement described in section 27 of the Arms Export Control Act (22 U.S.C. 2767). ‘‘(2) The term ‘offset agreement’ has the meaning provided that term by section 36(e) of the Arms Ex- port Control Act (22 U.S.C. 2776(e)). ‘‘(3) The terms ‘defense article’ and ‘defense service’ have the meanings provided those terms by section 47(7) of the Arms Export Control Act (22 U.S.C. 2794(7)).’’ § 4852. Offset policy; notification (a) ESTABLISHMENT OF OFFSET POLICY.—The President shall establish, consistent with the re- quirements of this section, a comprehensive pol- icy with respect to contractual offset arrange- ments in connection with the purchase of de- fense equipment or supplies which addresses the following: (1) Transfer of technology in connection with offset arrangements. (2) Application of offset arrangements, in- cluding cases in which United States funds are used to finance the purchase by a foreign gov- ernment. (3) Effects of offset arrangements on specific subsectors of the industrial base of the United States and for preventing or ameliorating any serious adverse effects on such subsectors. (b) TECHNOLOGY TRANSFER.—(1) No official of the United States may enter into a memo- randum of understanding or other agreement with a foreign government that would require the transfer of United States defense technology to a foreign country or a foreign firm in connec- tion with a contract that is subject to an offset arrangement if the implementation of such memorandum or agreement would significantly and adversely affect the defense industrial base of the United States and would result in a sub- stantial financial loss to a United States firm. (2) Paragraph (1) shall not apply in the case of a memorandum of understanding or agreement described in paragraph (1) if the Secretary of De- fense, in consultation with the Secretary of Commerce and the Secretary of State, deter- mines that a transfer of United States defense technology pursuant to such understanding or agreement will result in strengthening the na- tional security of the United States and so cer- tifies to Congress. (3) If a United States firm is required under the terms of a memorandum of understanding, or other agreement entered into by the United States with a foreign country, to transfer de- fense technology to a foreign country, the United States firm may protest the determina- tion to the Secretary of Defense on the grounds that the transfer of such technology would ad- versely affect the defense industrial base of the United States and would result in substantial fi- nancial loss to the protesting firm. The Sec- retary of Defense, in consultation with the Sec- retary of Commerce and the Secretary of State, shall make the final determination of the valid- ity of the protesting firm’s claim. (c) NOTIFICATION REGARDING OFFSETS.—If at any time a United States firm enters into a con- tract for the sale of a weapon system or defense- related item to a foreign country or foreign firm and such contract is subject to an offset ar- rangement exceeding $50,000,000 in value, such firm shall notify the Secretary of Defense of the proposed sale. Notification shall be made under this subsection in accordance with regulations prescribed by the Secretary of Defense in con- sultation with the Secretary of Commerce. (d) DEFINITIONS.—In this section: (1) The term ‘‘United States firm’’ means a business entity that performs substantially all of its manufacturing, production, and research

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Federal law — U.S. Code and appendices · legal_authorities

10 U.S.C. § 4851 — Defense memoranda of understanding and related agreements

**(a) Considerations in Making and Implementing MOUs and Related Agreements.—** In the negotiation, renegotiation, and implementation of any existing or proposed memorandum of understanding, or any existing or proposed agreement related to a memorandum of understanding, between the Secretary of Defense, acting on behalf of the United States, and one or more foreign countries (or any instrumentality of a foreign country) relating to research, development, or production of defense equipment, or to the reciprocal procurement of defense items, the Secretary of Defense shall— (1) consider the effects of such existing or proposed memorandum of understanding or related agreement on the defense technology and industrial base of the United States; and (2) regularly solicit and consider comments and recommendations from the Secretary of Commerce with respect to the commercial implications of such memorandum of understanding or related agreement and the potential effects of such memorandum of understanding or related agreement on the international competitive position of United States industry. **(b) Inter-Agency Review of Effects on United States Industry.—** Whenever the Secretary of Commerce has reason to believe that an existing or proposed memorandum of understanding or related agreement has, or threatens to have, a significant adverse effect on the international competitive position of United States industry, the Secretary may request an inter-agency review of the memorandum of understanding or related agreement. If, as a result of the review, the Secretary determines that the commercial interests of the United States are not being served or would not be served by adhering to the terms of such existing memorandum or related agreement or agreeing to such proposed memorandu

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Federal law — U.S. Code and appendices · legal_authorities

22 U.S.C. § 2767 — Authority of President to enter into cooperative projects with friendly foreign countries

**(a) Authority of President** 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) Definitions** As used in this section— (1) the term “cooperative project”, 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 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; (2) 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

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Federal law — U.S. Code and appendices · legal_authorities

22 U.S.C. § 2767 — Authority of President to enter into coop-

Page 1223 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 2767 (d) ‘‘Security assistance surveys’’ defined As used in this section, the term ‘‘security as- sistance surveys’’ means any survey or study conducted in a foreign country by United States Government personnel for the purpose of assess- ing the needs of that country for security assist- ance, and includes defense requirement surveys, site surveys, general surveys or studies, and en- gineering assessment surveys. (Pub. L. 90–629, ch. 2, § 26, as added Pub. L. 95–384, § 19, Sept. 26, 1978, 92 Stat. 740; amended Pub. L. 99–83, title I, § 114, Aug. 8, 1985, 99 Stat. 198; Pub. L. 103–437, § 9(a)(7), Nov. 2, 1994, 108 Stat. 4588.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (a), was in the original ‘‘this Act’’, meaning Pub. L. 90–629, Oct. 22, 1968, 82 Stat. 1321, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 2751 of this title and Tables. AMENDMENTS 1994—Subsec. (c). Pub. L. 103–437 substituted ‘‘Foreign Affairs’’ for ‘‘International Relations’’. 1985—Pub. L. 99–83, § 114(a)(1), substituted ‘‘Security assistance’’ for ‘‘Defense requirement’’ in section catchline. Subsecs. (a), (b). Pub. L. 99–83, § 114(a)(2), substituted ‘‘security assistance’’ for ‘‘defense requirement’’ wher- ever appearing. Subsec. (c). Pub. L. 99–83, § 114(a)(2), (b), substituted ‘‘submit to that committee copies of security assist- ance surveys’’ for ‘‘grant that committee access to de- fense requirement surveys’’. Subsec. (d). Pub. L. 99–83, § 114(a)(3), added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1985 AMENDMENT Amendment by Pub. L. 99–83 effective Oct. 1, 198

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Federal law — U.S. Code and appendices · legal_authorities

22 U.S.C. § 2776 — Reports and certifications to Congress on military exports

**(a) Report by President; contents** The President shall transmit to the Speaker of the House of Representatives, the Committee on Foreign Affairs of the House of Representatives, and to the chairman of the Committee on Foreign Relations of the Senate not more than sixty days after the end of each quarter an unclassified report (except that any material which was transmitted in classified form under subsection (b)(1) or (c)(1) of this section may be contained in a classified addendum to such report, and any letter of offer referred to in paragraph (1) of this subsection may be listed in such addendum unless such letter of offer has been the subject of an unclassified certification pursuant to subsection (b)(1) of this section, and any information provided under paragraph (11) of this subsection may also be provided in a classified addendum) containing— (1) a listing of all letters of offer to sell any major defense equipment for $1,000,000 or more under this chapter to each foreign country and international organization, by category, if such letters of offer have not been accepted or canceled; (2) a listing of all such letters of offer that have been accepted during the fiscal year in which such report is submitted, together with the total value of all defense articles and defense services sold to each foreign country and international organization during such fiscal year; (3) the cumulative dollar amounts, by foreign country and international organization, of sales credit agreements under [section 2763 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section2763&num=0&edition=prelim) and guaranty agreements under [section 2764 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section2764&num=0&edi

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Federal law — U.S. Code and appendices · legal_authorities

22 U.S.C. § 2776 — Reports and certifications to Congress on

Page 1231 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 2776 75 Stat. 424, which is classified principally to chapter 32 (§ 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. The Food for Peace Act, as amended, referred to in subsec. (a), is act July 10, 1954, ch. 469, 68 Stat. 454, which is classified principally to chapter 41 (§ 1691 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under section 1691 of Title 7 and Tables. AMENDMENTS 2008—Subsec. (a). Pub. L. 110–246 substituted ‘‘Food for Peace Act’’ for ‘‘Agricultural Trade Development and Assistance Act of 1954’’. 1974—Subsec. (b). Pub. L. 93–559 repealed subsec. (b) which provided for Presidential reports to Congress re- specting sales and guaranties to less developed coun- tries. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–246 effective May 22, 2008, see section 4(b) of Pub. L. 110–246, set out as an Effec- tive Date note under section 8701 of Title 7, Agri- culture. EFFECTIVE DATE Section effective July 1, 1968, see section 41 of Pub. L. 90–629, set out as a note under section 2751 of this title. Executive Documents DELEGATION OF FUNCTIONS For delegation of functions of the President under subsec. (a) of this section, see section 1(i) of Ex. Ord. No. 13637, Mar. 8, 2013, 78 F.R. 16130, set out as a note under section 2751 of this title. Functions were pre- viously delegated by Ex. Ord. No. 11958, which was for- merly set out as a note under section 2751 of this title and was revoked, subject to a savings provision, by sec- tion 4 of Ex. Ord. No. 13637. § 2776. Re

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Federal law — U.S. Code and appendices · legal_authorities

22 U.S.C. § 2794 — Definitions

For purposes of this chapter, the term— (1) “excess defense article” has the meaning provided by [section 2403(g) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section2403/g&num=0&edition=prelim); (2) “value” means, in the case of an excess defense article, except as otherwise provided in [section 2761(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section2761/a&num=0&edition=prelim), not less than the greater of— (A) the gross cost incurred by the United States Government in repairing, rehabilitating, or modifying such article, plus the scrap value; or (B) the market value, if ascertainable; (3) “defense article”, except as provided in paragraph (7) of this section, means, with respect to a sale or transfer by the United States under the authority of this chapter or any other foreign assistance or sales program of the United States— (A) any weapon, weapons system, munition, aircraft, vessel, boat, or other implement of war, (B) any property, installation, commodity, material, equipment, supply, or goods used for the purposes of making military sales, (C) any machinery, facility, tool, material, supply, or other item necessary for the manufacture, production, processing, repair, servicing, storage, construction, transportation, operation, or use of any article listed in this paragraph, and (D) any component or part of any article listed in this paragraph, but does not include merchant vessels or (as defined by the Atomic Energy Act of 1954 [[42 U.S.C. 2011](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section2011&num=0&edition=prelim) et seq.]) source material (except uranium depleted in the isotope 235 which is incorporated in defense articles so

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Federal law — U.S. Code and appendices · legal_authorities

22 U.S.C. § 2794 — Definitions

Page 1272 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 2793 1977—Subsec. (b). Pub. L. 95–92 substituted provisions relating to criteria for recovery of charges for adminis- trative expenses calculated under section 2761(e)(1)(A) of this title, for provisions relating to reimbursement from amounts received for sales under sections 2761 and 2762 of this title of administrative expenses incurred by a United States government department or agency in carrying out functions under this chapter for the ben- efit of any foreign country. 1976—Pub. L. 94–329 designated existing provisions as subsec. (a) and added subsec. (b). Statutory Notes and Related Subsidiaries 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 sec- tion 2151–1 of this title. EFFECTIVE DATE Section effective July 1, 1968, see section 41 of Pub. L. 90–629, set out as a note under section 2751 of this title. § 2793. Other provisions unaffected No provision of this chapter shall be construed as modifying in any way the provisions of the Atomic Energy Act of 1954, as amended [42 U.S.C. 2011 et seq.], or section 8677 of title 10. (Pub. L. 90–629, ch. 4, § 44, Oct. 22, 1968, 82 Stat. 1327; Pub. L. 115–232, div. A, title VIII, § 809(f), Aug. 13, 2018, 132 Stat. 1842.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘this Act’’, meaning Pub. L. 90–629, Oct. 22, 1968, 82 Stat. 1321, which is classified principally to this chap- ter. For complete classification of this Act to the Code, see Short Title note set out under section 2751 of this title and Tables. The Atomic Energy Act of 1954, as amended, referred to in text, is act Aug. 1, 1946, ch. 724, as add

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