
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 22USC2762]

 
               TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
 
                     CHAPTER 39--ARMS EXPORT CONTROL
 
          SUBCHAPTER II--FOREIGN MILITARY SALES AUTHORIZATIONS
 
Sec. 2762. Procurement for cash sales


(a) Authority of President; dependable undertaking by foreign country or 
        international organization; interest rates

    Except as otherwise provided in this section, the President may, 
without requirement for charge to any appropriation or contract 
authorization otherwise provided, enter into contracts for the 
procurement of defense articles or defense services for sale for United 
States dollars to any foreign country or international organization if 
such country or international organization provides the United States 
Government with a dependable undertaking (1) to pay the full amount of 
such contract which will assure the United States Government against any 
loss on the contract, and (2) to make funds available in such amounts 
and at such times as may be required to meet the payments required by 
the contract, and any damages and costs that may accrue from the 
cancellation of such contract, in advance of the time such payments, 
damages, or costs are due. Interest shall be charged on any net amount 
by which any such country or international organization is in arrears 
under all of its outstanding unliquidated dependable undertakings, 
considered collectively. The rate of interest charged shall be a rate 
not less than a rate determined by the Secretary of the Treasury taking 
into consideration the current average market yield on outstanding 
short-term obligations of the United States as of the last day of the 
month preceding the net arrearage and shall be computed from the date of 
net arrearage.

(b) Issuance of letters of offer under emergency determination; 
        availability of appropriations for payment

    The President may, if he determines it to be in the national 
interest, issue letters of offer under this section which provide for 
billing upon delivery of the defense article or rendering of the defense 
service and for payment within one hundred and twenty days after the 
date of billing. This authority may be exercised, however, only if the 
President also determines that the emergency requirements of the 
purchaser for acquisition of such defense articles and services exceed 
the ready availability to the purchaser of funds sufficient to make 
payments on a dependable undertaking basis and submits both 
determinations to the Congress together with a special emergency request 
for authorization and appropriation of additional funds to finance such 
purchases under this chapter. Appropriations available to the Department 
of Defense may be used to meet the payments required by the contracts 
for the procurement of defense articles and defense services and shall 
be reimbursed by the amounts subsequently received from the country or 
international organization to whom articles or services are sold.

(c) Applicability of Renegotiation Act of 1951

    The provisions of the Renegotiation Act of 1951 [50 App. U.S.C. 1211 
et seq.] do not apply to procurement contracts heretofore or hereafter 
entered into under this section, section 2769 of this title, or 
predecessor provisions of law.

(d) Competitive pricing

    (1) Procurement contracts made in implementation of sales under this 
section for defense articles and defense services wholly paid for from 
funds made available on a nonrepayable basis shall be priced on the same 
costing basis with regard to profit, overhead, independent research and 
development, bid and proposal, and other costing elements, as is 
applicable to procurements of like items purchased by the Department of 
Defense for its own use.
    (2) Direct costs associated with meeting additional or unique 
requirements of the purchaser shall be allowable under contracts 
described in paragraph (1). Loadings applicable to such direct costs 
shall be permitted at the same rates applicable to procurement of like 
items purchased by the Department of Defense for its own use.

(Pub. L. 90-629, ch. 2, Sec. 22, Oct. 22, 1968, 82 Stat. 1323; Pub. L. 
93-189, Sec. 25(3), Dec. 17, 1973, 87 Stat. 730; Pub. L. 94-329, title 
II, Sec. 207, June 30, 1976, 90 Stat. 738; Pub. L. 95-384, Sec. 17, 
Sept. 26, 1978, 92 Stat. 740; Pub. L. 96-533, title I, Sec. 105(b)(2), 
Dec. 16, 1980, 94 Stat. 3134; Pub. L. 104-107, title V, Sec. 531A(a), 
Feb. 12, 1996, 110 Stat. 731; Pub. L. 106-113, div. B, Sec. 1000(a)(7) 
[div. B, title XII, Sec. 1223], Nov. 29, 1999, 113 Stat. 1536, 1501A-
498.)

                       References in Text

    The Renegotiation Act of 1951, referred to in subsec. (c), is act 
Mar. 23, 1951, ch. 15, 65 Stat. 7, as amended, which was classified 
principally to section 1211 et seq. of Title 50, Appendix, War and 
National Defense, prior to its omission from the Code. See Codification 
note set out under section 1211 of Title 50, Appendix.


                               Amendments

    1999--Subsec. (d). Pub. L. 106-113 designated existing provisions as 
par. (1) and added par. (2).
    1996--Subsec. (d). Pub. L. 104-107 added subsec. (d).
    1980--Subsec. (c). Pub. L. 96-533 substituted ``procurement 
contracts'' for ``contracts for the procurement of defense articles and 
defense services'' and inserted reference to contracts entered into 
under section 2769 of this title.
    1978--Subsec. (c). Pub. L. 95-384 added subsec. (c).
    1976--Subsec. (a). Pub. L. 94-329, Sec. 207(a), inserted provisions 
requiring interest to be charged on any net amount a country or 
international organization is in arrears and the rate of interest to be 
determined by the Secretary of Treasury considering current average 
market yield of short-term obligations of United States on a particular 
day.
    Subsec. (b). Pub. L. 94-329, Sec. 207(b), substituted provisions 
authorizing President to issue letters of offer with provisions for 
billing on delivery of article or rendering of service and payment 
within 120 days after billing date where President determines that 
emergency conditions exist, for provisions authorizing President to 
accept a dependable undertaking of a foreign country or international 
organization with respect to sales of defense articles and services and 
to make payment within 120 days of delivery of article or rendering of 
service.
    1973--Pub. L. 93-189 designated text preceding first proviso as 
subsec. (a) and inserted ``Except as otherwise provided in this 
section,'' before ``the President'', designated first proviso as subsec. 
(b) and inserted reference to acceptance of a dependable undertaking of 
a foreign country or international organization, and struck out further 
provisions setting forth Presidential powers with respect to sales 
agreements with and payments by purchasing countries or international 
organizations.


       Effective Date of 1996 Amendment; Implementing Regulations

    Section 531A(b) of Pub. L. 104-107 provided that: ``Section 22(d) of 
the Arms Export Control Act [subsec. (d) of this section], as added by 
subsection (a)--
        ``(1) shall take effect on the 60th day following the date of 
    the enactment of this Act [Feb. 12, 1996];
        ``(2) shall be applicable only to contracts made in 
    implementation of sales made after such effective date; and
        ``(3) shall be implemented by revised procurement regulations, 
    which shall be issued prior to such effective date.''

                         Delegation of Functions

    Functions of President under subsec. (a) of this section delegated 
to Secretary of Defense by section 1(d) of Ex. Ord. No. 11958, Jan. 18, 
1977, 42 F.R. 4311, as amended, set out as a note under section 2751 of 
this title.


                            Prior Provisions

    Provisions similar to those comprising subsec. (d)(2) of this 
section were contained in the following appropriation acts:
    Pub. L. 106-113, div. B, Sec. 1000(a)(2) [title V, Sec. 556], Nov. 
29, 1999, 113 Stat. 1535, 1501A-100.
    Pub. L. 105-277, div. A, Sec. 101(d) [title V, Sec. 536], Oct. 21, 
1998, 112 Stat. 2681-150, 2681-181.
    Pub. L. 105-118, title V, Sec. 535, Nov. 26, 1997, 111 Stat. 2416.
    Pub. L. 104-208, div. A, title I, Sec. 101(c) [title V, Sec. 533A], 
Sept. 30, 1996, 110 Stat. 3009-121, 3009-153.
    Pub. L. 104-107, title V, Sec. 531A(c), Feb. 12, 1996, 110 Stat. 
731.

                  Section Referred to in Other Sections

    This section is referred to in sections 2291c, 2311, 2751, 2767, 
2775, 2776, 2777, 2779, 2791, 2795 of this title.
