B-244177, Jul 26, 1991

B-244177, Jul 26, 1991

MISCELLANEOUS TOPICS - National Security/International Affairs - Foreign sales - Military assistance - Prohibition - Desert Storm DIGEST: Responding to a question regarding the prohibition in section 109 of Pub.L. No. 102-28 against providing sales, credits, or guarantees for defense articles or services under Arms Export Control Act to countries that have not fulfilled their commitments to share burden of Operation Desert Storm, GAO finds no basis for legal objection to the view of the Department of State that: (1) the prohibition does not extend to activities undertaken prior to the consummation of the transaction, and (2) the prohibition does not require that the entire commitment be paid before foreign military sales transactions may be consummated.

Honorable Robert C. Byrd

Chairman, Committee on Appropriations

United States Senate:

Your May 6, 1991, letter requested a discussion of the prohibition in section 109 of Public Law 102-28 against providing sales, credits, or guarantees for defense articles or services under the Arms Export Control Act to countries that have not fulfilled their "commitments" to share the burden of Operation Desert Storm. You asked whether the section prohibits executive branch agencies from taking actions related to any such transaction prior to consummation of the transaction. Although your letter made specific reference to a proposed sale to the United Arab Emirates, a member of your staff has since informed us that you are interested as well in a general answer to your question. We also understand from your staff that you wish us to discuss whether less than complete fulfillment of a commitment to share the Desert Storm burden would trigger the prohibition.

In addition to the issues discussed in this letter, our National Security and International Affairs Division (NSIAD) is performing a review of the Administration's implementation of sections 107 and 109 of Public Law 102- 28, pursuant to your request.

Concerning the sale to the United Arab Emirates, the State Department has indicated that the country's total commitment to support Operation Desert Storm has been fulfilled. We also understand that notification to the Congress of the proposed sale was provided on June 11, 1991. NSIAD plans to cover this matter in its review.

Section 109 provides as follows:

"None of the funds appropriated or otherwise made available by this Act or any other provision of law shall be available for sales, credits, or guarantees for defense articles or defense services under the Arms Export Control Act to any country that has made a commitment to contribute resources to defray any of the costs of Operation Desert Storm and that has not fulfilled its commitment."

We requested the views of the Departments of State and Defense concerning the interpretation of this section. By letter dated July 15, 1991, the Assistant Legal Advisor for Politico-Military Affairs provided the views of the Department of State. We understand that the Department of Defense concurs with the views expressed in that letter.

On the question of activities undertaken in preparation for a sale prior to its consummation, the Department of State's letter states that:

"We do not interpret section 109 as prohibiting Executive branch officials from taking steps that might be preliminary to the making of sales, so long as no agreements are actually concluded for sales of defense articles or defense services under the Arms Export Control Act. It would thus be permissible for the Administration to "process" FMS cases in the sense, for example, of evaluating a country's military need for particular defense articles, or the effects such a sale might have on ongoing diplomatic efforts. Indeed, taking such preliminary actions could prove useful in encouraging a recalcitrant country to fulfill its commitments by sending a signal that the United States would be willing to resume this aspect of our bilateral relationship expeditiously once that country carries through on its pledge."

We see no basis for objecting to this interpretation. The language of section 109 itself refers only to sales, credits, or guarantees, not to activities preliminary to the making of such agreements. Nor is this view inconsistent with a statement in the Senate Appropriations Committee report, that:

"... the Committee has included a provision in this measure ... which prohibits any arms sale to any nation which has not yet contributed the amount which it pledged." S. Rep. No. 102-23 at 22 (1991).

In enacting other appropriations limitations, the Congress has explicitly precluded activities preliminary to the actual commitment of funds to carry out program ends. For example, section 9017 of the fiscal year 1990 Department of Defense Appropriations Act provides as follows:

"Section 9017. During the current fiscal year and hereafter, none of the funds available to the Department of Defense shall be available for the

planning or execution of programs which utilize amounts credited to Department of Defense appropriations or funds pursuant to the provisions of section 37(a) of the Arms Export Control Act representing payment for the actual value of defense articles specified in section 21(a)(1)(A) of that Act: ..." Section 9017 of the 1990 DOD Appropriations Act, Pub.L. No. 101-165.

In the absence of specificity such as that contained in section 9017, or of a clearer expression of the section's meaning in its legislative history, we see little basis for objecting to State's interpretation of the subject language as not extending to activities prior to the actual consummation of an agreement.

Turning to the issue of whether the fulfillment of a country's commitment under section 109 means that the foreign country must pay the full amount of the pledged amount, as opposed to simply meeting a payment schedule, the legislative history of section 109 reveals that the original Senate language on this point was modified during conference.

Both the language and stated intent of the Senate Appropriations Committee's initial version of section 109 would have prohibited the making of an FMS sale until the foreign country had completely paid its contribution commitment. That version provided as follows:

"None of the funds appropriated or otherwise made available by this Act or any other provision of law shall be available for sales, credits, or guarantees for defense articles or defense services under the Arms Export Control Act to any country that has made a commitment to contribute resources to defray any of the costs of Operation Desert Storm and has not made such contributions."

The Senate Appropriations Committee explained the intended meaning of the above prohibition as follows:

"The Committee understands the administration is considering the sale of sophisticated American weapons to some of the countries which have pledged aid but not yet fully delivered on their pledges. It does not feel that it is proper for such arms sales to be submitted to the Congress for its approval until the full amount of the money promised has been delivered, since if the promisor nation has money to buy arms from us, it can first use that money to fulfill its pledge to help defray some of our costs. Therefore, the Committee has included a provision in this measure ... which prohibits any arms sale to any nation which has not yet contributed the amount which it pledged." S. Rep. No. 102-23 at 22 (1991).

The Conference Committee, however, modified the Senate's version to read "... has not fulfilled its commitment." This was the language enacted into law. The Conference Committee report did not explain whether this change was intended to have any substantive legal effect.

The position of the Department of State on the meaning of the modification is that a letter from the Secretary of State dated March 21, 1991, expressing concern about section 109, led to the modified language adopted by the Conference Committee. It is the Department's view, as expressed in its letter to us, that:

"... In rejecting language that turns on whether a country 'has not made such contributions,' the conferees decided not to impose a standard that could be interpreted (and, indeed, had been interpreted in the report of the Senate Appropriations Committee) as covering countries until the full amount of their pledges had in fact been contributed. By instead adopting language that turns on whether a country 'has not fulfilled its commitment,' the conferees decided that the touchstone for deciding whether section 109 covers a country is the country's own commitment.

Thus, a country cannot be said to have 'not fulfilled its commitment' to pay an amount that is not yet due."

While the legislative history is silent as to whether section 109 was modified in response to the Secretary's concern, or as to whether the intent of the Conference Committee was, in fact, as suggested in the Department's letter, we are of the view that the language, as enacted, is susceptible to the Department's interpretation. We also recognize that you made a floor statement to the effect that the Conference Committee's change was only technical in nature and therefore should not be interpreted as substantively altering the meaning of the original Senate language. In the absence of any support in the Conference Report for this interpretation of the conference action, however, and in view of the language of section l09 as enacted, we see no basis for legal objection to the Department's position. Cf., B-230656, April 4, 1988.

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