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The Senate Foreign Relations Committee requested a review of the implementation of the defense property leasing authority contained in 10 U.S.C. 2667 which enables the Secretaries of the military departments to lease nonexcess property when it is determined to be in the public interest or will promote national defense. Originally, the law was intended to aid the industrial facilities standby programs of the military services after World War II by authorizing the lease of defense plant production equipment and real property to domestic private enterprises. However, in recent times, the law has been used to transfer military equipment to foreign countries.

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Matter for Congressional Consideration

Matter Status Comments
Congress should amend 10 U.S.C. 2667 to prohibit the lease of defense property to foreign governments on a rent-free or nominal-rent basis. Equipment transferred on this basis should be done exclusively under the authority of the Foreign Assistance Act.
Please call 202/512-6100 for additional information.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. The Secretary of Defense should direct the Secretaries of the Army, Navy, and Air Force to establish management control and accountability procedures over leased property. These procedures should require the monitoring of lessee compliance with the terms in lease agreements as well as the assurance that all lease payments are made when due.
Please call 202/512-6100 for additional information.

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