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Chapter 11 - HPR

C11.HR.1.1. Definition and Purpose. Prior to FY 1982, defense articles and services provided to allied Governments or international organizations by grant aid were administered through MAP. MAP procedures are different from those used for sales of defense articles and services. Since FY 1982, grant funds are part of the Foreign Military Financing (FMF) program and are not provided under MAP. There are still open FMS cases that use “MAP” or “MAP Merger” funds. The policy and/or procedures in this section apply to those cases. Table C11.HR.T1. lists the legal references for MAP.

Table C11.HR.T1. Military Assistance Program (MAP) Legislation Summary

Legislation Subject

AECA, Section 42(c)

Restricts off shore procurement under FMS cases funded with merged MAP funds.

FAA, Section 503(a)(3)

Authorizes the transfer of MAP funds to the FMS Trust Fund for merger with country trust fund deposits. Requires funds may be used only for payment on obligations of the recipient country for purchases from the USG under AECA, section 21 and section 22.

FAA, Section 505(a)

Places restrictions on recipients use. Executive Order No. 12163 delegates some responsibilities.

FAA, Section 505(f)

Requires net proceeds of sales received by a country in disposing of articles provided under this program to be paid to the USG. Authority to grant waivers of return of net proceeds for articles delivered prior to 1985 has been delegated to the Secretary of State.

FAA Section 620(q)

Sanctions

Brooke Amendment

Limitations on assistance to countries in default

C11.HR.1.2. What CAN Be Purchased Using MAP Funds? MAP funds are to be used solely for purchases from the USG made under the AECA. The funds are used to: finance portions of Letters of Offer and Acceptance (LOAs) that specify MAP funding; liquidate arrearages of 90 days or more on purchaser DD Form 645 FMS Billing Statements only at the specific direction of Defense Security Cooperation Agency (DSCA) (Business Operations Directorate); or pay for amounts due on DD Form 645 FMS Billing Statements only at the specific direction of DSCA (Business Operations Directorate).

C11.HR.1.3. What CANNOT Be Purchased Using MAP Funds? MAP funds may not be used for funding direct commercial purchases, or financing interest or repayments of principal or guaranty fees with respect to Federal Financing Bank (FFB) loans.

C11.HR.1.4. MAP Financing. MAP funds must be obligated within the period of availability prescribed in the annual appropriations act or the Continuing Resolution Authority.

C11.HR.1.5. MAP Pricing. Chapter 9 provides detailed guidance on pricing LOAs. FAA, section 503(a) was amended to eliminate the cost of military pay and entitlements if the case is totally financed by MAP. Effective October 1, 1985, services provided under AECA, section 21, section 22, or section 29 are priced to exclude military pay and entitlements (including retired pay accrual) for those cases citing MAP funds as the exclusive method of funding on the LOA. This pricing applies when services are performed regardless of the date of the LOA. Any subsequent Amendment or Modification to reduce the MAP method of funding below 100 percent of the case value must be re-priced to add military pay and entitlements to the entire case. This guidance does not apply to FY 1981 and prior MAP programs, to those general costs funds programmed in FY 1982 and subsequent years which are intended for the close-out of those programs, or to emergency drawdowns authorized by FAA, section 506(a). FAA, section 506 special authority implementing procedures are provided in the Drawdown section of this chapter (Section C11.HR.4).

C11.HR.1.6. Title Transfer of MAP Items. Title transfer for items transferred under the FAA is the same as for items transferred under the AECA. See LOA Standard Terms and Conditions, Figure C5.F4. Reversionary title rights do not accrue to the United States on any defense article sold under FMS procedures even when merger funds have been used to finance the purchase in whole or in part. Accordingly, recipient countries are not required (as they may be under FY 1981 and prior year MAP as well as FAA, section 516 (or its predecessor sections)) to return the article to the United States when the article is no longer needed.

C11.HR.1.7. Third Party Transfers of MAP Items. The same restrictions on transfers to a third party apply as apply for defense articles and services sold under FMS. See Chapter 8 for more information.

C11.HR.1.8. Sanctions on MAP Recipients. See Chapter 6 for information on the impact of suspensions and sanctions on MAP recipients.

C11.HR.1.9. Use and Disposal of MAP Materiel. This section applies to materiel furnished under: the FAA of 1961, as amended, (including materiel furnished under MAP orders prior to FY 1982); FAA, section 506(a) emergency drawdown authority and similar grant DoD drawdown authorities; FAA, section 516; and sections 517, 518, or 519, which were repealed in 1996. It does not apply to materiel purchased as a result of transfer of MAP funds to the FMS trust fund.

C11.HR.1.9.1. End Use of MAP-Provided Articles and/or Services. MAP recipients must use articles and/or services provided under this program only for the purposes for which they were furnished as identified in FAA, section 502; agree to return the materiel to the USG without charge when no longer needed for the purposes for which furnished; and agree not to transfer such materiel to anyone not an officer, employee, or agent of the recipient’s Government. DSCA, the Combatant Command, or the Security Cooperation Organization (SCO) do NOT have the authority to consent on behalf of the President to waive these requirements. The authority to approve retransfer, change the end-use, or otherwise dispose of MAP items has been delegated to the DoS. Controlled use of components (cannibalization) is an authorized use for these items.

C11.HR.1.9.2. Definition of Disposal. Disposal constitutes a change in end-use altering disposition so the foreign holder is no longer responsible for the item. This can occur through demilitarization or, for items not requiring demilitarization, through fair wear and tear or other destruction and qualified technical inspection that verifies the item is unserviceable and non-repairable. It can also include transfer, with military capabilities retained, to other authorized recipients.

C11.HR.1.9.3. Proceeds from Disposal of MAP Items. FAA, section 505(f) requires net proceeds from MAP disposal to be paid to the USG. In the case of items that were delivered prior to 1985, the President may waive the requirement that such net proceeds be paid to the USG if he or she determines that to do so is in the national interest of the United States. This waiver authority has been delegated to the Secretary of State. FAA, section 505(f) applies to disposals of MAP origin defense articles by countries that were the recipients of grant aid materiel after July 1, 1974. An agreement under FAA, section 505(f) that constitutes a condition of eligibility for recipients of grant defense articles programmed in FY 1975 and subsequently, was concluded with those countries. A FAA, section 505(f) agreement is not legally required for countries where no grant defense articles were programmed after June 30, 1974. U.S. policy requires (unless contrary to an agreement in force on June 30, 1974) a recipient country commitment to return to USG the net proceeds of sale whenever country disposal of MAP property is requested. In accordance with FAA, section 605(d) (22 U.S.C. 2355(d)) these funds shall be credited to the respective appropriation, fund or account used to procure such defense articles or to the appropriation, fund, or account currently available for the same general purposes. Any net proceeds from disposal shall be reimbursed in U.S. dollars except where Government-to-Government arrangements, with the DoS representing the USG, specify otherwise. See Table C8.T6., for an explanation of the calculation of net proceeds.

C11.HR.1.10. MAP Accountability and Disposal Process. Chapter 5 and Chapter 6 provide information on LOAs and deliveries of articles and/or services to purchasers. Those procedures also apply to MAP articles and/or services. Table C11.HR.T2. summarizes the unique MAP accountability and disposal processes that occur after MAP items have been delivered.

Table C11.HR.T2. MAP Accountability and Disposal Processes

# Step Action(s)
1 Establish Accountability Processes In-Country

 

  • Each SCO works with the country to ensure that a process exists for accountability, including technical inspection and disposal, of U.S.-origin defense articles. The SCO ensures these processes specifically identify aircraft, ships, radars, armored vehicles, general purpose vehicles, artillery, mortars, and missiles, including non-consumable and/or reparable components of those items, that were acquired under the FAA of 1961, as amended.

 

2 End-Use Monitoring

 

  • SCOs monitor the presence and use of U.S.-origin equipment as a matter of routine while performing other duties. Any suspected unauthorized end-use must be reported to DSCA (Operations and Programs Directorates) and the DoS with an information copy to the Combatant Command.

 

3 Excess Determinations

 

  • SCOs should encourage the country to declare MAP materiel excess when it is no longer needed and before items deteriorate. Items that are redistributed to defense forces within the country are not excess under this section.

 

4 Determine Condition of Excess Items

 

  • When MAP materiel is excess, the SCO determines its condition based on total or sample inspection, as appropriate, by qualified U.S. personnel. When this is not feasible, classification by foreign government authorities may be accepted. Disposal condition codes in DoD 4160.21-M shall be used.

 

5 Preparation of Screening Reports

SCOs report excess MAP items to the managing Implementing Agency (with an information copy to the Combatant Command and DSCA (Programs Directorate). Items must meet the following criteria to be included on the report:

  • Have a line item acquisition value of $50,000 or more.
  • In disposal Condition Codes 1 and 2 (unused-good and fair), 4 and 5 (used-good and fair), and 7 and 8 (repairs required-good and fair).
  • Are not obsolete. Unless it is believed that markets exist in other countries, “obsolete” may be assumed if items are no longer in DoD inventories and are at least 30 years old or, if this cannot be determined, have been in-country for at least 20 years.

 

These screening reports should show:

  • Item origin (e.g., “Transferred to country under MAP, January 1981”)
  • Item description
  • NSN or part number
  • Quantity
  • Condition
  • Acquisition and current value (estimated if not available)
  • SCO recommendations for disposition

 

Items not meeting the screening criteria above and those not redistributed as a result of MILDEP/defense agency screening should be disposed of through Department of Defense or DoS.

 

6 Implementing Agency Review of Screening

 

  • Implementing Agencies review SCO-prepared screening results and advise whether the items should be re-distributed or disposed of. Implementing Agencies provide any additional guidance required for reporting or redistributing excess MAP, including non-standard, items under their cognizance.

 

7 Disposal Determination

 

  • MAP-provided items may be disposed of or retransferred through a DRMO, under the AECA (via an FMS LOA) or the Federal Property and Administrative Services Act of 1949. MAP-provided equipment is not eligible for redistribution as EDA. Disposal, via sale, of undemilitarized Category I USML items may be made subject to proper demilitarization or through an LOA.
  • If item disposal is through non-DoD channels or transfer to third parties, go to Step #8.
  • If item disposal is through a DRMO or DoD channels (e.g., AECA FMS procedures), go to Step #10.

 

8 Request DoS Approval for Disposal or Third Party Transfer

Section C8.7. provides guidance on Third Party Transfer requirements. MAP recipients request Third Party Transfers from the DoS. The request shall include the following information:

  • The foreign designation or description of the item, including the name, class, identification number, or other pertinent descriptive information if a vessel.
  • Former U.S. designation of equipment, including the name, class, identification number, or other pertinent descriptive information if a vessel.
  • Date of acquisition by the United States and original acquisition cost.
  • Date and means of acquisition of equipment by the host nation and value of equipment at that time. This should be based on records if possible. If records are unavailable, best estimates should be provided and described as such.
  • Item condition, using disposal condition codes as the guide; e.g., “Code S (scrap)-has no value except basic materiel content (destroyed in crash)” or “Code 5 (used, fair)-usable without repairs but somewhat worn or deteriorated and may soon require repairs.”
  • Current estimated value, normally based on expected disposal method; e.g., scrap value or third party sale with capability retained.
  • Proposed means of disposal (e.g., sale as scrap; sale or donation, following demilitarization if applicable, to third party; sale to third country).
  • If the items were granted, whether retention of funds by the host nation is requested and whether the request is supported by the SCO.

 

9 DoS Review/Approval of Transfer Requests

 

  • The DoS reviews all Third Party Transfer requests and determines whether they will be approved. The DoS also determines whether a waiver can be granted to allow net proceeds to be retained by the recipient country.
  • If the DoS approves the Third Party Transfer request and items are being transferred to another country or other third party, go to Step #11.
  • If the DoS does not approve the Third Party Transfer request, recipient country must find other means to dispose of the items.

 

10 Disposal through DRMS or Other DoD Channels

 

  • When items are disposed of through DoD channels, DoS clearance is not required. This applies to items turned over to DRMOs for disposal or to in-country DRMO-supervised disposal. DRMO does NOT have authority to authorize countries to dispose of articles themselves. Speed and assurance that proper disposal procedures are followed are principal reasons to emphasize disposal through a DRMO. This includes instances where the holding country disposes of items based on arrangements with DRMS, DRMS regional offices, DRMOs, or representatives of those entities such as disposal assistance teams, in conformity with DoD disposal standards and under AECA or DoDI 2030.8.
  • Condition Code S (scrap) consumable items not requiring demilitarization or other special controls are no longer defense articles and may be disposed of through DoD facilities without further U.S. approval.
  • LOAs selling MAP items through DRMS (i.e., not returned to U.S. inventory) must include the unique notes. See Appendix 6 for exact note wording. Any LOA sale of MAP-provided items shows Source of Supply Code “E.” PCH&T and/or rehabilitation costs may be included on the LOA as appropriate.
  • DoD may use items not taken to fill Security Assistance requirements.
  • Go to Step #12.

 

11 Disposal to a Third Party

 

  • Upon approval by the DoS, the MAP recipient may transfer the items to the third party in accordance with instructions provided by the USG.
  • Go to Step #12

 

12 Net Proceeds Returned to USG

 

  • Net proceeds resulting from the item disposal must be returned to the USG unless a waiver has been granted by the DoS. See Table C8.T6. for an explanation of the calculation of net proceeds.

 

13 Update MAP Records

 

  • SCOs in countries receiving or redistributing MAP property advise the appropriate MILDEP or agency when transfer of articles has been completed, ensure that due-ins for items received are cancelled, and submit appropriate program change data to DSCA.