Defense articles and military equipment that are no longer needed by the U.S. armed forces are eligible for transfer to foreign countries under section 516 of the Foreign Assistance Act (FAA) of 1961. These excess articles and materials range from rations and uniforms to vehicles, aircraft, and ships. Between 1990 and 1995, the United States transferred more than $7 billion worth of excess military equipment worldwide––most of it to developing countries. During the last 20 years, the U.S. Navy has supplied 231 ships to 43 countries and 26 aircraft to six countries.
The Foreign Assistant Act authorizes the President to transfer excess defense articles on a grant basis to countries which the State Department defines as eligible. The list of eligible countries must be included in the State Department's annual Congressional Presentation for Foreign Operations. Although many transfers of surplus U.S. equipment are given away ("granted") at no cost, there are also cases where supplies are sold to the recipient country.
The specific armed service that is overseeing a transfer determines the current value of EDA, which normally ranges between five and 50 percent of the article's original acquisition value, depending upon the age and condition. The maximum aggregate amount of EDA that may be transferred during any given fiscal year is $425 million, measured by current value, although exceptions can be made for high-cost items.
All EDA transactions, for example, Foreign Military Sales (FMS) purchases, are coordinated by Security Assistance Organizations (SAOs) at U.S. embassies, individual armed services, and the Defense Security Cooperation Agency (DSCA).
There are some limitations for EDA under section 516. Restrictions on the President's power to transfer EDA include the following:
Under section 516, EDA priority is given to NATO member countries, major non-NATO allies and the Philippines.
Transportation costs and any costs associated with refurbishing and repairing the transferred items must be paid by the recipient country. The President can waive EDA transportation charges if:
Congressional notification is required if the original value of a proposed EDA transfer exceeds $7 million. Section 516 requires that the President provide 30 days' advance notice to the Senate Foreign Relations Committee, the House International Relations Committee, and the Senate and House Appropriations Committees. DSCA provides this notification. The notification must include the following information:
The EDA Program enables the United States to meet foreign policy objectives while simultaneously supporting our friends and allies in improving their defense capabilities. Some of the objectives met by EDA are:
EDA articles are transferred on an "as is, where is" basis to the recipient and are only offered in response to a demonstrated requirement. The grant EDA program operates at essentially no cost to the U.S., with the recipient responsible for any required refurbishment and repair of the items as well as any associated transportation costs. The vast majority of EDA items are of low to medium technologies that do not present proliferation concerns.
A country's eligibility for EDA simply permits a nation to be considered for grant EDA, and does not guarantee the transfer of any EDA. Furthermore, all potential EDA transfers are subject to the same Conventional Arms Transfer Policy interagency review as any other government-to-government transfer.