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Title 22 — Foreign Relations and IntercourseRelease 119-73

§2795 Fund

Title 22 › Chapter CHAPTER 39— - ARMS EXPORT CONTROL › Subchapter SUBCHAPTER V— - SPECIAL DEFENSE ACQUISITION FUND › § 2795

Last updated Apr 6, 2026|Official source

Summary

The Secretary of Defense must set up a Special Defense Acquisition Fund under the President’s direction and after talking with the Secretary of State. The Fund is a separate revolving account run by the Department of Defense to buy defense equipment and services so they can be sent to eligible foreign countries and international organizations under this law, the Foreign Assistance Act of 1961, or other law. The Fund can buy items that the U.S. military has not yet received or does not have under contract when doing so fits security and transfer needs. The Fund can keep common items on continuous order for use by all military departments and can buy equipment for narcotics control, like small boats, aircraft (including helicopters), and communications gear. Money in the Fund comes from three kinds of collections: sales of items not meant to be replaced in stock, charges for use of assets and shares of nonrecurring research, development, and production costs, and receipts from sales or transfers of items bought under this subchapter valued as the law requires. The Fund’s total may not go above the dollar limit in section 114(c) of title 10. That total means the cash in the Fund plus the acquisition cost of items still held for transfer. Funds may only be obligated in a fiscal year if Congress provides the money in advance in appropriation acts.

Full Legal Text

Title 22, §2795

Foreign Relations and Intercourse — Source: USLM XML via OLRC

(a)(1)Under the direction of the President and in consultation with the Secretary of State, the Secretary of Defense shall establish a Special Defense Acquisition Fund (hereafter in this subchapter referred to as the “Fund”), to be used as a revolving fund separate from other accounts, under the control of the Department of Defense, to finance the acquisition of defense articles and defense service in anticipation of their transfer pursuant to this chapter, the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.], or as otherwise authorized by law, to eligible foreign countries and international organizations, and may acquire such articles and services with the funds in the Fund as he may determine. Acquisition under this subchapter of items for which the initial issue quantity requirements for United States Armed Forces have not been fulfilled and are not under current procurement contract shall be emphasized when compatible with security assistance requirements for the transfer of such items.
(2)Nothing in this subchapter may be construed to limit or impair any responsibilities conferred upon the Secretary of State or the Secretary of Defense under this chapter or the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.].
(3)The Fund may be used to keep on continuous order such defense articles and defense services as are assigned by the Department of Defense for integrated management by a single agency thereof for the common use of all military departments in anticipation of the transfer of similar defense articles and defense services to foreign countries and international organizations pursuant to this chapter, the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.], or other law.
(4)The Fund shall also be used to acquire defense articles that are particularly suited for use for narcotics control purposes and are appropriate to the needs of recipient countries, such as small boats, planes (including helicopters), and communications equipment.
(b)The Fund shall consist of—
(1)collections from sales made under letters of offer issued pursuant to section 2761(a)(1)(A) of this title representing the actual value of defense articles not intended to be replaced in stock,
(2)collections from sales representing the value of asset use charges (including contractor rental payments for United States Government-owned plant and production equipment) and charges for the proportionate recoupment of nonrecurring research, development, and production costs, and
(3)collections from sales made under letters of offer (or transfers made under the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.]) of defense articles and defense services acquired under this subchapter, representing the value of such items calculated in accordance with subparagraph (B) or (C) of section 2761(a)(1) of this title or section 2762 of this title or section 644(m) of the Foreign Assistance Act of 1961 [22 U.S.C. 2403(m)], as appropriate,
(c)(1)The size of the Fund may not exceed such dollar amount as is prescribed in section 114(c) of title 10. For purposes of this limitation, the size of the Fund is the amounts in the Fund plus the value (in terms of acquisition cost) of the defense articles acquired under this subchapter which have not been transferred from the Fund in accordance with this subchapter.
(2)Amounts in the Fund shall be available for obligation in any fiscal year only to such extent or in such amounts as are provided in advance in appropriation Acts.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (a)(1) to (3), was in the original “this Act”, meaning Pub. L. 90–629, Oct. 22, 1968, 82 Stat. 1321, which is classified principally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 2751 of this title and Tables. The Foreign Assistance Act of 1961, referred to in subsecs. (a) and (b)(3), is Pub. L. 87–195, Sept. 4, 1961, 75 Stat. 424, which is classified principally to chapter 32 (§ 2151 et seq.) of this title. For complete classification of this Act to the Code, see

Short Title

note set out under section 2151 of this title and Tables.

Amendments

1996—Subsec. (a)(4). Pub. L. 104–164 redesignated subpar. (A) as entire par. (4) and struck out subpar. (B) which read as follows: “Each report pursuant to section 2795b(a) of this title shall designate the defense articles that have been acquired or are to be acquired pursuant to this paragraph and the defense articles acquired under this subchapter that were transferred for use in narcotics control purposes.” 1989—Subsec. (a)(4). Pub. L. 101–231 added par. (4). 1986—Subsec. (c)(1). Pub. L. 99–433 substituted “section 114(c)” for “section 138(g)”. 1985—Subsec. (a)(3). Pub. L. 99–83, § 121(a), added par. (3). Subsec. (b). Pub. L. 99–139 amended subsec. (b) generally, so as to read similar to how it read prior to the amendment by Pub. L. 99–83. Pub. L. 99–83 amended subsec. (b) to read as follows: “The Fund shall consist of collections from sales made under letters of offer, or transfers made under the Foreign Assistance Act of 1961, of defense articles and defense services acquired under this subchapter (representing the value of such items calculated in accordance with subparagraph (B) or (C) of section 2761(a)(1) of this title or section 2762 of this title or section 644(m) of the Foreign Assistance Act of 1961, as appropriate), together with such funds as may be authorized and appropriated or otherwise made available for the purposes of the Fund.”

Statutory Notes and Related Subsidiaries

Effective Date

of 1985

Amendments

Pub. L. 99–139, § 1(b), Oct. 30, 1985, 99 Stat. 562, provided that: “The amendment made by subsection (a) [amending this section] shall take effect as of October 1, 1985.” Amendment by Pub. L. 99–83 effective Oct. 1, 1985, see section 1301 of Pub. L. 99–83, set out as a note under section 2151–1 of this title.

Reference

Citations & Metadata

Citation

22 U.S.C. § 2795

Title 22 — Foreign Relations and Intercourse

Last Updated

Apr 6, 2026

Release point: 119-73