The President may lease defense articles in the stocks of the Department of Defense to an eligible foreign country or international organization if—

(1) he determines that there are compelling foreign policy and national security reasons for providing such articles on a lease basis rather than on a sales basis under this chapter;

(2) he determines that the articles are not for the time needed for public use;

(3) the President first considers the effects of the lease of the articles on the national technology and industrial base, particularly the extent, if any, to which the lease reduces the opportunities of entities in the national technology and industrial base to sell new equipment to the country or countries to which the articles are leased; and

the country or international organization has agreed to pay in United States dollars all costs incurred by the United States Government in leasing such articles, including reimbursement for depreciation of such articles while leased, the costs of restoration or replacement if the articles are damaged while leased, and, if the articles are lost or destroyed while leased—

(A) in the event the United States intends to replace the articles lost or destroyed, the replacement cost (less any depreciation in the value) of the articles; or

(B) in the event the United States does not intend to replace the articles lost or destroyed, an amount not less than the actual value (less any depreciation in the value) specified in the lease agreement.

Each lease agreement under this section shall be for a fixed duration which may not exceed (A) five years, and (B) a specified period of time required to complete major refurbishment work of the leased articles to be performed prior to the delivery of the leased articles, and shall provide that, at any time during the duration of the lease, the President may terminate the lease and require the immediate return of the leased articles.

(1) Each lease agreement under this section shall be for a fixed duration which may not exceed (A) five years, and (B) a specified period of time required to complete major refurbishment work of the leased articles to be performed prior to the delivery of the leased articles, and shall provide that, at any time during the duration of the lease, the President may terminate the lease and require the immediate return of the leased articles.

(2) In this subsection, the term “major refurbishment work” means work for which the period of performance is 6 months or more.

Defense articles in the stocks of the Department of Defense may be leased or loaned to a foreign country or international organization only under the authority of this subchapter or chapter 2 of part II of the Foreign Assistance Act of 1961 [22 U.S.C. 2311 et seq.], and may not be leased to a foreign country or international organization under the authority of section 2667 of title 10.

(Pub. L. 90–629, ch. 6, § 61, as added Pub. L. 97–113, title I, § 109(a), Dec. 29, 1981, 95 Stat. 1524; amended Pub. L. 99–500, § 147, Oct. 18, 1986, 100 Stat. 1783–351, and Pub. L. 99–591, § 147, Oct. 30, 1986, 100 Stat. 3341–354; Pub. L. 100–202, § 101(e) [title V, § 556], Dec. 22, 1987, 101 Stat. 1329–131, 1329–170; Pub. L. 100–461, title V, § 552, Oct. 1, 1988, 102 Stat. 2268–35; Pub. L. 101–167, title V, § 550, Nov. 21, 1989, 103 Stat. 1235; Pub. L. 101–513, title V, § 546, Nov. 5, 1990, 104 Stat. 2019; Pub. L. 102–145, § 118, as added Pub. L. 102–266, § 102, Apr. 1, 1992, 106 Stat. 93; Pub. L. 102–391, title V, § 544, Oct. 6, 1992, 106 Stat. 1672; Pub. L. 103–87, title V, § 524, Sept. 30, 1993, 107 Stat. 952; Pub. L. 103–236, title VII, § 731(e), Apr. 30, 1994, 108 Stat. 503; Pub. L. 103–306, title V, § 524, Aug. 23, 1994, 108 Stat. 1632; Pub. L. 104–107, title V, § 524, Feb. 12, 1996, 110 Stat. 729; Pub. L. 104–164, title I, §§ 146, 153(a), July 21, 1996, 110 Stat. 1434, 1440; Pub. L. 104–208, div. A, title I, § 101(c) [title V, § 524], Sept. 30, 1996, 110 Stat. 3009–121, 3009–149; Pub. L. 105–118, title V, § 524, Nov. 26, 1997, 111 Stat. 2412; Pub. L. 105–277, div. A, § 101(d) [title V, § 524], Oct. 21, 1998, 112 Stat. 2681–150, 2681–177; Pub. L. 107–228, div. B, title XII, § 1233, Sept. 30, 2002, 116 Stat. 1433.)