Government and should work to the mutual advantage of the two Governments.

In recognition of this mutuality of interest, the United States Government will facilitate the carrying out of the LRPA contract between the Lockheed Corporation and the Canadian Government. Towards this end the United States Government will facilitate, to the maximum extent permissible under United States law, the achievement of the Canadian industrial involvement provided for in the contract by:

1. permitting the rent-free use of United States Government production and research property subject to the normal terms and conditions governing such use,

2. permitting a shift in the manufacture of mutually-agreed selected components from the United States to Canada, and

3. agreeing to duty-free entry into the United States of Canadamanufactured components incorporated in P-3 type of aircraft sold by Lockheed to Canada or other countries.

If a situation were to occur under U.S. bankruptcy laws involving voluntary or involuntary reorganization or bankruptcy of Lockheed which might affect Lockheed's contract performance, the United States Government, recognizing that it is in its best interest to do so, will act with Canada in all matters relating to the Canadian LRPA contract to obtain for Canada advantages and considerations no less favorable than those that might be obtained by the United States with respect to performance of its own defense procurement contracts, in the following respects:

With Respect to Delivery:

In its determination to see that its aircraft and those of Canada are delivered expeditiously, the United States authorities will make every effort to ensure that all measures taken to obtain the production of P-3 and S-3 aircraft for the United States Navy will also be applied to maintain for Canada production of LRPA in accordance with its proposed contract with Lockheed, including an equitable dovetailing of the production of its P-3 aircraft and the Canadian LRPA to achieve delivery on a schedule as close as possible to that provided for in their respective contracts with Lockheed.

With Respect to Price:

In the event of a requirement to renegotiate the price of the Canadian LRPA the United States authorities will seek for Canada treatment no less favorable than that which the United States Department of Defense obtains with respect to its own defense procurement contracts. In this regard the United States authorities will endeavor to ensure that any renegotiation of the LRPA price will be based on direct costs and reasonable indirect costs and profits associated with subsequent production of the Canadian LRPA.

With Respect to Canadian Industrial Involvement:

The undertakings of the United States Government with regard to facilitating Canadian industrial involvement set out in the three numbered subparagraphs above, will continue to apply.

Chile

Under section 406(a) of the International Security Assistance and Arms Export Control Act of 1976 (P.L. 94-329; 90 Stat. 758; 22 U.S.C. 2370 note), approved June 30, 1976, no military or security supporting assistance and no military education and training are to be furnished under the Foreign Assistance Act of 1961 for Chile; and no credits are to be extended and no loan guaranteed under the Arms Export Control Act with respect to Chile. Also, no deliveries of any such assistance, credits, or guaranties were to be made to Chile on or after the date of enactment. Further the section provides that no sales may be made and no export licenses issued under the Arms Export Control Act with respect to Chile on or after the enactment date.

For limitations on economic assistance to Chile, see ante, Ch. 3, § 6, p. 172.

Egypt

On March 25, 1976, President Ford determined that the sale to Egypt of C-130 aircraft and the training of Egyptian personnel in their operation and maintenance would "strengthen the security of the United States and promote world peace." The determination was made pursuant to section 3(a)(1) of the Foreign Military Sales Act, as amended (22 U.S.C. 2753; now the Arms Export Control Act) and was necessary to make Egypt eligible to purchase the aircraft and training from the U.S. Government. The Department of Defense, on March 25, informed the Congress of the proposed sale, as required by section 36(b) of that Act (22 U.S.C. 2776(b)). (Cong. Rec., Vol. 122, No. 45, Mar. 29, 1976, p. S4470).

On April 13, the House of Representatives International Relations Committee voted to table five draft resolutions of disapproval under section 36(b). In the Senate no resolutions opposing the proposed action were submitted. Failure to adopt a concurrent resolution of disapproval by midnight April 14, the end of the 20-day review period provided under section 36(b) of the Foreign Military Sales Act (22 U.S.C. 2776(b)), permitted the sale of the aircraft and training to go forward.

Sec. 36(b) of the Foreign Military Sales Act was amended by P.L. 94-329 (90 Stat. 729), approved June 30, 1976, which, inter alia, extends the congressional review period to 30 days and restyles the Act as the Arms Export Control Act.

Secretary of State Kissinger, in testimony before the Subcommittee on Foreign Assistance of the Senate Committee on Foreign Relations on Apr. 2, 1976, supported the proposed sale to Egypt in the context of U.S. policy followed, with congressional support, in the Middle East since 1973, "to help bring about a settlement of the... Arab-Israeli dispute, to support and insure the survival and security of Israel, and improve our relations with the Arab States of the region." For the text of Secretary Kissinger's statement, see Dept. of State Bulletin, Vol. LXXIV, No. 1921, Apr. 19. 1976, pp. 505-507; Hearings on Proposed Sale of C-130's to Egypt,

Subcommittee on Foreign Assistance, Committee on Foreign Relations, U.S. Senate, 94th Cong., 2d Sess., Mar. 31 and Apr. 2, 1976, pp. 89-121.

Israel

The Department of State determined that there was no violation of the U.S.-Israel Mutual Defense Assistance Agreement (TIAS 2675; 3 UST 4985; entered into force July 23, 1952) in the use by Israel of U.S.-furnished C-130 military aircraft in its successful commando raid into Uganda on July 3, 1976, to rescue 104 Israeli hostages held at Entebbe Airport following the hijacking of an Air France plane. Robert L. Funseth, State Department spokesman, stated in a news briefing on July 14, 1976:

. . . [P]aragraph 2 of the Mutual Defense Assistance Agreement between the United States and Israel authorizes the use by Israel of U.S.-supplied defense articles for a number of purposes, including self-defense.

As Governor [William W.] Scranton stated in the Security Council, the Entebbe rescue operation was, in our judgment, legally justifiable as a use of limited force by Israel for the protection of its nationals-which is a well-established right that flows from the right of self-defense.

Therefore, we believe that the use of the U.S.-supplied equipment for that operation was consistent with the authorized use for self-defense within the meaning of the Mutual Defense Administration Agreement.

For a discussion of the Israeli rescue operation at Entebbe Airport and excerpts from the statement of Ambassador Scranton in the U.N. Security Council, see ante, Ch. 3, § 6, p. 150. Par. 2 of the U.S.-Israel Mutual Defense Assistance Agreement reads as follows:

2. The Government of Israel assures the United States Government that such equipment, materials, or services as may be acquired from the United States under the provisions of Section 408(e) of the Mutual Defense Assistance Act of 1949, as amended, are required for and will be used solely to maintain its internal security, its legitimate self-defense, or to permit it to participate in the defense of the area of which it is a part, or in United Nations collective security arrangements and measures, and that it will not undertake any act of aggression against any other

state.

Saudi Arabia

Ambassador Robert J. McCloskey, Assistant Secretary of State for Congressional Relations, in a letter of January 30, 1976, to Senator William L. Scott explained the statutory authority for the activities of the Corps of Engineers in Saudi Arabia and commented on the Saudi practice with respect to enforcement of the Arab boycott. The following is an excerpt from Ambassador McCloskey's letter:

The Corps of Engineers provides engineering services to the Government of Saudi Arabia on a cash basis pursuant to a 1965

agreement between the Governments of the United States and Saudi Arabia . . . . Federal statutory authority for providing such services is Section 21 of the Foreign Military Sales Act of 1968, as amended, which provides in part:

The President may sell . . . defense services of the Department of Defense to any friendly country . . if such country... agrees to pay not less than the value thereof in United States dollars

We believe that the activities of the Corps in Saudi Arabia are fully in accord with the purposes of that Act, since they contribute to our security posture by strengthening the security and stability of a friendly nation with which we share important strategic objectives. These objectives, broadly speaking, are to encourage and strengthen the moderate states of the Middle East, and thus both to increase the likelihood that a just and lasting peace will be achieved, and to limit the opportunities for expansion of Soviet influence in the area. The Corps' activities in Saudi Arabia do not retard access by American firms to Saudi Arabia but rather facilitate such access by relieving American firms of the normally burdensome Saudi bonding procedures and by cutting the red tape which otherwise deters many firms from bidding on Saudi projects. Though Saudi Arabia enforces the Arab boycott, it exercises flexibility in implementing the boycott with respect to activities enhancing its security or development. It has not sought to require the Corps to incorporate boycott language into subcontracts, and the Corps has consistently let subcontracts on a commercial basis without reference to the boycott.

Dept. of State File No. P76 0011-1069. Sec. 21 of the Foreign Military Sales Act of Oct. 22, 1968, as amended, is set out at 22 U.S.C. 2761.

The Arms Control and Disarmament Agency (ACDA) announced, on September 2, 1976, that, in accordance with the Arms Export Control Act (P.L. 94-329; 90 Stat. 734), it had evaluated the proposed sale of 850 Sidewinder missiles and 650 Maverick missiles to Saudi Arabia and had concluded that there was no objection to the sale from an arms control standpoint. It assessed the arms control impact in terms of three criteria: whether the proposed sale was likely to lead to an arms race, to increase the possibility of conflict, or to prejudice the development of international arms control arrangements. The Agency came to the following conclusions:

We do not believe that the proposed sale would be likely to lead to an arms race. The Saudis plan a modest air force modernization program based principally on delivery over the next several years of 110 F-5 aircraft. The Maverick and Sidewinder are standard munitions in the USAF inventory, and have been provided to a number of other countries in the Middle East. The proposed deliveries will be phased over several years and are not likely to stimulate responses from neighboring countries.

The size of this sale will not provide a stockpile sufficient to raise concern about the possibility of acquisition by third countries.

ACDA has carefully considered the controls on such a transfer and the technical difficulties involved and we are satisfied that this is not a serious concern with this sale.

The risk of conflict between Saudi Arabia and neighboring states is unlikely to be affected by the delivery of this number of missiles. The size of the arms transfer is unlikely to have an adverse affect on the prospects for obtaining arms control agreements in the area.

ACDA Press Release 76-18, Sept. 2, 1976.

Sudan

On November 5, 1976, President Ford, in a memorandum to the Secretary of State, determined, pursuant to section 3(a) (1) of the Arms Export Control Act (22 U.S.C. 2753(a) (1)), that the sale of defense articles and defense services to the Government of the Democratic Republic of the Sudan would strengthen the security of the United States and promote world peace.

Fed. Reg., Vol. 41, No. 223, Nov. 17, 1976, p. 50625.

Surinam

President Ford, in a memorandum to the Secretary of State dated April 14, 1976, determined that the sale of defense articles and defense services to the Government of Surinam would strengthen the security of the United States and promote world peace. The determination was made pursuant to section 3(a) (1) of the Arms Export Control Act (22 U.S.C. 2753(a) (1)).

Fed. Reg., Vol. 41, No. 86, May 3, 1976, p. 18281.

Presidential Veto of Security Assistance Bill

On May 7, 1976, President Ford returned without approval S. 2662, the security assistance authorization bill for fiscal year 1976 on the grounds that "the bill would seriously obstruct the exercise of the President's constitutional responsibilities for the conduct of foreign affairs." In his veto message, the President stressed objections to an arbitrary arms sale ceiling, restrictive human rights language, a mandated termination of grant military assistance and of military assistance advisory groups after fiscal year 1977, premature lifting of Viet-Nam trade restrictions, and several provisions which he regarded as violating the constitutional separation of executive and legislative powers, including use of the concurrent resolution method to restrict or terminate programs authorized by law.