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It is widely stated that "Ukraine Democracy Defense Lend-Lease Act of 2022" exempts Ukraine from paying back for military aid, e.g.

Under the current American law . . . makes the recipient country fully financially liable for any costs incurred, including reimbursement for the damaged or destroyed items. The Ukraine Democracy Defense Lend-Lease Act of 2022 exempts Ukraine and neighbouring countries from these and several other requirements link

But above-mentioned act has only the following:

(2) EXCLUSIONS. . . .

(A) Section 503(b)(3) of the Foreign Assistance Act of 1961 (22 U.S.C. 2311(b)(3)).

(B) Section 61 of the Arms Export Control Act (22 U.S.C. 2796).

So it excludes item 3 of Foreign Assistance Act but not 503(b)(5) that says that aid has to be repaid.

(5) the loan agreement provides that

(A) if the defense article is damaged while on loan, the country or international organization to which it was loaned will reimburse the United States for the cost of restoring or replacing the defense article, and

(B) if the defense article is lost or destroyed while on loan, the country or international organization to which it was loaned will pay to the United States an amount equal to the replacement cost (less any depreciation in the value) of the defense article.

Is that a mistake or will Ukraine actually have to pay back, or does 503(b)(5) not apply here because of some technical legal exception?

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  • 2
    Just for context, military aid provided by the US is usually given as a loan meaning recipients are expected to give the hardware back or more likely pay for it. Military aid to Ukraine by EU countries was mostly in the form of donations. There was also some discussion in German media that US officials asked EU members to increase their financial support for Ukraine and journalists then claiming that most of the EU cash to Ukraine would actually be used to pay for US military hardware. So whether the US loans or donates is a very relevant question.
    – quarague
    Commented Dec 19, 2022 at 9:28
  • 2
    It's difficult to answer this question without having the text of the Ukraine lend-lease act. We can see what provisions are excepted thanks to your noting them in the question, but we can't see what provisions are invoked.
    – phoog
    Commented Dec 19, 2022 at 21:16
  • The main point about the lend-lease for the USSR back in WW2 was that it was interest-free and had no enforced term. It was fully paid back like in... 2000s? Of course, anyone could pay back 60 years old interest-free debt out of pocket. I think the terms for Ukraine aren't much different.
    – fraxinus
    Commented Dec 28, 2022 at 19:51
  • @fraxinus I'd say we got our money's worth on that one.
    – Schwern
    Commented Dec 28, 2022 at 19:53

1 Answer 1

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Q: Why doesn't the "Ukraine Democracy Defense Lend-Lease Act of 2022" exclude repayment explicitly?

Unknown, but likely the method used was provided by legal counsel.


Only eight bills in the past 40+ years have referenced "Section 503(b)(3) of the Foreign Assistance Act of 1961". All were introduced in 2022. In the table below, only the first bill (S. 3522) became law. None have made reference to Section 503(b)(5).

There was no report from any committee for any of these bills, nor any mention in the Congressional record of Section 503(b)(5). Absent a report, discussion, or any explanation in the bills themselves, one may only surmise that a request was made of Congressional legal counsel for a means of getting around the restrictions without changing the existing law. Their solution then was to exclude the five year limit for lending in Section 503(b)(3) and the need for an agreement to repay in Section 61 of the Arms Export Control Act – "Since Ukraine never agreed to pay, and with no time limit for the use of the equipment, we cannot require they pay for or return the equipment at a later date".

Note that four of the bills were introduced prior to the beginning of the "special military operation" and that the two most recent bills refer to Taiwan.

Legislation
Number
Title Date of
Introduction
S. 3522 Ukraine Democracy Defense Lend-Lease Act of 2022 01/19/2022
H.R. 6742 Never Yielding Europe’s Territory (NYET) Act of 2022 02/15/2022
S. 3652 Never Yielding Europe’s Territory (NYET) Act of 2022 02/15/2022
H.R. 6753 Ukraine Democracy Defense Lend-Lease Act of 2022 02/18/2022
H.R. 6876 Ukraine Democracy Defense Lend-Lease Act of 2022 02/28/2022
H.R. 7611 Ukraine Democracy Defense Lend-Lease Act of 2022 04/27/2022
S. 4652 Taiwan Democracy Defense Lend-Lease Act of 2022 07/28/2022
H.R. 8631 Taiwan Democracy Defense Lend-Lease Act of 2022 07/29/2022

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