# § 4971. Establishment of loan guarantee program
**(a)** **Establishment.—** In order to meet the national security objectives in section 4811(a) of this title, the Secretary of Defense shall establish a program under which the Secretary may issue guarantees assuring a lender against losses of principal or interest, or both principal and interest, arising out of the financing of the sale or long-term lease of defense articles, defense services, or design and construction services to a country referred to in subsection (b).
**(b)** **Covered Countries.—** The authority under subsection (a) applies with respect to the following countries:
**(1)** A member nation of the North Atlantic Treaty Organization (NATO).
**(2)** A country designated as of March 31, 1995, as a major non-NATO ally pursuant to section 2350a(i)(3) of this title, as in effect on that date.
**(3)** A country in Central Europe that, as determined by the Secretary of State—
**(A)** has changed its form of national government from a nondemocratic form of government to a democratic form of government since October 1, 1989; or
**(B)** is in the process of changing its form of national government from a nondemocratic form of government to a democratic form of government.
**(4)** A noncommunist country that was a member nation of the Asia Pacific Economic Cooperation (APEC) as of October 31, 1993.
**(c)** **Authority Subject to Provisions of Appropriations.—** The Secretary may guarantee a loan under this subchapter only to such extent or in such amounts as may be provided in advance in appropriations Acts.
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**Source Credit**: (Added Pub. L. 104–106, div. A, title XIII, § 1321(a)(1), Feb. 10, 1996, 110 Stat. 475, § 2540; amended Pub. L. 108–375, div. A, title X, § 1084(d)(21), Oct. 28, 2004, 118 Stat. 2062; renumbered § 4971 and amended Pub. L. 116–283, div. A, title XVIII, §§ 1873(b), (c)(1), 1883(b)(2), Jan. 1, 2021, 134 Stat. 4290, 4294.)
## Editorial Notes
### Amendments
2021—, (c)(1), renumbered as this section.
Subsec. (a). , substituted “section 4811(a)” for “section 2501(a)”.
2004—Subsec. (b)(2). inserted “, as in effect on that date” before period at end.
## Statutory Notes and Related Subsidiaries
### Effective Date of 2021 Amendment
Amendment by effective , with additional provisions for delayed implementation and applicability of existing law, see , set out as a note preceding .
### Authority To Issue Loan Guarantees
> “To the extent authorized by subchapter I of chapter 389 of title 10, United States Code, for the current fiscal year and hereafter the Secretary of Defense may issue loan guarantees in support of United States defense exports not otherwise provided for:
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> , That the total contingent liability of the United States for guarantees issued under the authority of this section may not exceed $15,000,000,000:
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> , That the exposure fees charged and collected by the Secretary for each guarantee shall be paid by the country involved and shall not be financed as part of a loan guaranteed by the United States:
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> , That the Secretary shall provide quarterly reports to the Committees on Appropriations, Armed Services, and Foreign Relations of the Senate and the Committees on Appropriations, Armed Services, and International Relations [now Committee on Foreign Affairs] in the House of Representatives on the implementation of this program:
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> , That amounts charged for administrative fees and deposited to the special account provided for under
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> , shall be available for paying the costs of administrative expenses of the Department of Defense that are attributable to the loan guarantee program under subchapter I of chapter 389 of title 10, United States Code.”
, , , as amended by , , ; , , , provided that:
[, and , made identical amendments to , set out above, substituting “subchapter I of chapter 389” for “subchapter VI of chapter 148” in two places and “section 4974(d)” for “section 2540c(d)”. The amendment by was effective as if included in title XVIII of , thus making the amendments effective simultaneously.]
Similar provisions were contained in the following prior appropriation acts:
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