§ 2540. Establishment of loan guarantee program

• (a) In order to meet the national security objectives in section 2501(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) 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) 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.