,i #aafth ,,congress #ast ,session ,h4 ,r4 #caid ,,in ,,the ,,house ,,of ,,representatives ,june #aa1 #bjai,mr4 ,engel 7for himself and ,mr4 ,mc,caul7 introduced the following bill2 which was referred to the ,committee on ,foreign ,affairs ,a ,,bill ,to provide financial lending mechanisms to assist ,north ,atlantic ,treaty ,organization allies in modernizing their military forces1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,,nato ,defense ,financing ,act4 #b4 ,findings ,congress finds the following3 7#a7 ,many ,united ,states allies1 including some ,north ,atlantic ,treaty ,organization 7,,nato7 members1 continue to operate ,soviet era military equipment4 ,this equipment is outdated1 unreliable1 increasingly unsafe and is unable to effectively integrate and operate jointly with ,united ,states military forces4 7#b7 ,the inability of some ,,nato allies to fully operate alongside ,united ,states military forces decreases ,,nato combat effectiveness and places additional strain on the ,united ,states military4 7#c7 ,some ,,nato allies are compelled to buy spare parts and services from ,russian providers to keep their ,soviet-designed equipment functional4 ,these ,,nato allies desire to operate modern ,western military equipment1 but have limited financial resources available to purchase expensive new equipment4 7#d7 ,following the end of ,world ,war ,,ii1 the ,united ,states faced a need to help allies rebuild their militaries1 which it addressed by providing substantial financial assistance through the ,mutual ,defense ,assistance ,act of #aidi 7#bb ,u4,s4,c4 #aega et seq47 and the ,mutual ,security ,act of #aiea 7,public ,law #hb-afe2 #fe ,stat4 #cgc74 ,however1 the ,united ,states has not provided similar assistance to new ,,nato allies following the end of the ,cold ,war4 7#e7 ,given the return of great power competition and an aggressive ,russia1 there is a pressing need to assist ,,nato allies to modernize their forces and replace their obsolete ,soviet military equipment4 7#f7 ,the ,united ,states does provide some military equipment to ,,nato allies through the foreign military financing program and other grant assistance1 but that assistance is insufficient to meet allies' needs4 7#g7 ,to supplement existing grant assistance1 providing foreign military financing loans to allies--at rates competitive with those already available on commercial markets--to purchase ,,nato interoperable military equipment supports allies' modernization requirements4 7#h7 ,as described in ,article #b of the ,north ,atlantic ,treaty1 in addition to providing security to allies1 ,,nato was established to promote democratic institutions and values by strengthening their free institutions1 by bringing about a better understanding of the principles upon which these institutions are founded1 and by promoting conditions of stability and well-being4 #c4 ,statement of ,policy ,it is the policy of the ,united ,states to-- 7#a7 deter aggression against ,north ,atlantic ,treaty ,organization 7,,nato7 allies by ,russia or any other adversary2 7#b7 assist ,,nato allies in acquiring and deploying modern1 ,,nato interoperable military equipment and reducing their dependence on ,russian or former ,soviet-era defense articles2 7#c7 ensure that ,,nato allies meet alliance defense commitments1 including through adequate investments in national defense2 and 7#d7 work to maintain and strengthen the democratic institutions and practices of all ,,nato allies1 in accordance with the goals of ,article #b of the ,north ,atlantic ,treaty4 #d4 ,foreign military loan authority 7a7 ,in general ,subject to the notification requirements under subsection 7b71 the ,president1 acting through the ,secretary of ,state1 is authorized-- 7#a7 to make direct loans under section #bc of the ,arms ,export ,control ,act 7#bb ,u4,s4,c4 #bgfc7 to member countries of the ,north ,atlantic ,treaty ,organization 7,,nato7 that joined after ,march #a1 #aiii1 notwithstanding the minimum interest rate required by subsection 7c77#a7 of such section2 and 7#b7 to charge fees for such loans under paragraph 7#a71 which shall be collected from borrowers in accordance with section #ejb7g7 of the ,congressional ,budget ,act of #aigd1 and which may be used to cover the costs of such loans as defined in section #ejb of the ,congressional ,budget ,act of #aigd4 7b7 ,notification ,a loan may not be made under the authority provided by subsection 7a7 unless the ,secretary of ,state submits to the appropriate congressional committees a certification1 not fewer than fifteen days before entering into an agreement to make such loan1 that-- 7#a7 the recipient country is making demonstrable progress toward meeting its spending commitments in accordance with the #bjad ,,nato ,wales ,summit ,declaration2 7#b7 the government of such recipient country is respecting that country's constitution and upholds democratic values such as freedom of religion1 freedom of speech1 freedom of the press1 the rule of law1 and the rights of minorities2 and 7#c7 the recipient country has demonstrated fiscal stability1 a commitment to a free market economy1 and the financial capacity to meet the terms of the loan proposed to be provided by the ,united ,states4 7c7 ,repayment ,a loan made under the authority provided by subsection 7a7 shall be repaid in not more than #ab years1 but may include a grace period of up to one year on the repayment of the principal4 7d7 ,appropriate congressional committees defined ,in this ,act1 the term appropriate congressional committees means-- 7#a7 the ,committee on ,foreign ,affairs and the ,committee on ,appropriations of the ,house of ,representatives2 and 7#b7 the ,committee on ,foreign ,relations and the ,committee on ,appropriations of the ,senate4