Sec. 202. Security assistance to modernize Taiwan’s security capabilities to deter and defeat aggression by the People's Republic of China
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The Secretary of State, in consultation with the Secretary of Defense, shall use the authorities under this section to strengthen the United States-Taiwan defense relationship, and to support the acceleration of the modernization of Taiwan’s defense capabilities required to deter or, if necessary, to defeat an invasion of Taiwan by the People’s Republic of China. In this subsection, the term appropriate congressional committees means— the Committee on Foreign Relations of the Senate ; and the Committee on Foreign Affairs of the House of Representatives.
Not later than 180 days after the date of the enactment of this Act, and annually thereafter for 7 years, the Secretary of State and the Secretary of Defense shall jointly submit a report to the appropriate congressional committees that describes steps taken to enhance the United States-Taiwan defense relationship and Taiwan’s modernization of its defense capabilities. Each report required under paragraph
(2)shall include— an assessment of the commitment of Taiwan to implement a military strategy that will deter and, if necessary, defeat military aggression by the People’s Republic of China, including the steps that Taiwan has taken and the steps that Taiwan has not taken towards such implementation; an assessment of the efforts of Taiwan to acquire and employ within its forces counter intervention capabilities, including— long-range precision fires; integrated air and missile defense systems; anti-ship cruise missiles; land-attack cruise missiles; coastal defense; anti-armor; undersea warfare; survivable swarming maritime assets; manned and unmanned aerial systems; mining and countermining capabilities; intelligence, surveillance, and reconnaissance capabilities; command and control systems; and any other defense capabilities that the United States and Taiwan jointly determine are crucial to the defense of Taiwan, in accordance with the process developed pursuant to section 203(a); an evaluation of the balance between conventional and counter intervention capabilities in the defense force of Taiwan as of the date on which the report is submitted; an assessment of steps taken by Taiwan to enhance the overall readiness of its defense forces, including— the extent to which Taiwan is requiring and providing regular and relevant training to such forces; the extent to which such training is realistic to the security environment that Taiwan faces; and the sufficiency of the financial and budgetary resources Taiwan is putting toward readiness of such forces; an assessment of steps taken by Taiwan to ensure that the All-Out Defense Mobilization Agency can recruit, train, equip, and mobilize its forces; an evaluation of— the severity of manpower shortages in the military of Taiwan, including in the reserve forces; the impact of such shortages in the event of a conflict scenario; and the efforts made by the Government of Taiwan to address such shortages; an assessment of the efforts made by Taiwan to boost its civilian defenses, including any informational campaigns to raise awareness among the population of Taiwan of the risks Taiwan faces; an assessment of the efforts made by Taiwan to secure its critical infrastructure, including in transportation, telecommunications networks, and energy; an assessment of the efforts made by Taiwan to enhance its cybersecurity, including the security of civilian government and military networks; an assessment of any significant gaps in any of the matters described in subparagraphs
(A)through
(I)with respect to which the United States assesses that additional action is needed; a description of cooperative efforts between the United States and Taiwan on the matters described in subparagraphs
(A)through (J); and a description of any resistance within the Government of Taiwan and the military leadership of Taiwan to— implementing the matters described in subparagraphs
(A)through (I); or United States support or engagement with regard to such matters. The report required under paragraph
(2)shall be submitted in classified form, but shall include a detailed unclassified summary. The Secretary of State and the Secretary of Defense shall jointly share the unclassified summary required under paragraph
(4)with the government and military of Taiwan. The Secretary of State, in consultation with the Secretary of Defense, shall use amounts appropriated pursuant to subsection
(i)to provide assistance to the Government of Taiwan under subsection (d). The Secretary of State shall establish a Foreign Military Financing Program to provide assistance, including equipment, training, and other support, to enable the Government and military of Taiwan— to accelerate the modernization of defense capabilities that will enable Taiwan to delay, degrade, and deny attempts by People’s Liberation Army forces— to conduct coercive or grey zone activities; to achieve maritime control over the Taiwan Strait and adjoining seas; to secure a lodgment on any Taiwanese islands and expand or otherwise use such lodgment to seize control of a population center or other key territory in Taiwan; and to prevent the People’s Republic of China from decapitating, seizing control of, or otherwise neutralizing or rendering ineffective the Government of Taiwan. Of the amounts appropriated pursuant to subsection (i)(1), not more than $100,000,000 may be used during each of the fiscal years 2023 through 2032 to maintain a stockpile (if established under section 212), in accordance with section 514 of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2321h ), as amended by section 211. Not later than December 1, 2022, and annually thereafter, the Secretary of State, in coordination with the Secretary of Defense, shall submit a plan to the appropriate committees of Congress describing how funds appropriated pursuant to subsection (i)(2) will be used to achieve the purposes described in subsection (d). Amounts appropriated for each fiscal year pursuant to subsection (i)(2) shall be made available for the purpose described in such subsection after the Secretary of State certifies to the appropriate committees of Congress that Taiwan has increased its defense spending relative to Taiwan’s defense spending in its prior fiscal year, excepting accounts in Taiwan’s defense budget related to personnel expenditures, (other than military training and education and any funding related to the All-Out Defense Mobilization Agency). Subject to subparagraph (B), amounts appropriated for a fiscal year pursuant to subsection (i)(2) that are not obligated and expended during such fiscal year shall be added to the amount that may be used for Foreign Military Financing to Taiwan in the subsequent fiscal year. Amounts appropriated pursuant to subsection (i)(2) that remain unobligated on September 30, 2027 shall be rescinded and deposited into the general fund of the Treasury. In addition to assistance provided pursuant to subsection (c), the Secretary of State, in coordination with the Secretary of Defense, may make available to the Government of Taiwan, in such quantities as the Secretary of State considers appropriate to provide assistance to the Government of Taiwan under subsection (d)— weapons and other defense articles from the United States inventory and other sources; and defense services. The Secretary of State may use amounts appropriated pursuant to subsection (i)(2) for the cost of replacing any item provided to the Government of Taiwan pursuant to paragraph (1)(A). Notwithstanding section 23(c)(1) of the Arms Export Control Act ( 22 U.S.C. 2763 ), during fiscal years 2023 through 2027, the Secretary of State may make direct loans available for Taiwan pursuant to section 23 of such Act. Gross obligations for the principal amounts of loans authorized under subparagraph
(A)may not exceed $2,000,000,000. In this subparagraph, the term cost — has the meaning given such term in section 502(5) of the Congressional Budget Act of 1974 ( 2 U.S.C. 661a(5) ); shall include the cost of modifying a loan authorized under subparagraph (A); and may include the costs of selling, reducing, or cancelling any amounts owed to the United States or to any agency of the United States. Amounts appropriated pursuant to subsection (i)(1) may be made available to pay for the cost of loans authorized under subparagraph (A). The Government of the United States may charge fees for loans made pursuant to subparagraph (A), which shall be collected from borrowers through a financing account (as defined in section 502(7) of the Congressional Budget Act of 1974 ( 2 U.S.C. 661a(7) ). Amounts made available under any appropriations Act for any fiscal year may not be used to pay any fees associated with a loan authorized under subparagraph (A). Loans made pursuant to subparagraph
(A)shall be repaid not later than 12 years after the loan is received by the borrower, including a grace period of not more than 1 year on repayment of principal. Notwithstanding section 23(c)(1) of the Arms Export Control Act ( 22 U.S.C. 2763(c)(1) , interest for loans made pursuant to subparagraph
(A)may be charged at a rate determined by the Secretary of State, except that such rate may not be less than the prevailing interest rate on marketable Treasury securities of similar maturity. Amounts made available under this paragraph for interest costs shall not be considered assistance for the purposes of any statutory limitation on assistance to a country. Amounts appropriated pursuant to subsection (i)(1) may be made available for the costs of loan guarantees for Taiwan under section 24 of the Arms Export Control Act ( 22 U.S.C. 2764 ) for Taiwan to subsidize gross obligations for the principal amount of commercial loans and total loan principal, any part of which may be guaranteed, not to exceed $2,000,000,000. A loan guarantee authorized under subparagraph (A)— may not guarantee a loan that exceeds $2,000,000,000; and may not exceed 80 percent of the loan principal with respect to any single borrower. Any loan guaranteed pursuant to subparagraph
(A)may not be subordinated to— another debt contracted by the borrower; or any other claims against the borrower in the case of default. Repayment in United States dollars of any loan guaranteed under this paragraph shall be required not later than 12 years after the loan agreement is signed. Notwithstanding section 24 of the Arms Export Control Act ( 22 U.S.C. 2764 ), the Government of the United States may charge fees for loan guarantees authorized under subparagraph (A), which shall be collected from borrowers, or from third parties on behalf of such borrowers, through a financing account (as defined in section 502(7) of the Congressional Budget Act of 1974 ( 2 U.S.C. 661a(7) ). Amounts made available under this paragraph for the costs of loan guarantees authorized under subparagraph
(A)shall not be considered assistance for the purposes of any statutory limitation on assistance to a country. Amounts appropriated to carry out this subsection may not be expended without prior notification of the appropriate committees of Congress. In addition to amounts otherwise authorized to be appropriated for Foreign Military Financing, there is authorized to be appropriated to the Department of State for Taiwan Foreign Military Finance grant assistance— $250,000,000 for fiscal year 2023; $750,000,000 for fiscal year 2024; $1,500,000,000 for fiscal year 2025; $2,000,000,000 for fiscal year 2026; and $2,000,000,000 for fiscal year 2027. Of the amounts authorized to be appropriated under paragraph (1), the Secretary of State shall use not less than $2,000,000 per fiscal year for 1 or more blanket order Foreign Military Financing training programs related to the defense needs of Taiwan. Assistance may not be provided under this section after September 30, 2032.
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Sec. 202
Security assistance to modernize Taiwan’s security capabilities to deter and defeat aggression by the People's Republic of China
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