US law on aid to Egypt

Delta Royalty Consulting President Jim Roy,* who left an informative comment on www.peacefare.net correcting some of my errors and omissions last week, offers:

Since the code of Hammurabi was carved in stone three thousand eight hundred and eight years ago, the presence of written law has distinguished civilized societies from barbarians.   The tradition in the United States is that the Congress writes the law and the Administration implements the law.   Separation of powers has protected Americans from the evils of dictatorships and police states.

Under US law, the coup d’etat in Egypt requires that US financial aid for military purposes be suspended, as well as financial aid for training of military and police.   The coup does not require suspension of financial aid for economic assistance, but limits how such aid may be used.   In particular, economic assistance may not be used to support police or security measures. The coup does not affect programs delivered directly by USAID.  It also does not affect shipments of US-manufactured weapons that Egypt may acquire as a major non-NATO ally. 

There is no immediate practical effect of suspending military financial aid, because the US transferred the bulk of the appropriated aid to Egypt’s account in the US Federal Reserve Bank of New York in May.  The US is not scheduled to provide further funds until just before budget authority expires in September.

US interest is best served if Egypt quickly returns to the rule of law.  The correct position for the White House is to follow the law.  Whether the law is good or bad is not as important as demonstrating to Egyptians that the United States is capable of following its own law.    The rhetoric from the White House wondering whether events in Egypt is a coup d’etat is an insult to Egyptians.  The rhetoric strongly suggests that the United States supports the Egyptian military and does not support the elected government.  This rhetoric harms the US because it encourages the Egyptian people who oppose the coup to direct their anger at the United States.     

The basic US law on foreign aid is contained in the United States Code, Title 22, especially chapter 32.  USC Title 22 describes programs and purposes, incorporating the various authorizing laws.   Annual appropriations give effect to the programs. Both annual appropriations and USC Title 22 contain restrictions that preclude giving aid in certain situations.  There are 25 permanent restricts in §2730 of 22 USC 32.  Temporary restrictions included in annual appropriations vary from year to year.  The list of temporary restrictions has grown as past restrictions are repeated and new restrictions added.

The appropriation bills considered by the House (H5857; sponsor Granger) and by the Senate (S3241; sponsor Leahy) for fiscal year ending September 30, 2013 contained the same dollar amounts for Egypt, but different restrictions.   Both bills died without going to vote.   The funds for different classes of aid were included in the Continuing Appropriations Act, 2013, which became Public Law 113-6 on 26 March 2013.   This act amended PL 112-6, carrying forward restrictions from 2012, but adding no new restrictions.

Congress agreed to give Egypt $250 million in economic support and $1.3 billion in military financing. These amounts are not subject to reduction under the balanced budget act.  Egypt also gets a portion of funds provided for military training and for police training   In addition Egypt is eligible to receive surplus military equipment because Congress has designated Egypt as a major non-NATO ally.

Restrictions on this aid appear in several places.

The same sentence  that authorizes the funds also includes the proviso that that the Secretary of State must certify that Egypt has held free and fair elections and is implementing policies to protect the rights of journalists, due process, and freedoms of expression and association.  Secretary Kerry gave this certification in May 2013.   The law does not require the certification to be given twice, but recent events that include overturning the results of elections, closing television stations, and killing demonstrators suggests that the certification should be reviewed.

Section 7008 prohibits direct assistance to any country whose duly elected head of government is deposed by a coup d’etat or decree in which the military plays a decisive role.   This section first appeared in 1986 but has been repeated each year since.  It allows assistance to be resumed if the President determines and certifies to the Committees on Appropriations that subsequent to the termination of assistance a democratically elected government has taken office.  This section applies fully to military aid to Egypt, but is modified by Section 7041b which provides specific conditions for aid to Egypt.

Conditions in section 7041b, with respect to military financial aid, require (1) that Egypt meet its obligations under the 1979 Egypt-Israel Peace Treaty and  (2) that Egypt “is supporting transition to civilian government, including holding free and fair elections, implementing policies to protect freedom of expression, association, and religion, and due process of law.

Section 7041b also provides, with respect to economic financial assistance, that notwithstanding any provision of law (e.g. section 7008), economic aid may be used for “an Egypt initiative for the purpose of improving the lives of the Egyptian people …”. 

Egypt also receives non-financial military aid in the form of direct transfer of surplus equipment.   Section 7016, which applies to all countries that receive such equipment, requires that the Department of Defense give notice to the Committees on Appropriation prior to transferring surplus equipment.   Congress is currently under notice that certain equipment is scheduled for delivery.  There have been proposals to impose conditions on delivery of weapons to Egypt, but no conditions have been passed into law.

*Jim Roy is President of Delta Royalty Consulting Ltd, a Canadian business that advises governments on oil and gas management.  His current clients include the governments of Afghanistan, Bolivia, and Canada.    He served in the US military as a medic, attended undergraduate at University of Chicago, has a M.Sc. in mathematics from University of Missouri, and a second M.Sc. in Economics/Statistics from the University of Calgary (in Alberta, Canada).  Before becoming a consultant, he served the government of Alberta as a Budget Analyst, as a Research Manager, as a Finance Director, as Director of Legislation, and as Senior Advisor for Oil and Gas Policy.