The foreign country or organization must agree to pay a rental fee, which covers all costs incurred by the United States Government, including depreciation. The lessee must also agree to pay a replacement or restoration fee should leased articles be destroyed or broken.

The lease resembles a grant if the President exercises his right to waive the rental fee. This can be done for items that are past three-quarters of their service life, or items that are to be used in a cooperative research and development effort determined to be "in the national security interest" of the United States.

The lease agreement, including all renewals, cannot be longer than 5 years. The U.S. government can end a lease at any time. The chart below reflects these lease arrangements.

There are other types of leasing arrangements that take place outside of the Arms Export Control Act leasing agreements described above. For example, since 1999 Colombia has received 84 helicopters from the United States. Most, if not all, are under a leasing arrangement whereby the U.S. still owns and oversees maintenance for the aircraft. Funding for these helicopters was included in a variety of Colombia aid packages and therefore comes from the U.S. and not the Colombian government. These leases are managed by the International Narcotics and Law Enforcement Program of the Department of State.

Limitations

In order to lease weapons or equipment to a country, the following eligibility requirements must be met:

1. The President must determine that there are foreign policy or national security reasons for the lease;
2. The President must justify why the articles in question must be leased, rather than sold;
3. The articles must not be needed by the United States at the time;
4. The country or organization reimburses the United States for all incurred costs and the depreciation value, and
5. The recipient country or organization can not be barred from receiving aid by other sections of the Foreign Assistance Act and Arms Export Control Act.

The law also limits the terms under which the lease can be negotiated:

1. The recipient country or international organization must pay all costs related to the articles during the time they are leased, as well as their depreciation value;
2. The recipient party is responsible for fixing or replacing damaged or lost goods;
3. Foreign Military Financing (FMF) funds cannot be used for the rental payment; and
4. The lease cannot be more than five years in duration, including renewals.

Notification

The Speaker of the House of Representatives and the chairmen of the Senate Foreign Relations Committee and the Senate Armed Services Committee must be notified within 30 days of an agreement or renewal if:

• A lease will be for one year or more; or
• A renewal period is for at least one year.

Within the notification period, Congress may prohibit a lease by passing a joint resolution, but only if:

• The value of major defense equipment (replacement cost not including depreciation) is $14,000,000 or more; or
• The value of the defense articles to be leased is $50,000,000 or more.
  
  ["Major defense equipment" means any item on the United States Munitions List with a research and development cost of at least $50 million or a total production cost of at least $200 million.]

Exceptions and waivers

The President can waive rental fees if:

• It is determined that the lease is in the U.S. national-security interest;
• The articles are past three-quarters of their expected useful life; or
• The President determines, through a written certification to Congress, that an emergency situation exists.