CONDITIONS RELATING TO COMBINED LEASE-SALE TRANSFERS.

SEC. 604. CONDITIONS RELATING TO COMBINED LEASE-SALE TRANSFERS. A transfer of a vessel on a combined lease-sale basis authorized by section 601 shall be made in accordance with the following requirements: (1) The President may initially transfer the vessel by lease, with lease payments suspended for the term of the lease, if the country entering into the lease for the vessel simultaneously enters into a foreign military sales agreement for the transfer of title to the vessel. (2) The President may not deliver to the purchasing country title to the vessel until the purchase price of the vessel under such a foreign military sales agreement is paid in full. (3) Upon payment of the purchase price in full under such a sales agreement and delivery of title to the recipient country, the President shall terminate the lease. (4) If the purchasing country fails to make full payment of the purchase price in accordance with the sales agreement by the date required under the sales agreement— (A) the sales agreement shall be immediately terminated; (B) the suspension of lease payments under the lease shall be vacated; and (C) the United States shall be entitled to retain all funds received on or before the date of the termination under the sales agreement, up to the amount of the lease payments due and payable under the lease and all other costs required by the lease to be paid to that date. (5) If a sales agreement is terminated pursuant to paragraph (4), the United States shall not be required to pay any interest to the recipient country on any amount paid to the United States by the recipient country under the sales agreement and not retained by the United States under the lease.