Key Issues and Recent Developments

		Relevant Provisions in FY2013 Public Law

The National Defense Authorization Act (NDAA) for FY2013 became P.L. The act contains limitations, conditions, and waiver authorities for Coalition Support Fund (CSF) reimbursements and Pakistan Counterinsurgency Fund (PCF) disbursements. 111-73 ). Section 1227 of the FY2013 NDAA limits CSF reimbursements to Pakistan to $1.2 billion in the current fiscal year, and it prohibits any such reimbursements for the roughly seven-month period (November 2011-July 2012) that Pakistan had barred NATO from transiting along its Ground Lines of Communication (GLOCs) linking Afghanistan with the Arabian Sea. The bill would also require the President to terminate Pakistan's status as a Major Non-NATO Ally. For FY2014, the Administration has requested just over half of the legislation's authorized amount. U.S. Aid to Pakistan After 9/11

Following a decade of alienation in the 1990s, U.S. relations with Pakistan were once again transformed in dramatic fashion, this time with the September 11, 2001, terrorist attacks on the United States and the ensuing enlistment of Pakistan as a pivotal ally in U.S.-led counterterrorism efforts. The EPPA also clarifies activities related to the Pakistan Counterinsurgency Capability Fund (PCCF), established by Congress in the Supplemental Appropriations Act, 2009 ( P.L. The Pentagon reports total Foreign Military Sales agreements with Pakistan worth $5.2 billion for FY2002-FY2011 (sales of F-16 combat aircraft and related equipment account for more than half of this). Congress also has appropriated more than $3 billion in Foreign Military Financing (FMF) grants to Pakistan since 2001; more than two-thirds has been disbursed to date. In the lead-up to the 2009 conference, Pakistani officials called for a "Marshall Plan" for Pakistan that would provide $30 billion in international donations over a five-year period. FY2014 Request for Aid to Pakistan and Objectives

The FY2014 budget request indicates the level of importance the Obama Administration places on a stable, democratic, and prosperous Pakistan because of its "critical role" in the region with respect to U.S. counterterrorism efforts, nuclear nonproliferation, regional stability, the peace process in Afghanistan, and regional economic integration and development: "As the United States withdraws its troops from Afghanistan, FY2014 U.S. assistance needs to reflect [America's] continued robust engagement of Pakistan and its role in the region." Nevertheless, the State Department in 2009 reported being "comfortable" with congressional conditions and "confident" that required certifications could be issued (such certifications were issued only once and the requirements were waived by the Admiration for FY2012 and FY2013). Current Conditionality and Administration Certifications/Waivers76

				Key Congressional Conditions on U.S. Assistance to Pakistan

The most notable sets of conditions on U.S. assistance to Pakistan are found in two laws: the country-specific Enhanced Partnership with Pakistan Act of 2009, and the State and foreign operations appropriations provisions found in the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ). As noted above, these substantive conditions apply only to security-related assistance for FY2011-FY2014 and arms transfers for FY2012-FY2014 (nonmilitary aid is not subject to conditions in this law). The law precludes such assistance and transfers until the Secretary of State certifies annually for Congress that the Pakistani government 
(1) is continuing to cooperate with the United States in efforts to dismantle supplier networks relating to the acquisition of nuclear weapons-related materials, such as providing relevant information from or direct access to Pakistani nationals associated with such networks; 
(2) had during the preceding fiscal year has demonstrated a sustained commitment to and is making significant efforts towards combating terrorist groups ... including taking into account the extent to which the Government of Pakistan has made progress on matters such as A) ceasing support, including by any elements within the Pakistan military or its intelligence agency, to extremist and terrorist groups, particularly to any group that has conducted attacks against United States or coalition forces in Afghanistan, or against the territory or people of neighboring countries; B) preventing al Qaeda, the Taliban and associated terrorist groups, such as Lashkar-e-Taiba and Jaish-e-Mohammed, from operating in the territory of Pakistan, including carrying out cross-border attacks into neighboring countries, closing terrorist camps in the FATA, dismantling terrorist bases of operations in other parts of the country, including Quetta and Muridke, and taking action when provided with intelligence about high-level terrorist targets; and C) strengthening counterterrorism and anti-money laundering laws; and
(3) is ensuring that its security forces are not materially and substantially subverting the political or judicial processes of Pakistan. Corruption and lack of sufficient transparency is identified as a key obstacle to effective implementation of U.S. aid programs in Pakistan, and has drawn significant attention in Congress. Inspectors General report, contributing to further ongoing accountability and reporting challenges. Purposes of Security Assistance:
1.
In the post-2001 era, the United States has viewed Pakistan as a key ally, especially in the context of counterterrorism and Afghan and regional stability. Pakistan has been among the leading recipients of U.S. foreign assistance both historically and in recent years, although assistance levels have fluctuated considerably over the decades of Pakistani independence. In the wake of 9/11, however, aid to Pakistan increased steadily. Since 1948, the United States has pledged more than $30 billion in direct aid, about half for military assistance, and more than two-thirds appropriated in the post-2001 period. Many observers question the gains accrued to date, variously identifying poor planning, lack of both transparency and capacity, corruption, and slow reform by the Pakistani government as major obstacles. Moreover, any goodwill generated by U.S. aid is offset by widespread and intense anti-American sentiment among the Pakistani people.
Developments in 2011 put immense strains on bilateral relations, making uncertain the future direction of the U.S. aid program. Relations have remained tense since that time, although civilian aid has continued to flow and substantive defense transfers are set to resume later in 2013. Disruptions in 2011 included the killing of Osama bin Laden in a Pakistani city and a NATO military raid into Pakistani territory near Afghanistan that inadvertently left 24 Pakistani soldiers dead. The latter development led Islamabad to bar U.S. and NATO access to vital ground lines of communication (GLOCs) linking Afghanistan to the Arabian Sea for a period of more than seven months. More recently, the 113th Congress is focusing on measures to reduce the federal budget deficit. This backdrop appears to be further influencing debate over assistance levels to a top-ranking recipient that many say lacks accountability and even credibility as a U.S. ally. For many lawmakers, the core issue remains balancing Pakistan's strategic importance to the United States—not least its role in Afghan reconciliation efforts—with the pervasive and mutual distrust bedeviling the bilateral relationship.
The 111th Congress passed the Enhanced Partnership with Pakistan Act of 2009 (P.L. 111-73) authorizing the President to provide $1.5 billion in annual nonmilitary aid to Pakistan for five years (FY2010-FY2014) and requiring annual certification for release of security-related aid. Such conditionality is a contentious issue. Congress also established two new funds in 2009, the Pakistan Counterinsurgency Fund (PCF, within Defense Department appropriations) and the Pakistan Counterinsurgency Capability Fund (PCCF, within State-Foreign Operations Appropriations). The 112th Congress enacted further conditions and limitations on assistance. Among these were certification requirements for nearly all FY2012 assistance (in the Consolidated Appropriations Act, 2012—P.L. 112-74) and for FY2013 Coalition Support Funds (CSF, military reimbursements funded out of the Pentagon) and PCF (in the National Defense Authorization Act for FY2013—P.L. 112-239). Similar provisions appear in pending FY2014 legislation. In September 2012, the Administration waived FY2012 certification requirements under included national security provisions and, in February 2013, it issued a waiver to allow for the transfer of major defense equipment in FY2013.
The Administration has requested nearly $1.2 billion economic and security aid to Pakistan for FY2014. This represents a steep decline from total FY2012 assistance of about $1.9 billion (excluding CSF). Estimated FY2013 allocations are not yet available. This report will be updated as warranted by events. For broader discussion, see CRS Report R41832, Pakistan-U.S. Relations, by [author name scrubbed]. See also CRS Report R42116, Pakistan: U.S. Foreign Aid Conditions, Restrictions, and Reporting Requirements, by [author name scrubbed] and [author name scrubbed].