vestment to, and its equitable treatment in, friendly countries and areas participating in programs under this Act;

(4) 788 seek, consistent with the national interest, compliance by other countries or areas with all treaties for commerce and trade and taxes, and take all reasonable measures under this Act or other authority to secure compliance therewith and to assist United States citizens in obtaining just compensation for losses sustained by them or payments exacted from them as a result of measures taken or imposed by any country or area thereof in violation of any such treaty;

(5)788 to the maximum extent practicable 789 carry out programs of assistance through private channels and to the extent practicable in conjunction with local private or governmental participation, including loans under the authority of section 122 790 to any individual, corporation, or other body of per

sons;

789

(6)791 take appropriate steps to discourage nationalization, expropriation, confiscation, seizure of ownership or control of private investment and discriminatory or other actions, having the effect thereof, undertaken by countries receiving assistance under this Act, which divert available resources essential to create new wealth, employment, and productivity in those countries and otherwise impair the climate for new private investment essential to the stable economic growth and development of those countries;

(7) 791 utilize wherever practicable the services of United States private enterprise (including, but not limited to, the services of experts and consultants in technical fields such as engineering);

(8) 792 utilize wherever practicable the services of United States private enterprise on a cost-plus incentive fee contract basis to provide the necessary skills to develop and operate a specific project or program of assistance in a less developed friendly country or area in any case in which direct private investment is not readily encouraged, and provide where appropriate for the transfer of equity ownership in such project or program to private investors at the earliest feasible time. (c) 793 (1) There is hereby established an International Private Investment Advisory Council on Foreign Aid to be composed of such

789 Sec. 301(a)(2) of the FA Act of 1963 inserted "to the maximum extent practicable” in lieu of "wherever appropriate", and inserted a semicolon for the period at the end of the paragraph. 790 Sec. 102(g)(2)(B) of the International Development and Food Assistance Act of 1978 (Public Law 95-424; 92 Stat. 942) inserted "122" in lieu of "201".

791 Pars. (6) and (7) were added by sec. 301(a)(3) of the FA Act of 1963. Originally added as pars. (5) and (6), they were redesignated by sec. 301(a)(2) of the FA Act of 1966.

792 Sec. 301(a)(3) of the FA Act of 1966 added par. (8).

793 Subsec. (c) was amended by sec. 301(a)(4) of the FA Act of 1966. It formerly read as follows:

"(c)(1) There is hereby established an Advisory Committee on Private Enterprise in Foreign Aid. The Advisory Committee shall carry out studies and make recommendations for achieving the most effective utilization of the private enterprise provisions of this Act to the head of the Agency charged with administering the programs under part I of this Act, who shall appoint the Committee.

"(2) Members of the Advisory Committee shall represent the public interest and shall be selected from the business, labor and professional world, from the universities and foundations, and from among persons with extensive experience in government. The Advisory Committee shall consist of not more than nine members, and one of the members shall be designated as chairman.

number of leading American business specialists as may be selected, from time to time, by the Administrator of the Agency for International Development for the purpose of carrying out the provisions of this subsection.794 The members of the Council shall serve at the pleasure of the Administrator, who shall designate one member to serve as Chairman.

(2) It shall be the duty of the Council, at the request of the Administrator, to make recommendations to the Administrator with respect to particular aspects of programs and activities under this Act where private enterprise can play a contributing role and to act as liaison for the Administrator to involve specific private enterprises in such programs and activities.794

(3) The members of the Advisory Council shall receive no compensation for their services but shall be entitled to reimbursement in accordance with section 5703 of title 5 of the United States Code 795 for travel and other expenses incurred by them in the performance of their functions under this subsection.

(4) The expenses of the Advisory Council shall be paid by the Administrator from funds otherwise available under this Act.

(d) 796 It is the sense of Congress that the Agency for International Development should continue to encourage, to the maximum extent consistent with the national interest, the utilization of engineering and professional services of United States firms (including, but not limited to, any corporation, company, partnership, or other association) or by an affiliate of such United States firms in connection with capital projects financed by funds authorized under this Act.797

(e) 798 (1) The Congress finds that significantly greater effort must be made in carrying out programs under part I of this Act to award contracts on the basis of competitive selection procedures. All such contracts should be let on the basis of competitive selection procedures except in those limited cases in which the procurement regulations governing the agency primarily responsible for administering part I of this Act allow noncompetitive procedures to be used.

"(3) Members of the Advisory Committee shall receive no compensation for their services but shall be entitled to reimbursement in accordance with section 5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b2) for travel and other expenses incurred in attending meetings of the Advisory Committee.

"(4) The Advisory Committee shall, if possible, meet not less frequently than once each month, shall submit such interim reports as the Committee finds advisable, and shall submit a final report not later than June 30, 1965, whereupon the Committee shall cease to exist. Such reports shall be made available to the public and to the Congress.

"(5) The expenses of the Committee, which shall not exceed $50,000, shall be paid from funds otherwise available under this Act.".

794 This function of the Administrator of AID was transferred to the Director of IDCA, pursuant to sec. 6 of Reorganization Plan No. 2 of 1979 (establishing IDCA). The Reorganization Plan No. 2 of 1979 ceased to be effective with enactment of the Foreign Affairs Reform and Restructuring Act of 1998, pursuant to sec. 1422(a)(1) (division G of Public Law 105–277; 112 Stat. 2681).

795 The words "5703 of title 5 of the United States Code" were inserted in lieu of "5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b2)" by sec. 301(a) of the FA Act of 1967. 796 Subsec. (d) was added by sec. 301(b) of the FA Act of 1964.

797 This responsibility of the agency and its Administrator was transferred to the Director of IDCA, pursuant to sec. 6 of Reorganization Plan No. 2 of 1979 (establishing IDCA). The Reorganization Plan No. 2 of 1979 ceased to be effective with enactment of the Foreign Affairs Reform and Restructuring Act of 1998, pursuant to sec. 1422(a)(1) (division G of Public Law 105–277; 112 Stat. 2681).

798 Subsec. (e) was added by sec. 501 of the International Development and Food Assistance Act of 1978 (Public Law 95-424; 92 Stat. 956).

(2) 799 *** [Repealed-1981]

Sec. 602.800 Small Business. (a) Insofar as practicable and to the maximum extent consistent with the accomplishment of the purposes of this Act, the President shall assist American small business to participate equitably in the furnishing of commodities, defense articles, and services (including defense services) financed with funds made available under this Act

(1) by causing to be made available to suppliers in the United States, and particularly to small independent enterprises, information, as far in advance as possible, with respect to purchases proposed to be financed with such funds;

(2) by causing to be made available to prospective purchasers in the countries and areas receiving assistance under this Act information as to such commodities, articles, and services produced by small independent enterprises in the United States; and

(3) by providing for additional services to give small business better opportunities to participate in the furnishing of such commodities, articles, and services financed with such funds. (b) There shall be an Office of Small Business, headed by a Special Assistant for Small Business, in such agency of the United States Government as the President may direct, to assist in carrying out the provisions of subsection (a) of this section.

(c) The Secretary of Defense shall assure that there is made available to suppliers in the United States, and particularly to small independent enterprises, information with respect to purchases made by the Department of Defense pursuant to part II, such information to be furnished as far in advance as possible.

Sec. 603.801 Shipping on United States Vessels.-The ocean transportation between foreign countries of commodities and defense articles purchased with foreign currencies made available or derived from funds made available under this Act or the Agricultural Trade Development and Assistance Act of 1954 as amended (7 U.S.C. 1691 et seq.), and transfers of fresh fruit and products thereof under this Act shall not be governed by the provisions of section 901(b) of the Merchant Marine Act of 1936, as amended (46 U.S.C. 1241), or any other law relating to the ocean transportation of commodities on United States flag vessels.

Sec. 604,802 Procurement.-(a)(1) LIMITATIONS ON PROCUREMENT OUTSIDE THE UNITED STATES.-Funds made available for as

799 Par. (2), which had required certain information to be supplied to Congress within the congressional presentation materials for development assistance in fiscal years 1980 and 1981 concerning contracts entered into by AID without competitive selection procedures, was struck out by sec. 734(a)(1) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1560).

800 22 U.S.C. 2352.

801 22 U.S.C. 2353.

802 22 U.S.C. 2354. Sec. 597 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 (Public Law 102-391; 106 Stat. 1694), restated sec. 604(a), which formerly read as follows:

"Procurement. (a) Funds made available under this Act may be used for procurement outside the United States only if the President determines that such procurement will not result in adverse effects upon the economy of the United States or the industrial mobilization base, with special reference to any areas of labor surplus or to the net position of the United States in its balance of payments with the rest of the world, which outweigh the economic or other advantages to the United States of less costly procurement outside the United States, and only if the price of any commodity procured in bulk is lower than the market price prevailing in the

sistance under this Act may be used by the President for procurement

(A) only in the United States, the recipient country, or developing countries; or

(B) in any other country but only if—

(i) the provision of such assistance requires commodities or services of a type that are not produced in and available for purchase in any country specified in subparagraph (A);

or

(ii) the President determines, on a case-by-case basis, that procurement in such other country is necessary

(I) to meet unforeseen circumstances, such as emergency situations, where it is important to permit procurement in a country not specified in subparagraph (A); or

(II) to promote efficiency in the use of United States foreign assistance resources, including to avoid impairment of foreign assistance objectives.

(2) For purposes of this subsection, the term "developing countries" shall not include advanced developing countries.

(b) No funds made available under this Act shall be used for the purchase in bulk of any commodities at prices higher than the market price prevailing in the United States at the time of purchase, adjusted for differences in the cost of transportation to destination, quality, and terms of payment.

(c) 803 In providing for the procurement of any agricultural commodity or product thereof available for disposition under the Agricultural Trade Development and Assistance Act of 1954 as amended, for transfer by grant under this Act to any recipient country in accordance with its requirements, the President shall, insofar as practicable and when in furtherance of the purposes of this Act, authorize the procurement of such agricultural commodity only within the United States except to the extent that such agricultural commodity is not available in the United States in sufficient quantities to supply emergency requirements of recipients under this Act.

(d) In providing assistance in the procurement of commodities in the United States, United States dollars shall be made available for marine insurance on such commodities where such insurance is placed on a competitive basis in accordance with normal trade practice prevailing prior to the outbreak of World War II: Provided, That in the event a participating country, by statute, decree, rule, or regulation, discriminates against any marine insurance company authorized to do business in any State of the United States, then commodities purchased with funds provided hereunder and destined for such country shall be insured in the United States against

United States at the time of procurement, adjusted for differences in the cost of transportation to destination, quality, and terms of payment.".

See also in the Kenneth M. Ludden Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2002: sec. 541-Purchase of American-Made Equipment and Products (115 Stat. 2154).

803 Sec. 301(b)(1) of the FA Act of 1966 struck out the word "surplus" which appeared before the word "agricultural" in three places in this subsec. and inserted "or product thereof available for disposition under the Agricultural Trade Development and Assistance Act of 1954, as amended,". For text of the Agricultural Trade Development and Assistance Act, see Legislation on Foreign Relations Through 2001, vol. I–B.

marine risk with a company or companies authorized to do a marine insurance business in any State of the United States.

(e) 804 No funds made available under this Act shall be used for the procurement of any agricultural commodity or product thereof outside the United States when the domestic price of such commodity is less than parity, unless the commodity to be financed could not reasonably be produced in the United States in fulfillment of the objectives of a particular assistance program under which such commodity procurement is to be financed.

(f) 805 No funds authorized to be made available to carry out part I of this Act shall be used under any commodity import program to make any payment to a supplier unless the supplier has certified to the agency primarily responsible for administering such part I, such information as such agency shall by regulation prescribe, including but not limited to, a description of the commodity supplied by him and its condition, and on the basis of such information such agency shall have approved such commodity as eligible and suitable for financing under this Act.

(g) 806 (1) None of the funds authorized to be appropriated or made available for obligation or expenditure under this Act may be made available for the procurement of construction or engineering services from advanced developing countries, eligible under the Geographic Code 941, which have attained a competitive capability in international markets for construction services or engineering serv

ices.

(2) 8 807 Paragraph (1) does not apply with respect to an advanced developing country which

(A) is receiving direct economic assistance under chapter 1 of part I or chapter 4 of part II of this Act, and

(B) if the country has its own foreign assistance programs which finance the procurement of construction or engineering services, permits United States firms to compete for those services.

Sec. 605,808 Retention and Use of Certain Items and Funds. (a) Any commodities and defense articles procured to carry out this Act shall be retained by, or upon reimbursement, transferred to, and for the use of, such agency of the United States Government as the President may determine in lieu of being disposed of to a foreign country or international organization, whenever in the judgment of the President the best interests of the United States will be served thereby or whenever such retention is called for by concurrent resolution. Any commodities or defense articles so retained may be disposed of without regard to provisions of law relating to the disposal of property owned by the United States Government, when necessary to prevent spoilage or wastage

***

804 Subsec. (e) was added by sec. 301(b)(2) of the FA Act of 1966. The last phrase of subsec. (e), beginning with the words ", unless the commodity * were added by sec. 705(a) of the International Security and Development Cooperation Act of 1980 (Public Law 96-593; 94 Stat.

3157).

805 Subsec. (f) was added by sec. 301(a) of the FA Act of 1968.

806 Subsec. (g) was added by sec. 705(b) of the International Security and Development Cooperation Act of 1980 (Public Law 96-533; 94 Stat. 3158).

807 Par. (2) was added by sec. 1207 of the International Security and Development Cooperation Act of 1985 (Public Law 99-83; 99 Stat. 278).

808 22 U.S.C. 2355. Sec. 301(a)(1) of the FA Act of 1965 inserted "Certain Items and Funds" for "Items" in the section heading.