U.S. shipyard engaged in the construction, maintenance or repair of fishing vessels, or of a controlling interest in such a company or such a shipyard, to foreign control, for the purpose of obtaining the views of the Director before taking final action on the application. MARAD shall consider the Director's views before taking final action under 16 U.S.C. 808, 835.

The Director, in his discretion, may hold a public hearing on an application for the purpose of obtaining the views of interested persons. If the Director decides to hold a hearing, he shall publish timely notice of the time, place, and subject matter of the hearing in the Federal Register, and shall solicit the views of interested persons. The hearing and any ancillary or related proceedings shall be conducted as the Director may order. If the Director decides not to hold a hearing, he shall publish timely notice of the referral of the application to the Service in the Federal Register, and shall solicit the views of interested persons.

The Director, on the basis of the information available to him, including information of the type normally collected by the Service, shall reach a conclusion as to whether he should recommend the approval, conditional approval or disapproval of the application to MARAD, and shall transmit said recommendation to MARAD within a reasonable time after the referral of the application to him. In reaching his conclusion, he shall consider, along with other matters which he may deem relevant, the following:

1. Whether the application is made by, or on behalf of, a foreign entity or person which is incorporated in, and/or has its principal place of business in, a country under whose flag or under whose national ownership, whether state, public or individual, commercial fishing operations are conducted in a manner which diminishes the effectiveness of any international fishery conservation program to which the United States is a party.

2. Whether the Federal Government's policy on foreign investment in the United States poses any impediment to disapproval, approval or conditional approval of the application. In this connection, the Director shall consider whether he should recommend any exception to that policy on the basis of considerations peculiar to the domestic commercial fishing industry.

3. Whether the grant of the application reasonably can be expected to adversely affect, favorably affect, or have no effect upon the fish stock (s) to be exploited or possibly to be exploited. In this connection, the Director shall consider such matters as the number of species to be fished: the condition (s) of the stock (s) of that species; the degree of fishing effort to be expended in terms of (i) the number of vessels to be operated, (ii) the grounds to be fished. and (iii) the length (s) of the fishing season (s) to be observed; and the degree to which the fishing operations envisioned by the application will be subject to Federal and/or State and/or international conservation regimes.

4. Whether the grant of the application reasonably can be expected to adversely affect, favorably affect, or have no effect upon the U.S. company subject to foreign control. In this connection, the Director shall consider such matters as the applicant's reputation in

the business community, and that of any other company or individual having a substantial ownership position in the applicant; the apparent purpose of the acquisition (whether for investment or direct operational control and, if the latter, the experience of the applicant in commercial fishing); the amount and source of money which the applicant intends to pay, and the form of the payment; the experience and reputations of the managers who will operationally direct the company; the likelihoods of (i) the continued employment of U.S. citizens, and (ii) the selling off of the fishing assets of the company, or its dissolution, by the applicant; the projected use of profits; and whether any subsidized fishing vessels are involved.

5. Whether the grant of the application reasonably can be expected to adversely affect, favorably affect, or have no effect upon the particular segment (s) of the commercial fishing industry involved. In this connection, the Director shall consider such matters as the degree of foreign control of such industry segment (s) which would result from approval of the application; the nature of the competitive situation which would result; and the likelihood of the employment of unfair trade practices by the applicant.

6. Whether the grant of the application reasonably can be expected to adversely affect, favorably affect, or have no effect upon the domestic suppliers of goods and services to the domestic company, and/or upon the domestic purchasers of that company's products. In this connection, the Director shall consider such matters as the likelihoods of the company's (i) purchasing fewer goods and services domestically, (ii) exporting disproportionate amounts of its products, and (iii) reducing the quality of its products sold domestically.

In reaching his conclusion on the basis of the foregoing considerations, and any other matters which he may deem relevant, the Director shall place particular emphasis upon the reasonably forseeable effect of the grant of the application upon the fish resource(s) to be exploited by the applicant.

If, on balance, the Director concludes that, from the standpoint of the U.S. commercial fishing interests, the approval of the application by MARAD would be undesirable, or would be acceptable only if subject to one or more conditions, he shall so notify MARAD in writing, together with any recommended condition (s) and his reasons therefor. If the Director concludes that the unconditional approval of the application would be acceptable, he shall inform MARAD in writing that the Service has no objection to the approval of the application.

In this policy, the word "applicant" refers to the foreign entity or individual which seeks control of one or more U.S. fishing companies, without regard to whether that foreign entity or individual is the applicant of record in a given application.

This policy is effective September 20, 1974.

See the Fed. Reg., Vol. 39, No. 184, Sept. 20, 1974, pp. 33812-33813. See also the 1973 Digest, Ch. 3, § 3, pp. 97-98 for NOAA's interim policy statement.

On July 8, 1974, President Nixon approved Public Law 93-333, Stat. 290, the Foreign Disaster Assistance Act of 1974. Section 4 of Act, providing for information to Congress with respect to modifi tion of foreign debts owed to the United States, is as follows:

The Secretary of State shall keep the appropriate committees Congress fully and currently informed of the ongoing sta of any negotiations with any foreign government regarding cancellation, renegotiation, rescheduling, or settlement of any d owed to the United States by any such foreign government un the Foreign Assistance Act of 1961. The Secretary of State sh transmit to the Speaker of the House of Representatives, and to chairman of the appropriate Senate committee, the text of any ternational agreement proposing a modification in the terms of s debt no less than thirty days prior to its entry into force, toget with a detailed explanation of the interest of the United States such modification.

The House bill (H.R. 12412) had also provided that debts owed to the Un States could be modified only pursuant to legislative authorization applicabl the original debt. The Senate amendment contained no corresponding provis and the conference substitute also omitted such provision. The Conference port states that "The conferees recognize that, in certain instances, such fication may necessarily be transmitted on a classified basis; and note that such cases, appropriate safeguards will be exercised by the appropriate gressional committees." See H.R. Rept. No. 93-1126, 93d Cong., 2d Sess., June 1974, p. 4.

On July 23, 1974, Arthur Z. Gardiner, Jr., General Counsel of Agency for International Development (AID), sent a memorand to Daniel Parker, the AID Administrator, setting forth an analy of Section 4. Mr. Gardiner said, in relevant part:

* * *

The legislative history makes it clear that the provision requ the Secretary of State to notify the House Committee on Fore Affairs and the Senate Committee on Foreign Relations of any I posed negotiations which may eventually have the effect of libera

ing the repayment terms of one or more bilateral foreign aid loans extended to a government under the authority of the Foreign Assistance Act of 1961, as amended. The Department of State must notify the legislative committees of our intention to enter into multilateral discussions which could have the impact stated above and must thereafter respond to requests by the committees for further information on the status of the negotiations. The committees agreed to handle such information under appropriate conditions of confidentiality, in recognition that disclosure of the information may prejudice the U.S. bargaining position. (Cong. Rec., Vol. 120, No. 94, June 26, 1974, p. H5742).

Several points should be noted:

First, the law applies only to negotiations which may result in modifications of debts under loans extended under authority of the Foreign Assistance Act of 1961, as amended; it does not apply to P.L. 480 debts, Export-Import Bank Act debts, or to debts under predecessor foreign aid statutes, to debts under other laws. (H.R. Rept. No. 93-816, p. 3).

Second, the law only applies to loans to foreign governments, that is, to bilateral country to country debts, not debts owed to the United States by private entities or any other organizations which are not governments. (H.R. Rept. No. 93-816, p. 3.)

Third, the law applies only to negotiations which may result in liberalizing the terms of the debt, not other modifications of loan agreements. Agreements accelerating payments are not covered. (H.R. Rept. No. 93-816, p. 3.)

Fourth, the law requires that the notification must go to the congressional committees, not to individual members, although it would be permissible to notify interested individuals. (Cong. Rec., Vol. 120, No. 94, p. H5742.)

Fifth, the legal obligation to respond to requests for information on the status of negotiations likewise extends to the committees and not to individuals, although responses to individuals are permissible. (Cong. Rec., Vol. 120, No. 94, p. H5742.)

Sixth, the law requires that the text of each bilateral agreement with a debtor foreign government be transmitted to the Speaker of the House of Representatives and to the Chairman of the Senate Committee on Foreign Relations at least thirty days before its entry into force. (H.R. Rept. No. 93-816, p. 3.)

There is no requirement to submit to either the committees or to members a proposed consortium minute or memorandum of understanding regarding debt rescheduling or modification if it does not constitute an international agreement between the United States and the debtor government which obligates the United States to reschedule a loan extended under the Foreign Assistance Act.

Dept. of State File No. P74 0098-1523.

U.S.-India

Bilateral Agreements

On June 7, 1974, the United States and India signed an Agreement Regarding the Consolidation and Rescheduling of Certain Debts Owed to the United States Government and its Agencies (TIAS 7890; 25 UST 1540; entered into force June 7, 1974).

The two governments agreed to defer and reschedule certain dollar obligations to the U.S. Government falling due between October 5, 1973, and March 31, 1974. The Agreement was made pursuant to the provisions of the Record of Understanding among the member countries of the Indian Consortium signed in Washington on December 19, 1973, by the Government of India and the International Bank for Reconstruction and Development as Chairman of the Consortium. The amount of the debt deferred and rescheduled under the Agreement is not to be less than the estimated share of the United States of $29,120,000, as indicated in the 1973 Record of Understanding.

The consolidated debt (principal, interest, and credit fees due and payable to the United States between October 5, 1973, and March 31, 1974) is to be repaid in twenty equal annual installments on April 1 of each year commencing on April 1, 1981. The consolidation interest rate (interest accruing and payable on the consolidated debt after the original respective due dates) is to be 1.814% on the outstanding balance of the consolidated debt. The consolidation interest is to begin to accrue on the due date specified in each of the original agreements for each payment of interest or credit fee and each repayment of principal deferred. The consolidation interest is payable on April 1 of each year beginning on April 1, 1974.

The Agreement also provides that it is to be implemented by a separate bilateral agreement between the Government of India and the Agency for International Development (AID).

Annex A to the Agreement lists the India-AID loans rescheduled: Annex B sets forth the payments subject to rescheduling (totalling $29,339,519.15); Annex C gives the schedule of repayments.

The implementing Agreement of June 7, 1974, between the United States and the President of India amends the original India-AID loan agreements to provide for the debt rescheduling.

For the 1973 Record of Understanding Regarding Debt Relief to India, see Dept. of State File L/T.

U.S.-Sri Lanka

On June 28, 1974, the United States and Sri Lanka signed an agreement (TIAS 7904; 25 UST 1676; entered into force July 1,