(3) designed to improve the ability of friendly countries to utilize their resources with maximum effectiveness, thereby contributing to greater self-reliance by such countries.

(d) PRIORITY TO CERTAIN COUNTRIES.-In selecting personnel for education and training pursuant to this section, priority should be given to personnel from countries determined by the Secretary of State to be countries frequently transited by proliferation-related shipments of cargo.

SEC. 585.853 LIMITATIONS.

The limitations contained in section 573(a) and (d) of this Act shall apply to this chapter.

SEC. 586.854 AUTHORIZATION OF APPROPRIATIONS.

(a) AUTHORIZATION OF APPROPRIATIONS.-There are authorized to be appropriated to the President to carry out this chapter $162,000,000 for fiscal year 2003.855

(b) AVAILABILITY OF FUNDS.-Funds made available under subsection (a) may be used notwithstanding any other provision of law (other than section 502B or 620A) and shall remain available until expended.

(c) 856 TREATMENT OF APPROPRIATIONS. -Amounts made available by the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2002,856 under "Nonproliferation, Antiterrorism, Demining, and Related Programs" and "Assistance for the Independent States of the Former Soviet Union" accounts for the activities described in subsection (d) shall be considered to be made available pursuant to this chapter.

(d) COVERED ACTIVITIES.-The activities referred to in subsection (c) are

(1) assistance under the Nonproliferation and Disarmament Fund;

(2) assistance for science and technology centers in the independent states of the former Soviet Union;

(3) export control assistance; and

853 22 U.S.C. 2349bb-3. Originally enacted as sec. 584; redesignated as sec. 585 by sec. 1303(1) of the Security Assistance Act of 2002 (division B of the Foreign Relations Authorization Act, Fiscal Year 2003; Public Law 107-228; 116 Stat. 1436).

22 U.S.C. 2349bb-4. Originally enacted as sec. 585; redesignated as sec. 586 by sec. 1303(1) of the Security Assistance Act of 2002 (division B of the Foreign Relations Authorization Act, Fiscal Year 2003; Public Law 107-228; 116 Stat. 1436).

Sec. 1301(b) of the Security Assistance Act of 2002 (division B of the Foreign Relations Authorization Act, Fiscal Year 2003; Public Law 107-228; 116 Stat. 1433) provided the following: b) SUBALLOCATIONS.-Of the amount authorized to be appropriated to the President for fiscal year 2003 by section 585 of the Foreign Assistance Act of 1961 (22 U.S.C. 2349bb-4)

"(1) $2,000,000 is authorized to be available for such fiscal year for the purpose of carrying out section 584 of the Foreign Assistance Act of 1961, as added by section 1303 of this Act; and

"(2) $65,000,000 for fiscal year 2003 are authorized to be available for science and technology centers in the independent states of the former Soviet Union.".

See also secs. 303 and 304 of the Security Assistance Act of 2000 (Public Law 106-280; 114 Stat. 853), in Legislation on Foreign Relations Through 2004, vol. I-B.

55 Sec. 1301(a)(1) of the Security Assistance Act of 2002 (division B of the Foreign Relations Authorization Act, Fiscal Year 2003; Public Law 107-228; 116 Stat. 1435) struck out $129,000,000 for fiscal year 2001 and $142,000,000 for fiscal year 2002." and inserted in lieu thereof "$162,000,000 for fiscal year 2003.".

556 Sec. 1301(a)(2) of the Security Assistance Act of 2002 (division B of the Foreign Relations Authorization Act, Fiscal Year 2003; Public Law 107-228; 116 Stat. 1435) struck out "FISCAL YEAR 2001" in the subsec. heading; and in the text struck out “2001” and inserted in lieu thereof *2002".

(4) export control and border assistance under chapter 11 of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2295 et seq.) or the FREEDOM Support Act (22 U.S.C. 5801 et seq.).

PART III

Chapter 1-General Provisions

Sec. 601.857 Encouragement of Free Enterprise and Private Participation.-(a) The Congress of the United States recognizes the vital role of free enterprise in achieving rising levels of production and standards of living essential to economic progress and development. Accordingly, it is declared to be the policy of the United States to encourage the efforts of other countries to increase the flow of international trade, to foster private initiative and competition, to encourage the development and use of cooperatives, credit unions, and savings and loan associations, to discourage monopolistic practices, to improve the technical efficiency of their industry, agriculture, and commerce, and to strengthen free labor unions; and to encourage the contribution of United States enterprise toward economic strength of less developed friendly countries, through private trade and investment abroad, private participation in programs carried out under this Act (including the use of private trade channels to the maximum extent practicable in carrying out such programs), and exchange of ideas and technical information on the matters covered by this subsection.

(b) In order to encourage and facilitate participation by private enterprise to the maximum extent practicable in achieving any of the purposes of this Act, the President shall

(1) make arrangements to find, and draw the attention of private enterprise to opportunities for investment and development in less developed countries and areas;

(2) establish an effective system for obtaining adequate information with respect to the activities of, and opportunities for, nongovernmental participation in the development process, and for utilizing such information in the planning, direction, and execution of programs carried out under this Act, and in the coordination of such programs with the ever-increasing developmental activities of nongovernmental United States institutions;

(3) 858 accelerate a program of negotiating treaties for commerce and trade, including tax treaties, which shall include provisions to encourage and facilitate the flow of private investment to, and its equitable treatment in, friendly countries and areas participating in programs under this Act;

(4) 858 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

857 22 U.S.C. 2351.

858 Sec. 301(a)(2) of the FA Act of 1966 redesignated paras. (2), (3), (4), (5), and (6) as paras. (3), (4), (5), (6), and (7), respectively, and added a new para. (2).

result of measures taken or imposed by any country or area thereof in violation of any such treaty;

(5) 8 858 to the maximum extent practicable 859 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 122 860 to any individual, corporation, or other body of per

sons;

859

(6)861 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)861 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) 862 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) 863 (1) There is hereby established an International Private Investment Advisory Council on Foreign Aid to be composed of such

$59 Sec. 301(a)(2) of the FA Act of 1963 (Public Law 88-205) struck out "wherever appropriate" and inserted in lieu thereof "to the maximum extent practicable", and inserted a semicolon for a period at the end of the paragraph.

860 Sec. 102(g)2XB) of the International Development and Food Assistance Act of 1978 (Public Law 95-424; 92 Stat. 942) struck out "201" and inserted in lieu thereof "122".

861 Added by sec. 301(a)(3) of the FA Act of 1963 (Public Law 88-205) as paras. (5) and (6). Redesignated as paras. (6) and (7) by sec. 301(a)(2) of the FA Act of 1966 (Public Law 89-583). 862 Sec. 301(a)(3) of the FA Act of 1966 (Public Law 89-583) added para. (8).

863 Sec. 301(a)(4) of the FA Act of 1966 (Public Law 89-583) amended and restated subsec. fe). It formerly read as follows:

cx1) 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.

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.".

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.864 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.864

(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 865 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) 866 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.867

(e) 868 (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.

864 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).

865 Sec. 301(a) of the FA Act of 1967 (Public Law 90-137) struck out "5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b2)" and inserted in lieu thereof "5703 of title 5 of the United States Code".

866 Sec. 301(b) of the FA Act of 1964 (Public Law 88-633) added subsec. (d).

867 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).

868 Sec. 501 of the International Development and Food Assistance Act of 1978 (Public Law 95-424; 92 Stat. 956) added subsec. (e).

869 Sec. 734(a)(1) of the International Security and Development Cooperation Act of 1981 (Public Law 97-113; 95 Stat. 1560) struck out para. (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.

Sec. 602.870 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. 603,871 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. 604,872 Procurement.-(a)(1) LIMITATIONS ON PROCUREMENT OUTSIDE THE UNITED STATES.-Funds made available for assistance under this Act may be used by the President for procurement

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

870 22 U.S.C. 2352.

871 22 U.S.C. 2353.

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