22 U.S.C. § 5401 — Support for East European Democracy

Page 1651 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 5401 (d) Construction of section Nothing in this section may be construed as prior approval of any legislation which may be necessary to implement any recommendations resulting from discussions under this section. (Pub. L. 100–418, title III, § 3603, Aug. 23, 1988, 102 Stat. 1387.) Executive Documents DELEGATION OF FUNCTIONS Functions of President under this section delegated to Secretary of the Treasury by section 1 of Ex. Ord. No. 12781, Nov. 20, 1991, 56 F.R. 59203, set out as a note under section 301 of Title 3, The President. § 5354. Banks loan loss reserves The Federal Reserve Board shall submit to the Committee on Banking, Housing, and Urban Af- fairs of the Senate and the Committee on Bank- ing, Finance and Urban Affairs of the House of Representatives a report on the issues raised by including loan loss reserves as part of banks’ primary capital for regulatory purposes by March 31, 1989. Such report shall include a re- view of the treatment of loan loss reserves and the composition of primary capital of banks in other major industrialized countries, and shall include an analysis as to whether loan loss re- serves should continue to be counted as primary capital for regulatory purposes. (Pub. L. 100–418, title III, § 3604, Aug. 23, 1988, 102 Stat. 1388.) Statutory Notes and Related Subsidiaries CHANGE OF NAME Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Com- mittee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Con- gress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Rep- resentatives, and jurisdiction over matters relating to securities and exchanges and insurance generally trans- ferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001. CHAPTER 63—SUPPORT FOR EAST EUROPEAN DEMOCRACY (SEED) Sec. 5401. Support for East European Democracy (SEED) Program. 5402. Scope of authority. SUBCHAPTER I—STRUCTURAL ADJUSTMENT 5411. Multilateral support for structural adjust- ment in Poland and Hungary. 5412. Stabilization assistance for Poland. 5413. Agricultural assistance. 5414. Debt-for-equity swaps and other special tech- niques. SUBCHAPTER II—PRIVATE SECTOR DEVELOPMENT 5421. Enterprise Funds for Poland and Hungary. 5422. Labor market transition in Poland and Hun- gary. 5423. Technical training for private sector develop- ment in Poland and Hungary. Sec. 5424. Peace Corps programs in Poland and Hun- gary. 5425. Use of Polish currency generated by agricul- tural assistance. 5426. United States policy of private financial sup- port for Polish and Hungarian credit unions. SUBCHAPTER III—EDUCATIONAL, CULTURAL, AND SCIENTIFIC ACTIVITIES 5441. Educational and cultural exchanges and sis- ter institutions programs with Poland and Hungary. 5442. Poland-Hungary scholarship partnership. 5443. Science and technology exchange with Poland and Hungary. SUBCHAPTER IV—OTHER ASSISTANCE PROGRAMS 5451. Assistance in support of democratic institu- tions in Poland and Hungary. 5452. Environmental initiatives for Poland and Hungary. 5453. Medical supplies, hospital equipment, and medical training for Poland. SUBCHAPTER V—ADDITIONAL SEED PROGRAM ACTIONS 5461. Policy coordination of SEED Program. 5462. SEED Information Center System. 5463. Encouraging voluntary assistance for Poland and Hungary. 5464. Economic and commercial officers at United States embassies and missions in Poland and Hungary. SUBCHAPTER VI—REPORTS TO CONGRESS 5471. Report on initial steps taken by United States and on Poland’s requirement for ag- ricultural assistance. 5472. Report on confidence building measures by Poland and Hungary. 5473. Report on environmental problems in Poland and Hungary. 5474. Annual SEED Program report. 5475. Omitted. 5476. Notifications to Congress regarding assist- ance. SUBCHAPTER VII—MISCELLANEOUS PROVISIONS 5491. Suspension of SEED assistance. 5492. Declaration of the Republic of Hungary. 5493. Administrative expenses of Agency for Inter- national Development. 5494. Relation of provisions of this chapter to cer- tain provisions of appropriations acts. 5495. Certain uses of excess foreign currencies. § 5401. Support for East European Democracy (SEED) Program (a) SEED Program The United States shall implement, beginning in fiscal year 1990, a concerted Program of Sup- port for East European Democracy (which may also be referred to as the ‘‘SEED Program’’). The SEED Program shall be comprised of di- verse undertakings designed to provide cost-ef- fective assistance to those countries of Eastern Europe that have taken substantive steps to- ward institutionalizing political democracy and economic pluralism. (b) Objectives of SEED assistance The President should ensure that the assist- ance provided to East European countries pursu- ant to this chapter is designed— Page 1652 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 5401 (1) to contribute to the development of democratic institutions and political plu- ralism characterized by— (A) the establishment of fully democratic and representative political systems based on free and fair elections, (B) effective recognition of fundamental liberties and individual freedoms, including freedom of speech, religion, and association, (C) termination of all laws and regulations which impede the operation of a free press and the formation of political parties, (D) creation of an independent judiciary, and (E) establishment of non-partisan mili- tary, security, and police forces; (2) to promote the development of a free market economic system characterized by— (A) privatization of economic entities, (B) establishment of full rights to acquire and hold private property, including land and the benefits of contractual relations, (C) simplification of regulatory controls regarding the establishment and operation of businesses, (D) dismantlement of all wage and price controls, (E) removal of trade restrictions, including on both imports and exports, (F) liberalization of investment and cap- ital, including the repatriation of profits by foreign investors; (G) tax policies which provide incentives for economic activity and investment, (H) establishment of rights to own and op- erate private banks and other financial serv- ice firms, as well as unrestricted access to private sources of credit, and (I) access to a market for stocks, bonds, and other instruments through which indi- viduals may invest in the private sector; and (3) not to contribute any substantial ben- efit— (A) to Communist or other political par- ties or organizations which are not com- mitted to respect for the democratic process, or (B) to the defense or security forces of any member country of the Warsaw Pact. (c) SEED Actions Assistance and other activities under the SEED Program (which may be referred to as ‘‘SEED Actions’’) shall include activities such as the following: (1) Leadership in the World Bank and Inter- national Monetary Fund United States leadership in supporting— (A) loans by the International Bank for Reconstruction and Development and its af- filiated institutions in the World Bank group that are designed to modernize indus- try, agriculture, and infrastructure, and (B) International Monetary Fund programs designed to stimulate sound economic growth. (2) Currency stabilization loans United States leadership in supporting mul- tilateral agreement to provide government-to- government loans for currency stabilization where such loans can reduce inflation and thereby foster conditions necessary for the ef- fective implementation of economic reforms. (3) Debt reduction and rescheduling Participation in multilateral activities aimed at reducing and rescheduling a coun- try’s international debt, when reduction and deferral of debt payments can assist the proc- ess of political and economic transition. (4) Agricultural assistance Assistance through the grant and concessional sale of food and other agricul- tural commodities and products when such as- sistance can ease critical shortages but not in- hibit agricultural production and marketing in the recipient country. (5) Enterprise Funds Grants to support private, nonprofit ‘‘Enter- prise Funds’’, designated by the President pur- suant to law and governed by a Board of Direc- tors, which undertake loans, grants, equity in- vestments, feasibility studies, technical as- sistance, training, and other forms of assist- ance to private enterprise activities in the Eastern European country for which the En- terprise Fund so is designated. (6) Labor market-oriented technical assistance Technical assistance programs directed at promoting labor market reforms and facili- tating economic adjustment. (7) Technical training Programs to provide technical skills to as- sist in the development of a market economy. (8) Peace Corps Establishment of Peace Corps programs. (9) Support for indigenous credit unions Support for the establishment of indigenous credit unions. (10) Generalized System of Preferences Eligibility for trade benefits under the Gen- eralized System of Preferences. (11) Normal trade relations The granting of temporary or permanent nondiscriminatory treatment to the products of an East European country through the ap- plication of the criteria and procedures estab- lished by section 2432 of title 19 (commonly re- ferred to as the ‘‘Jackson-Vanik amend- ment’’). (12) United States International Development Finance Corporation Programs of the United States International Development Finance Corporation. (13) Export-Import Bank programs Programs of the Export-Import Bank of the United States. (14) Trade and Development Program activi- ties Trade and Development Agency activities under the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.]. (15) Investment treaties Negotiation of bilateral investment treaties. Page 1653 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 5401 (16) Special tax treatment of below-market loans Exempting bonds from Internal Revenue Code [title 26] rules relating to below-market loans. (17) Exchange activities Expanded exchange activities under the Ful- bright, International Visitors, and other pro- grams conducted by the United States Infor- mation Agency. (18) Cultural centers Contributions toward the establishment of reciprocal cultural centers that can facilitate educational and cultural exchange and ex- panded understanding of Western social de- mocracy. (19) Sister institutions Establishment of sister institution programs between American and East European schools and universities, towns and cities, and other organizations in such fields as medicine and health care, business management, environ- mental protection, and agriculture. (20) Scholarships Scholarships to enable students to study in the United States. (21) Science and technology exchanges Grants for the implementation of bilateral agreements providing for cooperation in science and technology exchange. (22) Assistance for democratic institutions Assistance designed to support the develop- ment of legal, legislative, electoral, journal- istic, and other institutions of free, pluralist societies. (23) Environmental assistance Environmental assistance directed at over- coming crucial deficiencies in air and water quality and other determinants of a healthful society. (24) Medical assistance Medical assistance specifically targeted to overcome severe deficiencies in pharma- ceuticals and other basic health supplies. (25) Encouragement for private investment and voluntary assistance Encouraging private investment and vol- untary private assistance, using a variety of means including a SEED Information Center System and the provision by the Department of Defense of transportation for private non- financial contributions. (Pub. L. 101–179, § 2, Nov. 28, 1989, 103 Stat. 1299; Pub. L. 102–549, title II, § 202(e), Oct. 28, 1992, 106 Stat. 3658; Pub. L. 105–206, title V, § 5003(b)(6), July 22, 1998, 112 Stat. 790; Pub. L. 115–254, div. F, title VI, § 1470(m)(1), Oct. 5, 2018, 132 Stat. 3518.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (b), was in the original ‘‘this Act’’, meaning Pub. L. 101–179, Nov. 28, 1989, 103 Stat. 1298, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out below and Tables. The Foreign Assistance Act of 1961, referred to in sub- sec. (c)(14), is Pub. L. 87–195, Sept. 4, 1961, 75 Stat. 424, which is classified principally to chapter 32 (§ 2151 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 2151 of this title and Tables. AMENDMENTS 2018—Subsec. (c)(12). Pub. L. 115–254 added par. (12) and struck out former par. (12). Prior to amendment, text read as follows: ‘‘Programs of the Overseas Private Investment Corporation.’’ 1998—Subsec. (c)(11). Pub. L. 105–206 in heading sub- stituted ‘‘Normal trade relations’’ for ‘‘Most favored nation trade status’’ and in text struck out ‘‘(com- monly referred to as ‘most favored nation status’)’’ after ‘‘nondiscriminatory treatment’’. 1992—Subsec. (c)(14). Pub. L. 102–549 substituted ‘‘Agency’’ for ‘‘Program’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Amendment by Pub. L. 115–254 effective at the end of the transition period, as defined in section 9681 of this title, see section 1470(w) of Pub. L. 115–254, set out as a note under section 905 of Title 2, The Congress. SHORT TITLE Pub. L. 101–179, § 1(a), Nov. 28, 1989, 103 Stat. 1298, pro- vided that: ‘‘This Act [enacting this chapter and sec- tion 2185 of this title, amending sections 2184 and 2199 of this title, section 1757 of Title 12, Banks and Bank- ing, and section 2462 of Title 19, Customs Duties, enact- ing provisions set out as notes under sections 2185, 2199, and 2421 of this title, section 635 of Title 12, and section 7872 of Title 26, Internal Revenue Code, and amending provisions set out as a note under section 7872 of Title 26] may be cited as the ‘Support for East European De- mocracy (SEED) Act of 1989’.’’ TRANSFER OF FUNCTIONS United States Information Agency (other than Broad- casting Board of Governors and International Broad- casting Bureau) abolished and functions transferred to Secretary of State, see sections 6531 and 6532 of this title. Executive Documents EX. ORD. NO. 12703. SUPPORT FOR EAST EUROPEAN DEMOCRACY (SEED) PROGRAM Ex. Ord. No. 12703, Feb. 20, 1990, 55 F.R. 6351, as amended by Ex. Ord. No. 13118, § 10(2), Mar. 31, 1999, 64 F.R. 16598, provided: By the authority vested in me as President by the Constitution and laws of the United States of America, including the Support for East European Democracy (SEED) Act (P.L. 101–179, hereinafter referred to as the ‘‘Act’’) [22 U.S.C. 5401 et seq.] and section 301 of Title 3 of the United States Code, it is hereby ordered as fol- lows: SECTION 1. SEED Program Coordinator. The functions conferred by Title VII of the Act [22 U.S.C. 5471 et seq.] relating to reports to the Congress are hereby dele- gated to the Coordinator of the SEED Program. The Coordinator is authorized to assign responsibility for particular aspects of the reports to appropriate agen- cies. Sec. 2. Department of State. The functions conferred upon the President by section 201 of the Act [22 U.S.C. 5421] relating to Enterprise Funds for Poland and Hun- gary are hereby delegated to the Secretary of State. SEC. 3. Department of Commerce. The functions con- ferred upon the President by section 602 of the Act [22 U.S.C. 5462] regarding the establishment of a SEED In- formation Center System in cooperation with the Gov- ernments of Poland and Hungary are hereby delegated Page 1654 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 5402 to the Secretary of Commerce. This authority is to be exercised in consultation with the SEED Program Co- ordinator and in consultation with other agencies as appropriate. SEC. 4. Department of the Treasury. The functions con- ferred upon the President by section 104 of the Act [22 U.S.C. 5414] regarding debt reduction of certain East European countries are hereby delegated to the Sec- retary of the Treasury. The Secretary shall consult, as appropriate, with other relevant agencies in exercising the functions herein delegated. GEORGE BUSH. § 5402. Scope of authority (a) General authorization The President is authorized to conduct activi- ties for any East European country that are similar to any activity authorized by this chap- ter to be conducted in Poland or Hungary (ex- cluding those authorized by section 5412 of this title or the amendments made by sections 301 and 304) if such similar activities would effec- tively promote a transition to market-oriented democracy. (b) Administration of justice programs In order to strengthen the administration of justice in East European countries, the Presi- dent may exercise the same authorities with re- spect to those countries as are available under section 2346c of this title, subject to the limita- tions and requirements of that section, other than subsection (c) and the last two sentences of subsection (e). (c) ‘‘East European country’’ defined For purposes of this chapter, the term ‘‘East European country’’ includes Albania, Bulgaria, the Czech and Slovak Federal Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and states that were part of the former Socialist Federal Republic of Yugoslavia. (Pub. L. 101–179, § 3, as added Pub. L. 102–511, title IX, § 903(a), Oct. 24, 1992, 106 Stat. 3355.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a) and (c), was in the original ‘‘this Act’’, meaning Pub. L. 101–179, Nov. 28, 1989, 103 Stat. 1298, which is classified prin- cipally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 5401 of this title and Tables. Sections 301 and 304, referred to in subsec. (a), are sections 301 and 304 of Pub. L. 101–179, title III, Nov. 28, 1989, 103 Stat. 1311, 1312. Section 301 amended section 2462 of Title 19, Customs Duties. Section 304 enacted section 2185 of this title, amended section 2184 of this title, and enacted provisions set out as a note under section 2185 of this title. SUBCHAPTER I—STRUCTURAL ADJUSTMENT § 5411. Multilateral support for structural adjust- ment in Poland and Hungary (a) Multilateral assistance for Poland and Hun- gary (1) In general To the extent that Poland and Hungary con- tinue to evolve toward pluralism and democ- racy and to develop and implement com- prehensive economic reform programs, the United States Government shall take the lead- ership in mobilizing international financial in- stitutions, in particular the International Monetary Fund and the International Bank for Reconstruction and Development and its affiliated institutions in the World Bank group, to provide timely and appropriate re- sources to help Poland and Hungary. (2) World Bank structural adjustment loan for Poland In furtherance of paragraph (1), the Sec- retary of the Treasury shall direct the United States Executive Director of the International Bank for Reconstruction and Development to urge expeditious approval and disbursement by the Bank of a structural adjustment loan to Poland in an appropriate amount in time to facilitate the implementation of major eco- nomic reforms scheduled for early 1990, includ- ing the termination of energy, export, and ag- ricultural subsidies and wage indexation. (b) Stabilization assistance, debt relief, and agri- cultural assistance for Poland To the extent that Poland continues to evolve toward pluralism and democracy and to develop and implement comprehensive economic reform programs, the United States Government shall do the following: (1) Stabilization assistance The United States Government, in conjunc- tion with other member governments of the Organization of Economic Cooperation and De- velopment (OECD) and international financial institutions (including the International Mon- etary Fund), shall support the implementation of a plan of the Government of Poland to at- tack hyperinflation and other structural eco- nomic problems, address pressing social prob- lems, carry out comprehensive economic re- form, and relieve immediate and urgent bal- ance of payments requirements in Poland, through the use of mechanisms such as— (A) the Exchange Stabilization Fund pur- suant to section 5302 of title 31 and in ac- cordance with established Department of the Treasury policies and procedures; and (B) the authority provided in section 5412(c) of this title. (2) Debt relief The United States Government— (A) shall urge all members of the ‘‘Paris Club’’ of creditor governments and other creditor governments to adopt, and partici- pate in, a generous and early rescheduling program for debts owed by the Government of Poland; and (B) in coordination with other creditor governments, shall seek to expedite con- sultations between the Government of Po- land and its major private creditors in order to facilitate a rescheduling and reduction of payments due on debt owed to such creditors in a manner consistent with the inter- national debt policy announced by the Sec- retary of the Treasury on March 10, 1989.