
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 22USC2779a]

 
               TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
 
                     CHAPTER 39--ARMS EXPORT CONTROL
 
                SUBCHAPTER III--MILITARY EXPORT CONTROLS
 
Sec. 2779a. Prohibition on incentive payments


(a) In general

    No United States supplier of defense articles or services sold or 
licensed under this chapter, nor any employee, agent, or subcontractor 
thereof, shall, with respect to the sale or export of any such defense 
article or defense service to a foreign country, make any incentive 
payments for the purpose of satisfying, in whole or in part, any offset 
agreement with that country.

(b) Civil penalties

    Any person who violates the provisions of this section shall be 
subject to the imposition of civil penalties as provided for in this 
section.

(c) Presidential authority

    In the enforcement of this section, the President is authorized to 
exercise the same powers concerning violations and enforcement and 
imposition of civil penalties which are conferred upon departments, 
agencies and officials by subsections (c), (d), (e), and (f) of section 
11 of the Export Administration Act of 1979 [50 App. U.S.C. 2410(c), 
(d), (e), (f)], and section 12(a) of such Act [50 App. U.S.C. 2411(a)], 
subject to the same terms and conditions as are applicable to such 
powers under that Act [50 App. U.S.C. 2401 et seq.], except that section 
11(c)(2)(B) of such Act shall not apply, and instead, as prescribed in 
regulations issued under this section, the Secretary of State may assess 
civil penalties for violations of this chapter and regulations 
prescribed thereunder and further may commence a civil action to recover 
such civil penalties, and except further that notwithstanding section 
11(c) of that Act, the civil penalty for each violation of this section 
may not exceed $500,000 or five times the amount of the prohibited 
incentive payment, whichever is greater.

(d) Definitions

    For purposes of this section--
        (1) the term ``offset agreement'' means an agreement, 
    arrangement, or understanding between a United States supplier of 
    defense articles or defense services and a foreign country under 
    which the supplier agrees to purchase or acquire, or to promote the 
    purchase or acquisition by other United States persons of, goods or 
    services produced, manufactured, grown, or extracted, in whole or in 
    part, in that foreign country in consideration for the purchase by 
    the foreign country of defense articles or defense services from the 
    supplier;
        (2) the term ``incentive payments'' means direct monetary 
    compensation made by a United States supplier of defense articles or 
    defense services or by any employee, agent or subcontractor thereof 
    to any other United States person to induce or persuade that United 
    States person to purchase or acquire goods or services produced, 
    manufactured, grown, or extracted, in whole or in part, in the 
    foreign country which is purchasing those defense articles or 
    services from the United States supplier; and
        (3) the term ``United States person'' means--
            (A) an individual who is a national or permanent resident 
        alien of the United States; and
            (B) any corporation, business association, partnership, 
        trust, or other juridical entity--
                (i) organized under the laws of the United States or any 
            State, the District of Columbia, or any territory or 
            possession of the United States; or
                (ii) owned or controlled in fact by individuals 
            described in subparagraph (A) or by an entity described in 
            clause (i).

(Pub. L. 90-629, ch. 3, Sec. 39A, as added Pub. L. 103-236, title VII, 
Sec. 733, Apr. 30, 1994, 108 Stat. 504; amended Pub. L. 106-113, div. B, 
Sec. 1000(a)(7) [div. B, title XII, Sec. 1246, title XIII, Sec. 1303], 
Nov. 29, 1999, 113 Stat. 1536, 1501A-502, 1501A-511.)

                       References in Text

    The Export Administration Act of 1979, referred to in subsec. (c), 
is Pub. L. 96-72, Sept. 29, 1979, 93 Stat. 503, as amended, which is 
classified principally to section 2401 et seq. of Title 50, Appendix, 
War and National Defense. For complete classification of this Act to the 
Code, see Short Title note set out under section 2401 of Title 50, 
Appendix, and Tables.


                               Amendments

    1999--Subsec. (a). Pub. L. 106-113, Sec. 1000(a)(7) [title XII, 
Sec. 1246(a)], inserted ``or licensed'' after ``sold'' and ``or export'' 
after ``sale''.
    Subsec. (c). Pub. L. 106-113, Sec. 1000(a)(7) [title XIII, 
Sec. 1303], inserted ``section 11(c)(2)(B) of such Act shall not apply, 
and instead, as prescribed in regulations issued under this section, the 
Secretary of State may assess civil penalties for violations of this 
chapter and regulations prescribed thereunder and further may commence a 
civil action to recover such civil penalties, and except further that'' 
after ``except that''.
    Subsec. (d)(3)(B)(ii). Pub. L. 106-113, Sec. 1000(a)(7) [title XII, 
Sec. 1246(b)], inserted ``or by an entity described in clause (i)'' 
after ``subparagraph (A)''.

                         Delegation of Functions

    Functions of President under this section delegated to Secretary of 
State by Memorandum of President of the United States, July 26, 1994, 59 
F.R. 40205, set out as a note under section 2370a of this title.
