Pub. L. 89-171, pt. III, ch. 1, sec. 301

Sec. 301. Chapter 1 of part III of the Foreign Assistance Act of 1961, as amended, which relates to general provisions, is amended as follows: (a) Amend section 605, which relates to retention and use of items, as follows: (1) In the section heading strike out “Items” and substitute “Certain Items and Funds”. (2) Add the following new subsections: “(c) Funds realized as a result of any failure of a transaction financed under authority of part I of this Act to conform to the requirements of this Act, or to applicable rules and regulations of the United States Government, or to the terms of any agreement or contract entered into under authority of part I of this Act, shall revert to the respective appropriation, fund, or account used to finance such transaction or to the appropriation, fund, or account currently available tor the same general purpose. “(d) Funds realized by the United States Government from the sale, transfer, or disposal of defense articles returned to the United States Government by a recipient country or international organization as no longer needed for the purpose for which furnished shall be credited to the respective appropriation, fund, or account used to procure such defense articles or to the appropriation, fund, or account currently available for the same general purpose.” 79 Stat. 659 (b) Amend section 612, which relates to use of foreign currencies, by redesignating subsection (c) as subsection (b), and by striking out the first sentence of the second paragraph of such subsection and by adding at the end thereof the following new paragraph: “The President shall take all appropriate steps to assure that, to the maximum extent possible, United States-owned foreign currencies are utilized in lieu of dollars. Dollar funds made available pursuant to this Act shall not be expended for goods and services when United States-owned foreign currencies are available for such purposes unless the administrative official approving the voucher certifies as to the reason for the use of dollars in each case.” (c) Amend section 613, which relates to foreign currencies, as follows: (1) Strike out the section heading and substitute the following: “Accounting, Valuation, Reporting, and Administration of Foreign Currencies”. (2) Add the following new subsection: “(d) In cases where assistance is to be furnished to any recipient country in furtherance of the purposes of this or any other Act on a basis which will result in the accrual of foreign currency proceeds to the United States, the Secretary of the Treasury shall issue regulations requiring that agreements, in respect of such assistance, include provisions for the receipt of interest income on the foreign currency proceeds deposited in authorized depositaries: Provided, That whenever the Secretary of State determines it not to be in the national interest to conclude arrangements for the receipt of interest income he may waive the requirement thereof: Provided further, That the Secretary of State, or his delegate, shall promptly make a complete report to the Congress on each such determination and the reasons therefor.” (d) Amend section 620, which relates to prohibitions against furnishing assistance to Cuba and certain other countries, as follows: (1) Amend the section heading to read as follows: “Prohibitions Against Furnishing Assistance.—”. (2) Amend subsection (e)(2), which relates to the act of state doctrine, by inserting after the words “other right” each time they appear the words “to property”, and by striking out “, or (3) in any case in which the proceedings are commenced after January 1, 1966”. (3) In section 620(1), which relates to the prohibition against furnishing assistance to countries which fail to enter into agreements to institute the investment guaranty program and providing protection against certain risks, strike out “December 31, 1965” and substitute “December 31, 1966”. (4) At the end of such section 620, add the following new subsections: “(n) In view of the aggression of North Vietnam, the President shall consider denying assistance under this Act to any country which has failed to take appropriate steps, not later than sixty days after the date of enactment of the Foreign Assistance Act of 1965— “(A) to prevent ships or aircraft, under its registry from transporting to North Vietnam— “(i) any items of economic assistance, “(ii) any items which are, for the purposes of title I of the Mutual Defense Assistance Control Act of 1951, as amended, arms, ammunition and implements of war, atomic energy materials, petroleum, transportation materials of79 Stat. 660 strategic value, or items of primary strategic significance used in the production of arms, ammunition, and implements of war, or “(iii) any other equipment, materials, or commodities; and “(B) to prevent ships or aircraft under its registry from transporting any equipment, materials, or commodities from North Vietnam. “(o) In determining whether or not to furnish assistance under this Act, consideration shall be given to excluding from such assistance any country which hereafter seizes, or imposes any penalty or sanction against, any United States fishing vessel on account of its fishing activities in international waters. The provisions of this subsection shall not be applicable in any case governed by international agreement to which the United States is a party.”