against violators of controls commensurate with the severity of SEC. 2443. MANDATORY SANCTIONS AGAINST TOSHIBA AND KONGSBERG. (1) a prohibition on contracting with, and procurement of (A) Toshiba Machine Company and Kongsberg Trading Company, and (B) any other foreign person whom the President finds to have knowingly facilitated the diversion of advanced milling machinery by Toshiba Machine Company and Kongsberg Trading Company to the Soviet Union, by any department, agency, or instrumentality of the United States Government; and (2) a prohibition on the importation into the United States of all products produced by Toshiba Machine Company, Kongsberg Trading Company, and any foreign person described in paragraph (1)(B). (b) SANCTIONS AGAINST TOSHIBA CORPORATION AND KONGSBERG VAAPENFABRIKK.-The President shall impose, for a period of 3 years, a prohibition on contracting with, and procurement of products and services from, the Toshiba Corporation and Kongsberg Vaapenfabrikk, by any department, agency, or instrumentality of the United States Government. (c) EXCEPTIONS.-The President shall not apply sanctions under this section (1) in the case of procurement of defense articles or defense services (A) under existing contracts or subcontracts, including exercise of options for production quantities to satisfy United States operational military requirements; (B) if the President determines that the company or foreign person to whom the sanctions would otherwise be applied is a sole source supplier of essential defense articles or services and no alternative supplier can be identified; or (C) if the President determines that such articles or services are essential to the national security under defense coproduction agreements; or (2) to (A) products or services provided under contracts or other binding agreements (as such terms are defined by the President in regulations) entered into before June 30, 1987; (B) spare parts; (C) component parts, but not finished products, essential (D) routine servicing and maintenance of products; or (d) DEFINITIONS.-For purposes of this section (1) the term "component part" means any article which is not usable for its intended functions without being imbedded or integrated into any other product and which, if used in production of a finished product, would be substantially transformed in that process; (2) the term "finished product" means any article which is usable for its intended functions without being imbedded in or integrated into any other product, but in no case shall such term be deemed to include an article produced by a person other than a sanctioned person that contains parts or components of the sanctioned person if the parts or components have been substantially transformed during production of the finished product; and (3) the term "sanctioned person" means a company or other foreign person upon whom prohibitions have been imposed under subsection (a) or (b). [SEC. 2444. MANDATORY SANCTIONS FOR FUTURE VIOLATIONS. New section 11A of the Export Administration Act of 1979, as amended.] [SEC. 2445. ANNUAL REPORT OF DEFENSE IMPACT. New subsection (f) of section 14 of the Export Administration Act of 1979, as amended.] [SEC. 2446. IMPROVED MULTILATERAL COOPERATION. Amendment to section 5(i) of the Export Administration Act of 1979, as amended.] [SEC. 2447. TECHNICAL AND CONFORMING AMENDMENTS.] B. EXPORT FINANCING AND PROMOTION 1. Export-Import Bank of the United States Export-Import Bank Act of 1945, as amended [12 U.S.C. 635; P.L. 79-173, as amended by P.L. 79-282, P.L. 80-89, P.L. 82-158, P.L. 83-30, P.L. 83-570, P.L. 83-779, P.L. 85-55, P.L. 85-424, P.L. 87-311, P.L. 88-101, P.L. 89-348, P.L. 90-267, P.L. 92-126, P.L. 93-331, P.L. 93-374, P.L. 93-425, P.L. 93-450, P.L. 93-646, P.L. 95-143, P.L. 95-407, P.L. 95-630, P.L. 96-470, P.L. 97-35, P.L. 98-109, P.L. 98-143, P.L. 98-181, P.L. 99-440, P.L. 99-472, P.L. 99-509, P.L. 100-217, P.L. 100-418, P.L. 100-690, P.L. 101-240, P.L. 101-513, P.L. 101-623, and P.L. 102-429] SEC. 2. (a)(1) There is hereby created a corporation with the name Export-Import Bank of the United States, which shall be an agency of the United States of America. The objects and purposes of the Bank shall be to aid in financing and to facilitate exports and imports and the exchange of commodities and services between the United States or any of its Territories or insular possessions and any foreign country or the agencies or nationals thereof. In connection with and in furtherance of its objects and purposes, the Bank is authorized and empowered to do a general banking business except that of circulation; to receive deposits; to purchase, discount, rediscount, sell, and negotiate, with or without its endorsement or guaranty, and to guarantee notes, drafts, checks, bills of exchange, acceptances, including bankers' acceptances, cable transfers, and other evidences of indebtedness; to guarantee, insure, coinsure, and reinsure against political and credit risks of loss; to purchase, sell, and guarantee securities but not to purchase with its funds any stock in any other corporation except that it may acquire any such stock through the enforcement of any lien or pledge or otherwise to satisfy a previously contracted indebtedness to it; to accept bills and drafts drawn upon it; to issue letters of credit; to purchase and sell coin, bullion, and exchange; to borrow and to lend money; to perform any act herein authorized in participation with any other person, including any individual, partnership, corporation, or association; to adopt, alter, and use a corporate seal, which shall be judicially noticed; to sue and to be sued, to complain and to defend in any court of competent jurisdiction; to represent itself or to contract for representation in all legal and arbitral proceedings outside the United States; and the enumeration of the foregoing powers shall not be deemed to exclude other powers necessary to the achievement of the objects and purposes of the Bank. The Bank shall be entitled to the use of the United States mails in the same manner and upon the same conditions as the executive departments of the Government. The Bank is authorized to publish or arrange for the publication of any documents, reports, contracts, or other material necessary in connection with or in furtherance of its objects and purposes without regard to the provisions of section 501 of title 44, United States Code, whenever the Bank determines that publication in accordance with the provisions of such section would not be practicable. Subject to regulations which the Bank shall issue pursuant to section 553 of title 5, United States Code, the Bank may impose and collect reasonable fees to cover the costs of conferences and seminars sponsored by, and publications provided by, the Bank. Amounts received under the preceding sentence shall be credited to the fund which initially paid for such activities, and may accept reimbursement for travel and subsistence expenses incurred by a director, officer, or employee of the Bank in accordance with subchapter I of chapter 57 of title 5, United States Code. The Bank is hereby authorized to use all of its assets and all moneys which have been or may hereafter be allocated to or borrowed by it in the exercise of its functions and shall be offset against the expenses of the Bank for such activities. Net earnings of the Bank after reasonable provision for possible losses shall be used for payment of dividends on capital stock. Any such dividends shall be deposited into the Treasury as miscellaneous receipts. (2) In order for the Bank to be competitive in all of its financing programs with countries whose exports compete with United States exports, the Bank shall establish a program that (A) provides medium-term financing where necessary to be fully competitive (i) at rates of interest to the customer which are equal to rates established in international agreements; and (ii) in amounts up to 85 percent of the total cost of the exports involved; and (B) enables the Bank to cooperate fully with the Secretary of Commerce and the Administrator of the Small Business Administration to develop a program for purposes of disseminating information (using existing private institutions) to small business concerns regarding the medium-term financing provided under this paragraph. (3) ENHANCEMENT OF MEDIUM-TERM PROGRAM.-To enhance the medium-term financing program established pursuant to paragraph (2), the Bank shall establish measures to (A) improve the competitiveness of the Bank's medium-term financing and ensure that its medium-term financing is fully competitive with that of other major official export credit agencies; (B) ease the administrative burdens and procedural and documentary requirements imposed on the users of medium-term financing; (C) attract the widest possible participation of private financial institutions and other sources of private capital in the medium-term financing of United States exports; and (D) render the Bank's medium-term financing as supportive of United States exports as is its Direct Loan Program. (b)(1)(A) It is the policy of the United States to foster expansion of exports of manufactured goods, agricultural products, and other goods and services, thereby contributing to the promotion and maintenance of high levels of employment and real income and to the increased development of the productive resources of the United States. To meet this objective in all its programs, the Export-Import Bank is directed, in the exercise of its functions, to provide guarantees, insurance, and extensions of credit at rates and on terms and other conditions which are fully competitive with the Government-supported rates and terms and other conditions available for the financing of exports of goods and services from the principal countries whose exporters compete with United States exporters. The Bank shall, in cooperation with the export financing instrumentalities of other governments, seek to minimize competition in government-supported export financing and shall, in cooperation with other appropriate United States Government agencies, seek to reach international agreements to reduce government subsidized export financing. The Bank shall, on an annual basis, report to the appropriate committees of Congress its actions in complying with these directives. In this report the Bank shall include a survey of all other major export-financing facilities available from other governments and government-related agencies through which foreign exporters compete with the United States exporters and indicate in specific terms the ways in which the Bank's rates, terms, and other conditions compare with those of fered from such other governments directly on indirectly. Further, the Bank shall at the same time survey a representative number of United States exporters and United States commercial lending institutions which provide export credit to determine their experience in meeting financial competition from other countries whose exporters compete with United States exporters. The results of this survey shall be included as part of the annual report required by this subparagraph. The Bank shall include in the annual report a description of its role in the implementation of the strategic plan prepared by the Trade Promotion Coordinating Committee in accordance with section 2312 of the Export Enhancement Act of 1988. (B) It is further the policy of the United States that loans made by the Bank in all its programs shall bear interest at rates determined by the Board of Directors, consistent with the Bank's mandate to support United States exports at rates and on terms and conditions which are fully competitive with exports of other countries, and consistent with international agreements. For the purpose of the preceding sentence, rates, terms and conditions need not be identical in all respects to those offered by foreign countries, but should be established so that the effect of such rates, terms, and conditions for all the Bank's programs, including those for small businesses and for medium-term financing, will be to neutralize the effect of such foreign credit on international sales competition. The Bank shall consider its average cost of money as one factor in its determination of interest rates, where such consideration does not impair the Bank's primary function of expanding United States exports through fully competitive financing. The Bank may not impose a credit application fee unless (i) the fee is competitive with the average fee charged by the Bank's primary foreign competitors, and (ii) the borrower or the exporter is given the option of paying the fee at the outset of the loan or over the life of the loan and the present value of the fee determined under either such option is the same amount. It is also the policy of the United States that the Bank in the exercise of its functions should supplement and encourage, and not compete with, private capital; |