PUBLIC LAW 102-558—OCT. 28, 1992

106 STAT. 4207

firms to compete for military export sales is not undermined, it
is the policy of the Congress that—

(1) no agency of the United States Government shall
encourage, enter directly into, or commit United States firms
to any offset arrangement in connection with the sale of defense
goods or services to foreign governments;

(2) United States Government funds shall not be used
to finance offsets in security assistance transactions, except
in accordance with policies and procedures that were in exist-
ence on March 1,1992;

(3) nothing in this section shall prevent agencies of the
United States Government from fulfilling obligations incurred
through international agreements entered into before March
1,1992; and

(4) the decision whether to engage in offsets, and the
responsibility for negotiating and implementing offset arrange-
ments, reside with the companies involved.

(b) PRESIDENTIAL APPROVAL OF EXCEPTIONS,—It is the policy
of the Congress that the President may approve an exception to
the policy stated in subsection (a) after receiving the rec-
ommendation of the National Security Council.

(c) CONSULTATION.—It is the policy of the Congress that the President.
President shall designate the Secretary of Defense to lead, in
coordination with the Secretary of State, an interagency team to
consult with foreign nations on limiting the adverse effects of offsets

in defense procurement. The President shall transmit an annual Reports,
report on the results of these consultations to the Congress as
part of the report required under section 309(a) of the Defense
Production Act of 1950.

SEC. 124. ANNUAL REPORT ON IMPACT OF OFFSETS.

Section 309 of the Defense Production Act of 1950 (50 U.S.C.
App. 2099) is amended—

(1) in subsection (a)—

(A) by striking "(a) REPORT REQUIRED.—Not later" and
inserting: "(a) ANNUAL REPORT ON IMPACT OF OFFSETS.—
"(1) REPORT REQUIRED.—Not later";

(B) by striking the second sentence; and

(C) by adding at the end the following new paragraph:
"(2) DUTIES OF THE SECRETARY OF COMMERCE.—The Sec-
retary of Commerce (hereafter in this subsection referred to
as 'the Secretary') shall—

"(A) prepare the report required by paragraph (1);

"(B) consult with the Secretary of Defense, the Sec-
retary of the Treasury, the Secretary of State, and the
United States Trade Representative in connection with the
preparation of such report; and

"(C) function as the President's Executive Agent for
carrying out this section.";

(2) by amending subsection (b) to read as follows:
"(b) INTERAGENCY STUDIES AND RELATED DATA.—

"(1) PURPOSE OF REPORT.—Each report required under sub-
section (a) shall identify the cumulative effects of offset agree-
ments on—

"(A) the full range of domestic defense productive

capability (with special attention paid to the firms serving

as lower-tier subcontractors or suppliers); and