22 U.S.C. § 9671: Limitations and preferences

Summary

The Corporation may not give any one recipient more than 2.5 percent of the Corporation’s maximum contingent liability authorized under section 9633. The Corporation must favor projects that involve United States persons (a U.S. citizen or an entity owned or controlled by a U.S. citizen). It should also favor projects in countries that follow or are making strong progress toward following their international trade rules, and it must check with the U.S. Trade Representative at least once a year about which countries meet those rules. The Corporation must only support projects in countries that are taking steps to adopt and enforce internationally recognized worker rights. Contracts must include language saying recipients will not block workers’ rights to organize and bargain, will follow laws on minimum age, wages, hours, safety, and will not use forced labor or the worst forms of child labor (but they are not responsible for actions of a foreign government). The Corporation should consider how projects affect women’s economic opportunities and aim to reduce gender gaps. The Board cannot approve any project that is likely to cause serious, sensitive, or unusual environmental or social harm unless an impact assessment or audit is finished at least 60 days before the vote, is shared with the U.S. public and local groups, and contracts include mitigation measures using best practices. The Corporation must try to favor projects involving small businesses and work so that at least 50 percent of projects involving U.S. persons are led or sponsored by U.S. small businesses, including women-, minority-, and veteran-owned firms. It must not support projects involving entities that use anticompetitive practices or projects run or controlled by the government of a country of concern or its state-owned enterprises, unless the President gives a written national security waiver to Congress. Definitions: “United States person” = U.S. citizen or entity owned/controlled by one; “owned” = majority or controlling interest; “control” = power to control by any means; “state-owned enterprise” = a business set up for commercial purpose that a government owns or controls. The Corporation must also check whether project sponsors have supported a boycott in the past 3 years.

Title 22, §9671

Foreign Relations and Intercourse, Source: USLM XML via OLRC

(a)Limitation on support for single entity

No entity receiving support from the Corporation under subchapter II of this chapter may receive more than an amount equal to 2.5 percent of the Corporation’s maximum contingent liability authorized under section 9633 of this title.

(b)Preference for support for projects sponsored by United States persons

(1)In general

The Corporation should give preferential consideration to projects sponsored by or involving private sector entities that are United States persons.

(2)United States person defined

In this subsection, the term “United States person” means—

(A)a United States citizen; or

(B)an entity owned or controlled by an individual or individuals described in subparagraph (A).

(c)Preference for support in countries in compliance with international trade obligations

(1)Consultations with United States Trade Representative

Not less frequently than annually, the Corporation shall consult with the United States Trade Representative with respect to the status of countries eligible to receive support from the Corporation under subchapter II of this chapter and the compliance of those countries with their international trade obligations.

(2)Preferential consideration

The Corporation shall give preferential consideration to providing support under subchapter II of this chapter for projects in countries in compliance with or making substantial progress coming into compliance with their international trade obligations.

(d)Worker rights

(1)In general

The Corporation shall only support projects under subchapter II of this chapter in countries that are taking steps to adopt and implement laws that extend internationally recognized worker rights (as defined in section 2467 of title 19) to workers in that country, including any designated zone in that country.

(2)Required contract language

The Corporation shall also include the following language, in substantially the following form, in all contracts which the Corporation enters into with persons receiving support under subchapter II of this chapter: “The person receiving support agrees not to take actions to prevent employees of the foreign enterprise from lawfully exercising their right of association and their right to organize and bargain collectively. The person further agrees to observe applicable laws relating to a minimum age for employment of children, acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety, and not to use forced labor or the worst forms of child labor (as defined in section 507 of the Trade Act of 1974 (19 U.S.C. 2467)). The person is not responsible under this paragraph for the actions of a foreign government.”.

(e)Impact notification

The Board shall not vote in favor of any project proposed to be supported by the Corporation under subchapter II of this chapter that is likely to have significant adverse environmental or social impacts that are sensitive, diverse, or unprecedented, unless—

(1)at least 60 days before the date of the vote, an environmental and social impact assessment or initial environmental and social audit, analyzing the environmental and social impacts of the proposed project and of alternatives to the proposed project, including mitigation measures, is completed;

(2)such assessment or audit has been made available to the public of the United States, locally affected groups in the country in which the project will be carried out, and nongovernmental organizations in that country; and

(3)the Corporation, applying best practices with respect to environmental and social safeguards, includes in any contract relating to the project provisions to ensure the mitigation of any such adverse environmental or social impacts.

(f)Women’s economic empowerment

In utilizing its authorities under subchapter II of this chapter, the Corporation shall consider the impacts of its support on women’s economic opportunities and outcomes and shall prioritize the reduction of gender gaps and maximize development impact by working to improve women’s economic opportunities.

(g)Preference for provision of support in countries embracing private enterprise

(1)In general

The Corporation should give preferential consideration to projects for which support under subchapter II of this chapter may be provided in countries the governments of which have demonstrated consistent support for economic policies that promote the development of private enterprise, both domestic and foreign, and maintaining the conditions that enable private enterprise to make a full contribution to the development of such countries, including—

(A)market-based economic policies;

(B)protection of private property rights;

(C)respect for the rule of law; and

(D)systems to combat corruption and bribery.

(2)Sources of information

The Corporation should rely on both third-party indicators and United States Government information, such as the Department of State’s Investment Climate Statements, the Department of Commerce’s Country Commercial Guides, or the Millennium Challenge Corporation’s Constraints Analysis, to assess whether countries meet the conditions described in paragraph (1).

(h)Consideration of foreign boycott participation

In providing support for projects under subchapter II of this chapter, the Corporation shall consider, using information readily available, whether the project is sponsored by or substantially affiliated with any person taking or knowingly agreeing to take actions, or having taken or knowingly agreed to take actions within the past 3 years, which demonstrate or otherwise evidence intent to comply with, further, or support any boycott described in section 4842(a) of title 50.

(i)Ensuring opportunities for small businesses in foreign development

The Corporation shall, using broad criteria, make, to the maximum extent possible consistent with this chapter, efforts—

(1)to give preferential consideration in providing support under subchapter II of this chapter to projects sponsored by or involving small businesses; and

(2)to ensure that the proportion of projects sponsored by or involving United States small businesses, including women-, minority-, and veteran-owned small businesses, is not less than 50 percent of all projects for which the Corporation provides support and that involve United States persons.

(j)Policies with respect to state-owned enterprises, anticompetitive practices, and countries of concern

(1)Policy

The Corporation shall develop appropriate policies and guidelines for support provided under subchapter II of this chapter for a project involving a state-owned enterprise, sovereign wealth fund, or a parastatal entity to ensure such support is provided consistent with appropriate principles and practices of competitive neutrality.

(2)Prohibitions

(A)Anticompetitive practices

The Corporation may not provide support under subchapter II of this chapter for a project that involves a private sector entity engaged in anticompetitive practices.

(B)Countries of concern

The Corporation may not provide support under subchapter II of this chapter for projects that would be operated, managed, or controlled by the government of a county of concern or a state-owned enterprise that belongs to or is under the control of a country of concern.

(C)Exception

The President may waive the restriction under subparagraph (B) on a project-by-project basis if the President submits to the appropriate congressional committees—

(i)a certification, which may be included as a classified or confidential annex to a report required by section 9656 of this title, that such support is important to the national security interests of the United States; and

(ii)a written justification of how such support directly counters or significantly limits the influence of an entity described in such subparagraph.

(3)Definitions

In this subsection: (A) Control

(B)Owned

The term “owned”, with respect to an enterprise, means a majority or controlling interest, whether by value or voting interest, of the shares of that enterprise, including through fiduciaries, agents, or other means.

(C)State-owned enterprise

The term “state-owned enterprise” means any enterprise established for a commercial or business purpose that is directly owned or controlled by one or more governments, including any agency, instrumentality, subdivision, or other unit of government at any level of jurisdiction.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (i), was in the original “this division”, meaning division F of Pub. L. 115–254, Oct. 5, 2018, 132 Stat. 3485, which is classified principally to this chapter. For complete classification of division F to the Code, see

Short Title

note set out under section 9601 of this title and Tables.

Amendments

2025—Subsec. (a). Pub. L. 119–60, § 8758(1), substituted “2.5 percent” for “5 percent”. Subsec. (j). Pub. L. 119–60, § 8758(2), added subsec. (j).

§9671 Limitations and Preferences

Summary

Title 22, §9671

Notes & Related Subsidiaries

Editorial Notes

References in Text

Short Title

Amendments

Citations & Metadata