§ 5421. — Enterprise Funds for Poland and Hungary.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC5421]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 63--SUPPORT FOR EAST EUROPEAN DEMOCRACY (SEED)
SUBCHAPTER II--PRIVATE SECTOR DEVELOPMENT
Sec. 5421. Enterprise Funds for Poland and Hungary
(a) Purposes
The purposes of this section are to promote--
(1) development of the Polish and Hungarian private sectors,
including small businesses, the agricultural sector, and joint
ventures with United States and host country participants, and
(2) policies and practices conducive to private sector
development in Poland and Hungary,
through loans, grants, equity investments, feasibility studies,
technical assistance, training, insurance, guarantees, and other
measures.
(b) Authorization of appropriations
To carry out the purposes specified in subsection (a) of this
section, there are authorized to be appropriated to the President--
(1) $240,000,000 to support the Polish-American Enterprise Fund;
and
(2) $60,000,000 to support the Hungarian-American Enterprise
Fund.
Such amounts are authorized to be made available until expended.
(c) Nonapplicability of other laws
The funds appropriated under subsection (b) of this section may be
made available to the Polish-American Enterprise Fund and the Hungarian-
American Enterprise Fund and used for the purposes of this section
notwithstanding any other provision of law.
(d) Designation of Enterprise Funds
(1) Designation
The President is authorized to designate two private, nonprofit
organizations as eligible to receive funds and support pursuant to
this section upon determining that such organizations have been
established for the purposes specified in subsection (a) of this
section. For purposes of this chapter, the organizations so
designated shall be referred to as the Polish-American Enterprise
Fund and the Hungarian-American Enterprise Fund (hereinafter in this
section referred to as the ``Enterprise Funds'').
(2) Consultation with Congress
The President shall consult with the leadership of each House of
Congress before designating an organization pursuant to paragraph
(1).
(3) Board of Directors
(A) Each Enterprise Fund shall be governed by a Board of
Directors comprised of private citizens of the United States, and
citizens of the respective host country, who have demonstrated
experience and expertise in those areas of private sector
development in which the Enterprise Fund is involved.
(B) A majority of the members of the Board of Directors of each
Enterprise Fund shall be United States citizens.: \1\ Provided,
That, as to Enterprise Funds established with respect to more than
one host country, such Enterprise Fund may, in lieu of the
appointment of citizens of the host countries to its Board of
Directors, establish an advisory council for the host region
comprised of citizens of each of the host countries or establish
separate advisory councils for each of the host countries
(hereinafter in this section referred to as the ``Advisory
Councils''), with which the Enterprise Fund's policies and proposed
activities and such host country citizens shall satisfy the
experience and expertise requirements of this clause.
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\1\ So in original.
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(C) A host country citizen who is not committed to respect for
democracy and a free market economy may not serve as a member of the
Board of Directors of an Enterprise Fund.
(4) Eligibility of Enterprise Funds for grants
Grants may be made to an Enterprise Fund under this section only
if the Enterprise Fund agrees to comply with the requirements
specified in this section.
(5) Private character of Enterprise Funds
Nothing in this section shall be construed to make an Enterprise
Fund an agency or establishment of the United States Government, or
to make the officers, employees, or members of the Board of
Directors of an Enterprise Fund officers or employees of the United
States for purposes of title 5.
(e) Grants to Enterprise Funds
Funds appropriated to the President pursuant to subsection (b) of
this section shall be granted to the Enterprise Funds by the Agency for
International Development to enable the Enterprise Funds to carry out
the purposes specified in subsection (a) of this section and for the
administrative expenses of each Enterprise Fund.
(f) Eligible programs and projects
(1) In general
The Enterprise Funds may provide assistance pursuant to this
section only for programs and projects which are consistent with the
purposes set forth in subsection (a) of this section.
(2) Employee stock ownership plans
Funds available to the Enterprise Funds may be used to encourage
the establishment of Employee Stock Ownership Plans (ESOPs) in
Poland and Hungary.
(3) Indigenous credit unions
Funds available to the Enterprise Funds may be used for
technical and other assistance to support the development of
indigenous credit unions in Poland and Hungary. As used in this
paragraph, the term ``credit union'' means a member-owned,
nonprofit, cooperative depository institution--
(A) which is formed to permit individuals in the field of
membership specified in such institution's charter to pool their
savings, lend the savings to one another, and own the
organization where they save, borrow, and obtain related
financial services; and
(B) whose members are united by a common bond and
democratically operate the institution.
(4) Telecommunications modernization in Poland
The Polish-American Enterprise Fund may use up to $25,000,000
for grants for projects providing for the early introduction in
Poland of modern telephone systems and telecommunications
technology, which are crucial in establishing the conditions for
successful transition to political democracy and economic pluralism.
(5) Economic foundation of NSZZ Solidarnosc
Funds available to the Polish-American Enterprise Fund may be
used to support the Economic Foundation of NSZZ Solidarnosc.
(g) Matters to be considered by Enterprise Funds
In carrying out this section, each Enterprise Fund shall take into
account such considerations as internationally recognized worker rights
and other internationally recognized human rights, environmental
factors, United States economic and employment effects, and the
likelihood of commercial viability of the activity receiving assistance
from the Enterprise Fund.
(h) Retention of interest
An Enterprise Fund may hold funds granted to it pursuant to this
section in interest-bearing accounts, prior to the disbursement of such
funds for purposes specified in subsection (a) of this section, and may
retain for such program purposes any interest earned on such deposits
without returning such interest to the Treasury of the United States and
without further appropriation by the Congress.
(i) Use of United States private venture capital
In order to maximize the effectiveness of the activities of the
Enterprise Funds, each Enterprise Fund may conduct public offerings or
private placements for the purpose of soliciting and accepting United
States venture capital which may be used, separately or together with
funds made available pursuant to this section, for any lawful investment
purpose that the Board of Directors of the Enterprise Fund may determine
in carrying out this section. Financial returns on Enterprise Fund
investments that include a component of private venture capital may be
distributed, at such times and in such amounts as the Board of Directors
of the Enterprise Fund may determine, to the investors of such capital.
(j) Financial instruments for individual investment in Poland
In order to maximize the effectiveness of the activities of the
Polish-American Enterprise Fund, that Enterprise Fund should undertake
all possible efforts to establish financial instruments that will enable
individuals to invest in the private sectors of Poland and that will
thereby have the effect of multiplying the impact of United States
grants to that Enterprise Fund.
(k) Nonapplicability of other laws
Executive branch agencies may conduct programs and activities and
provide services in support of the activities of the Enterprise Funds
notwithstanding any other provision of law.
(l) Limitation on payments to Enterprise Fund personnel
(1) No part of the funds of an Enterprise Fund shall inure to the
benefit of any board member, officer, or employee of such Enterprise
Fund, except as salary or reasonable compensation for services subject
to paragraph (2).
(2) An Enterprise Fund shall not pay compensation for services to--
(A) any board member of the Enterprise Fund, except for services
as a board member; or
(B) any firm, association, or entity in which a board member of
the Enterprise Fund serves as partner, director, officer, or
employee.
(3) Nothing in paragraph (2) shall preclude payment for services
performed before the date of enactment of this subsection nor for
arrangements approved by the grantor and notified in writing to the
Committees on Appropriations.
(m) Independent private audits
The accounts of each Enterprise Fund shall be audited annually in
accordance with generally accepted auditing standards by independent
certified public accountants or independent licensed public accountants
certified or licensed by a regulatory authority of a State or other
political subdivision of the United States. The report of each such
independent audit shall be included in the annual report required by
this section.
(n) GAO audits
The financial transactions undertaken pursuant to this section by
each Enterprise Fund may be audited by the General Accounting Office in
accordance with such principles and procedures and under such rules and
regulations as may be prescribed by the Comptroller General of the
United States, so long as the Enterprise Fund is in receipt of United
States Government grants.
(o) Recordkeeping requirements
The Enterprise Funds shall ensure--
(1) that each recipient of assistance provided through the
Enterprise Funds under this section keeps--
(A) separate accounts with respect to such assistance;
(B) such records as may be reasonably necessary to disclose
fully the amount and the disposition by such recipient of the
proceeds of such assistance, the total cost of the project or
undertaking in connection with which such assistance is given or
used, and the amount and nature of that portion of the cost of
the project or undertaking supplied by other sources; and
(C) such other records as will facilitate an effective
audit; and
(2) that the Enterprise Funds, or any of their duly authorized
representatives, have access for the purpose of audit and
examination to any books, documents, papers, and records of the
recipient that are pertinent to assistance provided through the
Enterprise Funds under this section.
(p) Annual reports
Each Enterprise Fund shall publish an annual report, which shall
include a comprehensive and detailed description of the Enterprise
Fund's operations, activities, financial condition, and accomplishments
under this section for the preceding fiscal year. This report shall be
published not later than January 31 each year, beginning in 1991.
(Pub. L. 101-179, title II, Sec. 201, Nov. 28, 1989, 103 Stat. 1305;
Pub. L. 104-107, title II, [(v)], Feb. 12, 1996, 110 Stat. 714; Pub. L.
105-118, title V, Sec. 588, Nov. 26, 1997, 111 Stat. 2438.)
References in Text
This chapter, referred to in subsec. (d)(1), was in the original
``this Act'', meaning Pub. L. 101-179, Nov. 28, 1989, 103 Stat. 1298,
which is classified principally to this chapter. For complete
classification of this Act to the Code, see Short Title note set out
under section 5401 of this title and Tables.
The date of enactment of this subsection, referred to in subsec.
(l)(3), probably means the date of enactment of Pub. L. 105-118 which
amended subsec. (l) generally and was approved Nov. 26, 1997.
Amendments
1997--Subsec. (l). Pub. L. 105-118, which directed the general
amendment of section 201(l) of the Support for East European Democracy
Act, was executed by amending heading and text of section 201(l) of the
Support for East European Democracy (SEED) Act of 1989, subsec. (l) of
this section, generally, to reflect the probable intent of Congress.
Prior to amendment, text read as follows: ``No part of the funds of
either Enterprise Fund shall inure to the benefit of any board member,
officer, or employee of such Enterprise Fund, except as salary or
reasonable compensation for services.''
1996--Subsec. (d)(3)(B). Pub. L. 104-107 inserted at end ``:
Provided, That, as to Enterprise Funds established with respect to more
than one host country, such Enterprise Fund may, in lieu of the
appointment of citizens of the host countries to its Board of Directors,
establish an advisory council for the host region comprised of citizens
of each of the host countries or establish separate advisory councils
for each of the host countries (hereinafter in this section referred to
as the `Advisory Councils'), with which the Enterprise Fund's policies
and proposed activities and such host country citizens shall satisfy the
experience and expertise requirements of this clause.''
Delegation of Functions
Functions of President under this section relating to Enterprise
Funds for Poland and Hungary delegated to Secretary of State by section
2 of Ex. Ord. No. 12703, Feb. 20, 1990, 55 F.R. 6351, as amended, set
out as a note under section 5401 of this title.
Section Referred to in Other Sections
This section is referred to in sections 2295b, 5425, 5953, 7513 of
this title.
