§ 1703. — Terms and conditions of sales.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1703]
TITLE 7--AGRICULTURE
CHAPTER 41--AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE
SUBCHAPTER II--TRADE AND DEVELOPMENT ASSISTANCE
Sec. 1703. Terms and conditions of sales
(a) Payment
(1) Dollars
Except as provided in paragraph (2), agreements under this
subchapter shall require that payment for agricultural commodities
be made in dollars.
(2) Local currencies
(A) In general
The Secretary may permit payment under an agreement under
this subchapter in the local currency of the appropriate country
in order to use the proceeds from such payments to carry out
activities under section 1704 of this title.
(B) Rates of exchange
Payments in local currency shall be at rates of exchange
that are no less favorable than the highest exchange rate
legally obtainable in the country and that are no less favorable
than the highest exchange rate obtainable by any other country.
(b) Interest
Such agreements shall provide that interest accrue on the payment
deferred under such agreement at a concessional rate as determined
appropriate by the Secretary.
(c) Duration
Payments required under such agreements may be made in reasonable
annual amounts over the period (not more than 30 years from the date of
the last delivery of commodities in each year under such agreement)
specified in the agreement.
(d) Deferral of payments
The Secretary may defer the date on which the developing country or
private entity is required to begin making payment, under such
agreements, for a period of not in excess of 5 years after the date of
the last delivery of commodities in each year under the agreement, and
interest shall be computed from the date of such last delivery.
(e) Delivery of commodities
Delivery of the commodities shall be made in accordance with the
terms of the agreement.
(July 10, 1954, ch. 469, title I, Sec. 103, 68 Stat. 456; Aug. 12, 1955,
ch. 873, Sec. 1, 69 Stat. 721; May 28, 1956, ch. 327, title II,
Sec. 208(a), 70 Stat. 201; Aug. 3, 1956, ch. 933, Sec. 1, 70 Stat. 988;
Pub. L. 85-128, Sec. 1(2), Aug. 13, 1957, 71 Stat. 345; Pub. L. 85-931,
Sec. 2, Sept. 6, 1958, 72 Stat. 1790; Pub. L. 86-341, title I, Sec. 2,
Sept. 21, 1959, 73 Stat. 606; Pub. L. 87-28, May 4, 1961, 75 Stat. 64;
Pub. L. 87-128, title II, Sec. 201(2), Aug. 8, 1961, 75 Stat. 306; Pub.
L. 88-638, Sec. 1(4), (5), Oct. 8, 1964, 78 Stat. 1035; Pub. L. 89-808,
Sec. 2(B), Nov. 11, 1966, 80 Stat. 1526; Pub. L. 90-436, Secs. 4, 5,
July 29, 1968, 82 Stat. 450; Pub. L. 91-524, title VII, Sec. 703, Nov.
30, 1970, as added Pub. L. 93-86, Sec. 1(26), Aug. 10, 1973, 87 Stat.
237; Pub. L. 93-125, Sec. 1(e), Oct. 18, 1973, 87 Stat. 450; Pub. L. 94-
161, title II, Sec. 203, Dec. 20, 1975, 89 Stat. 851; Pub. L. 95-88,
title II, Secs. 201(b), 211(b)(1), Aug. 3, 1977, 91 Stat. 545, 551; Pub.
L. 95-424, title I, Sec. 102(b)(2)(B), Oct. 6, 1978, 92 Stat. 941; Pub.
L. 96-53, title II, Sec. 201, Aug. 14, 1979, 93 Stat. 368; Pub. L. 97-
113, title IV, Sec. 401(2)-(4), Dec. 29, 1981, 95 Stat. 1537; Pub. L.
99-198, title XI, Sec. 1111(d), Dec. 23, 1985, 99 Stat. 1475; Pub. L.
100-202, Sec. 9, Dec. 22, 1987, 101 Stat. 1329-448; Pub. L. 101-624,
title XV, Sec. 1512, Nov. 28, 1990, 104 Stat. 3634; Pub. L. 104-127,
title II, Sec. 204, Apr. 4, 1996, 110 Stat. 953.)
Amendments
1996--Subsec. (a)(2)(A). Pub. L. 104-127, Sec. 204(1), struck out
``a recipient country to make'' after ``may permit'' and substituted
``the appropriate country'' for ``such country''.
Subsec. (c). Pub. L. 104-127, Sec. 204(2), struck out ``less than 10
nor'' before ``more than 30''.
Subsec. (d). Pub. L. 104-127, Sec. 204(3), substituted ``developing
country or private entity'' for ``recipient country'' and ``5 years''
for ``7 years''.
1990--Pub. L. 101-624 amended section generally, substituting
present provisions for provisions requiring President to consider
efforts of recipients to increase agricultural production, determine
amount needed in foreign currencies, protect other markets for United
States commodities, make sales only to friendly countries, use private
trade channels whenever practicable, consider expansion of markets,
prevent resale by recipients, obtain favorable exchange rates, emphasize
production of food crops, assist friendly countries in avoiding
Communist domination, require payment of at least 5 per centum of
purchase price upon delivery in dollars or convertible currency, obtain
commitments from recipients to publicize source of food, require
convertibility of foreign currencies, avoid displacement of sales that
would otherwise have been made, assure United States obtains fair share
in increase of commercial purchases by recipients, assure convertibility
of foreign currencies at uniform exchange rates, and favor countries
promoting private sector in allocation of commodities.
1987--Subsec. (r). Pub. L. 100-202 added subsec. (r).
1985--Subsec. (b). Pub. L. 99-198, Sec. 1111(d)(1), inserted ``, in
section 1708 of this title,'' after ``section 1704 of this title''.
Subsec. (d). Pub. L. 99-198, Sec. 1111(d)(2), struck out ``for
dollars on credit terms'' after ``agricultural commodities''.
Subsec. (m). Pub. L. 99-198, Sec. 1111(d)(3), inserted introductory
text ``except as provided in section 1708 of this title,'' substituted a
period for the semicolon at end of cl. (2), and inserted provisions
respecting period for convertibility of foreign currencies into dollars
and establishment in the agreement for sale of a schedule for conversion
without specifying the exchange rate.
Subsec. (n). Pub. L. 99-198, Sec. 1111(d)(4), struck out ``for
dollars on credit terms'' after ``sales'' and ``for cash dollars'' after
``made''.
Subsec. (o). Pub. L. 99-198, Sec. 1111(d)(5), substituted ``take''
for ``Take''.
Subsecs. (p), (q). Pub. L. 99-198, Sec. 1111(d)(6), (7), substituted
``except as provided in section 1708 of this title, assure
convertibility'' for ``Assure convertibility''.
1981--Subsec. (b). Pub. L. 97-113, Sec. 401(2), struck out
requirement that President take steps to assure a progressive transition
from sales for foreign currencies to sales for dollars (or to the extent
that transition to sales for dollars under the terms applicable to such
sales is not possible, transition to sales for foreign currencies on
credit terms no less favorable to the United States than those for
development loans made under section 2151t of title 22, and on terms
which permit conversion to dollars at the exchange rate applicable to
the sales agreement) at a rate whereby the transition can be completed
by Dec. 31, 1971; and struck out reference to subsec. (c) of section
1704 of this title.
Subsec. (d). Pub. L. 97-113, Sec. 401(3), in defining ``friendly
country'', struck out provision excluding from term ``for the purpose
only of sales of agricultural commodities for foreign currencies under
this subchapter, any country or area dominated by a Communist
government''.
Subsec. (l). Pub. L. 97-113, Sec. 401(4), struck out requirement
that President obtain commitments from friendly purchasing countries
that will insure, insofar as practicable, that food commodities sold for
foreign currencies under this subchapter shall be marked or identified
at point of distribution or sale as being provided on a concessional
basis to the recipient government through the generosity of the people
of the United States of America.
1979--Subsec. (f). Pub. L. 96-53 substituted provisions requiring
Presidential consideration to the development and expansion of markets
for United States agricultural commodities and local foodstuffs, for
provisions requiring special Presidential consideration to the
development and expansion of foreign markets for United States
agricultural commodities.
1978--Subsec. (b). Pub. L. 95-424 substituted ``section 2151t of
title 22'' for ``section 2161 of title 22''.
1977--Subsec. (b). Pub. L. 95-88, Sec. 211(b)(1), substituted ``and
in subchapters I and III-A of this chapter'' for ``and in section
1706(b)(2) of this title'' after ``uses specified in subsections (a),
(b), (c), (e), and (h) of section 1704''.
Subsec. (d). Pub. L. 95-88, Sec. 201(b), struck out provisions that
``friendly country'' not include, for the purpose only of sales of
agricultural commodities under this subchapter, any nation which sold or
furnished or permitted ships or aircraft under its registry to transport
to or from Cuba or North Vietnam (excluding United States installations
in Cuba) any equipment, materials, or commodities so long as they were
governed by a Communist regime: Provided, That this exclusion from the
definition of ``friendly country'' could be waived by the President if
he determined that such waiver was in the national interest and reported
such determination to the Congress within 10 days of the date of such
determination, and struck out provisions that ``friendly country'' also
not include, for the purposes only of sales under this subchapter, the
United Arab Republic, unless the President determined that such sale was
in the national interest of the United States, that no sales to the
United Arab Republic be based upon the requirements of that nation for
more than one fiscal year, and that the President keep the President of
the Senate and the Speaker of the House of Representatives fully and
currently informed with respect to sales made to the United Arab
Republic under this subchapter.
1975--Subsec. (a). Pub. L. 94-161, Sec. 203(1), substituted
``efforts to increase their own agricultural production, especially
through small, family farm agriculture, to improve their facilities for
transportation, storage, and distribution of food commodities, and to
reduce their rate of population growth'' for ``efforts to meet their
problems of food production and population growth''.
Subsec. (b). Pub. L. 94-161, Sec. 203(2), substituted ``section 1704
and in section 1706(b)(2) of this title'' for ``section 1704 of this
title''.
Subsec. (d). Pub. L. 94-161, Sec. 203(3), substituted second proviso
``Provided, That this exclusion from the definition of `friendly
country' may be waived by the President if he determines that such
waiver is in the national interest and reports such determination to the
Congress within 10 days of the date of such determination'' for
``Provided, That with respect to furnishing, selling, or selling and
transporting to Cuba medical supplies, non-strategic raw materials for
agriculture, and non-strategic agricultural or food commodities, sales
agreements may be entered into if the President finds with respect to
each such country and so informs the Senate and the House of
Representatives of the reasons therefor, that the making of each such
agreement would be in the national interest of the United States and all
such findings and reasons therefor shall be published in the Federal
Register''.
1973--Subsec. (o). Pub. L. 93-125 made technical correction to Pub.
L. 93-86, see 1973 Amendment note below.
Pub. L. 91-524, Sec. 703, as added by Pub. L. 93-86 as amended by
Pub. L. 93-125, inserted ``and that commercial supplies are available to
meet demands developed through programs carried out under this
chapter.'' before the semicolon at end.
1968--Subsec. (b). Pub. L. 90-436, Sec. 4, made mandatory, except
when determined by President to be inconsistent with objectives of this
chapter, proviso that President, in agreements for credit sales, require
immediate payment in dollars or in foreign currencies upon delivery of
agricultural commodities, such payment to be considered as an advance
payment of earliest obligations.
Subsecs. (o) to (q). Pub. L. 90-436, Sec. 5, added subsecs. (o) to
(q).
1966--Subsec. (a). Pub. L. 89-808 substituted provisions respecting
self-help measures for meeting problems of food production and
population growth for former provisions for appropriations for
reimbursement of Commodity Credit Corporation, advance use of other
funds, and classification of expenditures, now provided for in part by
section 1733 of this title.
Subsec. (b). Pub. L. 89-808 substituted provisions respecting taking
steps to assure a progressive transition from sales for foreign
currencies to sales for dollars (such transition to be completed by
December 31, 1971) but authorizing payment in foreign currencies for
purposes of section 1704(a) to (c), (e), and (h) of this title for
former limitation on transactions, now provided for by section 1710 of
this title.
Subsec. (c). Pub. L. 89-808 redesignated provisions of former
section 1701(a) of this title as subsec. (c), substituting
``subchapter'' for ``chapter''.
Subsec. (d). Pub. L. 89-808 redesignated provisions of former
section 1707 of this title as subsec. (d), provided for sales agreements
only with friendly countries and for periodic reports to Congress of
status of such countries, deleted from definition of ``friendly
country'' (formerly ``friendly nation'') clause ``(1) the U.S.S.R.'',
redesignated cls. (2) to (4) as (1) to (3), substituted ``country'' for
``nation'', struck out ``or controlled'' after ``dominated'' in cl. (2),
amended cl. (3) to include North Vietnam, insert selling or furnishing
ships or aircraft, substitute ``so long as they are governed by a
Communist regime'' for ``, so long as Cuba is governed by the Castro
regime'', and provided for entry into sales agreements when in the
national interest for furnishing, selling, or selling and transporting
to Cuba medical supplies, etc., upon information to Congress and
publication in Federal Register, designated existing provisions as cl.
(4), and substituted requirement of information to the President of the
Senate of sales to United Arab Republic rather than the Foreign
Relations Committee and Appropriations Committee of the Senate.
Subsec. (e). Pub. L. 89-808 redesignated provisions of former
section 1701(b) of this title as subsec. (e), inserting provision for
the taking of steps to assure that small business has adequate and fair
opportunity to participate in sales made under authority of this
chapter.
Subsec. (f). Pub. L. 89-808 redesignated provisions of former
section 1701(c) of this title as subsec. (f), substituting ``the
development and expansion of foreign markets for United States
agricultural commodities'' for ``utilizing the authority and funds
provided by this chapter, in order to develop and expand continuous
market demand abroad for agricultural commodities'' and ``emphasis on
more adequate storage, handling, and food distribution facilities as
well as long-term development of new and expanding markets by
encouraging economic growth'' for ``emphasis on underdeveloped and new
market areas''.
Subsec. (g). Pub. L. 89-808 redesignated provisions of former
section 1701(d) of this title as subsec. (g), substituted ``obtain'',
``purchasing countries'', and ``subchapter'' for ``seek and secure'',
``participating countries'', and ``chapter'' and struck out ``surplus''
before ``agricultural commodities''.
Subsec. (h). Pub. L. 89-808 redesignated provisions of former
section 1701(f) of this title as subsec. (h).
Subsec. (i). Pub. L. 89-808 added subsec. (i).
Subsec. (j). Pub. L. 89-808 incorporated in provisions added as
subsec. (j) former section 1693 of this title, substituting ``to be
independent of domination or control by any world Communist movement''
for ``to be independent of trade with the Union of Soviet Socialist
Republics or the Communist regime in China and with nations dominated or
controlled by the Union of Soviet Socialist Republics'' and ``sales
agreements under this subchapter with any government or organization
controlling a world Communist movement or with any country with which
the United States does not have diplomatic relations'' for
``transactions under this subchapter or subchapter I of this title with
the Union of Soviet Socialist Republics or any of the areas dominated or
controlled by the Communist regime in China'' and struck out provision
for prevention of increased availability of commodities to unfriendly
nations.
Subsec. (k). Pub. L. 89-808 added subsec. (k).
Subsec. (l). Pub. L. 89-808 added subsec. (l).
Subsec. (m). Pub. L. 89-808 redesignated provisions of former
section 1701(g) of this title as par. (1) and added par. (2).
Subsec. (n). Pub. L. 89-808 incorporated in provisions added as
subsec. (n) part of former section 1734 of this title requiring the
Secretary to take such reasonable precautions as he determines necessary
to avoid replacing any sales which the Secretary found and determined
would otherwise be made for cash dollars.
1964--Subsec. (a). Pub. L. 88-638, Sec. 1(4), directed the President
to classify expenditures under this chapter as for international affairs
and finance rather than for agriculture and agricultural resources.
Subsec. (b). Pub. L. 88-638, Sec. 1(5), substituted ``1965'' for
``1962'', ``1966'' for ``1964'', and ``$2,700,000,000 plus any amount by
which agreements entered into in prior years have called or will call
for appropriations to reimburse the Commodity Credit Corporation in
amounts less than authorized for such prior years by this chapter as in
effect during such years'' for ``$4,500,000,000''.
1961--Subsec. (b). Pub. L. 87-128 substituted authorization
provision of $4,500,000,000 for period beginning January 1, 1962, and
ending December 31, 1964, with a limitation of $2,500,000,000 for any
one calendar year, for authorization provision of $1,500,000,000 plus
any amount by which agreements entered into in the preceding calendar
year called for appropriations in amount less than authorized for such
preceding year by this chapter as in effect during the preceding year
for period beginning January 1, 1960, and ending December 31, 1961.
Pub. L. 87-28 authorized agreements during the calendar year 1961
calling for appropriations of not more than $3,500,000,000 plus any
unused authority carried over from 1960.
1959--Subsec. (b). Pub. L. 86-341 substituted ``in any calendar year
during the period beginning January 1, 1960, and ending December 31,
1961'' for ``during the period beginning July 1, 1958, and ending
December 31, 1959'', ``$1,500,000,000'' for ``$2,250,000,000'', ``in the
preceding calendar year'' for ``in prior fiscal years'', ``for such
preceding year'' for ``for such prior fiscal years'', and ``during such
preceding year'' for ``during such fiscal years''.
1958--Subsec. (b). Pub. L. 85-931 amended subsec. (b) generally,
substituting ``Agreements entered into'' for ``Transactions carried
out'', providing for $2,250,000,000 for sales between July 1, 1958, and
Dec. 31, 1959, and for carrying over unused authorizations from one
fiscal to succeeding fiscal years, and striking out clause that
limitation on sales shall not be apportioned by year or by country and
shall be considered as an objective to be reached as rapidly as possible
within the safeguards of this chapter.
1957--Subsec. (b). Pub. L. 85-128 substituted ``$4,000,000,000'' for
``$3,000,000,000''.
1956--Subsec. (a). Act May 28, 1956, authorized appropriations equal
to all Commodity Credit Corporation funds expended for ocean freight
costs.
Subsec. (b). Act Aug. 3, 1956, increased from $1,500,000,000 to
$3,000,000,000 the limitation on sales.
1955--Subsec. (b). Act Aug. 12, 1955, increased from $700,000,000 to
$1,500,000,000 the limitation on sales, and provided that this
limitation shall not be apportioned by year or by country.
Effective Date of 1990 Amendment
Amendment by Pub. L. 101-624 effective Jan. 1, 1991, see section
1513 of Pub. L. 101-624, set out as a note under section 1691 of this
title.
Effective Date of 1979 Amendment
Amendment by Pub. L. 96-53 effective Oct. 1, 1979, see section
512(a) of Pub. L. 96-53, set out as a note under section 2151 of Title
22, Foreign Relations and Intercourse.
Effective Date of 1978 Amendment
Amendment by Pub. L. 95-424 effective Oct. 1, 1978, see section 605
of Pub. L. 95-424, set out as a note under section 2151 of Title 22,
Foreign Relations and Intercourse.
Effective Date of 1977 Amendment
Amendment by Pub. L. 95-88 effective Oct. 1, 1977, see section 215
of Pub. L. 95-88, set out as a note under section 1702 of this title.
Effective Date of 1966 Amendment
Amendment by Pub. L. 89-808 effective Jan. 1, 1967, see section 5 of
Pub. L. 89-808, set out as a note under section 1691 of this title.
Effective Date of 1964 Amendment
Section 1(5) of Pub. L. 88-638 provided that the amendment made by
that section is effective Jan. 1, 1965.
Effective Date of 1961 Amendment
Section 201(2) of Pub. L. 87-128 provided that the amendment made by
that section is effective Jan. 1, 1962.
Effective Date of 1959 Amendment
Section 2 of Pub. L. 86-341 provided that the amendment made by that
section is effective Jan. 1, 1960.
Section Referred to in Other Sections
This section is referred to in section 1736o of this title.
