Military Offsets: Regulations Needed to Implement Prohibition on Incentive Payments

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Report Type	Reports and Testimonies
Report Date	Aug. 12, 1997
Report No.	NSIAD-97-189
Subject	Department of Defense contractors Export regulation Foreign military sales Foreign military sales agreements Foreign military sales policies International trade regulation International trade restriction Foreign Military Sales Program

Summary:

The State Department has made little progress in developing regulations to implement the statutory prohibition governing incentive payments on military offset programs, known as the "Feingold Amendment." The amendment bans U.S. contractors from making incentive payments to a U.S. company or individual to induce them to buy goods or services from a foreign country that has an offset agreement with the contractor. The lack of progress at the State Department is due to internal disagreements over which organizational component should draft implementing language and the low priority assigned to completing this task. Regulations are needed to clarify key definitions found in the law and establish how State will implement the law's enforcement and penalty provisions.

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Military Offsets: Regulations Needed to Implement Prohibition on Incentive Payments