[House Report 105-176]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-176
_______________________________________________________________________


 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                       APPROPRIATIONS BILL, 1998

                                _______
                                

 July 14, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Callahan, from the Committee on Appropriations, submitted the 
                               following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 2159]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill making 
appropriations for Foreign Operations, Export Financing, and 
Related Programs, and for sundry independent agencies and 
corporations for the fiscal year ending September 30, 1998, and 
for other purposes.

                        INDEX TO BILL AND REPORT

                                                               Page

                                                            Bill Report
Summary of bill............................................
                                                                      2
Committee Recommendations..................................
                                                                      3
Title I--Export and Investment Assistance:
        Export-Import Bank of the United States............     2
                                                                      4
        Overseas Private Investment Corporation............     4
                                                                      5
        Trade and Development Agency.......................     5
                                                                      6
Title II--Bilateral Economic Assistance:
        Child Survival and Disease Programs Fund...........     5
                                                                      7
        Development Assistance.............................     6
                                                                     10
        Development Fund for Africa........................
                                                                     20
        International Disaster Assistance..................     9
                                                                     21
        Debt Restructuring.................................     9
                                                                     21
        Micro and Small Enterprise Development Program.....    10
                                                                     21
        Urban and Environmental Credit Program.............    11
                                                                     22
        Payment to the Foreign Service Retirement and 
            Disability Fund................................    12
                                                                     22
        AID Operating Expenses.............................    12
                                                                     23
        Operating Expenses of the Agency for International 
            Development--Office of the Inspector General...    12
                                                                     23
        Economic Support Fund..............................    13
                                                                     24
        International Fund for Ireland.....................    13
                                                                     31
        Assistance for Eastern Europe and the Baltic States    14
                                                                     31
        Assistance for the New Independent States of the 
            Former Soviet Union............................    16
                                                                     33
Independent Agencies:
        Inter-American Foundation..........................    22
                                                                     41
        African Development Foundation.....................    22
                                                                     41
        Peace Corps........................................    23
                                                                     41
State Department:
        International Narcotics Control....................    23
                                                                     42
        Migration and Refugee Assistance...................    24
                                                                     43
        Refugee Resettlement Assistance....................    25
                                                                     44
        Emergency Refugee and Migration Assistance Fund....    25
                                                                     44
        Nonproliferation and Disarmament Fund..............
                                                                     44
        Nonproliferation, Anti-terrorism, Demining and 
            Related Programs...............................    26
                                                                     45
Title III--Military Assistance:
        International Military Education and Training......    29
                                                                     47
        Foreign Military Financing Program.................    30
                                                                     50
        Special Defense Acquisition Fund...................
                                                                     53
        Peacekeeping Operations............................    33
                                                                     54
Title IV--Multilateral Economic Assistance:
        International Financial Institutions Summary.......
                                                                     55
        International Bank for Reconstruction and 
            Development (IBRD).............................
                                                                     55
        Global Environment Fund............................    34
                                                                     56
        International Development Association (IDA)........    34
                                                                     56
        International Finance Corporation (IFC)............
                                                                     57
        Inter-American Development Bank (IDB)..............    35
                                                                     57
        Multilateral Investment Fund.......................
                                                                     58
        Asian Development Bank (ADB).......................    35
                                                                     58
        Asian Development Fund (ADF).......................    36
                                                                     58
        African Development Fund (AFDF)....................    36
                                                                     59
        European Bank for Reconstruction and Development 
            (EBRD).........................................    36
                                                                     59
        North American Development Bank (NADBank)..........    36
                                                                     60
        Enhanced Structural Adjustment Facility............
                                                                     61
        New Arrangements to Borrow.........................
                                                                     61
Department of State:
        International Organizations and Programs...........    37
                                                                     61
Title V--General Provisions................................    38
                                                                     63
Miscellaneous Information:
        Comparison with budget resolution..................
                                                                     66
        Five-year projection of outlays....................
                                                                     66
        Assistance to State and local governments..........
                                                                     67
        Constitutional Authority...........................
                                                                     67
        Changes in the application of existing law.........
                                                                     67
        Compliance with rule XIII--clause 3................
                                                                     71
        Appropriations not authorized by law...............
                                                                     72

                          Summary of the Bill

    The Committee has recommended foreign assistance and export 
financing funding at a level that is $4,576,754,000 below the 
Administration's fiscal year 1998 request in discretionary 
budget authority. The resulting total of $12,267,206,980 in 
discretionary appropriations is needed to meet the essential 
requirements of the United States and its President in 
conducting foreign policy and meeting urgent humanitarian needs 
abroad. The request includes $3,521,000,000 for the New 
Arrangements to Borrow.
    The bill is $232,793,020 below the Committee's fiscal year 
1998 602(b) allocation for discretionary budget authority, and 
consumes almost all of its allocation for outlays.

                       making children a priority

    The Committee strongly believes that even while the overall 
budget continues to be restricted, there is one priority which 
must remain unshaken and that is the Committee's commitment to 
helping the world's neediest citizens, its children. The 
Committee firmly believes that child survival must not be 
threatened even as other parts of the foreign assistance budget 
are being significantly reduced. As a result, for a second 
year, funding levels for child survival and efforts to combat 
infectious diseases are increased over the prior year's level. 
Equally important, the Committee is again recommending a 
separate account for these activities, the Child Survival and 
Disease Programs Fund. This special account, which includes 
basic education for children, will be funded at $650,000,000 in 
fiscal year 1998. The Committee's action focuses these valuable 
resources on a singular priority, one which enjoys the support 
of all Americans, ensuring child survival and combatting 
infectious diseases.

                         looking to the future

    The Committee is encouraged that the last Congress began to 
link foreign aid objectives to resources, and resources to 
policy. The Committee remains convinced that the United States 
can lead with fewer resources than were needed a decade ago. 
The Committee strongly believes that no price tag need be 
placed on leadership. Money matters in foreign policy, to be 
sure, but not nearly as much as consistent policy and 
constantly engaged leaders.
    As noted earlier, the Committee notes that the budgetary 
resources for foreign aid are already extremely limited and are 
likely to be even more so in the future. From the Committee's 
perspective, this simply means it is now more imperative than 
ever that the Committee forge a strong bipartisan consensus 
which will shape how scarce resources can be most effectively 
used to help the world's less fortunate achieve the same level 
of prosperity and opportunity presently enjoyed by all 
Americans.

                       committee recommendations

    For export and investment assistance programs the Committee 
has recommended a gross total of $752,614,000, which is 
partially offset by collections of $251,000,000. The subsidy 
appropriation for the Export-Import Bank is $632,000,000 and 
the Trade and Development Agency is funded at $40,000,000. The 
Committee has provided $32,000,000 for administrative expenses 
of the Overseas Private Investment Corporation.
    The Committee has recommended $917,945,980 of the 
$5,044,449,980 requested for the international financial 
institutions. The overall reduction is $67,958,730 below the 
fiscal year 1997 enacted level and $4,126,504,000 below the 
request.
    For development assistance, the Committee has recommended a 
total of $2,045,000,000 of which $650,000,000 is for child 
survival and disease prevention programs. Another 
$1,167,000,000 is for longer term development assistance. The 
Committee has also included $190,000,000 for disasters 
worldwide. Much of all three categories of assistance is likely 
to be used in Africa, but the Committee did not provide a 
specific regional earmark. The Committee has included 
$27,000,000 for debt restructuring for poor countries and for 
Jordan.
    The Committee has continued its new account for child 
survival and disease programs. It is designed to ensure that 
there will not be reductions in these vital programs as the 
overall bilateral assistance program is constrained. The 
emphasis is on programs that directly affect younger children, 
including basic education, and on accelerating efforts to 
eradicate diseases that threaten younger children and 
caregivers alike. The account does not include population 
assistance which will be funded through the development 
assistance account. It does provide for a grant to UNICEF at 
the requested level of $100,000,000.
    The Committee has included a total of $625,000,000 in 
assistance to the new independent states of the former Soviet 
Union, and $470,000,000 for Eastern Europe and the Baltics.
    The Committee has recommended a total of $705,000,000 for 
refugee programs.
    For economic assistance under the Economic Support Fund, 
the Committee has recommended a total of $2,400,000,000.
    The Committee has recommended $118,000,000 for a 
Nonproliferation, anti-terrorism and demining account which 
includes funding for the Non-proliferation and Disarmament 
Fund, anti-terrorism assistance, demining activities, United 
States participation in the Korean Energy Development 
Organization (KEDO), and the U.S. voluntary contribution to the 
International Atomic Energy Agency (IAEA).
    For Foreign Military Financing, the Committee has 
recommended a grant program of $3,280,750,000 and a loan 
subsidy appropriation of $60,000,000. The FMF loan value 
supported by the loan subsidy appropriation is limited to 
$657,000,000.

               TITLE I--EXPORT AND INVESTMENT ASSISTANCE

                Export-Import Bank of the United States

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $726,000,000
Fiscal year 1998 request..............................       632,000,000
Committee recommendation..............................       632,000,000
                                                                        

                        administrative expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $46,614,000
Fiscal year 1998 request..............................        48,614,000
Committee recommendation..............................        48,614,000
                                                                        

    The Committee has recommended a subsidy appropriation for 
the Export-Import Bank of $632,000,000 and an appropriation of 
$48,614,000 for administrative expenses. The committee of 
jurisdiction has commenced the process of reporting legislation 
that will extend the operating authority of Eximbank beyond its 
expiration date of September 30, 1997.
    The Committee has continued prior year language limiting 
the export of nuclear technology or fuel to certain countries. 
The Committee has also included language making possible 
Export-Import Bank activity in Eastern Europe and the Baltics.
    The Committee provided no additional funds for a tied-aid 
``war chest'', a reduction of $50,000,000 from its 1997 
capitalization. The estimated $330,000,000 remaining ``war 
chest'' balance for tied-aid purposes, may be used to support 
loans. The war chest has largely served its purpose of 
countering predatory finance offers by other nations at less 
cost than expected. If more funds are needed for the war chest, 
the Committee will promptly consider any additional requests 
from the President.
    Last year, the Committee warned that it would be hard 
pressed to sustain appropriations for the Eximbank at then-
current levels in future years. At present the Bank is facing a 
financial crisis as it is expected to exhaust its 1997 subsidy 
appropriation well before October 1, 1997, and the President 
has reduced his 1998 request by a total of $94,000,000. The 
Bank management is encouraged, once again, to begin consulting 
with the Committee regarding its plans for overcoming the 
likely gap between demand and federal resources in the near 
future.

                Overseas Private Investment Corporation

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $72,000,000
Fiscal year 1998 request..............................        60,000,000
Committee recommendation..............................                 0
                                                                        

                        administrative expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $32,000,000
Fiscal year 1998 request..............................        32,000,000
Committee recommendation..............................        32,000,000
                                                                        

    The Committee has not recommended a subsidy appropriation 
for the OPIC direct and guaranteed loan credit programs, but it 
has recommended $32,000,000 for operating expenses. Substantial 
operating expenses are required if OPIC is to administer multi-
year insurance policies and protect the public interest with 
regard to repayment of outstanding loans and guarantees.
    Although the subsidy appropriation request for 1998 is 16 
percent less than the current level, the Committee is reluctant 
to fund the request in the absence of any action by the 
committee of jurisdiction to extend the basic operating 
authority of OPIC beyond its expiration date of September 30, 
1997. When the committee of jurisdiction acts, the 
Appropriations Committee will follow suit. The Committee's 
recommendation at this time does not signal any reduction in 
its traditional support for OPIC.
    The Committee has continued prior year language required by 
the Federal Credit Reform Act and addressing representation 
expenses and availability of funds.
    OPIC and the Export-Import Bank continue to be vital 
supports for the export sectors which sustain America's current 
economic growth, but both institutions should focus on 
activities that cannot be undertaken by the private sector.

                 opic in africa and the caribbean basin

    An example is found in recent bipartisan initiatives to 
promote trade between the United States and Africa and to 
encourage American investment in Africa. The initiative depends 
in large part on an extension of the basic operating authority 
of OPIC. Supporters of economic growth in Africa are encouraged 
to examine the role that OPIC could play there.
    The Committee encourages OPIC to play an enhanced role in 
stimulating investment in the Caribbean and Central America, 
particularly since financing from other sources has diminished 
in recent years. OPIC should seriously consider establishing 
one or more equity funds in the Caribbean and Central America.

                      Trade and Development Agency

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $40,000,000
Fiscal year 1998 request..............................        43,000,000
Committee recommendation..............................        40,000,000
                                                                        

    The Committee has recommended funding for the Trade and 
Development Agency at the current level of $40,000,000. This 
reduction is made because of limited budgetary resources.
    The Committee believes that this export agency has made 
significant contributions to non-traditional American exports 
in the service sectors such as consulting engineering. It is 
beginning to move away from its previous status as an all-grant 
agency. The Committee commends TDA for recognizing that it 
needs to recoup some or all of the costs of its tax-financed 
assistance, especially when large and profitable companies 
benefit from TDA grants.

                TITLE II--BILATERAL ECONOMIC ASSISTANCE

                  Funds Appropriated to the President

                  Agency for International Development

    The Committee, in order to give the President more 
flexibility, has recommended funding two accounts for 
development assistance programs currently administered by the 
Agency for International Development. As in fiscal year 1997, 
the bill provides for an overall development assistance account 
and an account for child survival, children's basic education, 
and disease prevention and treatment activities.
    The following chart provides a comparison of the fiscal 
year 1997 enacted level with the fiscal year 1998 budget 
request of the President (in both the existing and the proposed 
account structures) as well as the Committee recommendation.

----------------------------------------------------------------------------------------------------------------
                                                         Fiscal years--                                         
                                  -----------------------------------------------------------                   
                                                          1998 request     1998 request (new       Committee    
                                      1997 enacted      (existing accts.)       accts.)                         
----------------------------------------------------------------------------------------------------------------
Child Survival and Disease                                                                                      
 Programs Fund...................       $600,000,000        $556,000,000   .................       $650,000,000 
UNICEF...........................       (100,000,000)       (100,000,000)       $100,000,000       (100,000,000)
Development assistance...........      1,181,500,000       1,242,000,000         998,000,000      1,167,000,000 
Development Fund for Africa......  ..................  ..................        700,000,000  ..................
----------------------------------------------------------------------------------------------------------------

    Funding for the United Nations Children's Fund (UNICEF) is 
included in ``Child Survival and Disease Programs Fund'' in 
fiscal year 1997 and in the Committee recommendation for fiscal 
year 1998. The budget request of the President proposes to fund 
the voluntary contribution for UNICEF in ``International 
organizations and programs''.

                Child Survival and Disease Programs Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $600,000,000
Fiscal year 1998 request:                                               
    (under fiscal year 1997 account structure)........       556,000,000
Committee recommendation..............................       650,000,000
                                                                        

    The Committee has recommended $650,000,000 for ``Child 
Survival and Disease Programs Fund''. It includes bilateral 
programs intended to reduce infant mortality and improve the 
health and nutrition of children, especially in the poorest 
nations, as well as an increase of $50,000,000 for targeted 
global programs to end infectious diseases such as polio, 
tuberculosis, HIV/AIDS, yellow fever, malaria, and measles. It 
also includes $100,000,000 for the annual United States 
contribution to the United Nations Children's Fund (UNICEF), as 
well as funding for children's basic education at not to exceed 
$98,000,000.
    Funding for child survival activities, basic education, and 
non-child disease programs would be allocated as follows:

                                                                        
                                                                        
                                                                        
Child survival activities.............................      $245,000,000
Non-child diseases....................................       157,000,000
Children's basic education............................        98,000,000
Grant to UNICEF.......................................       100,000,000
Communicable Diseases Initiative......................        50,000,000
                                                       -----------------
      Total in this account...........................       650,000,000
                                                       =================
Child survival in Egypt-ESF and disaster assistance...        55,000,000
                                                       -----------------
      Total in all accounts...........................       705,000,000
                                                                        

    Funds in this account may be used for activities in the New 
Independent States of the Soviet Union, Eastern and Central 
Europe, as well as other developing countries in other regions 
of the world. Funds would not be used for noninfectious adult 
diseases.
    Of the funds provided in this account, $100,000,000 shall 
be provided as a contribution in grant form to the United 
Nations Children's Fund. However, this does not preclude the 
Agency for International Development from providing additional 
funding for specific UNICEF projects as may be appropriate.
    The Committee intends that child survival funds in this 
account be used for traditional child survival programs. A 
significant proportion of these funds should be used for 
activities whose primary purpose is to reduce child morbidity 
and mortality.
    The total for bilateral child survival programs from all 
accounts should be a minimum of $300,000,000 in fiscal year 
1998, excluding funds which are provided from the Communicable 
Diseases Initiative. In order to provide the Agency for 
International Development with administrative flexibility, the 
Committee recommendation does not specify the amount of funds 
within the Communicable Diseases Initiative that should be 
focused on diseases that primarily affect children. However, 
the Committee intends a majority of the funds for this 
initiative should be provided for research, treatment, and 
prevention activities associated with childhood diseases.

                    communicable diseases initiative

    The Committee recommendation includes an increase of 
$50,000,000 for a Communicable Diseases Initiative. This 
initiative is intended to respond to the dramatic increase in, 
and resurgence of, communicable diseases affecting both 
children and adults. Within the United States, there have been 
confirmed reports of yellow fever and malaria, diseases which 
infected millions earlier in our history. Of those deaths 
attributable to malaria throughout the world, 85 percent of the 
victims are children. In addition, measles continues to cause 
the deaths of millions of children throughout the world on an 
annual basis. Finally, experts are recognizing that acute 
respiratory infections (ARI) are, after malnutrition, the 
biggest killers of children on the planet.
    The Committee believes this initiative is not only good for 
the children of the world, but it will help prevent the spread 
of these diseases to our shores. The more that communicable 
diseases are controlled in developing countries, the more the 
children of America will be protected.

                          eradication of polio

    The Committee recommendation includes $25,000,000 for the 
program initiated by the Committee in fiscal year 1996 to 
eradicate polio. Funds should be used to provide for the 
delivery of vaccines, and the development of the infrastructure 
necessary to implement the program. This funding is meant to be 
in addition to the resources for the regular immunization 
program of the Agency for International Development and is 
intended to supplement other related activities.

                              tuberculosis

    The Committee continues to be concerned about the global 
tuberculosis (TB) epidemic. This disease could result in the 
deaths of up to 30,000,000 people in the next decade. In 
addition, the Committee notes the threat to the United States 
from this disease due to international travel and immigration. 
Therefore the Committee recommends that a significant increase 
be provided to programs and activities involving tuberculosis 
and other acute respiratory infections in fiscal year 1998.
    In that regard, the Committee notes that the Gorgas 
Memorial Institute is developing a regional TB control 
initiative designed to address the major issues in reducing the 
global TB epidemic--training, operational improvement, and new 
approaches to disease control. The Committee supports this 
initiative, including the establishment of regional TB control 
activities in Latin America and Southeast Asia.

       vitamin a, vitamin c, iodine and micronutrient deficiency

    The Committee supports continuation of programs for vitamin 
A and C deficiency, iodine deficiency and other micro-nutrient 
deficiencies and supports continuing these programs at the 1997 
recommended level of $25,000,000. The Committee also expects 
that the report on the pilot program on vitamin C 
fortification, which has been delayed for over a year, will be 
submitted to the Committee as soon as possible.

                      aids prevention and control

    The U.S. has not increased its global AIDS funding since 
1993. Since this time the rate of new infections has increased 
extraordinarily, nearly doubling from 15,000,000 to 29,500,000. 
It is estimated that by the year 2000 over 40,000,000 people 
will have become infected with HIV. Ninety percent of these 
infections are occurring in the developing world. Half of all 
new infections occur among women, especially those under the 
age of twenty-five. In addition, new treatments such as those 
that block prenatal transmission have been discovered and need 
to be made as accessible as possible. To begin to respond 
adequately to current needs, the Committee urges AID to provide 
$121,000,000 to fund HIV/AIDS prevention and control efforts.
    New outbreaks of HIV infection are erupting in Eastern 
Europe, the former Soviet Union, India, Vietnam, Cambodia, 
China, and elsewhere. India, for example, had little HIV 
infection at the beginning of the decade, but is now estimated 
to have over 1,000,000 people living with HIV. In Cambodia, 10 
percent of people who offered to donate blood in Phnom Penh in 
1995 were infected, compared with 0.1 percent in 1991. Africa 
is the continent hardest hit by AIDS, with a drop in life 
expectancy of up to 10 years, and declining gross national 
products in many countries. New surveys in Zimbabwe and 
Botswana have found that up to 40 percent of pregnant women are 
infected. Many of these women transmit the virus to their 
children. During 1995 alone, approximately 500,000 children 
were born with the HIV infection worldwide--about 1,400 per 
day.
    Strong U.S. leadership in response to the global AIDS 
epidemic should continue. Efforts to support non-governmental 
organizations that have ``on the ground'' prevention and care 
programs in communities affected by HIV, as well as 
multilateral AIDS efforts such as UNAIDS are very important. 
The United States should continue efforts to develop 
therapeutics and microbicides that could be of use in 
developing nations as well as continue to provide leadership in 
coordinating international research to develop safe, effective 
vaccines.
    The Committee is also concerned about the high rates of HIV 
infection and the sex trade in Southeast Asia, and recommends 
that AID formulate a comprehensive, regional approach to 
address this issue. The Committee urges AID to commit resources 
to regional HIV/AIDS programs in Southeast Asia.

                           displaced children

    The Committee continues to support programs to help the 
more than 100,000,000 children worldwide who are displaced and/
or have become orphans. The Committee has placed a priority on 
the needs of these children. The Committee recommends that at 
least $10,000,000 in funding be allocated for the displaced 
children and orphans program in fiscal year 1998.

                         health care for girls

    Recent research indicates that girls under the age of five 
in the developing world face bias in the health care they 
receive. In the design and implementation of existing 
children's health initiatives, the Committee urges AID to make 
every effort to ensure that girls benefit from health care 
practices as much as boys. In that regard, AID should collect 
and analyze child survival data separately for boys and girls, 
and the Committee urges AID to accelerate their efforts in this 
regard.

              office of private and voluntary cooperation

    The Committee supports additional funding for child 
survival programs through AID's Office of Private and Voluntary 
Cooperation. It expects the agency to make best efforts to 
provide up to $30,000,000 in child survival grants for private 
and voluntary organizations through this office in fiscal year 
1998. However, funding for other essential programs 
administered through this office, such as cooperative 
development, matching grants, ocean freight or others, should 
not be reduced in order to provide these funds.

                      basic education for children

    The Committee believes that basic education programs are 
essential to both the well-being of the world's children and to 
achieving the long term goal of broad-based economic 
development. In particular, girl's education has multiple 
benefits, including improved child survival and overall family 
health. The Committee is also very interested in the use of 
basic education programs in addressing educational needs of 
children who are in or are leaving situations of hazardous and 
exploitative child labor. The Committee strongly supports 
funding for children's basic education at a level of 
$98,000,000. Childhood education should be defined to include 
early childhood, primary, and lower secondary education, as 
well as childhood education teacher training programs.

                         Development Assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................    $1,181,500,000
Fiscal year 1998 request:                                               
    (under fiscal year 1997 account structure)........     1,242,000,000
Committee recommendation..............................     1,167,000,000
                                                                        

    The Committee has recommended $1,167,000,000 for a general 
account for development assistance. The amount recommended is 
$14,500,000 less than the amount provided in fiscal year 1997. 
However, after adjusting for the grants to the Inter-American 
and African Foundations funded through this account in fiscal 
year 1997, and subtracting $17,500,000 that was made available 
for operating expenses of the Agency for International 
Development, the Committee recommendation provides for a 
program increase of $30,000,000 for fiscal year 1998. Funding 
in this account includes activities for agriculture, rural 
development, population, adult literacy and adult basic 
education, environment, energy, science and technology and 
other programs related to longer-term development.
    The recommendation reflects the same account structure as 
provided in fiscal year 1997.

                restrictions on use of population funds

    The Committee has continued prior year language in the bill 
that requires that none of the funds appropriated in this bill 
or any unobligated balances be made available to any 
organization or program which, as determined by the President, 
supports and participates in the management of a program of 
coercive abortion or involuntary sterilization. The bill 
language also states that funds cannot be used to pay for the 
performance of abortions as a method of family planning or to 
motivate or coerce any person to practice abortions. Further, 
the language indicates that in order to reduce reliance on 
abortions in developing countries, population funds shall be 
available only to voluntary family planning projects which 
offer, either directly or through referral, information about 
access to a broad range of family planning methods and 
services. An additional provision in the bill requires that in 
awarding grants for natural family planning under Section 104 
of the Foreign Assistance Act, no applicant shall be 
discriminated against because of such applicant's religious or 
conscientious commitment to offer only natural family planning.
    The Committee has also continued prior year language that 
states that nothing in the development assistance account 
portion of the bill is to alter any existing statutory 
prohibitions against abortion which are included under section 
104 of the Foreign Assistance Act. Section 518 of this act also 
addresses this matter.

                                campfire

    The Committee is recommending bill language to prohibit the 
use of funds for any activities in contravention of the 
Convention on International Trade in Endangered Species (CITES) 
in order to address concerns that AID funded activities in 
Zimbabwe are contributing to trade in elephant ivory.
    The Committee is pleased with the success of Zimbabwe's 
elephant conservation programs, noting the increase from 43,000 
elephants in 1987 to 67,000 in 1996. Much of this success is 
due to CAMPFIRE--the Communal Areas Management Program for 
Indigenous Resources. This program has demonstrated that the 
objectives of human development and conservation can be 
integrated and that market-led wildlife management can be an 
effective conservation tool. However, the Committee is 
concerned that CAMPFIRE not become a launching pad for renewed 
traffic in the ivory trade. The Committee directs that no funds 
be provided for activities that will result in the generation 
of income from the trade in ivory from African elephants 
outside of the limits set by the conservation program 
maintained by the Government of Zimbabwe.
    The Committee also directs that no United States taxpayer 
funds be provided for any lobbying activities by any non-
governmental organization. The use of taxpayer funds for 
lobbying is forbidden under current law. The Committee notes 
that the AID General Counsel did not find evidence of the use 
of funds for such activities, as had been alleged. However, the 
Committee is aware that AID helped fund the establishment of 
regional offices of an African non-governmental organization in 
Western Europe and the United States. The use of taxpayer funds 
for such purposes is totally unjustified.
    The Committee directs that no funds for any indigenous non-
governmental organization be used to establish or maintain 
offices in countries other than those in which the NGO is 
actively engaging in development programs. The Committee 
further requests that AID review all grants, contracts, and 
cooperative agreements in sub-Saharan Africa to ensure that 
this is not occurring. The Committee requests a report on this 
effort by March 1, 1998, including the status of any such 
funding, if it exists, and the steps AID is taking to eliminate 
this practice.

                    latin america and the caribbean

    The Committee is very concerned the Agency for 
International Development did not adequately respond to last 
year's bill and report language urging that greater emphasis be 
provided for programs in the Latin America and the Caribbean 
region. Indeed, Latin America is the only region of the world 
that would not receive an increase in funding under the 
President's budget request for development assistance for 1998. 
Already, the European Union has become the top international 
aid donor to Latin America. Therefore, the Committee is 
directing that an increase of $20,000,000 be allocated for this 
region. Among programs that could benefit from this increase 
are those designed to improve water and environmental quality 
in order to support long-term commercial relationships between 
United States companies and the rapidly expanding marketplace 
for environmental services and products in the region.
    The increase is intended to supplement the levels 
identified for the region in the budget justification documents 
for both ``Development assistance'' and ``Economic Support 
Fund'', either through bilateral country programs or regional 
programs. The Committee requests the Agency for International 
Development to report to the Appropriations Committees within 
30 days of enactment regarding the plans for allocating this 
increase of $20,000,000.

              latin america and the caribbean: el salvador

    The Committee supports the continued funding of programs to 
implement the peace accords in El Salvador. The Committee 
encourages AID to continue to fund programs that enhance 
democratic institutions and sustainable development, and that 
help build lasting solutions to the problems underlying the 
former conflict.
    The Committee is also concerned with reports that several 
non-governmental organizations in El Salvador were engaged in 
partisan political activities at the same time they were 
receiving USAID funds. The Committee requests a report from the 
Agency for International Development on this incident, as well 
as the steps that have been taken to correct this problem and 
to prevent similar problems from occurring in the future. The 
Committee requests such a report by December 1, 1997.
    The Committee is disturbed that USAID has not provided a 
full and complete accounting of USAID Cooperative Agreement No. 
519-0391-A-00-3254-00. The Committee requests a full and 
complete accounting of all funds expended under this grant by 
September 1, 1997.

                latin america and the caribbean: jamaica

    The Committee is concerned that the Government of Jamaica 
has not taken the steps necessary to assure long-term economic 
reform and a free market economy. In addition, the Government 
has recently moved to improve relations with Cuba. Such actions 
are not in the interest of the people of Jamaica. The Committee 
supports assistance that will benefit the people of Jamaica and 
lead to an improved economic and political future for that 
island.

                Latin America and the Caribbean: Panama

    The Committee is very concerned about actions by the 
Government of Panama which have disadvantaged United States 
firms seeking to operate in that country. In particular, the 
Committee is aware of irregular procedures in awarding 
contracts for operating the ports at both ends of the Panama 
Canal. During official travel earlier this year, members of the 
Committee discussed their concerns with the Foreign Minister of 
Panama. However, many of these concerns have yet to be 
adequately addressed.
    The Committee urges the Department of State to continue its 
efforts to ensure that American firms and businesses can 
operate in Panama under generally accepted business practices. 
Panama has been included in the list of countries for which 
assistance programs are subject to notification pursuant to 
section 520 of this act in order to maintain oversight of our 
activities in that country.

            latin america and the caribbean: parks in peril

    The Committee notes its strong support for the existing AID 
Parks in Peril program, a partnership with the private sector 
to promote biodiversity conservation in imperiled ecosystems 
throughout Latin America and the Caribbean. Parks in Peril is 
currently working in 28 sites in twelve different countries. 
The program has made significant progress in turning ``paper 
parks'' into genuine protected areas, to the extent that 10 
sites have been graduated from the program. Central AID funding 
will be phased out to those sites, and the program is shifting 
its successful methodology to new locations. Since its 
inception, Parks in Peril has received $23,000,000 from central 
AID funds, $5,000,000 from the Nature Conservancy, and has 
leveraged more than $10,000,000 from foreign private sources 
and foreign governments.

      latin america and the caribbean: neotropical migratory birds

    The Committee recommends that $750,000 in fiscal year 1998 
be provided to the National Fish and Wildlife Foundation for 
continued implementation of the Neotropical forest and 
grassland migratory bird conservation initiative. The decline 
in populations of Neotropical migratory birds has been linked 
to habitat loss and degradation in Central America and the 
Caribbean. Recent scientific evidence suggests that further 
decline of these 350 species could pose significant domestic 
economic and environmental problems, as these birds play a 
significant role in control of forest and agricultural pests. 
The Committee urges AID to make this program part of its budget 
request for fiscal year 1999 in order to provide the year-to-
year continuity required to fully implement this program.

          latin america and the caribbean: corps of engineers

    The Committee is concerned that USAID has not fully 
utilized the technical expertise of the U.S. Army Corps of 
Engineers, particularly in Latin America where the Corps has 
existing field offices in Honduras, El Salvador, Panama, 
Colombia, Bolivia, and Peru. The Agency for International 
Development is in a position to influence development in Latin 
America in an environmentally sustainable manner, especially if 
it and the Corps of Engineers work in partnership with Latin 
America countries to nurture government institutions, train 
engineers and scientists, and provide technical assistance 
embracing environmentally sustainable development. To the 
extent qualified private sector contractors are not available, 
the Committee recommends that AID utilize the Corps of 
Engineers to assist in carrying out the planning, engineering 
and design, construction, environmental restoration, and 
technical assistance.

 africa: greater horn of africa initiative and food security initiative

    The Committee supports the Greater Horn of Africa 
initiative, which is designed to alleviate the food insecurity 
that has plagued that portion of the continent. It is designed 
to provide a coordinated, rational approach to providing food 
aid and promoting economic development in the region in order 
to prevent the crises of the past. The Committee particularly 
recommends active support for those countries that are taking 
necessary steps to help themselves, such as Ethiopia, Uganda, 
and Eritrea.
    The President's budget also includes a new program for food 
security in Africa. However, the Committee has not received an 
adequate explanation of the relationship between this new 
initiative and the Greater Horn of Africa initiative. Indeed, 
as the Committee noted in last year's report, food security is 
the fundamental underpinning of the Greater Horn of Africa 
initiative. However, it is unclear precisely how this new 
program will be implemented and whether it will include close 
coordination with the Greater Horn of Africa initiative. The 
Committee does not support the establishment of duplicative 
programs.
    The Committee supports greater food security in sub-Saharan 
Africa. However, prior to obligating funds for this new 
initiative, the Committee expects the Agency for International 
Development to provide a report indicating:
          1. how this initiative is designed to complement the 
        Greater Horn of Africa initiative;
          2. how this program will be managed, and whether and 
        how this management differs from that for the Greater 
        Horn of Africa initiative;
          3. the countries targeted as part of this initiative;
          4. how the goals of the program will be met in the 
        long term, and how results will be measured against 
        these goals; and
          5. the programs, projects, and activities the agency 
        is terminating or reducing in order to focus on this 
        new initiative.

                             africa: sudan

    The Committee directs AID to use development and disaster 
assistance funds for capacity building purposes in areas of 
southern Sudan outside the control of the government of Sudan. 
The Committee strongly encourages AID to make funds available 
to non-governmental organizations for this purpose. The 
Committee expects that these funds will not be used in areas 
controlled by southern factions that continue to cooperate with 
the Government of Sudan.
    The Committee encourages AID to make funds available for 
organizations attempting to distribute humanitarian assistance 
in areas of southern Sudan not served adequately by other 
international organizations or the UN-sponsored ``Operation 
Lifeline Sudan''.

                             africa: kenya

    Serious human rights problems remain in Kenya. There are 
credible allegations of extrajudicial killings and torture, as 
well as harassment and intimidation of opposition 
parliamentarians, journalists, clergy members, human rights 
monitors and other critics of the ruling party. The Committee 
is encouraged by the formation of a standing committee on human 
rights, and hopes this standing committee will be permitted to 
vigorously address the serious human rights problems in Kenya.

                               East Timor

    The Committee is concerned about the continuing violence in 
East Timor. It is pleased the United Nations has appointed a 
special envoy and encourages all parties to cooperate in good 
faith with United Nations efforts to reach a peaceful 
settlement. If it becomes clear the United Nations efforts will 
not be successful, or if one of the parties to the conflict 
requests the help of the United States, the Committee 
encourages the Department of State to be prepared to appoint an 
American special envoy to facilitate a peaceful resolution. The 
Committee urges the United States to support and encourage 
international efforts to find a just and viable solution to the 
problems in East Timor.

                  private and voluntary organizations

    The Committee has continued prior year language that 
requires that private voluntary organizations obtain not less 
than 20 percent of their total funding from sources other than 
the United States Government. In addition, the Committee has 
continued language from the 1997 act stating that support for 
private voluntary organizations should be made available at a 
level equivalent to that provided in fiscal year 1995.
    The Committee continues to strongly support adequate 
funding for the Office of Private and Voluntary Cooperation 
(PVC) which leverages private resources by PVO's and 
cooperatives. PVC is the heart of the non-profit portion of the 
partnership between AID and the private sector. This office 
supports PVO microenterprise, child survival, and micronutrient 
grants; strengthens cooperative development efforts; and 
administers the PL 480-funded Farmer-to-Farmer program.
    The Committee expects the Administration to make every 
effort to adequately fund this key office. If AID intends to 
increase funding for PVO's, non-governmental organizations, and 
cooperatives to 40 percent over the next four years, the PVC 
office needs to ensure that the private, non-profit sector is 
capable of effective management of its increased 
responsibilities. The office also serves as a link between 
PVO's and the United States Government so that federally-funded 
PVO activity is generally consistent with foreign policy 
objectives.

                                 energy

    The Committee urges that the Office of Energy, Environment, 
and Technology be funded at an adequate level, no less than its 
fiscal year 1995 core budget. The Office promotes United States 
industrial leadership in the areas of power sector 
privatization, innovative technologies to reduce pollutants 
from fossil fuels, and renewable energy. The Committee 
reaffirms its support for an improved global environment 
through support for improved efficiency in energy production 
and use, especially in fossil fuels, recognizing that growing 
economies will require additional capacity for power generation 
from a wide range of sources.
    The Committee again recommends AID continue funding for 
projects which promote power sector efficiency, energy 
efficiency, and renewable energy, recognizing U.S. industrial 
leadership in these areas. These programs will be critical to 
the success of the Developing Country Climate Change 
Initiative.
    The projects should be developed and carried out in 
collaboration with U.S. industry and should be located in 
countries with the greatest potential for early success, 
without regard for the presence or absence of an AID field 
mission. Included in these efforts should be host country 
institutional capacity building, legal or regulatory reform, 
project preparation, innovative project financing, trade and 
reverse trade missions, training, and technology transfer and 
collaboration.
    The Committee is also concerned about the impact on the 
United States of energy activities in other countries. In that 
regard, the Committee is concerned about particle emissions 
being generated by Mexican power plants that are contributing 
to decreasing visibility in the Big Bend region of Texas, and 
requests the Secretary of State to report on steps being taken 
to obtain Mexican cooperation in reducing this air pollution.
    The Committee recommends a continuation of funding to build 
on the existing AID program fostering development in Southern 
Africa through the appropriate use of renewable energy 
technologies. This program, implemented through a public-
private partnership with the support of Historically Black 
Colleges and Universities, has facilitated commercially driven 
rural electrification by means of in-country capacity building, 
enterprise development, and linkage between United States and 
host country industry.

                              biodiversity

    The Committee strongly supports continued AID funding for 
biodiversity conservation and tropical forest protection in 
developing countries. The protection of global biodiversity is 
critical to our security and economic prosperity, and is 
particularly vital for American agricultural and pharmaceutical 
industries. Such conservation activities should continue to 
emphasize the use of non-government organizations (NGO's) as a 
cost-effective means of delivering development assistance. The 
Agency for International Development, through NGO partnerships, 
should remain active in regions that are significant for global 
biodiversity, even in countries where missions have been closed 
or have never been located, especially in situations where a 
lack of participation would undermine the success of a regional 
strategy.
    The Committee also supports the work of the International 
Cooperative Biodiversity Program (ICBP), a joint effort of the 
National Institutes of Health, the National Science Foundation, 
and the Agency for International Development. The Committee 
recommends that AID provide support for this program during 
fiscal year 1998.

                          aid/nasa cooperation

    The Committee supports cooperation between the National 
Aeronautics and Space Administration (NASA) and the Agency for 
International Development in assessing the impact of climate 
change on developing countries, including understanding the 
planetary water cycle. In that regard, the Committee recommends 
that AID establish a collaboration with NASA's Global Hydrology 
and Climate Center.

                          women in development

    The Committee urges that not less than $13,000,000 be 
provided for AID's Office of Women in Development (WID), 
including a transfer of not less than $1,000,000 from funds 
appropriated to ``Assistance to the New Independent States of 
the former Soviet Union''. The Committee is concerned that the 
office has not received sufficient funding in the past year, 
and that funds were not transferred for the purpose of 
assisting women in Russia and the other new independent states 
of the former Soviet Union during this time of economic 
transition. Over the past year, responsibility for AID's Girls' 
and Women's Education Initiative was transferred to the WID 
office, and it will require additional resources to implement. 
Improvements in women's educational status have been found to 
lead to increases in women's economic productivity, which is 
key to sustained economic growth. Furthermore, women's control 
of economic resources impacts directly on family health and 
nutrition. Finally, studies show that educated women are more 
likely to ensure that their daughters receive an education.

                            microenterprise

    The Committee recommends that microenterprise funding be 
provided at a program level of $130,000,000, $10,000,000 above 
the request, and supports additional funding for the program 
above this level to the maximum extent possible. In this 
regard, the Committee supports the use of additional local 
currency funds beyond the approximately $20,000,000 provided in 
each of the past several years.
    This program has proven its effectiveness in promoting 
economic growth in the poorest countries. Of these funds, at 
least fifty percent should be devoted to poverty lending 
programs, and a significant portion should be channeled through 
central mechanisms such as non-governmental organizations. For 
purposes of implementing this program, poverty lending programs 
are defined as loans of under $300 made to the poorest fifty 
percent of those living below the poverty line, or the 
institutional development of organizations primarily engaged in 
making such loans. In that regard, the Committee supports 
including smallholder farming operations among its other 
criteria for microenterprise lending programs, and requests 
that AID examine the possibility of using the International 
Fund for Agricultural Development (IFAD) as an implementing 
agency in providing microenterprise assistance for such 
activities.

              american schools and hospitals abroad (asha)

    The Committee recommends, and expects AID to provide, 
$15,000,000 from the funds provided in this Act for the 
American Schools and Hospitals Abroad (ASHA) program in fiscal 
year 1998. The Committee directs that none of these funds be 
reserved for programming in any future fiscal year. All funds 
are to be allocated and obligated in fiscal year 1998. The 
Committee further expects that support will be continued for 
traditional recipients of funding in countries such as Lebanon, 
Israel, and Egypt. In addition, funds should be made available 
for other deserving institutions as part of a competitive 
process.
    In addition, the Committee recommends that AID continue 
involving community colleges and Hispanic Serving Institutions 
(HSI's) in the delivery of vocational and occupational 
education and training elements of development assistance 
projects.

                        cass scholarship program

    The Committee has supported the scholarship programs 
currently known as the Cooperative Association of States for 
Scholarships (CASS) since 1985. This program utilizes more than 
30 community-based institutions around the United States 
offering 2 year degrees in various technical and vocational 
fields. The Committee believes AID should continue funding for 
this program at the same level provided in fiscal year 1997.

                              agriculture

    The Committee also supports the continuation, at least at 
the fiscal year 1997 level, of collaborative research support 
programs (CRSP's), such as the small ruminants CRSP; the pond 
dynamics/aquaculture CRSP; the sustainable agriculture and 
natural resources CRSP; the soil management CRSP; the peanut 
CRSP; and the bean/cowpea CRSP. These programs promote 
sustainable agriculture in the developing world in conjunction 
with the United States land grant system of higher education.
    The Committee is concerned that AID's support for 
agriculture development has diminished over the past few years. 
At least seventy percent of the developing world's population 
is engaged in agriculture-related activities, and the 
production and distribution of adequate food continues to be a 
significant survival issue in many parts of the world. The 
Committee supports additional resources for agricultural 
research and development, and requests the Agency for 
International Development to report by March 1, 1998, on the 
amount and sources of funding for international agriculture 
assistance for fiscal years 1995, 1996, and 1997.

                           dairy development

    The Committee continues to support dairy development, and 
recommends that the Agency for International Development make 
its best efforts to continue funding for this program at a 
level of $8,000,000. This successful program has increased 
family nutrition, helped women livestock caretakers, and formed 
democratic, self-help cooperatives through Central Europe, the 
Horn of Africa and developing countries in other regions. Many 
United States companies have made major investments overseas as 
a result of this development program that include the 
introduction of new technologies in animal feeds, improved 
cheese production and better seeds. These investments help 
United States companies as well as developing countries.

             development of credit unions and cooperatives

    The Committee strongly supports maintaining central 
funding, at least at the current level, from the Office of 
Private and Voluntary Cooperation to enable United States 
cooperatives to share their self-help business approaches with 
developing and market transition countries. The Committee 
continues to support development efforts carried out by United 
States cooperatives and credit unions. These programs promote 
free markets, create business linkages with the United States, 
export American technology, and build local economies, and help 
create a friendly climate for new and expanding United States 
markets. They enable people to achieve dignity and lasting 
economic benefits through member-owned businesses.

                           oic international

    The Committee encourages the Agency for International 
Development to extend its cooperative agreement with OIC 
International for not to exceed one year. The Committee 
recognizes the success of the organization's self-help and 
training programs. However, OIC International must begin 
competing for funding along with other organizations. The 
Committee requests AID to work with OIC International to 
develop the technical skills and program models to compete 
effectively, and urges the organization to pursue these goals 
as well.

              international fertilizer development center

    The Committee strongly supports the fertilizer-related 
research and development being conducted by the International 
Fertilizer Development Center (IFDC), and directs the 
Administrator of AID to make at least $2,000,000 available for 
the core grant to IFDC.

                 international executive service corps

    The Committee supports the work of the International 
Executive Service Corps (IESC), which utilizes volunteers to 
help developing countries in the areas of business development. 
For fiscal year 1998 the Committee strongly urges AID to 
provide IESC with the level allocated for fiscal year 1997.

                      Development Fund for Africa

    Funds provided under the unified development assistance 
account for fiscal year 1998 are to be used to implement the 
eleventh full year of the Development Fund for Africa (DFA). 
Recognizing that sub-Saharan African nations face unique 
development challenges, the DFA was created to permit the 
Agency for International Development to use development 
assistance resources in a more flexible fashion. As in 1996 and 
1997, the Committee does not recommend a separate development 
assistance account for Africa or any other region.
    The Committee has recommended increases in funding for both 
Development Assistance and Child Survival and Disease Programs 
Fund and therefore expects Africa to receive the fully 
requested amounts for these purposes in FY 1998.
    The Committee expects that a significant portion of the 
resources provided for ``Child Survival and Disease Programs 
Fund'' and ``Development assistance'' will be committed to 
programs in sub-Saharan Africa, and expects AID to provide 
close coordination between activities funded in those accounts 
and the Development Fund for Africa. In addition, the 
Communicable Diseases Initiative is intended, in part, to 
address the increase in infectious diseases affecting sub-
Saharan Africa. The allocation of funds from the Communicable 
Diseases Initiative will almost certainly result in an increase 
in funds for Africa over the 1997 level.
    The authorities available for the Development Fund for 
Africa shall apply in providing assistance to sub-Saharan 
African through ``Development assistance''.

                   International Disaster Assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $190,000,000
Fiscal year 1998 request..............................       190,000,000
Committee recommendation..............................       190,000,000
                                                                        

    The Committee has recommended $190,000,000 for the 
International Disaster Assistance account, the amount requested 
by the Administration and the same as the fiscal year 1997 
level. Activities to be funded under this account include 
relief, rehabilitation, reconstruction and capacity building.

                                 kosovo

    The Committee recommends that $6,000,000 be provided for 
disaster assistance for the people of Kosovo. The humanitarian 
situation in this region continues to be grim and has created a 
population of nearly 20,000 refugees in Albania, straining that 
country's already weakened economy

                             northern iraq

    The Committee recommends that funds continue to be provided 
to refugees and internally displaced persons in Northern Iraq 
where the Kurdish population and other inhabitants continue to 
suffer shortages of food and medicine. Due to the tense 
situation in the area, non-governmental organizations and 
private voluntary organizations remain unable to meet these 
serious needs.

                           Debt Restructuring

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $27,000,000
Fiscal year 1998 request..............................        34,000,000
Committee recommendation..............................        27,000,000
                                                                        

    The Committee has provided $27,000,000 for debt 
restructuring for fiscal year 1998. This is the same as the 
1997 level, but $7,000,000 below the request. The Committee has 
not included bill language to expand the authorities available 
under this account to allow for the restructuring of debt 
generated by Commodity Credit Corporation loans and Public Law 
480 loans. This issue should be addressed by the appropriate 
authorizing committee.
    The Committee has not retained the requirement for 
notifications for the obligation of funds from this account. 
The Committee already receives reports from the Department of 
State regarding bilateral debt agreements, and therefore the 
notification requirement is redundant. However, the Committee 
requests quarterly reports on obligations made from the 
account, and the purposes for which the funds are obligated.
    The Committee intends that debt restructuring for Jordan be 
completed as soon as practicable, and has included $12,000,000 
for this purpose, as requested.

             Micro and Small Enterprise Development Program

                         subsidy appropriations

                                                                        
                                                                        
                                                                        
Fiscal year 1997 enacted..............................        $1,500,000
Fiscal year 1998 request..............................         1,500,000
Committee recommendation..............................         1,500,000
                                                                        

                  estimated level of guaranteed loans

                                                                        
                                                                        
                                                                        
Fiscal year 1997 enacted..............................     ($39,000,000)
Fiscal year 1998 request..............................      (48,000,000)
Committee recommendation..............................      (48,000,000)
                                                                        

                           operating expenses

                                                                        
                                                                        
                                                                        
1997 enacted..........................................          $500,000
1998 budget request...................................           500,000
Committee recommendation..............................           500,000
                                                                        

    The Committee is recommending $1,500,000 in subsidy 
appropriations for the micro and small enterprise program. This 
level is the same as the 1997 enacted level and the budget 
estimate.
    The proposed level of funding will provide $48,000,000 in 
guarantee authority.
    In addition, the Committee is recommending $500,000 in 
administrative expenses, the same as the 1997 enacted level and 
the budget request.

             Urban and Environmental Credit Program Account

                         subsidy appropriations

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................        $3,500,000
Fiscal year 1998 request..............................         3,000,000
Committee recommendation..............................         3,000,000
                                                                        

                  estimated level of guaranteed loans

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................     ($29,400,000)
Fiscal year 1998 request..............................      (46,000,000)
Committee recommendation..............................      (46,000,000)
                                                                        

                           operating expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................        $6,000,000
Fiscal year 1998 request..............................         6,000,000
Committee recommendation..............................         6,000,000
                                                                        

    The Committee has recommended $3,000,000 for subsidy 
appropriations for the urban and environmental program account 
for fiscal year 1998. This is the same as the budget request 
and $500,000 below the enacted level. The name of the account 
has been changed, pursuant to the budget request. In addition, 
bill language has been included, consistent with the request, 
to clarify activities funded by the account.
    An appropriation of $6,000,000 is recommended for operating 
expenses. The recommendation is the same as the enacted level 
and the budget request.

     Payment to the Foreign Service Retirement and Disability Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $43,826,000
Fiscal year 1998 request..............................        44,208,000
Committee recommendation..............................        44,208,000
                                                                        

    The Committee has provided the budget request for the 
mandatory payment to the Foreign Service Retirement and 
Disability Fund.

     Operating Expenses of the Agency for International Development

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $470,750,000
Fiscal year 1998 request..............................       473,000,000
Committee recommendation..............................       468,750,000
                                                                        

    The Committee has recommended funding for Agency for 
International Development operating expenses at a level of 
$468,750,000 which is $4,250,000 below the Administration's 
request and $2,000,000 below the amount provided for fiscal 
year 1997.
    The Committee recommendation continues prior year language 
limiting funding for publications.
    The Committee is recommending a reduction from the budget 
request in anticipation of higher than expected carryover 
balances.

                 security at federal triangle building

    The Committee is concerned that adequate precautions be 
taken to ensure the security of AID employees at the new 
building at the Federal Triangle. The Committee requests 
regular consultations on the progress of efforts in this 
regard, and would entertain a reprogramming of funds to meet 
necessary security upgrades.

                         new management system

    The Committee remains concerned about the status of the New 
Management System (NMS) at the Agency for International 
Development, including the AID-Worldwide Accounting and Control 
System (AWACS). The Committee is pleased the agency is working 
with the Inspector General to resolve the problems with the 
system. In addition, operations of AWACS have been suspended in 
the field until technical deficiencies are corrected, 
implementation issues are resolved, and testing shows the 
system--or a cost effective subset of the system--operates 
effectively and complies with Federal financial management 
system requirements. The Committee requests that AID report on 
a quarterly basis on the status of the New Management System, 
including the cumulative costs associated with designing, 
correcting, and implementing the system. Any costs for the NMS 
above those originally projected for fiscal year 1998 should be 
subject to review by the Committees on Appropriations. In 
addition, the Committee requests that the fiscal year 1999 
budget justification documents for the Agency for International 
Development clearly identify the amounts requested for the NMS 
and its subsystems.

Operating Expenses of the Agency for International Development--Office 
                        of the Inspector General

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $30,000,000
Fiscal year 1998 request..............................        29,047,000
Committee recommendation..............................        29,047,000
                                                                        

    The Committee has recommended $29,047,000 for the Office of 
the Inspector General of AID for fiscal year 1998, the same as 
the budget request but $953,000 below the fiscal year 1997 
level.

                            overseas offices

    The Committee strongly supports the maintenance of a robust 
capacity for overseas audit and inspection activities. In that 
regard, the Committee strongly supports establishment of the 
proposed regional Inspector General office in Manila, as well 
as efforts to increase audit and inspection staff in Budapest. 
It is essential the AID Inspector General retain his capacity 
to adequately monitor the use of taxpayer funds overseas, and 
the existence of offices in these cities is an important 
component of this effort.

                         new management system

    The Committee appreciates the efforts of the Inspector 
General to maintain oversight of the New Management System, and 
encourages a continuation of these activities in fiscal year 
1998.

                            financial audits

    The request for operating expenses for AID includes 
$1,000,000 to reimburse the Defense Contract Audit Agency 
(DCAA) for pre-award and cost incurred audits. The Committee 
believes that the DCAA audits and the related AID reimbursement 
should be subject to the Inspector General's supervision and 
oversight.

                          Economic Support Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................    $2,343,000,000
Fiscal year 1998 request..............................     2,497,600,000
Committee recommendation..............................     2,400,000,000
                                                                        

    The Committee has recommended a total of $2,400,000,000 for 
the Economic Support Fund, an amount that is $97,600,000 below 
the request and $57,000,000 above the 1997 enacted level.
    The Committee notes that funds for the Middle East continue 
to make up the largest portion of this account. It is the 
Committee's view that the Administration should make every 
effort to reallocate these funds in a manner which recognizes 
the fiscal responsibility required by balancing the budget, the 
many changes which have occurred in the Middle East over the 
past twenty years, and the new challenges and requirements 
which are constantly emerging in other parts of the world. In 
this regard, the Committee's funding recommendations for 
countries in the Middle East must be considered in light of 
current discussions between the Administration and the Congress 
on possible ways to reallocate Middle East funding to meet 
these new priorities.

                                 israel

    The Committee recommends that not less than $1,200,000,000 
in Economic Support Funds be provided for Israel, which is the 
fiscal year 1997 level and the amount requested by the 
Administration. The Committee also requires in bill language 
that these funds be provided to Israel as a cash grant within 
thirty days of the signing of this act or by October 31, 1997, 
whichever is later.

                                 egypt

    The Committee recommends that not less than $815,000,000 in 
Economic Support Funds be provided for Egypt on a grant basis, 
which is the fiscal year 1997 level and the amount requested by 
the Administration. Cash transfer may be provided with the 
understanding that Egypt will continue to implement significant 
economic reforms. The Committee also strongly recommends that 
not less than $200,000,000 of the funds allocated for Egypt be 
used for Commodity Import Program assistance.

                                 jordan

    In January of this year, members of the Committee traveled 
to the Middle East to review programs and activities funded by 
the U.S. government and to receive an update on the peace 
process from the regional participants themselves. During this 
trip the members visited Jordan and met personally with King 
Hussein and senior members of the Government of Jordan. King 
Hussein and his senior advisors emphasized Jordan's commitment 
to the peace process, market reform and economic growth in 
Jordan, and a strong U.S.-Jordan relationship. The Committee 
expresses its strong support for and appreciation of Jordan's 
constructive and critical role in the peace process and 
encourages the Administration, in close consultation and 
cooperation with the Congress, to continue its efforts to 
assist Jordan in both the economic and security areas.

                           camp david accords

    The Committee emphasizes once again that the recommended 
levels of assistance for Israel and Egypt are based in great 
measure upon their continued participation in the Camp David 
accords and the Egyptian-Israeli peace process.

                          non-military exports

    The Committee strongly urges the President to ensure, in 
providing cash transfer assistance to Egypt and Israel, that 
the level of such assistance does not cause an adverse impact 
on the total level of non-military exports from the United 
States to each such country

                           west bank and gaza

    The Committee supports assistance to the West Bank and 
Gaza. The Committee continues to believe that support by the 
United States for the economic and social development of 
Palestinians is an important contribution to the peace process. 
However, the Committee is extremely concerned by recent 
violence in the West Bank and Gaza and views these actions as 
extremely harmful to the peace process. Furthermore, the 
Committee is very concerned by reports that the Palestinian 
Authority may be implicated in the harassment and persecution 
of Palestinian Christians, including persons outside the 
jurisdiction of the Authority. The Committee urges the 
administration to investigate these allegations and to report 
to the Committees on Appropriations by the earliest possible 
date on the results of this investigation.

                palestinian compliance with oslo accords

    The Committee is seriously concerned with the current 
atmosphere of the final status negotiations between the 
Palestinian Authority and the state of Israel. The Committee 
wants to register its displeasure with the apparent withdrawal 
of the Palestinian Authority from the joint security 
arrangements provided for by the Oslo Peace Accords. 
Furthermore, the Committee is disturbed with reports that 
senior officials of the Palestinian Authority intend to pursue 
the death penalty for Arabs who sell land to Jews. 
Additionally, the Committee is concerned about the result of 
audits, performed by the Palestinian Authority's auditing 
office, which found hundreds of millions of dollars have been 
misused by Palestinian officials.
    Therefore the Committee directs the Secretary of State to 
prepare and deliver to the Committees on Appropriations within 
120 days of enactment of this act a detailed report regarding 
the progress of the Palestinian Authority's compliance with the 
Oslo Peace Accords to include, but not be limited to, the 
following issues: (1) the Palestinian Authority's cooperation 
with Israeli security forces (2) repeal of the Palestinian 
Covenant, (3) steps taken to expunge from all official 
documents and publications of the Palestinian Authority 
depictions of a Palestinian state which does not acknowledge 
the presence of a sovereign state of Israel (4) the Palestinian 
Authority's honoring of extradition requests from the United 
States, Israel and other countries (5) the Palestinian 
Authority's progress toward repealing edicts imposing the death 
penalty on anyone who sells land to a Jew (6) are senior 
Palestinian officials involved in any way with terrorist 
operations affecting the state of Israel (7) and, provide a 
detailed accounting of all U.S. assistance provided to the 
Palestinian Authority or its representatives, affiliates, and 
agents.

                        report on peace process

    The Committee directs the Secretary of State to deliver a 
report to the Committees on Appropriations within 120 days of 
enactment of this act evaluating unilateral actions taken by 
any Middle East party, without adequate notice to the United 
States or other parties to the negotiations, that may have a 
bearing on the peace process.

                                lebanon

    The Committee believes support for the people of Lebanon 
continues to be in the United States national interest. The 
Committee supports continued funding for Lebanon from both the 
development assistance and Economic Support Fund accounts.

                       economic boycott of Israel

    The Committee has once again included language in the bill 
addressing the Arab League boycott of Israel under Sec. 541.

                      middle east desertification

    The Committee continues to believe the proposed Middle East 
and Mediterranean Desert Development Program for Combating 
Desertification through Sustainable Desert Development offers 
an excellent opportunity to expand these successful efforts 
throughout the region and provide a framework for regional 
cooperation in the 21st century. By bringing together officials 
from countries in the region to discuss and share ideas and 
technology on ways to combat problems inherent in countries 
with desert environments, the Committee believes that 
significant progress can be made in stemming desertification in 
this threatened area. Therefore, the Committee recommends that 
up to $5,000,000 be made available for this activity from the 
Economic Support Fund, development assistance or any other 
appropriate funds made available by this act.

                israeli-palestinian cooperation program

    The Committee notes with concern that the Middle East 
process has suffered recent setbacks. In order to promote 
better understanding and mutual respect between Israelis and 
Palestinians living in the West Bank and Gaza, the Committee 
believes the United States should encourage a broad range of 
educational, cultural and humanitarian activities which bring 
Palestinians and Israelis together. The Committee believes 
these activities can be successfully carried out by Israeli 
and/or Palestinian private voluntary organizations. The 
Committee therefore urges the Agency for International 
Development to provide up to $500,000 in fiscal year 1998 for 
such activities.

                                 burma

    The Committee recommends the 1997 level for activities in 
support of democracy in Burma for fiscal year 1998, and 
encourages the use of the National Endowment for Democracy in 
the programming of a significant portion of these funds. The 
Committee requests the Administration continue its efforts to 
encourage the Thai government to provide a hospitable 
environment for Burmese proponents of democracy operating in 
Thailand.
    The Committee is extremely concerned about recent attacks 
on refugees located along the Thai-Burmese border. The 
Committee encourages the Administration to work with the 
Government of Thailand to ensure that international standards 
regarding the treatment of refugees are maintained.
    The Committee is concerned that 1996 funds were used in 
Burma for a development assistance project without consultation 
with the Congress. The Committee recommends that funds intended 
for Burma projects be used only for purposes intended by the 
Congress, such as promotion of democracy activities within and 
outside Burma and provision of humanitarian assistance to 
refugee populations in the border areas.

                                 china

    The Committee encourages the Department of State to use all 
appropriate means to support the growth of democracy and 
democratic institutions, and the improvement of human rights, 
in China. In that regard, the Committee supports the creation 
of an East Asia-Pacific democracy fund, as proposed in the 
President's budget request. The Committee directs that the 
State Department submit a report on the intended uses of this 
fund prior to the obligation of any funds for these purposes 
pursuant to the Committee's notification procedures, and that 
the Committee be consulted closely as the program is developed.

                               hong kong

    The Committee will watch with great interest events in Hong 
Kong following the reversion to Chinese sovereignty. The 
Committee requests that the Administration employ all 
appropriate means to support democratic entities in Hong Kong 
during the year leading up to the post-transition parliamentary 
elections. Such support may include the provision of assistance 
to non-political organizations that support democracy and human 
rights in Hong Kong through a grant to the National Endowment 
for Democracy or a similar organization.

                                 cyprus

    The Committee recommends that every effort be made to 
provide $15,000,000 in Economic Support Funds for scholarships 
and bicommunal projects in Cyprus. These funds provide a basis 
for mutual cooperation and preparation for these two societies 
to live together harmoniously by increasing inter-communal 
contacts. In this regard, the Committee strongly encourages the 
Administration to fulfill its pledge to reach a just solution 
to the Cyprus situation in 1997 by giving this matter attention 
at the highest levels and by working with all parties in an 
even-handed and fair manner. The Committee also commends the 
Administration for appointing Richard Holbrooke as a special 
Cyprus envoy.

                                cambodia

    The Committee supports the budget request for Cambodia, 
provided the country continues to maintain a democratic and 
peaceful status. As a result of the recent political violence 
in Cambodia, the Committee encourages strong leadership by the 
Administration to preserve the democratic gains Cambodia has 
achieved. The Committee also expresses its strong support for 
the rule of law program in Cambodia and efforts to reform the 
judicial system. The Committee also remains concerned about the 
issue of illegal logging in Cambodia, particularly in the Thai 
border areas, and strongly urges the Governments of Cambodia 
and Thailand to cooperate effectively in ending illegal logging 
activity.

                                mongolia

    The Committee supports the Administration request for 
Mongolia. The Committee remains pleased with Mongolia's 
progress towards democracy and a free market system and 
commends Mongolia for its excellent human rights record. The 
Committee also urges the administration to support efforts to 
protect Mongolia's national park system as well as projects or 
activities designed to promote the use of clean and more 
efficient energy sources.

                                pakistan

    Consistent with language included in P.L. 104-107 (the 
Foreign Operations, Export Financing and Related Programs 
Appropriations Act, 1996), the Committee recognizes the 
Government of Pakistan has not been reimbursed for the non-
delivery of F-16 aircraft for which Pakistan paid more than 
$500,000,000. The Committee urges the Administration to pursue 
every appropriate avenue to sell these aircraft in order to 
compensate the government of Pakistan for the costs of the 
undelivered aircraft.

                    latin america and the caribbean

    The Committee expects the Administration to fully fund the 
fiscal year 1998 Economic Support Fund request for Latin 
America. (Haiti is addressed separately below.) It remains the 
Committee's strong belief that given the importance of the 
region and the long history of United States support, it is 
essential that aid levels not be reduced further.
    The Committee believes it remains in our country's interest 
to help our neighbors stabilize their economies and combat 
severe levels of poverty. In doing so, we help strengthen 
emerging democracies and create new markets for American 
exports. This growing trade activity supports millions of jobs 
here at home.
    The Committee reiterates its long-standing view that our 
interests in this region of the world, in this time of 
transition, are vital and our obligations continue. It is 
essential that the people of Latin America and the Caribbean 
understand our commitment to the democratic development of this 
hemisphere.

                               guatemala

    The Committee congratulates the Government and the people 
of Guatemala for achieving a peaceful settlement to the long 
and devastating civil war in Guatemala. The Committee strongly 
supports the successful implementation of the December 29, 
1996, Peace Accords by all sectors of Guatemalan society. In 
March of this year, members of the Committee traveled to 
Guatemala to review implementation of the first phase of the 
Accord and to determine the proper role U.S. assistance could 
play in supporting reconciliation and an enduring peace. 
Members of the Committee met with President Arzu and his 
cabinet, former guerrilla leaders, human rights activists and 
private business leaders in an attempt to gain a broad 
perspective on the implementation of the peace agreement. As a 
result, the Committee strongly urges the Administration to meet 
all of its financial commitments in support of the successful 
implementation of this historic agreement. Furthermore, the 
Committee is convinced that the ability of institutions such as 
the judicial system to assume new roles and responsibilities 
will be vital in ensuring the success of the peace agreement. 
The Committee therefore strongly urges the Administration to 
provide substantial Administration of Justice support to 
Guatemala to help it improve its judicial system. The Committee 
expects Guatemala to take significant steps in this important 
area and fully utilize this valuable program.
    The Committee requests the Government of Guatemala and AID 
to seriously consider using local currency generated by 
Economic Support Fund grants to restructure dollar denominated 
debt held by institutions of higher education in Guatemala. 
This debt has been repaid on time for many years, but, without 
some relief, continued repayment under current exchange rates 
now threatens the financial integrity of several institutions 
which are integral to implementation of the peace process.

                               nicaragua

    The Chairman of the Subcommittee on Foreign Operations, 
Export Financing and Related Programs visited Nicaragua in May 
of this year and met personally with President Aleman and his 
Cabinet. The Committee commends President Aleman for the 
commitment of his government to market reform, economic growth 
and development, and the continued democratization of 
Nicaragua. The Committee strongly supports the existing 
Administration of Justice program in Nicaragua and commends the 
various branches of government in Nicaragua for their 
cooperative efforts in support of this program. The Committee 
also encourages the Administration to move forward 
expeditiously in supporting efforts by the Minister of 
Government and the First Commissioner of Police to improve the 
investigative skills of the Nicaraguan police. The police in 
Nicaragua must not fall behind other institutions in Nicaragua 
in the process of further democratization.

                                 haiti

    The Committee continues to insist that U.S. assistance to 
Haiti be implemented in a manner which significantly advances 
market-based economic reforms and respect for the rule of law. 
The Committee emphasizes that funding for Haiti is being 
provided with the clear understanding that it will only be 
provided if the Haitian government is actually implementing a 
meaningful restructuring of the Haitian public sector. The 
privatization of parastatal companies and strict accountability 
for the effective use of donor resources are core reforms which 
were promised, but not accomplished, in prior years. The 
Committee recommends that assistance to the Government of Haiti 
provided in this Act be made contingent on the privatization of 
at least three parastatal enterprises.
    The Committee has modified the existing general provision 
(section 567) on Haiti in order to focus on the most recent 
political killings. While Congress continues to support 
judicial resolution of extra-judicial killings prior to January 
1996, the Committee recognizes that the Government of Haiti and 
American advisors in Haiti are more capable of resolving the 
killings that took place since the Special Investigating Unit 
was mobilized. The Committee also expects the Administration to 
abide by its written commitments to consult the Congress on the 
provision of aid to the Government of Haiti.

                                  peru

    The Committee is concerned about the fate of a number of 
American citizens currently imprisoned in Peru. The Committee 
urges the Administration to work with the Government of Peru to 
try these persons expeditiously, so they may apply for transfer 
to the United States to serve out their remaining prison 
sentences.

                           religious freedom

    The Committee is concerned that the Administration has yet 
to submit the report on religious persecution requested in the 
report accompanying the fiscal year 1997 appropriations act. 
The report was due on January 15, 1997. The Committee expects 
the Administration to submit this report at the earliest 
possible date.
    The Committee remains concerned by reports of anti-
Christian persecution around the world and that in some cases 
these reports come from countries which receive United States 
foreign assistance. In particular, the Committee is very 
concerned by reports of growing violence and discrimination 
against Coptic Christians and individuals who change their 
religion in Egypt, especially reports that these individuals 
may have been killed, targeted for extortion or arrested. The 
Committee once again urges the Department of State to be 
attentive to the growing problem of religious persecution and 
to reiterate United States support for religious freedom around 
the world and to actively express the strong concern of the 
United States Government to countries where known cases of 
religious persecution occur.

                         availability of funds

    The Committee has continued language that funds in this 
account are to remain available for obligation for two years.

                     International Fund for Ireland

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $19,600,000
Fiscal year 1998 request..............................                 0
Committee recommendation..............................        19,600,000
                                                                        

    The Committee recommends $19,600,000 for the International 
Fund for Ireland in support of the Anglo-Irish Accord. Funding 
of this amount was requested for this activity through the 
Economic Support Fund, but the Committee recommendation would 
continue a separate account for assistance to Ireland. The 
amount is the same as the 1997 enacted level.
    The Committee strongly urges the International Fund for 
Ireland to take every step possible to ensure that all 
recipients of Fund support are promoting equality of 
opportunity and non-discrimination in employment. The Committee 
further urges the Fund to focus on those projects that hold the 
greatest potential for job creation and equal opportunity for 
the Irish people.

          Assistance for Eastern Europe and the Baltic States

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $475,000,000
Fiscal year 1998 request..............................       492,000,000
Committee recommendation..............................       470,000,000
                                                                        

    The Committee has recommended $470,000,000 for Assistance 
for Eastern Europe and the Baltic States for fiscal year 1998. 
This is $22,000,000 less than the budget request. However the 
Committee is recommending that $25,000,000 requested in this 
account for police training in Bosnia be provided through 
``International Narcotics Control''.
    The Committee is recommending that the balance of 
$3,000,000 remaining after the transfer be used for high 
priority activities in such emerging democracies as Romania, 
Bulgaria, and Macedonia. Such funds should be used primarily 
for non-governmental assistance by organizations such as the 
National Endowment for Democracy, which is able to respond 
quickly where new openings for democratic and free market 
reforms exist or where democracy is under attack as in Serbia.
    However, the Committee is concerned by information received 
that American investors in Bulgaria have been victimized by 
persons with ties to the previous regime. The Committee 
recommends that the Government of Bulgaria make a good-faith 
and expeditious effort to discover legal avenues to have the 
mis-appropriated funds immediately returned to the American 
investors.

                         bosnia and herzegovina

    The Committee recommendation includes $200,000,000 for the 
final year of reconstruction assistance to Bosnia and 
Herzegovina, as proposed in the budget request. The Committee 
expects funds will be made available to private voluntary 
organizations (PVO's) to foster reconciliation and assist in 
the process of reconstruction in Bosnia. Many PVO's have been 
active in the region for a number of years, and are uniquely 
qualified to assist AID in implementing reconstruction 
programs.
    The Committee has recommended bill language, similar to 
that enacted as part of the Bosnia supplemental appropriation 
in Public Law 104-122, that prohibits the use of funds for the 
construction or repair of housing or residences, unless 
directly related to the efforts of United States troops to 
promote peace in Bosnia and Herzegovina; requires the written 
approval of the Administrator of AID for loans and projects 
under the Economic Reconstruction Program; subjects such funds 
to the provisions of section 531 of this act; withholds 50 
percent of the funds for economic revitalization for Bosnia 
until the President certifies that Bosnia is in compliance with 
the Dayton Accord regarding the presence of foreign forces and 
has terminated intelligence cooperation with Iranian officials. 
In addition, bill language has been recommended to allow for 
the use of up to $7,000,000 for restructuring debt owed by 
Bosnia to the United States. Similar language was included in 
Public Law 104-122, but the authority for the use of the funds 
expires at the end of fiscal year 1997.

                                albania

    The Committee is concerned about the progress of democracy 
in Albania. United States assistance to that country should be 
dependent on the willingness of the government to continue 
economic and political reforms and to build an open, democratic 
society.

                           legal initiatives

    The Committee encourages the Agency for International 
Development to continue to provide financial support for the 
Central and Eastern European Law Initiative (CEELI), a project 
of the American Bar Association. CEELI has received grants to 
help Central and East Europe and the NIS create new legal 
frameworks based on the rule of law rather than through Party 
doctrine or caprice.
    Through a variety of program components, CEELI is making 
available legal expertise to assist countries that are in the 
process of modifying or restructuring their laws or legal 
systems. CEELI emphasizes long-term engagement country-by-
country and supports projects that facilitate extensive 
consultations with policy-makers, legal scholars, judges, and 
attorneys. CEELI has focused work in several critical priority 
areas: constitutional reform; judicial restructuring; bar 
reform; commercial law; criminal law and procedure; and legal 
education reform, and has helped develop and/or 
institutionalize self-sustaining indigenous non-governmental 
organizations (NGO's) in more than 22 countries.

  training and exchanges in the former soviet union and central europe

    Training, exchanges, and partnerships between the United 
States and the nations of Eurasia, Central Europe, and the 
southern tier of Europe continue to be an essential part of 
sustaining democracy. The Committee recommends that the 
Administration make best efforts to provide funding for the 
Russian, Eurasian, and East European Research and Training 
Program (title VIII) at the fiscal year 1996 level. Funding for 
the program should come from this account and from ``Assistance 
for the New Independent States of the Former Soviet Union''.
    The Committee continues to support U.S. assistance for 
other graduate fellowship and professional training projects in 
both regions, such as those that provide opportunities for 
graduate study at U.S. institutions for outstanding graduate 
students and young professionals from Central and Eastern 
Europe.
    The Committee recommends the East Central European 
Scholarship Program (ECESP) be continued at the same level as 
fiscal year 1997, in order to allow the program to begin a 
transition toward countries in the southern tier of Central 
Europe. The Orava project in Slovakia, which incorporates 
democratic concepts and practises into schools and teacher 
education programs, should also be reviewed for possible use as 
a pilot program.
    The Committee also continues to support funding for 
partnership programs, and their extension into the southern 
tier of Europe. The Committee urges the Administration to 
complete funding commitments to worthy projects.

  Assistance for the New Independent States of the Former Soviet Union

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $625,000,000
Fiscal year 1998 request..............................       900,000,000
Committee recommendation..............................       625,000,000
                                                                        

    The Committee has recommended $625,000,000 for Ukraine, 
Armenia, Georgia, Russia, and the new independent republics of 
the former Soviet Union. This is $275,000,000 less than the 
request, and the same as the enacted 1997 level.

                    justification for recommendation

    There are positive developments in many nations that are 
helped by this account. Nonetheless, the Committee is reluctant 
to recommend a higher level at this time because of 
Congressional concern about inaction by the Russian Federation 
on nuclear transfers to Iran and Cuba and the uncertain status 
of economic reform and foreign investment in Ukraine. The 
President has freely used the many waivers Congress has 
provided to him to avoid limitations in prior year acts. As a 
result, the Committee is recommending a more restrictive waiver 
standard with regard to nuclear and missile technology 
transfers.
    President Clinton's proposed increase in assistance for the 
Russian Federation must be considered in the absence of any 
commitment by President Yeltsin to adequately address the issue 
of transfer of Russian nuclear technology. Transfers to Iran 
and Cuba are addressed in the Committee's recommendations, but 
little or no progress has been reported to the Committee by the 
Administration following similar language in prior year 
appropriation acts.
    The Committee has continued prior year language providing 
the funds ``notwithstanding any other provision of law'' and 
applying the provisions of section 498B(j) of the Foreign 
Assistance Act. The Committee has included long-standing 
language on territorial integrity, human rights, non-use of 
funds for enhancing military capacities, and providing all 
funds subject to notification.
    The Committee has specifically continued several new 
provisions from the 1997 act, relating to: cost-sharing and 
regional experience, among grantees and contractors, and 
interest earned by enterprise funds.

                                ukraine

    Obligation of fiscal year 1997 funds for Ukraine has been 
delayed by lagging and regressive actions by the Government of 
Ukraine in the energy and agriculture sectors. Valid complaints 
against the Government of Ukraine by numerous American 
investors have been received by the Committee and discussed in 
two public hearings. The Vice President has taken these matters 
up in the May 1997 Gore-Kuchma Commission meeting in 
Washington, D.C. In addition, Public Law 105-18 included 
incentives for the Government of Ukraine to effectively act on 
these matters.
    Over the past few weeks, the President of Ukraine has taken 
encouraging steps to revive the credibility of Ukraine, and has 
communicated with the Committee in this regard. The Committee 
encourages President Kuchma. As a further incentive for Ukraine 
to support the necessary reform efforts and end harassment of 
American investors, the Committee has recommended language that 
would withhold one-half of Ukraine's assistance and make it 
available for obligation only when the President has certified 
certain actions by the Government of Ukraine.

         overview of assistance for the New Independent States

    The Committee welcomes and supports the reform concepts of 
the President's Partnership for Freedom. By focusing the 
activities funded from this account on activities that are 
viable in the long term and identifying regions and local 
institutions that share common values with the North Atlantic 
community, the false starts and questionable use of money that 
once characterized activities in this account can be avoided in 
the future. Any reduction from the request for this account for 
budgetary reasons should not be taken as a rejection by the 
Committee of the reform concepts embedded in the Partnership 
for Freedom. The available funds are provided to support the 
Partnership initiative.
    The Committee strongly supports the shift toward a greater 
emphasis on economic development, trade, and U.S. investment. A 
fundamental transition of this kind is overdue. It continues to 
support efforts to promote civil society and small business 
development, as well as training and exchange programs which 
have demonstrated their value. The Committee would welcome 
additional emphasis in these programs on environmental health, 
child survival, including early childhood education, and family 
planning as an alternative to abortion. American support for 
national and local efforts to combat crime, corruption, and 
narcotics trafficking in Russia and the Black Sea region are 
funded in other appropriations acts as well as this one, but 
should not be overlooked by the Coordinator as he allocates the 
funds recommended by the Committee.
    The Committee commends the Mission Director in Moscow for 
her effective response to allegations regarding outside 
activities by a prominent contractor, and it expects other 
senior officials to protect the integrity of U.S. assistance 
programs in the region.
    The Committee commends the Coordinator of U.S. Assistance 
to the New Independent States of the Former Soviet Union who 
has the concurrent responsibilities of Special Advisor to the 
President. It notes that the Coordinator and his staff, 
together with the Assistant Administrator for the region at the 
Agency for International Development, have worked closely with 
the Committee on matters of mutual concern in a way which could 
be a model for other offices in the State Department and AID.

                        russia and proliferation

    The Committee modifies language from last year's bill 
dealing with Russian nuclear cooperation with Iran. The 
modified language now includes Russian ballistic missile 
cooperation with Iran. The Committee is extremely disturbed by 
media reports which indicate that Russian entities are 
extensively engaged with Iran in cooperative projects which 
significantly enhance Iran's ballistic missile capabilities. 
The ballistic missile cooperation, combined with Russian 
nuclear cooperation with Iran, represent a significant step in 
Iran's efforts to obtain a comprehensive, highly sophisticated 
weapons of mass destruction capability. The Committee therefore 
has also raised the threshold in the waiver provisions to 
``vital to the national security interest of the United 
States'' as opposed to ``important to'' as used in last year's 
act. In addition, the Committee language provides that the 
waiver may only be utilized for fifty percent of the funds 
allocated for Russia in 1998.
    The Committee expresses its strong concern that the 
People's Republic of China is also engaged in an extensive 
proliferation program, including reported nuclear and ballistic 
missile cooperation with Iran, which seriously jeopardizes 
peace in the region and poses a direct threat to United States 
troops deployed in the Middle East.

                   proposed law on religion in russia

    The Committee is extremely concerned about the law on 
religion recently passed by the Federal Assembly. The law would 
significantly curtail the hard-won right to religious freedom 
in Russia by terminating the normal legal status of religious 
organizations not in existence 15 years ago and imposing harsh 
new registration restrictions on religious organizations and 
religious workers. The law conterradicts guarantees of 
religious freedoms provided for in international convenants to 
which Russia is a signatory, including the European Convention 
(Article 9), the Helsinki Final Act (Article 18) and the United 
Nations Declaration on the Elimination of All Forms of 
Intolerance and Discrimination Based on Religion and Belief and 
has been viewed by observers in Russia and the international 
community as the most severe infringement on human rights in 
the post-Soviet era. The Committee commends President Boris 
Yeltsin for vetoing legislation in 1993 that would have 
similarly restricted religious freedom and for expressing 
concern about an earlier, milder version of the current 
legislation. The Committee encourages President Yeltsin take 
whatever steps are necessary to ensure that this legislation 
does not become law.

                               corruption

    After two public hearings on the subject and numerous 
private meetings, the Committee concludes that rampant 
corruption and lack of transparency are the major obstacles to 
economic growth in most NIS nations. Corruption appears at 
every level of government, impeding business and undermining 
economic reforms. The Committee strongly encourages the 
Secretary of State and the Coordinator to take immediate steps 
to ensure that U.S. assistance is not going to individuals 
reliably reported to be involved in corruption. The Secretary 
and the Coordinator are directed to report to the relevant 
committees no later than 90 days of enactment of this Act on 
the use of U.S. assistance to help combat corruption in the 
former Soviet Union. The report should include complete 
documentation of directives issued by all federal agencies 
(other than intelligence agencies) to establish a firewall 
between American assistance and corrupt individuals.

        civil society and continued development of a free press

    The Committee continues to support assistance for 
independent broadcast media throughout the former Soviet Union. 
Although this is proving to be a difficult task, it is a 
necessary component of genuine economic and political reform. 
The Committee expects that U.S. Ambassadors in each country 
will cooperate with efforts to promote civil society, 
especially efforts to expand access to quality licensed 
broadcast programming. Effective support for a free press 
includes training in commercial management, basic journalism, 
and development of an independent media infrastructure. At 
present this is a national effort, with organizations from 
California to New York providing training and support. The 
Committee encourages this diversity.

                     assistance for small business

    Increasing assistance to small manufacturers in Russia, 
Ukraine, and elsewhere in the region is viewed by the Committee 
as a promising aspect of the Partnership for Freedom. 
Successful small loan and microcredit programs need to be 
expanded into additional regions. The use of American business 
volunteers, both active and retired, has proved beneficial to 
counterparts in the region. Several U.S.-funded programs in the 
region have informed the Committee that training and consulting 
assignments in-country are most effective when a percentage of 
the assistance is provided on a ``cost-share'' basis, and the 
Committee supports this approach. Programs that combine in-
country assistance to small manufacturers with observation and 
training at U.S. production sites have reported greater 
effectiveness. This approach, pioneered by the Marshall Plan, 
should be expanded.

          health, child survival, and environmental pollution

    The Committee encourages AID to seriously consider funding 
cooperative efforts with private voluntary organizations and 
the U.S. medical community to assist with the transfer of 
surplus medical equipment and to facilitate cooperative 
programs with U.S. physicians who wish to volunteer their time 
and services to needy communities in Eastern Europe, the NIS 
and other areas in need throughout the developing world. AID 
should pay particular attention to eliminating bureaucratic 
barriers to these equipment transfers and for physicians who 
offer voluntary services.
    The Committee encourages the Agency for International 
Development (AID) to focus resources on non-governmental, 
private organizations currently operating in the Ukraine who 
seek to implement a comprehensive program of physicians' 
training, prenatal and infant care. A child survival program of 
this type can reduce the incidence of birth complications, 
immune deficiencies and infant mortality. The Committee is 
particularly concerned for women and children in all regions 
affected by radiation from the 1986 disaster at Chernobyl.

  Alleviating long-term consequences of the Chernobyl nuclear accident

    Fallout from the Chernobyl nuclear accident has 
contaminated large areas in Belarus, Russia, and Ukraine and 
continues to pose health hazards to those living in the region. 
Contamination through ingestion of irradiated products, 
particularly cesium and strontium in milk, and avoidance of 
milk due to concern about contamination, has had a major 
adverse impact of the health of children and families in 
Belarus and Ukraine.
    The Committee supports the installation, and operation of 
effective and affordable technology to decontaminate milk 
supplies in the region. Emphasis should be placed on increasing 
the viability of privately-owned diaries and milk processing 
plants. The Committee requests the Coordinator to work with 
relevant U.S. agencies and report to the Committee within 120 
days of enactment of this act on the availability of American 
decontamination technology, and, if warranted, the allocation 
of funds from this account or the Child Survival and Disease 
Programs Fund to install milk decontamination systems in 
Ukraine and Belarus.

                       Operation Support Freedom

    The Committee welcomes the support of the First Lady for 
Operation Support Freedom when its 500th flight departed 
Andrews Air Force Base in June 1997. The program has been an 
invaluable public-private partnership since its inception under 
the direction of the Coordinator's office. As a result of the 
leadership of former Senator Denton, over $1,000,000,000 worth 
of donated humanitarian assistance was shipped to the NIS and 
Central Europe. The program raises $128 through volunteer 
donations for every Federal dollar spent for administrative 
purposes. The Committee is aware of numerous obstacles placed 
in the way of small and medium sized donors under an AID 
replacement program which provides only ``port-to-port'' ocean 
freight shipping costs that donate goods through AID. The 
Committee requests that the Coordinator provide the Committee 
with a justification for turning over part of the successful 
Operation Support Freedom program to AID, the savings that will 
result, and steps he is taking to facilitate the shipment of 
small and medium sized donations. Unless the Committee's 
concerns can be addressed in a satisfactory manner through the 
new program, the Committee urges the Administration to 
reinstate the original Operation Support Freedom.

          Caucasus conflicts: Armenia, Azerbaijan, and Georgia

    In light of an expanded U.S. role in the Caucasus as co-
chair of the Organization for Security and Cooperation in 
Europe (OSCE) Minsk Group, the Committee seeks to facilitate 
constructive engagement between Armenia and Azerbaijan to break 
the impasse that has halted progress towards settling the 
conflict over Karabagh. The Committee is prepared to work with 
the Executive branch to move from the current cease-fire in the 
region to a political settlement. Toward that end, the 
Committee urges the President and the Secretary of State to 
facilitate the resettlement of the hundreds of thousands of 
refugees and displaced persons in the region, and not to 
promote the semi-permanent camps that prolonged the plight of 
displaced Palestinians. In the interim, the Committee has 
provided authority for the President to provide direct 
assistance by American NGO's to refugees and displaced persons 
throughout the region including those in Nagorno-Karabagh.
    The Committee is aware of ongoing discussions among the 
nations of the Caucasus region that may lead to the lifting of 
the blockades of Armenia and suspension of the restrictions on 
aid to the Government of Azerbaijan imposed by section 907. It 
welcomes the declaration of the United States, France, and the 
Russian Federation (the Minsk Group) at the June 1997 Denver 
Economic Summit. In an effort to promote a settlement of 
conflicts in the region, the Committee recommends that the 
Executive branch not utilize waivers of section 907 and the 
Humanitarian Corridor Act except in support of negotiations for 
a lasting settlement of conflicts between Armenia and its 
neighbors, and only after full consultation with Congress.
    The Committee recommends a limited one-year waiver of 
section 907 of the FREEDOM Support Act for activities in 
support of democracy in Azerbaijan. It expects that the 
National Endowment for Democracy and its grantees will be used 
in this effort. The Committee directs that the Coordinator 
fully consult with it before allocating any funds for democracy 
activities in Azerbaijan.
    The Committee reiterates the statement contained in last 
year's report on this bill that its actions regarding Armenia 
and Azerbaijan are not meant to express a view on the political 
status of Nagorno-Karabagh.
    The extent and timing of United States and multilateral 
assistance, other than humanitarian assistance, to the 
government of any country in the Caucasus region should be 
proportional to its willingness to cooperate with the Minsk 
Group and other efforts to resolve regional conflicts.

                                Armenia

    The Committee recognizes the important economic reforms 
being made by Armenia and fully supports the President's 
requested level of assistance to Armenia. Armenia's progress 
has not come without setbacks, but it continues to move forward 
despite tremendous obstacles. To provide additional flexibility 
for the Executive branch, the Committee would allow the 
President to provide $95,000,000 in fiscal year 1998 from this 
or any other appropriations act.
    Reports concerning Russian troops and equipment in Armenia 
have been addressed in other legislation. The Committee 
continues to fully support the sovereignty and independence of 
Armenia, and notes that its continued support for the 
Government of Armenia is contingent upon its compliance with 
international agreements and progress toward the removal of 
foreign troops from its territory.
    The Committee requests that the President provide in any 
future justification of a waiver of the Humanitarian Aid 
Corridor Act more comprehensive, objective, and detailed 
documentation, including an assessment of the actual dollar 
costs incurred as a result of any blockades of U.S. 
humanitarian assistance.

                                Georgia

    The Committee takes note of the remarkable economic 
progress that has taken place in the Republic of Georgia over 
the past four years. Georgia's rate of economic growth is the 
envy of its neighbors, although part of its Black Sea territory 
Abhkazia remains outside of national jurisdiction. Democracy 
has also taken root in Georgia.
    Georgia's unstinting efforts to promote cooperation and 
development among the South Caucasus nations merit United 
States support. Alone among its neighbors, it recognizes that 
if the region is to have a prosperous future, all of the 
countries must cooperate to provide a bridge between Central 
Asia and Europe. In Georgia's view, that is possible only if 
it, Armenia, and Azerbaijan avoid becoming dependencies of 
Russia or Iran. Georgian leaders encourage Armenia to take 
advantage of its strategic importance within the region and 
become less dependent on its Diaspora community. If warranted 
by need and viable development proposals, there is no reason 
that the level of assistance to Georgia should not be 
increased.

                               Azerbaijan

    The Committee supports President Clinton's efforts to 
improve relations between Azerbaijan and the United States in 
the context of a solution to regional conflicts. When steps are 
taken to open transit routes between Azerbaijan and all of its 
neighbors, especially for shipment of humanitarian assistance, 
the Committee requests that the President actively consider 
increases in the level of economic cooperation with Azerbaijan. 
Until such steps are taken, the Committee must follow existing 
law.

               Russian-American and other enterprise fund

    In general, the Committee expects the Coordinators, 
officials of all enterprise funds, and AID to keep it closely 
informed about matters affecting enterprise funds. Aware of 
different operating procedures in each fund, the Committee 
encourages each enterprise fund to minimize administrative 
costs incurred in the United States. The governing boards of 
the funds should not be allowed to direct legal and other 
fiduciary work to firms that employ any member of the board. 
Furthermore, the Committee directs the Coordinators, in 
consultation with AID and the enterprise fund boards, to 
provide the Committee no later than February 1, 1998, a written 
summary of significant developments during 1997 in policy, 
operations, and financial accountability at each enterprise 
fund. The report should also include a summary of pending or 
anticipated policy changes during 1998.
    The Committee has not included language proposed by the 
Administration which would allow up to $50,000,000 to be used 
for credit subsidy appropriations on behalf of enterprise 
funds.

          matching funds for civilian scientists and engineers

    The Committee again encourages the Coordinator and Special 
Advisor to the President to seriously consider providing 
adequate funds to match private and Department of Defense funds 
in support of the R&D Foundation located at the National 
Science Foundation that supports civilian, non-defense research 
and development activities through private sector linkages 
between scientists and engineers in the United States and in 
the states of the former Soviet Union. The Foundation is 
authorized by section 511 of P.L. 102-511 and is governed by a 
Board of Directors.

 American business centers and centers for business skills development

    A major priority of the Partnership for Freedom initiative 
is the promotion of trade and investment in the new independent 
states. The Committee finds that American business centers and 
centers for business skills development are effective ways to 
promote both American and local investment in the region. 
Expansion of the existing network of combined business centers 
and centers for business skills development in 3 to 5 emerging 
growth regions designated under the Partnership should be 
seriously considered by the Coordinator. U.S. providers of 
international graduate management education with experience in 
the region should be included in the list of bidders for this 
project.

                          INDEPENDENT AGENCIES

                       Inter-American Foundation

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level...............................     ($20,000,000) 
Fiscal year 1998 request.............................        22,000,000 
Committee recommendation.............................        20,000,000 
                                                                        

    The Committee recommendation provides $20,000,000 for the 
Inter-American Foundation, the same amount provided in fiscal 
year 1997 through ``Development assistance''. However, the 
Committee has also provided authority under that account for an 
additional $2,000,000 for the Foundation. If this authority is 
exercised, the Foundation will receive its full budget request.
    The Committee continues to encourage the Foundation to 
explore alternative sources of funding, both private and 
public.

                     African Development Foundation

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level...............................     ($11,500,000) 
Fiscal year 1998 request.............................        14,000,000 
Committee recommendation.............................        11,500,000 
                                                                        

    The Committee has recommended funding for the African 
Development Foundation at a level of $11,500,000, $2,500,000 
less than the amount requested by the Administration and the 
same as the amount provided in fiscal year 1997 through the 
``Development assistance'' account. However, the Committee has 
also provided authority under that account for an additional 
$2,500,000 for the Foundation. If this authority is exercised, 
the Foundation will receive its full budget request.
    The Committee continues to encourage the Foundation to 
explore alternative sources of funding, both public and 
private.

                              Peace Corps

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $208,000,000
Fiscal year 1998 request..............................       222,000,000
Committee recommendation..............................       222,000,000
                                                                        

    The Committee recommends Peace Corps funding of 
$222,000,000. This is the amount requested, but $14,000,000 
above the 1997 enacted level. When the recommended transfer to 
the Peace Corps of $12,000,000 from the NIS account during 1997 
is factored in, consistent with prior year practice, the 
increase is $2,000,000. Prior year language addressing purchase 
of motor vehicles, abortion, and ability of funds has been 
continued in the bill.
    The Committee supports the work of the Peace Corps, and 
notes that the Corps has undertaken a process of consolidation 
after its expansion in recent years. The Peace Corps entered 
numerous new countries, five of which are in Eastern Europe, 
since 1989. While this rapid expansion was welcome at the time 
and reflective of a worldwide trend toward democracy, the new 
determination to move toward a balanced budget led the Peace 
Corps to anticipate probable future reductions in funding. The 
Committee commends the Director for his leadership in this 
regard. The Congress has traditionally taken the lead in 
ensuring adequate funding levels for the Peace Corps.

                          DEPARTMENT OF STATE

                    International Narcotics Control

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $213,000,000
Fiscal year 1998 request..............................       230,000,000
Committee recommendation..............................       230,000,000
                                                                        

    The Committee has recommended $230,000,000 for 
``International Narcotics Control''. This is $17,000,000 above 
the appropriated level for 1997, and the same as the budget 
request.
    The Committee intends that $25,000,000 in funds requested 
in ``Assistance for Eastern Europe and the Baltic States'' for 
police training activities in Bosnia will be made available 
from funds appropriated in this account. The Committee notes 
that obligations of funds for this activity have not matched 
the budget request for the past two fiscal years, and 
encourages the Bureau of International Narcotics and Law 
Enforcement to carefully manage this program to minimize the 
impact on other programs in this account. In addition, the 
Committee encourages the State Department to seek funds from 
other nations for police training activities in Bosnia. 
Currently this program is almost exclusively funded by the 
United States.
    The Committee notes that section 520 applies to the use of 
narcotics control funds for countries such as Colombia and 
Peru.

            latin america law enforcement training facility

    The Committee supports establishment of a regional law 
enforcement training center for Latin America, modeled on the 
International Law Enforcement Academy (ILEA) in Hungary. Funds 
are included in the fiscal year 1998 budget request to 
establish such a center. The Committee believes that, given the 
proximity of the United States to Latin America, it is 
appropriate for such a center to be located in the United 
States. An existing facility, the deBremmond Training Center in 
Roswell, New Mexico, is available for such a center. The 
Committee urges the Department of State to review this facility 
and to establish the training center at this site if it has the 
capacity to handle the training needs projected by the Bureau 
of International Narcotics and Law Enforcement Affairs.

                    Accountability and human rights

    The Committee has retained language from the 1997 act which 
prohibits funds for any unit of the security forces of a 
foreign country if the Secretary of State has credible evidence 
to believe such unit has committed gross violations of human 
rights unless the Secretary determines and reports to the 
Committees on Appropriations that the government of such 
country is taking steps to bring the responsible members of the 
security forces to justice.
    The Committee believes that the counter-narcotics human 
rights provision must be retained to ensure that U.S. 
assistance does not go to units involved in human rights 
violations and to ensure the success of the U.S. counter-
narcotics effort. The Committee welcomes the Administration's 
vigorous support for this provision and expects that it will 
continue existing policy of applying the provision to excess 
defense articles used for counter-narcotics purposes.
    In that regard, the Committee notes the continuing delay in 
the publication of end use monitoring reports. The Committee 
requests the Department of State include in each country 
section credible reports of human rights violations perpetrated 
by any security unit receiving United States assistance 
involved in counter-narcotics operations. Such end use reports 
should be published in a timely manner, and past years reports 
should be published as soon as possible.

                                colombia

    The Committee is very concerned about continuing reports of 
human rights violations in Colombia. The Committee is aware 
that a human rights unit has been established in the Colombian 
Attorney General's office, but its operational capacity is 
limited due to lack of resources. The Committee encourages the 
Government of Colombia to provide the resources necessary for 
this office to function effectively.

                    Migration and Refugee Assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $650,000,000
Fiscal year 1998 request..............................       650,000,000
Committee recommendation..............................       650,000,000
                                                                        

    The Committee has recommended $650,000,000 for ``Migration 
and Refugee Assistance'', the amount requested by the President 
and the same level as that provided for fiscal year 1997. A 
limitation of $12,000,000 is recommended for administrative 
expenses. Combined with the Emergency Refugee and Migration 
Assistance Fund and Refugee Resettlement Assistance, there will 
be a total of $705,000,000 available in fiscal year 1998 for 
assistance to refugees. The Committee believes that in light of 
the world wide refugee emergency, appropriations for this 
account should not be below the budget request.

                            tibetan refugees

    The Committee supports continued funding to assist Tibetan 
refugees, and expects that $2,000,000 will be provided for this 
purpose. The Committee requests a report by February 1, 1998, 
on its plans for implementing this assistance, and on the 
history of, and future plans for, this program.

                                 israel

    The Committee strongly recommends continuation of the 
$80,000,000 provided last year for the resettlement of Soviet, 
Eastern European and other refugees resettling in Israel. These 
funds are included in the budget request.

                         unaccompanied children

    The Committee is concerned about the more than 1,000,000 
refugee children who are orphaned, separated from their 
parents, or have other special needs as a result of armed 
conflict or other causes of forced migration. The Committee 
recommends that the United States take the lead in this area by 
providing approximately $5,000,000 in fiscal year 1998 for 
unaccompanied refugee children. The primary purpose of this 
funding should be to help establish a fund through the United 
Nations High Commissioner for Refugees for vulnerable refugee 
children, particularly those separated from their parents.

                    refugee resettlement assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................        $5,000,000
Fiscal year 1998 request..............................                 0
Committee recommendation..............................         5,000,000
                                                                        

    The Committee recommendation includes $5,000,000 for the 
targeted assistance program for refugee resettlement 
administered by the Department of Health and Human Services. 
There was no budget request for this item.
    These funds will augment the 10-percent of the targeted 
assistance program which is set-aside for grants to localities 
most heavily impacted by the influx of refugees such as Laotian 
Hmong, Cambodians and Soviet Pentecostals, including secondary 
migrants who entered the United States after October 1, 1979.

     United States Emergency Refugee and Migration Assistance Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $50,000,000
Fiscal year 1998 request..............................        50,000,000
Committee recommendation..............................        50,000,000
                                                                        

    The Committee has recommended $50,000,000 for the Emergency 
Refugee and Migration Assistance Fund. This is the same as the 
1997 enacted level and the budget request.

                       anti-terrorism assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................     ($18,000,000)
Fiscal year 1998 request..............................        19,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee has combined these activities with those 
funded in the following account and two programs previously 
funded in ``International Organizations and Programs'' in the 
``Nonproliferation, Anti-terrorism, Demining, and Related 
Programs'' account.

                 Nonproliferation and Disarmament Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................     ($15,000,000)
Fiscal year 1998 request..............................        15,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee has combined these activities with those 
funded in the previous account and two programs previously 
funded in ``International Organizations and Programs'' in the 
``Nonproliferation, Anti-terrorism, Demining, and Related 
Programs'' account.

    Nonproliferation, Anti-terrorism, Demining and Related Programs

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $151,000,000
Fiscal year 1998 request..............................                 0
Committee recommendation..............................       118,000,000
                                                                        

    In order to fully support and implement the increased 
emphasis the Congress and the President have placed on 
nonproliferation, anti-terrorism and demining activities, as 
well as to provide the executive branch with more flexibility 
in administering funds for these activities, the committee has 
retained the ``Nonproliferation, Anti-terrorism, Demining, and 
Related Programs'' account.
    Funding for demining activities requested by the 
Administration in ``Foreign Military Financing Program'' as 
well as funding for two nonproliferation activities (the Korean 
Peninsula Energy Development Organization and the U.S. 
voluntary contribution to the International Atomic Energy 
Agency) are also included in this account.

                         NONPROLIFERATION, ANTI-TERRORISM, DEMINING AND RELATED PROGRAMS                        
----------------------------------------------------------------------------------------------------------------
                                                                          Fiscal years--                        
                                                                 --------------------------------    Committee  
                                                                       1997        1998 request                 
----------------------------------------------------------------------------------------------------------------
Anti-terrorism..................................................     $18,000,000     $19,000,000     $19,000,000
NDF.............................................................      15,000,000      15,000,000      15,000,000
Demining........................................................       7,000,000      15,000,000      20,000,000
IAEA............................................................      36,000,000      36,000,000      36,000,000
KEDO............................................................      25,000,000      30,000,000      25,000,000
Israel Anti-terrorism...........................................      50,000,000               0               0
Export Controls.................................................               0               0       3,000,000
                                                                 -----------------------------------------------
      Total.....................................................     151,000,000     115,000,000     118,000,000
----------------------------------------------------------------------------------------------------------------

    The committee fully funds the Administration request for 
the Nonproliferation and Disarmament Fund, Anti-terrorism 
Assistance and the U.S. contribution to the IAEA, increases 
demining funds by $5,000,000 over the request, and provides 
$3,000,000 to support export control activities.

                       anti-terrorism assistance

    The Committee supports the Administration's request and 
recommends $19,000,000 for anti-terrorism assistance.

                        Terrorist organizations

    The Committee is concerned that the Secretary of State has 
not used the authority provided by section 302 of Public Law 
104-132, The Antiterrorism and Effective Death Penalty Act of 
1996, to designate organizations that engage in terrorist 
activities. This authority is critical to preventing 
international terrorist groups from using the United States as 
a safe haven to raise funds and coordinate their activities.

                 nonproliferation and disarmament fund

    The Committee supports the Administration's request and 
recommends $15,000,000 for the Nonproliferation and Disarmament 
Fund. The Committee strongly supports the core nonproliferation 
activities of the NDF which are to designed to provide the 
Secretary of State with a flexible funding source to respond to 
urgent, unanticipated nonproliferation activities of immediate 
concern to the United States. Longer term programmatic 
activities, such as export controls, should be funded 
separately and therefore subject to the normal conditions for 
legislative oversight and review. For this reason the Committee 
recommends that $3,000,000 in NADR account funds be used to 
support export control related activities. With respect to the 
NDF and export control activities funded in NADR, the Committee 
strongly opposes using funds provided for these activities to 
support salaries and expenses. The Committee also believes that 
as the Secretary of State considers reorganization of the 
United States foreign policy establishment she should maintain 
the critical relationship between NDF and the policy elements 
of the State Department and not allow NDF to be subsumed by the 
administrative elements of the Department.

                          demining activities

    The Committee recommends $20,000,000 for demining 
activities, an increase of $5,000,000 over the fiscal year 1998 
request. Last year the Committee urged the Administration to 
substantially improve interagency coordination of the U.S. 
government's demining activities and to unify, to the extent 
feasible, the budget for this important activity which enjoys 
strong support in the Congress. The Committee also directed the 
Secretary of State, in consultation with the Secretary of 
Defense, to provide a report to the Committees on 
Appropriations not later than January 15, 1997, on these 
issues. The Committee commends the Administration for providing 
a thorough, detailed report, on a timely basis, in response to 
the Committee's request.

                          demining in Cambodia

    Members of the Committee visited Cambodia in January of 
this year. During their visit they met with officials from the 
Cambodian Mine Action Committee (CMAC) and were very impressed 
with their dedication and extensive activities, as well as the 
enormity of the mine problem which exists in Cambodia today. In 
response to these findings, the Committee recommends $3,000,000 
be made available for demining activities in Cambodia.

                           demining research

    The Committee directs the Secretary of Defense to review 
the synergy, cost savings and efficiencies that would result 
from the colocation of the Unexploded Ordnance (UXO) Center of 
Excellence with the expertise and capabilities in ordnance, 
mines, countermines and demolitions already existing at the 
Army Research, Development and Engineering Center (ARDEC).

            korean peninsula energy development organization

    The Committee also provides that not to exceed $25,000,000 
may be made available for the United States contribution to the 
Korean Peninsula Energy Development Organization (KEDO) and 
these funds may only be used for administrative expenses and 
heavy fuel oil costs. This is equal to last year's funding 
level for KEDO and $5,000,000 less than the Administration 
request. The Committee notes that strong concern exists in the 
Congress that even indirectly supporting a nation which is a 
duly designated terrorist state, in all likelihood retains an 
ongoing nuclear weapons program, continues to wantonly 
proliferate weapons of mass destruction to other terrorist 
states, and is knowingly allowing its own people to face mass 
starvation, is at best a questionable undertaking. Nonetheless, 
despite these reservations, the Committee has not acted to 
impede the Administration's policy. The Committee has once 
again included bill language which requires that any obligation 
of funds for KEDO shall be subject to the regular notification 
procedures of the Committees on Appropriations.

                          kedo burden sharing

    The Committee continues to strongly believe it is essential 
that other nations share the financial burden in responding to 
the North Korean nuclear threat. The United States stations 
37,000 uniformed Americans in South Korea and spends over 
$2,500,000,000 per year to ensure stability and peace on the 
Korean peninsula. The Committee fully expects other nations to 
do their share and fund the heavy fuel oil component of the 
Agreed Framework. The Committee is also very concerned that 
KEDO has assumed nearly $50,000,000 in unpaid obligations 
relating to the delivery of heavy fuel oil. The Committee views 
with the most serious concern any action by the U.S. government 
which assumes debts and obligations absent congressional 
authority and appropriation. The Committee is hopeful that the 
new Secretary of State will directly address this issue, 
particularly with respect to enlisting the support of other 
nations in responding to North Korea's nuclear proliferation 
activities. The Committee did not waive the statutory 
provisions which currently prohibit the provision of assistance 
to North Korea.

                     TITLE III--MILITARY ASSISTANCE

                  Funds Appropriated to the President

             International Military Education and Training

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $43,475,000
Fiscal year 1998 request..............................        50,000,000
Committee recommendation..............................        50,000,000
                                                                        

    The Committee recommends the Administration request of 
$50,000,000 for the International Military Education and 
Training program. The Committee recommendation reflects its 
continued support for the IMET program, particularly those new 
programs initiated in the NIS and Central Europe since 1991. In 
1998, more than half of the increase requested for this account 
is allocated to these nations.
    The Committee included bill language limiting Indonesia and 
Guatemala to expanded IMET only. The Committee is aware that in 
the case of Indonesia, the Government of Indonesia has informed 
the Administration that it will not utilize expanded IMET in 
1998. In providing expanded IMET to Indonesia in prior years 
the Committee hoped this training would substantially improve 
the human rights performance of the Indonesian military. The 
Committee notes that by rejecting expanded IMET training, 
Indonesia creates the perception that it is not interested in 
improving the human rights performance of the Indonesian 
military. The Committee believes this is a mistake. The 
Committee has not dropped the language in the bill limiting 
Indonesia to expanded IMET, despite the Indonesia government's 
statement that it will not accept it. The Committee is 
concerned that if the Government of Indonesia changes its 
position and this language is absent, Indonesia would be 
eligible for regular IMET. The Committee has not changed its 
view that military training for Indonesia should be limited 
only to expanded IMET. Related to this, the Committee was 
disturbed to learn that Indonesia is purchasing military 
training from the United States. The Committee believes that 
all military training for Indonesia, whether purchased or 
grant, should be limited only to expanded IMET.

              imet, human rights and economic development

    The Committee continues to support both the IMET program 
and its ``Expanded IMET'' component. The Committee supports a 
substantial human rights component in programs for all IMET 
countries, including information on international human rights 
conventions, human rights law in the recipient's country, 
American human rights law and policy, and appropriate behavior 
by military personnel. The Committee supports the holding of 
IMET field seminars that bring together elements of the 
military and indigenous human rights groups. The Committee also 
supports inclusion of a substantial number of civilian 
employees of foreign governments in IMET programs. In this 
regard, the Chairman of the Foreign Operations, Export 
Financing and Related Programs subcommittee visited Nicaragua 
in May of this year and was very impressed by the Embassy's 
initiative to provide expanded IMET training to select civilian 
members of the Ministry of Defense. The Committee believes that 
the IMET program and its expanded IMET component offer the 
military of other nations full exposure to how the United 
States military performs as a professional, highly respected 
institution in a civil, democratic society governed by the rule 
of law. It remains the Committee's view that the attainment of 
such a military must be a fundamental objective of any 
underdeveloped nation in its pursuit of economic growth and 
prosperity and that the IMET program plays an important role in 
supporting this objective.

                         school of the Americas

    While funds in this act are not the primary funding source 
for the School of the Americas, over the past year and a half 
the Committee has carefully reviewed the activities of the 
School of the Americas to make certain that grant IMET funds 
used to support students at the School are being appropriately 
utilized to support United States national security objectives 
and to improve the professionalism of Latin American 
militaries. As a result of this review, the Committee includes 
new bill language which will: make it clear that the School is 
not engaged in any inappropriate activities, strengthen the 
screening and selection process used to identify candidates for 
the School, and provide a post-instruction assessment process 
which will enable the School to continue to improve the 
training curriculum. The Committee believes that it is 
essential that these actions be taken by the Administration as 
soon as possible. Therefore the Committee withholds the 
obligation of IMET funds to support training at the School of 
the Americas until certain specific actions are taken by the 
Administration. First the Secretary of Defense must certify 
that the instruction and training provided by the School of the 
Americas is fully consistent with training and doctrine, 
particularly with respect to the observance of human rights, 
provided by the Department of Defense to United States military 
students at Department of Defense institutions whose primary 
purpose is to train United States military personnel and, the 
Secretary of State, in consultation with the Secretary of 
Defense, has developed and issued specific guidelines governing 
the selection and screening of candidates for instruction at 
the School of the Americas. Second, the Secretary of Defense 
must submit to the Committees on Appropriations a report 
detailing the training activities of the School of the Americas 
and a general assessment regarding the performance of its 
graduates during 1996. With respect to part one of the 
certification, it is not the intent of the Committee that 
``fully consistent'' be interpreted as identical to U.S 
training. The Committee's concern is specifically with respect 
to human rights training, in which case the Committee believes 
training by the School of the Americas should be fully 
consistent with the United States government's statutory and 
executive order obligations and limitations in this area.

                     school of the americas report

    The Committee, in House Report 104-600, instructed the 
Secretary of Defense, in consultation with the Secretary of 
State, to prepare and submit to the Committees on 
Appropriations no later than January 15, 1997, a report on the 
School of the Americas at Fort Benning, Georgia. The Committee 
notes with great displeasure that the report was not delivered 
until June 25, 1997. Furthermore, the Committee wants to 
register its dissatisfaction with the manner in which this 
report was conducted. This report is woefully inadequate and 
does not respond to the Committee's specific request. The 
Committee wishes to impress upon the Secretary of Defense the 
significance it places on thorough and timely reports.

                           Global guidelines

    The Committee believes that it would be useful for the 
Administration to develop uniform guidelines for the screening 
and selection of all IMET candidates. While the committee's 
review of the IMET screening and selection processes in Latin 
America indicated that the embassies visited were thorough, 
well-coordinated and aware of the importance of these 
activities, the procedures were individually developed rather 
than based upon any broad set of general screening and 
selection guidelines. The Committee is concerned that other 
embassies may not be as attentive to this issue as the 
embassies visited; therefore the new bill language is meant to 
remedy this potential problem. If such uniform guidance is not 
currently available for the rest of the IMET program, the 
Committee is of the strong view that the Secretary of State, in 
consultation with the Secretary of Defense, should develop 
appropriate guidelines at the earliest possible date.

                   Foreign Military Financing Program

                                 grants

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................    $3,224,000,000
Fiscal year 1998 request..............................     3,274,250,000
Committee recommendation..............................     3,259,250,000
                                                                        

                         subsidy appropriations

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $60,000,000
Fiscal year 1998 request..............................        66,000,000
Committee recommendation..............................        60,000,000
                                                                        

                                 loans

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................    ($540,000,000)
Fiscal year 1998 request..............................     (699,500,000)
Committee recommendation..............................     (657,000,000)
                                                                        

    The Committee has recommended $3,259,250,000 in Foreign 
Military Financing grants, and $60,000,000 as a subsidy 
appropriation for loans. The amount provided for the subsidy 
appropriation will support a loan program totaling 
$657,000,000. Thus, the total program level of foreign military 
grants and loans for fiscal year 1996 is $3,916,250,000. This 
program level is $57,500,000 below the amount requested by the 
President for fiscal year 1998 and $152,250,000 above last 
year's program level for grants and loans.

                                 israel

    The Committee recommends a total Foreign Military Financing 
Program of not less than $1,800,000,000 in grants for Israel. 
These funds are to be disbursed within thirty days of enactment 
of this act or by October 31, 1997, whichever is later.
    The Committee also recommends that to the extent that the 
Government of Israel requests that FMF grant funds for Israel 
be used for such purposes, and as agreed by Israel and the 
United States, funds may be made available for advanced weapons 
systems of which not less than $475,000,000 shall be available 
for the procurement in Israel of defense articles and defense 
services, including research and development.
    The Committee remains concerned that Israel's technological 
military edge could erode as a result of the unrestrained sales 
of advanced military equipment to Israel's potential 
adversaries by other nations and the increasing sophistication 
and cost of advanced weapons systems. Therefore, the Committee 
continues to believe the United States must make every effort 
to carry out its long-standing policy of ensuring that Israel's 
technological edge is maintained.

                                 egypt

    The Committee recommends a total Foreign Military Financing 
Program for Egypt of not less than $1,300,000,000 in Foreign 
Military Financing grants. In January of this year, Members of 
the Committee visited Egypt and met with Egyptian President 
Mubarak. Members noted Egypt's strategic location, its 
immediate proximity to Libya and Sudan both of which actively 
support international terrorism, its critical contribution 
during the Gulf War in resisting Iraqi aggression, and its 
essential role in the Middle East peace process. The Committee 
believes that continued military cooperation between Egypt and 
the United States remains in the national security interests of 
both countries. Furthermore, the Committee understands that the 
Government of Egypt is considering the acquisition of a 
tactical command and control system for its Army. The Committee 
strongly recommends that they purchase a system manufactured by 
a U.S. company, one which is compatible with systems used by 
the U.S. army.

                                 jordan

    The Committee strongly supports the Administration's 
efforts to improve Jordanian security. Members of the Committee 
visited Jordan in January and met personally with King Hussein 
and his senior advisers. The Committee is well aware that 
Jordan's security requirements are extensive, particularly in 
the areas of ground force modernization and border security. In 
this regard, the Committee recommends that Jordan pay special 
attention to border security and consider the acquisition of a 
border surveillance system which will ensure its ability to 
protect the integrity of its borders.

          warsaw initiative and partnership for peace nations

    The Committee continues to support the President's January 
1994 Warsaw Initiative to provide military assistance to 
Partnership for Peace (PFP) nations. The Committee believes the 
1998 request will continue to enhance security and stability in 
Europe by promoting the standardization and interoperability, 
as well as the continued downsizing, of the armed forces of 
participating nations, particularly those of nations most 
likely to be considered for NATO membership. The fiscal year 
1998 request for $70,000,000 represents a modest increase of 
$3,100,000 from 1997. The Committee also strongly supports the 
Regional Airspace Initiative for Estonia, Latvia and Lithuania.

                   partnership for peace notification

    The Committee includes a provision stating that no FMF 
grant assistance shall be available for any non-NATO country 
participating in the Partnership for Peace Program except 
through the regular notification procedures of the Committees 
on Appropriations. The Committee would note that while Russia 
is a member of the Partnership for Peace, the Committee repeats 
prior year report language that it strongly believes it is 
still extremely premature to consider providing military 
assistance to Russia.

                        administrative expenses

    The Committee has continued a limitation on administrative 
expenses of $23,250,000, the level requested by the 
Administration and the same level approved for 1997. The 
Committee expects the Department of Defense to carefully review 
administrative expenses in an effort to reduce expenditures.

                  foreign military financing surcharge

    The Committee has included an overall limitation of Foreign 
Military Financing operating costs of $350,000,000, unless 
notified through the Committee's fifteen day notification 
process. This is $5,000,000 less than last year and reflects a 
revised estimate transmitted to the Committee on June 23, 1997 
by General Thomas Rhame, Director of the Defense Security 
Assistance Agency. The Committee believes that it is important 
to retain this overall limitation in order to ensure that funds 
collected to pay for personnel dedicated to the operation of 
the FMF system are used for that purpose only.

                          excess subsidy costs

    The Committee has included prior year language allowing the 
subsidy costs of direct loans to be used to supplement funds 
available for grants under certain conditions and vice versa.

                          fmf expenditure rate

    The Committee continues prior year language that requires 
that Foreign Military Financing funds be expended at the 
minimum rate necessary to make timely payments for defense 
articles and services.

                                 loans

    The Committee has included a provision in the bill limiting 
loans to $657,000,000.

                           fmf loan criteria

    The Committee is disturbed by the apparent modification of 
existing Administration policy regarding credit rating 
eligibility for the FMF loan program. The Committee notes that 
in previous years funds were made available for the FMF loan 
program based upon a clear understanding, provided by the 
Administration at the time funds were being requested, of its 
loan criteria. The Committee considers this a very serious 
issue and the Committee expects the Administration to consult 
with the Committee on this issue at the earliest possible date.

                         procurement agreements

    The Committee has continued prior year language requiring 
recipients of Foreign Military Financing to sign agreements 
with the United States prior to using FMF funds to finance the 
procurement of any item not sold by the United States under the 
Arms Export Control Act.

                              prohibitions

    The Committee has included bill language prohibiting 
military assistance to Sudan and Liberia. The Administration 
did not request military assistance for these countries for 
fiscal year 1998. While the Committee is mindful of the 
significant advances in the peace process and market reforms 
contributing to the economic progress for the people of 
Guatemala, it is not yet ready to lift the prohibition on 
military assistance for Guatemala in 1998.

                    fmf loans for greece and turkey

    The Committee reaffirms that 1996 marked the graduation of 
both Greece and Turkey as annual FMF loan program recipients 
for the purpose of supporting major new weapons acquisitions. 
The administration's fiscal year 1998 request for FMF loans for 
Greece and Turkey is the same as the 1997 program level and is 
to be used to support upgrades or replacement parts for 
existing U.S. origin equipment currently in the inventories of 
the Turkish and Greek armed forces.

                    special defense acquisition fund

    Language requested by the Administration for this account 
is included in section 535. Section 535 extends to fiscal year 
2000 the authority provided by the Committee in Public Law 103-
306 to utilize a portion of SDAF receipts to implement the 
close out of SDAF. In fiscal year 1998, receipts from the 
decapitalization of SDAF will produce a reduction in the 
deficit of approximately $106,000,000.

                                  peru

    The Committee notes that the Administration has not 
requested FMF funds for Peru in 1998 and the Committee supports 
this position. The Committee would further note that if FMF 
funds are requested in FY98 the request would be subject to the 
regular notification procedures of the Committees on 
Appropriations.

                                Morocco

    Members of the Committee visited Morocco in January of this 
year to discuss key issues in U.S.-Moroccan relations, 
particularly in the security area. The Committee notes that 
Morocco is a key friend and ally and therefore the Committee 
recommends that up to $2,000,000 in FMF be made available to 
Morocco to support U.S. origin equipment. The Committee, also 
emphasizes its support for the mission of former Secretary of 
State James Baker to resolve issues pertaining to the Western 
Sahara. In light of the Baker mission and recognizing Morocco's 
right of legitimate self defense, the Administration should 
ensure that U.S. military equipment sold or provided to Morocco 
should not be used in Western Sahara in a manner inconsistent 
with the United Nations Settlement Plan, particularly those 
provisions of the cease fire dealing with the deployment of 
military equipment.

                         peacekeeping training

    The Committee notes that the Administration is requesting 
$12,000,000 in FMF funds to support peacekeeping related 
training and other peacekeeping support activities. This in 
addition to funds requested for 1998 in the ``Peacekeeping 
Operations'' account.

                   arms sales to latin america report

    The Committee directs the Secretary of State, in 
consultation with the Secretary of Defense, to provide to the 
Committees on Appropriations, within 90 days of enactment of 
this act, a report detailing the security needs in Latin 
America and the impact of lifting the existing U.S. ban on high 
technology weapons sales to the region.

                        Peacekeeping Operations

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $65,000,000
Fiscal year 1998 request..............................        90,000,000
Committee recommendation..............................        77,500,000
                                                                        

    The Committee recommends $77,500,000 for voluntary 
contributions for International Peacekeeping Operations. This 
amount is $12,500,000 above the level provided in fiscal year 
1997 and $12,500,000 below the President's request. The 
Committee notes that the Administration has also requested 
$12,000,000 in FMF funds for peacekeeping training and 
activities in Africa and to support the Enhanced Peacekeeping 
Initiative.

                   African Crisis Response Initiative

    The Committee has thoroughly reviewed the Administration's 
African Crisis Response Initiative and supports efforts to 
develop an African regional capability to respond to low-
intensity peacekeeping activities either in lieu of United 
States troops or in cooperation with them. The Committee 
initially expressed concern over the vagueness of the 
anticipated command and control relationships, as well as which 
countries or organizations would exercise operational and 
political control over the potential uses of these African 
peacekeeping capabilities. The Committee has been assured by 
the Administration that the command arrangements will be sub-
regional, regional, possibly with United States or West 
European participation depending on the situation, and when 
appropriate or requested by African states or organizations, UN 
sanctioned.

            voluntary contributions to war crimes tribunals

    The Committee strongly supports the efforts of the two war 
crimes tribunals in their work to ensure the impartial 
administration of justice regarding war crimes committed during 
the Bosnian and African Great Lakes conflicts. To further this 
effort, up to $3,000,000 of the funds appropriated in this 
account should be provided to the tribunals as voluntary 
contributions. However, the Committee notes that most of the 
funds for these activities is provided through assessed 
contributions to the United Nations. In addition, the Committee 
is aware of a report issued on March 11, 1997, by the Secretary 
General of the United Nations on the 1997 resource requirements 
for the International Tribunal for the Former Yugoslavia. This 
report was prepared by the Under Secretary General for Internal 
Oversight Services, and recommended a number of steps to reduce 
costs and establish procedures for assessing resource needs. 
The Committee strongly supports additional funding for the 
tribunals, if such funding is justified consistent with 
established budgeting standards.

               TITLE IV--MULTILATERAL ECONOMIC ASSISTANCE

             International Financial Institutions Overview

    The Committee is keenly aware of the fact that the 
multilateral development banks have served American interests 
in many ways. Many of them have supported, and continue to 
support, American businesses in opening new markets and 
securing financing unavailable from commercial markets. The 
``leveraging effect'' of more than $20 made available to 
developing economies for every dollar appropriated by Congress 
has enabled the Committee to prudently reduce the size of its 
foreign operations appropriations acts over the past decade. 
These factors--the impact on American business and maximum 
``leveraging'' ratios--have guided the Committee in its 
recommendations.
    Another factor entered into the Committee's deliberations: 
the growing role of the private sector in developing nations 
that have until recently chosen to undertake development 
through centrally planned or state-dominated economic models. 
Two years ago, the Committee heard dramatic testimony about the 
fast growing sector for American exports, private sector 
infrastructure projects, mostly in the areas of energy and 
telecommunications. Several successful participants in such 
projects have volunteered that certain of the MDB's had been 
vital to their undertakings which promote sustainable 
development abroad and good jobs in the United States.

                              agriculture

    The Committee has long recognized that one of the most 
effective means of fostering sustainable economic growth in 
developing countries is promotion of agriculture and rural 
development. The Committee again encourages all multilateral 
development banks to increase resources devoted to these areas. 
It invites other MDB's to review the World Bank's efforts to 
develop new and more effective projects in the area of 
agriculture and rural development.

                             funding trends

    Finally, the Committee commends the Department of Treasury 
for its understanding of budget realities in negotiating 
reduced future commitments to the multilateral development 
banks. There is broad support among the Committee for clearing 
past due U.S. payments as soon as feasible. This may be 
possible during fiscal year 1998 due to the special provisions 
included in the budget resolution for this purpose.

     Contribution to the International Bank for Reconstruction and 
                              Development

                           social assessment

    The Committee is pleased that the World Bank has 
incorporated environmental impact statements into its project 
approval process, and encourages the Bank to implement a 
similar policy providing for community consultation during the 
project development process.

                       loans to terrorist states

    Although generally supportive of the basic principles and 
objectives of the World Bank under the management of President 
Wolfensohn, the Committee is convinced that provision of loans 
to Iran and Syria, countries that openly support international 
terrorism, would diminish support for the Bank in Congress.

            Contribution to the Global Environment Facility

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $35,000,000
Fiscal year 1998 request..............................       100,000,000
Committee recommendation..............................        35,000,000
                                                                        

    The Committee recommends $35,000,000 for the Global 
Environment Facility (GEF), administered by the International 
Bank for Reconstruction and Development (IBRD). The 
recommendation is the same as the 1997 enacted level.
    The Committee welcomes the new medium grants window at the 
GEF that will improve procurement efficiency, be more 
accessible to field implementing agencies, and facilitate the 
role of conservation organizations in implementing the GEF's 
mission of protecting biodiversity. The Committee expects to 
closely monitor implementation of the new mechanism over the 
next fiscal year.
    The Committee notes that, in many developing countries, 
NGOs have superior capacity and expertise to implement 
biodiversity conservation projects, and therefore the United 
States should continue to press for improved access for NGOs to 
GEF funding.

       Contribution to the International Development Association

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $700,000,000
Fiscal year 1998 request..............................     1,034,504,000
Committee recommendation..............................       606,000,000
                                                                        

    The Committee is providing $606,000,000 toward the U.S. 
contribution to the Eleventh Replenishment of the International 
Development Association, a reduction of $94,000,000 below the 
1997 enacted level. The Committee wishes to make clear that the 
decision to provide less than the full request is a result of 
necessary budgetary constraints and the decision by other 
donors to continue to deny American companies access to 
procurement for the $1,000,000,000 remaining from the intended 
$3,000,000,000 Interim Trust Fund.
    The Committee has included a new provision withholding all 
IDA funds from obligation until the Secretary of the Treasury 
certifies to the Committees on Appropriations that procurement 
restrictions imposed by the Interim Trust Fund have been 
lifted, and that the remaining balance is available for open 
competition.

                     explanation of recommendation

    The Committee remains concerned about the formation of an 
Interim Trust Fund within the International Development 
Association (IDA), because American companies have been denied 
the opportunity to bid on contracts and projects funded from 
this entity.
    Punitive restrictions by IDA on procurement by U.S. 
companies cannot be ignored by the Committee in light of its 
provision of more than 20 percent of IDA funds over the past 35 
years while receiving only 10 percent of IDA procurement.
    The Committee supports U.S. participation in this 
development program which is directed toward the poorest 
countries in the world, but also finances relatively well-off 
nations. The Committee recognizes that IDA could play an 
important role in building markets for U.S. exports, as well as 
enhancing the effectiveness of U.S. bilateral export promotion 
programs.

                             ida and china

    The Committee strongly urges the Administration to oppose 
further IDA loans to the People's Republic of China in light of 
its current strong economic performance and its abysmal human 
rights record. China should be graduated from IDA, as 
recommended by the Department of Treasury, and this 
recommendation should be implemented as soon as possible.

                   International Finance Corporation

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................        $6,656,000
Fiscal year 1998 request..............................                 0
Committee recommendation..............................                 0
                                                                        

    The Committee recommends that the Secretary of the Treasury 
consult with Congress regarding future financial requirements 
of the International Finance Corporation. The major 
reorganization of the World Bank Group now underway places 
major new emphasis on activities now undertaken solely by the 
IFC, raising the possibility that IFC staff will be diverted to 
IDA and IBRD projects, or that the IFC will require a capital 
increase in the near future if it is designated the World Bank 
Group's sole implementing agency for direct private sector 
investment.
    Negative environmental impacts of certain IFC investments 
and financing operations are of continuing concern to the 
Committee. It reiterates that the U.S. executive director and 
Treasury Department officials should use their influence to 
bring IFC into compliance with section 521 of P.L. 101-240 
(known as the Pelosi amendment).
    The Committee strongly encourages the IFC to adopt an 
accountability mechanism, as recommended by President 
Wolfensohn, to encourage community participation in IFC project 
development. An inspection panel mechanism could be implemented 
by the IFC that would protect clients' privacy while providing 
local people with effective recourse.

          Contribution to the Inter-American Development Bank

                     inter-regional paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $25,610,667
Fiscal year 1998 request..............................        25,610,667
Committee recommendation..............................        25,610,667
                                                                        

                    (Limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal 1997 level.....................................  ($1,503,718,910)
Fiscal 1998 request...................................   (1,503,718,910)
Committee recommendation..............................   (1,503,718,910)
                                                                        

                      Fund for Special Operations

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $10,000,000
Fiscal year 1998 request..............................        20,835,000
Committee recommendation..............................        20,835,000
                                                                        

    The Committee has recommended funding for Inter-regional 
paid-in capital of $25,610,667 for fiscal year 1998, the same 
amount as the President's request for the Inter-American 
Development Bank. The Committee has recommended a limitation on 
callable capital of $1,503,718,910 for fiscal year 1998.

                      fund for special operations

    The Committee recommends $20,835,000 for fiscal year 1998 
for the soft-loan Fund for Special Operations, the same as the 
amount requested and $10,835,000 more than the fiscal year 1997 
level. The Committee notes that Inter-American Development Bank 
management is considering a plan to make the FSO self-
sustaining within a few years. Confirmation of this graduation 
policy will be of interest to the Committee.

                      Multilateral Investment Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $27,500,000
Fiscal year 1998 request..............................        30,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee defers funding for the Administration's 
request of $30,000,000 for a past-due U.S. contribution to the 
Multilateral Investment Fund (MIF) until it has been satisfied 
that the MIF is making a unique contribution to the social and 
economic development of the hemisphere, as the Committee was 
assured when the MIF was first established. At present, there 
is little evidence to differentiate the activities of the MIF 
from those of the Inter-American Development Bank's Fund for 
Special Operations. The Committee notes that it recommended 
full funding of the FSO.

               Contribution to the Asian Development Bank

                            paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $13,221,596
Fiscal year 1998 request..............................        13,221,596
Committee recommendation..............................        13,221,596
                                                                        

                    (Limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................    ($647,858,204)
Fiscal year 1998 request..............................     (647,858,204)
Committee recommendation..............................     (647,858,204)
                                                                        

                         Asian Development Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $100,000,000
Fiscal year 1998 request..............................       150,000,000
Committee recommendation..............................       100,000,000
                                                                        

    The Administration is requesting $13,221,596 for paid-in 
capital and a limitation of $647,858,204 on callable capital 
subscriptions (which do not require appropriations) of the 
Asian Development Bank. The Committee recommends an amount that 
is the same as the request and the 1997 enacted level.
    The recommendation for the soft-loan Asian Development Fund 
is $100,000,000, the amount provided in fiscal year 1997, but 
$50,000,000 less than the amount requested and needed to meet a 
four year schedule, recently negotiated with other donor 
countries, for payment of past due pledges.

              Contribution to the African Development Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................                 0
Fiscal year 1998 Budget Estimate......................       $50,000,000
Committee recommendation..............................        25,000,000
                                                                        

    The Committee is encouraged by the new management of the 
African Development Bank and Fund, and appreciates the efforts 
of the U.S. Executive Director to promote overdue reform at the 
Bank and Fund. The Committee views the $25,000,000 recommended 
for 1998 as a downpayment, with future funding contingent upon 
continued recovery and progress by the African Development 
Fund.

                                nigeria

    Although no funds were provided in fiscal year 1997 for the 
African Development Bank, and no funds are requested for fiscal 
year 1998, the Committee is aware that renewed requests for the 
Bank may be forthcoming. Before considering future requests for 
the African Development Bank, the Committee expects to closely 
monitor its anticipated lending to Nigeria. There has been no 
measurable progress on human rights in Nigeria. The 
legitimately elected leader of Nigeria remains incarcerated and 
large numbers of pro-democracy activists have been arrested 
this year. The Committee strongly recommends that the U.S. 
Executive Director at the African Development Bank and her 
counterparts and other international financial institutions 
oppose any lending to Nigeria.

  Contribution to the European Bank for Reconstruction and Development

                            paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $11,916,447
Fiscal year 1997 request..............................        35,778,717
Committee recommendation..............................        35,778,717
                                                                        

                    (Limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................     ($27,805,043)
Fiscal year 1998 request..............................     (123,237,803)
Committee recommendation..............................     (123,237,803)
                                                                        

    The Committee is recommending $35,778,717 for the European 
Bank for Reconstruction and Development. This amount is 
significantly less than the $70,000,000 provided in fiscal year 
1996 and the same as the President's request.
    After a difficult start-up period, the EBRD has made 
exceptional progress in its aim of financing the private sector 
in Central and Eastern Europe. During 1996, more than 70 
percent of EBRD's commitments went to the new private sector in 
the region. For the most part, this financing was available 
only through the EBRD.
    As the Committee begins to cut back somewhat on its 
bilateral appropriations for Central Europe, it anticipates 
that market-rate credits from multilateral institutions such as 
the EBRD and the IBRD can finance the economic growth that is 
needed to support democracy and free markets in the region. The 
Committee is encouraged the EBRD has agreed that its 
forthcoming replenishment will be its first and last request 
for public sector funds. The EBRD expects to become the first 
multilateral bank to become self-sustaining and dependent on 
profits and private funds.

                    North American Development Bank

                            paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................       $56,000,000
Fiscal year 1997 request..............................        56,500,000
Committee recommendation..............................        56,500,000
                                                                        

                    (limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal year 1996 level................................    ($318,750,000)
Fiscal year 1997 request..............................     (318,750,000)
Committee recommendation..............................     (318,750,000)
                                                                        

    The Administration is requesting $56,500,000 for paid-in 
capital and a limitation of $318,750,000 on callable capital 
subscriptions (which do not require appropriations) of the 
North American Development Bank. The request is $500,000 above 
the 1997 enacted level. The Committee recommends the full 
request. The North American Development Bank was created and is 
governed by the United States and Mexico as part of the North 
American Free Trade Agreement. This is the third and final year 
funding has been recommended in this bill; an initial U.S. 
investment to mobilize NADBank was directly appropriated in the 
NAFTA Implementation Act.
    The NADBank is unique among the multilateral development 
banks, as it is specifically designed to fund projects that 
will have either a direct or indirect impact on the United 
States and its citizens. It was designed to provide between 
$2,000,000,000 and $3,000,000,000 in financing for high 
priority environmental infrastructure projects, ninety percent 
of which are within 60 miles of the border and ten percent 
elsewhere when directly tied to NAFTA-related job displacement.
    The primary purpose of NADBank is to finance environmental 
infrastructure projects along the U.S.-Mexican border, 
particularly in the areas of wastewater treatment, drinking 
water, and municipal solid waste. Only projects certified by 
the U.S.-Mexican Border Environment Cooperation Commission, a 
new institution designed to assist border states and local 
communities in coordinating border clean-up, will be eligible 
for NADBank financing.

                      International Monetary Fund

      Contribution to the Enhanced Structural Adjustment Facility

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................                 0
Fiscal year 1998 request..............................        $7,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee is unable to recommend any funding in fiscal 
1998 for the Enhanced Structural Adjustment Facility of the 
International Monetary Fund. The President requested $7,000,000 
for this purpose, less than 30 percent of the amount requested 
and denied in fiscal year 1996 and the same as the amount 
denied in fiscal year 1997.

                       New Arrangements to Borrow

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................                 0
Fiscal year 1998 request..............................    $3,521,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee defers action on this matter until further 
action by the committee of jurisdiction. The New Arrangements 
to Borrow (NAB) is a contingent loan arrangement in support of 
the International Monetary Fund. The NAB is somewhat similar to 
the General Arrangements to Borrow (GAB) for which United 
States participation was approved on two previous occasions, 
under Presidents Kennedy and Reagan.

                International Organizations and Programs

                                                                        
                                                                        
                                                                        
Fiscal year 1997 level................................      $169,950,000
Fiscal year 1998 request..............................       365,000,000
Committee recommendation..............................       194,000,000
                                                                        

    The Committee is recommending $194,000,000 for 
International Organizations and Programs. This is $24,050,000 
above the fiscal year 1997 level and $271,000,000 below the 
President's request. However, as in fiscal year 1997, the 
Committee has shifted $100,000,000 for a grant to UNICEF from 
this account to ``Child Survival and Disease Programs Fund'' 
under title II. It has also shifted funds for the International 
Atomic Energy Agency (IAEA) and the Korea Peninsula Energy 
Development Organization (KEDO) from this account to 
``Nonproliferation, anti-terrorism, demining and related 
programs'' under title II. Therefore, on a comparable basis, 
the recommendation is $5,000,000 below the President's request.
    The Committee recommendation includes bill language carried 
in the 1997 appropriations act that limits funding for the 
United Nations Population Fund (UNFPA) to a maximum level of 
$25,000,000, $5,000,000 below the request. It also states that 
not more than one-half of this amount may be made available to 
UNFPA before March 1, 1998, and that no later than February 15, 
1998, the Secretary of State shall submit a report to the 
Committees on Appropriations indicating the amount UNFPA is 
budgeting for China in 1998. If UNFPA plans to spend any funds 
in China in 1998, such funds shall be deducted from the funds 
to be made available to UNFPA after March 1, 1998. The language 
also requires UNFPA to maintain such funds in a separate 
account and not commingle them with any other funds.

                             funding levels

    The Committee recommendation also includes bill language 
prohibiting the use of funds for the Korean Peninsula Energy 
Development Organization (KEDO) or the International Atomic 
Energy Agency (IAEA). Both organizations are funded under 
``Nonproliferation, anti-terrorism, demining and related 
programs''.
    The Committee supports funding for the United Nations 
Voluntary Fund for Victims of Torture at least at last year's 
level, and expects the State Department to make best efforts to 
provide up to $3,000,000. In addition, the Committee supports 
the budget request for the United Nations Development Program.
    The Committee also supports funding at the budget request 
for international conservation programs, including the 
Convention on International Trade in Endangered Species 
(CITES), the World Conservation Union (IUCN), the International 
Tropical Timber Organization (ITTO), and the Ramsar Convention 
on Wetlands of International Importance.

                                 unicef

    The Committee has included bill language prohibiting the 
use of funds appropriated under this heading for the United 
Nations development group or for any similar organization. This 
prohibition is not intended to limit funds for the ongoing 
operations of the United Nations Development Program (UNDP) or 
the United Nations Population Fund (UNFPA). However, the 
Committee is very concerned about proposals to consolidate 
these organizations, along with the United Nations Children's 
Fund (UNICEF), into a new United Nations development group. The 
Committee strongly opposes any proposal that would compromise 
the ability of UNICEF to focus on its primary mission--
assisting the children of the world. Such a proposal could also 
jeopardize the ability of UNICEF to raise funds from the 
private sector. The Committee expects the State Department to 
take every step possible to ensure that the ability of UNICEF 
to perform its important mission is not compromised. In that 
regard, the Committee will carefully follow developments in 
this area, and cautions that future support for voluntary 
contributions for United Nations organizations could be 
adversely affected if UNICEF's operational autonomy is not 
maintained.

                 Government Performance and Results Act

    The Committee considers the full and effective 
implementation of the Government Performance and Results Act, 
P.L. 103-62, to be a priority for all agencies of government.
    Starting with fiscal year 1999, the Results Act requires 
each agency to ``prepare an annual performance plan covering 
each program activity set forth in the budget of such agency''. 
Specifically, for each program activity the agency is required 
to ``establish performance goals to define the level of 
performance to be achieved by a program activity'' and 
``performance indicators to be used in assessing the relevant 
outputs, service levels, and outcomes of each program 
activity''.
    The Committee takes this requirement of the Results Act 
very seriously and plans to carefully examine agency 
performance goals and measures during the appropriations 
process. As a result, starting with the fiscal year 1999 
appropriations cycle, the Committee will consider agencies 
progress in articulating clear, definitive, and results-
oriented (outcome) goals and measures as it reviews requests 
for appropriations.
    The Committee suggests agencies examine their program 
activities in light of their strategic goals to determine 
whether any changes or realignments would facilitate a more 
accurate and informed presentation of budgetary information. 
Agencies are encouraged to consult with the Committee as they 
consider such revisions prior to finalizing any requests 
pursuant to 31 U.S.C. 1104. The Committee will consider any 
requests with a view toward ensuring that fiscal year 1999 and 
subsequent budget submissions display amounts requested against 
program activity structures for which annual performance goals 
and measures have been established.

                      TITLE V--GENERAL PROVISIONS

    The Committee recommends that many of the general 
provisions carried in the fiscal year 1997 act be deleted. 
These provisions are either addressed elsewhere in permanent 
law, have been considered by the authorizing committee, or are 
no longer necessary.
    The Committee has recommended the following new and revised 
general provisions.
    Sec. 502, ``Prohibition of Bilateral Funding for 
International Financial Institutions'' has been modified with 
the new clause, ``Notwithstanding section 614 of the Foreign 
Assistance Act of 1961''.
    Sec. 509, ``Transfers Between Accounts'' requires 
notification, restoring language that was in place prior to 
fiscal year 1997.
    Sec. 512, ``Limitation on Assistance to Countries in 
Default'' is modified by adding Liberia to list of waiver-
eligible countries.
    Sec. 515, ``Notification Requirements'' is modified to 
delete ``Debt restructuring'' since it is redundant.
    Sec. 518A, ``Authorization of Population Planning'' deletes 
all language except for limitation of $385,000,000 on funds for 
population planning.
    Sec. 520, ``Special Notification Requirements'' is modified 
to delete Zaire, Dominican Republic, and Guatemala and add 
Panama and Democratic Republic of Congo.
    Sec. 524, ``Reciprocal Leasing'' is modified by extending 
the authority through fiscal year 1998.
    Sec. 526, ``Authorization Requirement'' makes funds in act 
``subject to'' authorization requirement.
    Sec. 533, ``Compliance with UN Sanctions Against Iraq'' is 
modified to delete reference to Serbia or Montenegro, per 
President's request; and to delete language on import 
sanctions, which is not under the jurisdiction of the 
Appropriations Committee.
    Sec. 535, ``Extension of Authority to Obligate Funds to 
Close the Special Defense Acquisition Fund'' extends the 
authorities to close out this fund until the end of fiscal year 
1999.
    Sec. 540, ``Special Authorities'' is modified to delete 
language on the Khmer Rouge and modification of the funding 
ceiling under section 451 of the Foreign Assistance Act.
    Sec. 541, ``Policy on Terminating the Arab League Boycott 
of Israel'' is modified by expressing concern about the 
reinstatement of the boycott, and urging League members to 
normalize relations with Israel.
    Sec. 543, ``Eligibility for Assistance'' is modified, per 
the request, to include programs under chapter 11, and chapter 
4 of part II, of the Foreign Assistance Act.
    Sec. 546, ``Prohibition on Publicity or Propaganda'' 
reduces funding ceiling for activities authorized under section 
316 of P.L. 96-533 from $750,000 to $500,000.
    Sec. 551, ``Prohibition on Assistance to Foreign 
Governments that Export Lethal Military Equipment to Countries 
Supporting International Terrorism'' is updated to change time 
frame for which this section applies from contracts entered 
into ``after the date of enactment of this Act'' to ``after 
April 24, 1996.''
    Sec. 556, ``Landmines'' is modified to delete proviso which 
changed permanent law.
    Sec. 559, ``Equitable Allocation of Funds'' funding ceiling 
decreased from 20 percent to 18 percent for any one country in 
Latin America and the Caribbean region.
    Sec. 562, ``International Development Association'' is 
modified to provide for an authorization of appropriations of 
$606,000,000, the same level recommended in title IV.
    Sec. 565, ``Guatemala'' is modified to remove a prohibition 
on IMET funding from the provision, and the prohibition on FMF 
financing is modified to allow such financing only if the 
military is cooperating fully with the implementation of the 
peace agreement; other restrictions from fiscal year 1997 
remain in effect.
    Sec. 567, ``Limitation on Assistance for Haiti'' is 
modified; deletes reference to killings prior to enactment of 
1996 Act; substitutes anti-narcotics and rule of law assistance 
for term ``development'' and adds economic reform conditions.
    Sec. 571, a new provision, provides that not more than 
$40,000,000 from ``Economic Support Fund'' may be made 
available for Turkey and that of this amount not less than 
fifty percent of the assistance provided shall be utilized to: 
support private nongovernmental organizations engaged in 
strengthening democratic institutions in Turkey, provide 
economic assistance for individuals and communities affected by 
civil unrest, and, support and promote peaceful solutions and 
economic development which will contribute to the settlement of 
regional problems in Turkey.

               provisions retained from fiscal year 1996

    The following general provisions from the fiscal year 1997 
bill were retained in the fiscal year 1998 bill unchanged 
except for new section numbers where appropriate:
          Sec. 501. Obligations During Last Month of 
        Availability.
          Sec. 503. Limitation on Residence Expenses.
          Sec. 504. Limitation on Expenses.
          Sec. 505. Limitation on Representational Allowances.
          Sec. 506. Prohibition on Financing Nuclear Goods.
          Sec. 507. Prohibition Against Direct Funding of 
        Certain Countries.
          Sec. 508. Military Coups.
          Sec. 510. Deobligation/Reobligation Authority.
          Sec. 511. Availability of Funds.
          Sec. 513. Commerce and Trade.
          Sec. 514. Surplus Commodities.
          Sec. 516. Limitation on Availability of Funds.
          Sec. 517. Economic Support Fund Assistance for 
        Israel.
          Sec. 518. Prohibition on Funding for Abortions and 
        Involuntary Sterilizations.
          Sec. 519. Reporting Requirement.
          Sec. 521. Definition of Program, Project, and 
        Activity.
          Sec. 522. Child Survival and AIDS Activities.
          Sec. 523. Prohibition Against Indirect Funding to 
        Certain Countries.
          Sec. 525. Notification on Excess Defense Equipment.
          Sec. 527. Prohibition on Bilateral Assistance to 
        Terrorist Countries.
          Sec. 528. Commercial Leasing of Defense Articles.
          Sec. 528A. Competitive Insurance.
          Sec. 529. Stingers in the Persian Gulf Region.
          Sec. 530. Debt for Development.
          Sec. 531. Separate Accounts.
          Sec. 532. Compensation for U.S. Executive Directors.
          Sec. 534. Competitive Pricing for Sales of Defense 
        Articles.
          Sec. 536. Cash Flow Financing.
          Sec. 537. Authorities for the Peace Corps, The Inter-
        American Foundation and the African Development 
        Foundation.
          Sec. 538. Impact on Jobs in the United States.
          Sec. 539. Restrictions on the Termination of 
        Sanctions Against Serbia and Montenegro.
          Sec. 542. Anti-Narcotics Activities.
          Sec. 544. Earmarks.
          Sec. 545. Ceilings and Earmarks.
          Sec. 547. Use of American Resources.
          Sec. 548. Prohibition of Payments to UN Members.
          Sec. 549. Consulting Services.
          Sec. 550. Private Voluntary Organizations--
        Documentation.
          Sec. 552. Withholding of Assistance for Parking Fines 
        Owed by Foreign Countries.
          Sec. 553. Limitation on Assistance for the West Bank 
        and Gaza.
          Sec. 554. Export Financing Transfer Authorities.
          Sec. 555. War Crimes Tribunals.
          Sec. 557. Restrictions Concerning the Palestinian 
        Authority.
          Sec. 558. Prohibition on Payment of Certain Expenses.
          Sec. 560. Purchase of American-Made Equipment and 
        Products.
          Sec. 561. Limitation of Funds for North American 
        Development Bank.
          Sec. 563. Special Debt Relief for the Poorest.
          Sec. 564. Authority to Engage in Debt Buybacks or 
        Sales.
          Sec. 566. Sanctions Against Countries Harboring War 
        Criminals.
          Sec. 568. Requirement for Disclosure of Foreign Aid 
        in Report of Secretary of State.
          Sec. 569. Restrictions on Voluntary Contributions to 
        United Nations Agencies.
          Sec. 570. North Korea.

                       MISCELLANEOUS INFORMATION

                   Comparison With Budget Resolution

    Section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344), requires 
that the report accompanying a bill providing new budget 
authority contain a statement detailing how the authority 
compares with the reports submitted under section 602(b) of the 
Act for the most recently agreed to concurrent resolution on 
the budget for the fiscal year. This information follows:

                     FISCAL YEAR 1998 APPROPRIATIONS                    
                          [Dollars in millions]                         
------------------------------------------------------------------------
                                     Budget authority       Outlays     
------------------------------------------------------------------------
Sec. 602(b):                                                            
    Discretionary.................             12,500             13,050
    Mandatory.....................                 44                 44
                                   -------------------------------------
      Total.......................             12,544             13,094
                                   =====================================
This bill:                                                              
    Discretionary.................             12,267             13,011
    Mandatory.....................                 44                 44
                                   -------------------------------------
      Total.......................             12,311             13,055
------------------------------------------------------------------------

    The bill provides no new spending authority as described in 
section 401(c)(2) of the Congressional Budget and Impoundment 
Control Act of 1974 (Public Law 93-344), as amended.

                    Five-Year Projection of Outlays

    In compliance with section 308(a)(1)(C) of the 
Congressional Budget Act of 1974 (Public Law 93-344 as 
amended), the following table contains five-year projections 
associated with the budget authority provided in the 
accompanying bill.

                     Fiscal Year 1998 Appropriations                    
                                                                        
                                                            Millions    
                                                                        
Budget authority......................................           $12,311
Outlays...............................................            13,059
Fiscal Year:                                                            
    1998..............................................             5,018
    1999..............................................             3,743
    2000..............................................             1,401
    2001..............................................               775
    2002 and future years.............................               809
                                                                        

               Assistance to State and Local Governments

    Section 308(a)(1)(D) of the Congressional Budget Act of 
1974 requires that the report accompanying any bill or 
resolution providing new budget authority (other than 
continuing appropriations shall contain a statement of the new 
budget authority and budget outlays provided by that bill or 
resolution for financial assistance to State and local 
governments.
    The amounts recommended in the accompanying bill contains 
$4,000,000 in budget authority and $1,000,000 in budget outlays 
for State or local governments.

                        Constitutional Authority

    Clause 2(l)(4) of rule XI of the Rules of the House of 
Representatives states that:
          ``Each report of a committee on a bill or joint 
        resolution of a public character, shall include a 
        statement citing the specific powers granted to the 
        Congress in the Constitution to enact the law proposed 
        by the bill or joint resolution.''
    The Committee on Appropriations bases its authority to 
report this legislation from Clause 7 of Section 9 of Article I 
of the Constitution of the United States of America which 
states:
          ``No money shall be drawn from the Treasury but in 
        consequence of Appropriations made by law . . .''
    Appropriations contained in this Act are made pursuant to 
this specific power granted by the Constitution.

               Changes in the Application of Existing Law

    Pursuant to clause 3, rule XXI of the Rules of the House of 
Representatives, the following statements are submitted 
describing the effects of provisions in the accompanying bill 
which directly or indirectly change the application of existing 
law. Most of the language has been provided in previous 
measures including supplementals for the departments and 
agencies carried in the accompanying bill.
    1. The bill contains appropriations for a number of items 
for which authorizations for fiscal year 1998 have not yet been 
enacted. The bill allows funds appropriated in the bill to be 
obligated subject to an authorization of appropriations.
    2. The bill provides that a few of the appropriations shall 
remain available for obligation beyond the current fiscal year. 
In all cases it is deemed desirable to carry such language in 
order to provide for orderly administration of such programs 
and effective use of funds.
    3. The bill contains a number of general provisions and 
other language which have been carried in the bill in past 
years.
    4. Under ``Overseas Private Investment Corporation'', the 
corporation is authorized to make expenditures, and it is 
stated that administrative expenses shall not include project-
specific costs and other related costs. In addition, funds are 
authorized to be derived by transfer from the noncredit 
account. Finally, funds are authorized for administrative 
expenses by transfer from the noncredit account.
    5. Funds are provided for the Trade and Development Agency, 
and the agency is authorized to receive reimbursements from 
corporations and other entities to cover the costs of grants 
for feasibility studies and other project planning services, to 
be deposited as an offsetting collection and to be available 
for obligation until September 30, 1998, for necessary 
expenses. However, funds would not be available to cover the 
direct or indirect costs of administration.
    6. Under ``Development Assistance'' the bill contains 
provisions relating to abortion that were carried in the 1997 
act.
    7. Under ``Private and Voluntary Organizations'', the 
Committee includes a provision that funds appropriated under 
title II should be made available to PVOs at a level which is 
equivalent to the level provided in fiscal year 1995. It also 
continues provisions continued from last year on minimum funds 
from private sources.
    8. Under ``International Disaster Assistance'', funds are 
made available for rehabilitation and reconstruction 
assistance.
    9. Under ``Debt restructuring'', funds are made available 
for modifying direct loans and loan guarantees, including the 
cost of selling, reducing, or canceling amounts, through debt 
buybacks and swaps, owed to the United States as a result of 
concessional loans made to eligible Latin American and 
Caribbean countries.
    10. In title II, funds are provided for micro and small 
enterprise direct loans and loan guarantees, and administrative 
expenses are appropriated which may be transferred to the 
operating expenses account of the Agency for International 
Development.
    11. In title II, funds are appropriated for the 
administrative costs of the urban and environmental credit 
program, and such funds may be transferred to the operating 
expenses account of the Agency for International Development.
    12. Under ``Operating Expenses of the United States Agency 
for International Development'', the Committee has placed a 
ceiling of $25,000 on the amount of such funds that can be used 
to pay printing costs of certain reports or studies.
    13. Under ``International Fund for Ireland'', $19,600,000 
is provided, which shall be expended at the minimum rate 
necessary to make timely payment for projects and activities.
    14. Under ``Assistance to Eastern Europe and the Baltic 
States'', funds are provided notwithstanding any other 
provision of law for economic assistance; authority is provided 
for enterprise funds to deposit monies in interest-bearing 
accounts without the requirement that such interest be returned 
to the Treasury and without further appropriation by the 
Congress; funds are made available as if they were considered 
economic assistance under the Foreign Assistance Act; funds for 
Bosnia are subject to certain conditions, including limitations 
on funds for housing; and up to $7,000,000 is available for 
debt restructuring for Bosnia.
    15. Under ``Assistance for the New Independent States of 
the Former Soviet Union'', the Committee has included a 
provision regarding utilization of the private sector.
    16. Under ``International Narcotics Control'', the 
Department of State is provided the authority to use section 
608 of the Foreign Assistance Act, without regard to its 
limitations, to receive non-lethal excess property from an 
agency of the United States government for the purpose of 
providing it to a foreign country, subject to notification of 
the Committees on Appropriations.
    17. Funding is provided for ``Migration and Refugee 
Assistance'', and a limitation of $12,000,000 is provided for 
administrative expenses.
    18. Under ``United States Emergency Refugee and Migration 
Assistance Fund'', funds are provided notwithstanding the 
limitations contained in section 2(c)(2) of the Migration and 
Refugee Assistance Act of 1962.
    19. Under ``Nonproliferation, Anti-terrorism, Demining, and 
Related Programs'', funds are made available to countries other 
than the independent states of the former Soviet Union and 
international organizations when it is in the national security 
interest of the United States; funds are made available 
notwithstanding any other provision of law; and the use of 
funds is made subject to the notification procedures of the 
Committees on Appropriations.
    20. Under ``International Military Education and 
Training'', the Committee provides IMET for Indonesia and 
Guatemala shall be only for expanded military education and 
training and limits obligation of funds for the School of the 
Americas pending a certification by the Secretary of Defense.
    21. Under ``Foreign Military Financing Program'', the 
Committee has provided that not to exceed $475,000,000 in FMF 
grants shall be available for the procurement in Israel of 
defense articles and defense services, that FMF grants for any 
non-NATO country participating in the Partnership for Peace 
Program shall be subject to the Committee's regular 
notification procedures, and that FMF loans for Greece and 
Turkey shall not exceed $105,000,000 and $150,000,000, 
respectively and included other provisions.
    22. Funds are made available for the United States share of 
the paid-in portion of the increase in capital stock of the 
Inter-American Development Bank and a limitation is placed on 
callable capital subscriptions.
    23. Funds are made available for the United States share of 
the paid-in portion of the increase in capital stock of the 
Asian Development Bank and a limitation is placed on callable 
capital subscriptions.
    24. Under ``Contribution to the European Bank for 
Reconstruction and Development'', the Committee has limited to 
$35,778,717 the amount appropriated that may be expended for 
the purchase of stock during fiscal year 1998 and placed a 
limit on callable capital.
    25. The Committee has provided funds for the paid-in 
capital stock of the ``North American Development Bank'' and 
placed a limit on callable capital.
    26. Under ``International Organizations and Programs'', the 
Committee has prohibited and conditioned the funding of certain 
organizations and programs.
    27. Under ``International Organizations and Programs'', the 
Committee provides that not more than $25,000,000 shall be 
available for UNFPA and imposes other limitations.
    28. On pages 38 through 94, under ``General Provisions'':
    Sec. 502, regarding the use of section 209(d) of the 
Foreign Assistance Act of 1961, adds ``Notwithstanding section 
614 of the Foreign Assistance Act of 1961.''
    Sec. 506, regarding a prohibition on financing nuclear 
goods, is revised so that the prohibition does not apply to 
Nonproliferation, Anti-terrorism, Demining and Related Programs 
instead of International Organizations and Programs.
    Sec. 510, regarding deobligation/ reobligation authority, 
has been updated.
    Sec. 515 continues the provision for congressional 
notification requirements, updating it to reflect the new bill 
account structure and account titles.
    Sec. 516, limiting the availability of funds for 
international organizations and programs, has been updated to 
permit funds which are returned or not made available to 
organizations and programs because of the limitations of this 
section to remain available for obligation through September 
30, 1999.
    Sec. 520 has been revised by dropping Zaire, Guatemala and 
Dominican Republic from the notification requirements of this 
section and adding Panama and the Democratic Republic of Congo.
    Sec. 524, regarding reciprocal leasing, has been updated.
    Sec. 527, prohibiting bilateral assistance to terrorist 
countries, is revised by deleting text permitting the 
application of section 527 ``notwithstanding any other 
provision of law.''
    Sec. 530 continues the authority in debt-for-development 
programs for NGO's to deposit funds in interest bearing 
accounts and using the interest earned. Section 530 continues 
the requirement that such interest shall be used for the same 
purpose for which the assistance was provided to the 
organizations.
    Sec. 531, regarding separate accounts requires the Agency 
for International Development to take all ``necessary'' steps, 
rather than ``appropriate'' steps, to ensure that local 
currencies disbursed from a special account are used for the 
purposes agreed upon with the foreign government.
    Sec. 540 continues special authorities in prior year 
legislation and deletes increase in the President's contingency 
authority.
    Sec. 542, regarding anti-narcotics activities, is continued 
and revised by making adjustments to references of provisions 
contained in section 534 of the Foreign Assistance Act of 1961, 
including the addition of two ``notwithstanding'' authorities 
covering section 534(c) and the second sentence of section 
534(e) of the Foreign Assistance Act of 1961.
    Sec. 543, regarding eligibility for assistance, has been 
continued and updated.
    Sec. 553, regarding limitations for the PLO for the West 
Bank and Gaza, has been continued.
    Sec. 554, regarding export financing transfer authorities, 
has been updated.
    Sec. 559, provides that no country in Latin America and the 
Caribbean can receive more than 18 percent of funds 
appropriated by this Act for development assistance and ESF 
provided for bilateral and Latin America and the Caribbean 
regional programs.
    Sec. 565, regarding military assistance to Guatemala, is 
revised by deleting references to IMET.
    Sec. 569, contains sanctions against countries harboring 
war criminals.
    Sec. 567, placing limitations on certain non-humanitarian 
assistance to Haiti, is revised to reduce the scope of the 
extrajudicial killings affected and adds a new condition 
regarding economic reforms.

                  compliance with rule XIII--Clause 3

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman).

                           reciprocal leasing

    The accompanying bill in section 524 would amend section 
61(a) of the Arms Export Control Act and extend the leasing 
authority of that section through fiscal year 1998, as follows:
    Sec. 61. Leasing Authority.--(a) The President may lease 
defense articles in the stocks of the Department of Defense to 
an eligible foreign country or international organization if--
          (1) he determines that there are compelling foreign 
        policy and national security reasons for providing such 
        articles on a lease basis rather than on a sales basis 
        under this Act;
          (2) he determines that the articles are for the time 
        not needed for public use;
          (3) the President first considers the effects of the 
        lease of the articles on the national technology and 
        industrial base, particularly to the extent, if any, to 
        which the lease reduces the opportunities of entities 
        in the national technology and industrial base to sell 
        new equipment to the country or countries to which the 
        articles are leased; and
          (4) the country or international organization has 
        agreed to pay in United States dollars all cost 
        incurred by the United States Government in leasing 
        such articles, including reimbursement for depreciation 
        of such articles while leased, the costs of restoration 
        or replacement if the articles are damaged while 
        leased, and if the articles are lost or destroyed while 
        leased--
                  (A) in the event the United States intends to 
                replace the articles lost or destroyed, the 
                replacement cost (less any depreciation in the 
                value) of the articles; or
                  (B) in the event the United States does not 
                intend to replace the articles lost or 
                destroyed, an amount not less than the actual 
                value (less any depreciation in the value) 
                specified in the lease agreement.
The requirement of paragraph (4) shall not apply to leases 
entered into for purposes of cooperative research of 
development, military exercises, or communications or 
electronics interface projects. The President may waive the 
requirement of paragraph (4) for reimbursement of depreciation 
for any defense article which has passed three-quarters of its 
normal service life if the President determines that to do so 
is important to the national security interest of the United 
States.
    The President may waive the requirement of paragraph (4) 
with respect to a lease which is made in exchange with the 
lessee for a lease on substantially reciprocal terms of defense 
articles for the Department of Defense, except that this waiver 
authority--
          (A) may be exercised only if the President submits to 
        the Committee on Foreign Affairs and the Committee on 
        Appropriations of the House of Representatives and the 
        Committee on Foreign Relations and the Committee on 
        Appropriations of the Senate, in accordance with the 
        regular notification procedures of those Committees, a 
        detailed notification for each lease with respect to 
        which the authority is exercised; and
          (B) may be exercised only during the fiscal year 
        [1997] 1998 and only with respect to one country, 
        unless the Congress hereafter provides otherwise.
The preceding sentence does not constitute authorization of 
appropriations for payments by the United States for leased 
articles.

                    special defense acquisition fund

    The accompanying bill in section 535 would amend title III 
of Public Law 103-306, the Foreign Operations, Export Financing 
and Related Programs Appropriations Act, 1995, and extend until 
fiscal year 2000 the authority necessary to use Special Defense 
Acquisition Fund funds to finalize decapitalization of the 
Fund, as follows:

                    special defense acquisition fund

    Not to exceed $20,000,000 may be obligated pursuant to 
section 51(c)(2) of the Arms Export Control Act for the purpose 
of closing the Special Defense Acquisition Fund, to remain 
available for obligation until September 30, [1998] 2000: 
Provided That the authority provided in this Act is not used to 
initiate new procurements.

                  Appropriations Not Authorized by Law

    Pursuant to clause 3 of rule XXI of the House of 
Representatives, the following table lists the appropriations 
in the accompanying bill which, in whole or in part, are not 
authorized by law:
    Export-Import Bank
    Overseas Private Investment Corporation
    Trade and Development Agency
    Child Survival and Disease Programs Fund
    Development Assistance
    International Disaster Assistance
    Debt Restructuring
    Micro and Small Enterprise Development Program Account
    Urban and Environmental Credit Program Account
    AID Operating Expenses
    AID Operating Expenses, Office of Inspector General
    Economic Support Fund
    International Fund for Ireland
    Assistance for Eastern Europe and the Baltic States
    Assistance for the New Independent States of the Former 
            Soviet Union
    Inter-American Foundation
    African Development Foundation
    Peace Corps
    International Narcotics Control
    Refugee Resettlement Assistance
    Migration and Refugee Assistance
    Nonproliferation, Anti-Terrorism, Demining and Related 
            Programs
    International Military Education and Training
    Foreign Military Financing Program
    Peacekeeping Operations
    Global Environment Facility
    International Development Association
    International Organizations and Programs
    Inter-American Development Bank
    Asian Development Bank
    Asian Development Fund
    African Development Fund
    European Bank for Reconstruction and Development
    North American Development Bank


            ADDITIONAL VIEWS OF REPRESENTATIVE NANCY PELOSI

    First I want to compliment Chairman Callahan for the manner 
in which he worked with minority members in putting this bill 
together. For the most part the bill reflects a bipartisan 
approach, and incorporates a wide range of specific priorities 
of individual members of the Committee. The bill deals with 
many controversial issues fairly and in a manner which reflects 
a consensus view of the Committee.
    I do have serious concerns about several items in the bill. 
The total amount in the bill of $12,311,414,980 is slightly 
below the amount provided last year, and is well below the 
amount requested by the Administration--$16,888,168,980, and 
more significantly is $233,000,000 below the Committee's 602(b) 
allocation of $12,500,000,000.
    While the Appropriations Committee cannot be necessarily 
bound by every element of the Budget Summit agreement, there 
were specific understandings reached about the amounts to be 
provided for international affairs purposes and agreement that 
the Administration's request level be fully funded. I make this 
point not to be critical of what has been funded in this bill, 
but to make clear that in the context of the final bill for FY 
1998, I will be working to achieve a spending level closer to 
the Administration's request.
    Of particular concern is the low amount--$606,000,000--
included for the International Development Association (IDA) of 
the World Bank. The Administration had requested $1,034,504,000 
in order to meet our annual contribution level of $800,000,000 
and to pay for overdue past commitments of $234,504,000. If 
this low level of funding is not addressed in conference, 
American suppliers will suffer from further restrictions on 
their ability to compete for World Bank projects. In addition 
only $35,000,000 has been approved for the Global Environment 
Facility of the World Bank against a request of $100,000,000. 
The United States contributions to this facility have fallen so 
far behind that other countries are beginning to recede from 
their commitments. In light of the immense challenges that face 
us in the developing world, I strongly believe that this 
funding level should be increased.
    Similarly the bill contains only $625,000,000 for programs 
in the New Independent States. While this is the amount that 
was provided last year, it provides little or no funding for 
the new Partnership for Freedom initiative. We have been 
engaged with the former states of the Soviet Union with aid 
programs for the past five years, and it is now time to 
reconstitute those programs and move on to the next stage 
taking into account the lessons we have learned. This bill 
provides little ability to do so by restricting the amount to 
last years level.
    I commend the Chairman of the Subcommittee for funding many 
accounts at appropriate levels. The Development Assistance and 
Child Survival accounts have been increased. An additional $50 
million was added to the Child Survival account, which will 
allow for increases in amounts allocated to combat infectious 
diseases. Funding for AIDS prevention and control has been 
increased to a level of $121,000,000. Funding for development 
activities in Latin America have been increased by $20,000,000 
above the request, and funding for Microcredit activities has 
been increased by $10,000,000 above last year. The total amount 
requested for development activities in Africa has been 
approved. Even though a separate account for Africa was not 
approved, Africa will receive the same level of resources from 
AID as if separate funding had been approved, and will benefit 
from increases in Child survival activities and the 
Communicable Diseases Initiative.
    The traditional level of assistance has been recommended 
for the Middle East for both Israel and Egypt. A small increase 
in assistance to Jordan has been approved, and further action 
is expected to respond to the Administration's initiative to 
provide a more substantial package of economic assistance to 
Jordan from within amounts available for the Middle East.
    The Peace Corps, Refugee programs, UNICEF, and the United 
Nations Development Program have all been funded at the request 
level. Both the African Development Foundation and the 
InterAmerican Foundation will receive their budget requests 
through a combination of direct funding and transfers. Funding 
for Demining programs has been increased above the request.
    The bill fully funds our export promotion activities with 
the exception of the subsidy amounts for the Overseas Private 
Investment Corporation. Action on this aspect of the program 
has been deferred until the authorizing committee takes action.
    In terms of the International banks the bill, with the 
exceptions I have mentioned, funds most of the other 
institutions adequately. However, the African Development Fund 
only received $25,000,000 of the $50,000,000 requested and I 
hope to work to increase this amount later in the process.
    The committee worked out compromise language on many 
contentious issues such as assistance to Armenia and 
Azerbaijan, Turkey, and the Korean Peninsula Energy Development 
Organization. While I do not agree with every element of policy 
language on these items, compromises have been worked out in a 
bipartisan fashion. The Committee has once again included 
language restricting assistance to countries which harbor war 
criminals. I will work to strengthen our ability to restrict 
assistance when necessary to those countries harboring war 
criminals. The bill also contains restrictions on assistance to 
Haiti limiting the amounts which can be allocated and requiring 
certain actions by the government before aid can be given. I do 
not necessarily agree with these conditions and am concerned 
that they will make President Preval's efforts to achieve 
economic and electoral reforms more difficult.
    In conclusion, while I believe this bill is worthy of 
support, there are many funding level and policy issues which 
need to be addressed further. I intend to work to amend the 
bill so that it adequately funds our foreign assistance 
programs and gives the Administration the appropriate policy 
guidance from Congress in the conducting of foreign affairs.

                                                      Nancy Pelosi.
           ADDITIONAL VIEWS OF CONGRESSMAN MICHAEL P. FORBES

    The U.S.-Israel relationship is a historic commitment of 
two nations to the cause of peace, freedom, and security. 
However, evidence of Palestinian violations to the Oslo Accords 
concerns me and the time has come for Congress to re-examine 
its policy of providing assistance to the Palestinian 
Authority. My concern is not directed to the Palestinian 
people, but to the leadership of the Palestinian Authority 
whose actions reflect a lack of commitment to the spirit of the 
Oslo Accords. I would like to see the United States continue to 
be a partner in peace with the Palestinians and Israelis, 
however, if the Congress is going to continue to provide $100 
million a year to the Palestinians, we have an obligation to 
fully investigate the serious reports of violations and gross 
misconduct committed by the Palestinian Authority that include:
    (1) Imposing a death penalty on any Arab who sells land to 
a Jew.
    On May 3, 1997, Arafat's cabinet announced that it would 
impose the death penalty for any Arab who sells land to Jews. 
Arafat, PLO Justice Minister, and other senior PLO officials 
publicly endorsed the new policy. During the weeks following 
the announcement, 3 Arab landsellers were found murdered. In 
addition, the PA has marked 16 other Arab realtors for death 
and turned over their names to PA security organizations for 
execution, according to Israeli defense officials.
    Instead of condemning the murders, Arafat encourages the 
edict: ``Our law is a Jordanian law that we inherited, which 
applies to both the West Bank and Gaza, and sets the death 
penalty for those who sell land to Israelis. . . . We are 
talking about a few traitors, and we shall implement against 
them what is written in the law books. It is our right and our 
obligation to defend our land.'' (an interview with an Israeli 
newspaper Yediot Ahronot, May 20, 1997)
    Recent statements by PA Justice Minister Freih Abu Middein 
reflect the PA's intent on imposing the edict: ``I warned the 
land dealers several times through the media not to play with 
fire. For us, whoever sells land to Jews and settlers is more 
dangerous than collaborators. Therefore, they must be put on 
trial and sentenced to death . . . they are traitors.'' (an 
interview with an Israeli newspaper Yediot Ahronot, May 21, 
1997)
    This edict is in violation of internationally accepted 
norms and principles of human rights and the rule of the law. 
The practice of murdering Palestinians for land sales to Jews 
is a violation of international law and the spirit of the Oslo 
peace agreements, casting strong doubt whether the Palestinians 
are in compliance with their commitments to Israel. What kind 
of regime are we supporting with $100 million per year in 
foreign aid? Any kind of U.S. endorsement and encouragement for 
this practice by the most senior leadership of the PA is 
unacceptable. We cannot put up with this. The Committee should 
consider suspending aid in this bill. At what point do we say 
enough is enough? The Palestinians must be put on notice that 
these senseless acts must stop.
    (2) Failing to amend the Palestinian Covenant calling for 
the destruction of Israel through armed struggle.
    As part of the Hebron Accord (1/97), one of the Palestinian 
responsibilities that must be fulfilled immediately included 
``complete the process of revising the Palestinian National 
Charter.'' The Palestinian Council has not lived up to that 
requirement.
    On April 24, 1996, the PLO's National Council passed a 
resolution saying that it would, in the future, annul those 
articles in the Covenant that conflict with the accords; it 
also appointed a legal committee to explore the matter. The 
legal committee has not yet met or made any recommendations. 
Over the last 2 years, we have over and over again called upon 
the PA to recognize the right of Israel to exist. We have heard 
nothing.
    (3) Allegations of financial corruption and misuse of 
foreign donations.
    A 600-page report completed in May by the Palestinian 
Authority's auditing office found that $323 million, almost 40% 
of the PA's annual budget, has been misused by PLO/PA 
officials.
    An investigation by the New York Times revealed that the 
PLO has used at least $47 million in foreign donations to 
illegally purchase property in Jerusalem, to buy private 
apartments for PLO bureaucrats, and to finance covert political 
activities, according to internal correspondence between PLO 
and Yasser Arafat and officials of the PLO's PECDAR agency that 
handles donations from abroad. (NY Times, June 1995).
    (4) Continuing to incite Arabs to murder and violence.
    In an interview with the Russian newspaper Novoya Vremya, 
Arafat praises Hamas as ``patriotic.'' This is incitement to 
murder Jews because the official Hamas Manifesto declares ``by 
the command of the Prophet Mohammed must fight the Jews and 
kill them wherever they are * * *.''
    (5) Calling for an Arab Boycott of Israel.
    Earlier this year, in an address to an Arab League meeting 
in Cairo, PLO Chairman Yasser Arafat appealed to the Arab world 
to ``freeze relations with Israel.'' (AP) The Arab League 
issued a resolution calling on ``all Arab countries which have 
established normal ties with Israel'' to ``freeze relations.''
    (6) Refusing to honor extradition requests from Israel.
    Israel has requested the extradition of 31 terrorists. The 
PA has not honored any of those requests; 11 out of the 31 
suspects are serving in the Palestinian Security Forces.
    (7) Refusing to confiscate unauthorized weapons and 
maintaining a much larger police force than authorized under 
Oslo agreements.
    Time magazine reported in (12/8/96) that ``Yasser Arafat's 
security forces are working around the clock to obtain an 
arsenal of anti-tank and anti-aircraft missiles--weapons they 
are forbidden to have under the Oslo accords.''
    Israeli television reported (6/6/97) that hand grenades, 
shells, and possibly even Katyusha rockets are being 
manufactured by the PLO within Gaza.
    According to the Israeli Government Press Office, 
Palestinian security forces far exceed their permitted limit 
under Oslo. While the PA is prohibited from stationing more 
than 400 policemen in Hebron, it is alleged that they have 
stationed more than 1,000, some with weapons.

                                                       Mike Forbes.
 DISSENTING VIEWS OF ESTEBAN E. TORRES, NANCY PELOSI, SIDNEY R. YATES, 
           NITA LOWEY, THOMAS M. FOGLIETTA, AND DAVID R. OBEY

    The U.S. Army School of the Americas (SOA), as the facility 
used to provide military education and training for the armed 
forces of Latin America and the Caribbean, is in part funded 
through U.S. foreign assistance funds. While we believe the 
bill reflects an effort to address some of the concerns about 
the funding for the School of the Americas, we sincerely 
believe it is time to prohibit any funding for the School. The 
Committee narrowly rejected by a vote of 21 to 23, an amendment 
by Cong. Torres to cut off all funds in the bill that would be 
used for the School of the Americas.
    It is important to note that in last year's bill, this 
Committee directed the Department of State and Defense to 
submit a report no later than January 15th on a number of 
concerns Members had expressed about the School such as the 
screening process for applicants and monitoring of graduates. 
This approach was agreed upon at that time despite our 
inclination to cut off all funds. The report was received just 
prior to the Subcommittee mark-up on June 25th, nearly 6 months 
late. At 3\1/2\ pages in length, the report does not represent 
a serious effort to be responsive to the issues that were to be 
addressed. It merely details how screening is intended to be 
carried out, and contains no evaluation of whether this process 
is actually effective. It further states that neither the 
School nor other U.S. personnel have the capacity to monitor 
graduates. The lateness of the report and its brevity indicate 
that the School and the Defense Department have failed to take 
reform efforts seriously.
    We are concerned that a number of SOA graduates have been 
linked to some of the worst human rights atrocities during the 
1980's and 1990's in Latin America both before and after their 
SOA training. The list of human rights violators connected with 
the School is long and getting longer as names of violators are 
matched with graduate rosters. Known violators include 19 out 
of 26 officers cited by the Salvadoran Truth Commission for the 
massacre of the Jesuits, 100 out of 246 Colombian officers 
cited for war crimes, six Peruvian officers involved in the 
killings of nine students and a professor, and a Panamanian 
dictator Manuel Noriega. Clearly, this list cannot be dismissed 
as a few exceptions. Throughout Latin America, the School of 
the Americas is seen as a training ground for repressive 
militaries and dictators, and its record cannot be ignored.
    Furthermore, the recently declassified training manuals 
used at the School for many years taught abusive techniques and 
advocated profoundly undemocratic military tactics such as 
blackmail and illegal detention. These manuals taught armies to 
violate human rights, to use physical abuse and censorship, to 
spy on civilian organizations like student groups, community 
organizations, and opposition political parties, to confuse the 
boundaries between civilians and combatants, and to ignore the 
rule of law. The School has tried to downplay rather than fully 
acknowledge these problems with its training. The School has 
added four hours on human rights to its courses which is 
laudable. However, this hardly qualifies as adequately 
addressing the need for human rights training. These changes 
are too little, too late.
    There are many other avenues for U.S. engagement with Latin 
American militaries. Cutting off funds to the School does not 
prevent the many other forms of conduct and cooperation between 
the U.S. and Latin American militaries. Some 60,000 U.S. 
military personnel will rotate through Latin America this year, 
for example, on various training missions and assignments. 
Through the International Military Education and Training 
Program, foreign military personnel come to the United States 
and study at many U.S. institutions, the School of the Americas 
is but one.
    We believe the School represents a severely outdated 
approach to a fragile region that is struggling with democracy 
and civilian control of their militaries and should be closed. 
The Cold War is over. It is time to take a new look at U.S.-
Latin American military relationships and to mark a new era in 
U.S. support for democracy in the hemisphere.

                                   Sidney R. Yates.
                                   Nancy Pelosi.
                                   Nita Lowey.
                                   Esteban E. Torres.
                                   David R. Obey.
                                   Thomas M. Foglietta.