Page:United States Statutes at Large Volume 102 Part 2.djvu/363

 PUBLIC LAW 100-418—AUG. 23, 1988

102 STAT. 1367

"(C) if the President determines that such articles or services are essential to the national security under defense coproduction agreements; or "(2)to— "(A) products or services provided under contracts or other binding agreements (as such terms are defined by the President in r^ulations) entered into before the date on which the President notifies the Congress of the intention to impose the sanctions; "(B) spare parts; "(C) component parts, but not finished products, essential to United States products or production; "(D) routine servicing and maintenance of products; or "(E) information and technolc^y. "(d) EXCLUSION.—The President shall not apply sanctions under this section to a parent, affiliate, subsidiary, and successor entity of a foreign person if the President determines that— "(1) the parent, affiliate, subsidiary, or successor entity (as the case may be) has not knowingly violated the export control r ^ u l a t i o n violated by the foreign person, and "(2) the government of the country with jurisdiction over the parent, af^iate, subsidiary, or successor entity had in effect, at the time of the violation by the foreign person, an effective export control system consistent with principles agreed to in the Coordinating Committee, including the following: "(A) national laws providing appropriate civil and criminal penalties and statutes of limitations sufficient to deter potential violations; "(B) a prc^ram to evaluate export license applications that includes sufficient technical expertise to assess the licensing status of exports and ensure the reliability of end-users; "(C) an enforcement mechanism that provides authority for trained enforcement officers to investigate and prevent U l ^ a l exports; "(D) a system of export control documentation to verify the movement of goods and technolc^y; and "(E) procedures for the coordination and exchange of information concerning violations of the agreement of the Coordinating Committee. "(e) DEFINITIONS.—For purposes of this section— "(1) the term 'component part' means any article which is not usable for its intended functions without being imbedded in or i n t ^ r a t e d into any other product and which, if used in production of a finished product, would be substantially transformed in that process; "(2) the term 'finished product' means any article which is usable for its intended functions without being imbedded or i n t ^ r a t e d into any other product, but in no case shall such term be deemed to include an article produced by a person other than a sanctioned person that contains parts or components of the sanctioned person if the parts or components have been substantially transformed during production of the finished product; and "(3) the term 'sanctioned person' means a foreign person, and any parent, affiliate, subsidiary, or successor entity of the for-

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