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European Payments Union.

Transportation on U. S. flag v e s sels.

Procurement outside U. S.

Restriction on obligations.

Surplus agricultural commodities.

Ante, p. 843.

Funds allocated to Defense Department. Accounting, etc.

PUBLIC LAW 7 7 8 - S E P T. 3, 1954

[68

STAT.

shall any of these funds be expended for any purpose for which funds have been withdrawn by any recipient country to make payment on such debts: Provided, That none of the funds herein appropriated shall be used to make up any deficit to the European Payments Union for any nation of which a dependent area fails to comply with any treaty to which the United States and such dependent area are parties and said failure to comply has been adjudicated adversely to said nation in any court of competent jurisdiction nor shall any of the counterpart funds generated as a result of assistance under this Act be made available to such nation. SEC. 106. The Director shall, in providing for the procurement of commodities under authority of this Act, take such steps as may be necessary to assure, so far as is practicable, that at least 50 per centum of the gross tonnage of commodities, procured within the United States out of funds made available under this Act and transported abroad on ocean vessels, is so transported on United States flag vessels to the extent such vessels are available at market rates. SEC. 107. Funds made available pursuant to this Act may not be used for the procurement of equipment or materials outside the United States unless the President or an official of Cabinet rank designated by him determines that such procurement will not result in one or more of the following conditions: (1) Adverse effects upon the economy of the United States, with special reference to any areas of labor surplus, or upon the industrial mobilization base, which outweigh the strategic and logistic advantages to the United States of procurement abroad; (2) Production of such equipment or materials outside the United States under inadequate safeguards against sabotage or the release to potential enemies of information detrimental to the security of the United States; (3) Unjustifiable cost in comparison with procurement in the United States; and (4) Delays in delivery incompatible with United States defense objectives. SEC. 108. Not more than 25 per centum of any funds made available by this Act shall be obligated during the last two months of the fiscal year. SEC. 109. $55,000,000 of the unobligated balances continued available under this Act shall be available only for the procurement and sale, in accordance with provisions of section 402 of the Mutual Security Act of 1954, of surplus agricultural commodities as assistance to Spain during the current fiscal year: Provided, That 80 per centum of the foreign currencies generated hereunder shall be used to strengthen and improve the civilian economy of Spain, the balance to be available for use of the United States: Provided, however, That this provision shall not be construed as a precedent or as an abrogation of any agreement heretofore entered into. SEC. 110. Funds heretofore or hereafter allocated to the Department of Defense from any appropriation for military assistance (except funds obligated directly against any such appropriation for offshore procurement or other purposes) shall be accounted for by geographic area and by country solely on the basis of the value of materials delivered and services performed (such value to be determined in accordance with the applicable provisions of law governing the administration of military assistance). Within the limits of amounts available from funds so allocated, the Department of Defense is authorized to incur, in applicable appropriations, obligations in anticipation of reimbursement from such allocations, and no funds so allocated and available shall be withdrawn by administrative action

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