50 U.S.C. § 4568 — Annual report on impact of offsets

(a) Report required. (1) In general. The President must submit a detailed annual report to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services^*. The report must address the impact of offsets on United States defense preparedness, industrial competitiveness, employment, and trade.

(2) Duties of the Secretary of Commerce. The Secretary of Commerce (called the “Secretary” in this subsection) must—(A) prepare the report; (B) consult the Secretaries of Defense, the Treasury, and State, and the United States Trade Representative while preparing it; and (C) act as the President's Executive Agent for carrying out this section.

(b) Interagency studies and related data. (1) Purpose of report. Each report must identify the cumulative effects of offset agreements on—(A) the full range of domestic defense production capability, with special attention to lower-tier subcontractors and suppliers; and (B) the domestic defense technology base resulting from technology transfers connected with the agreements. (2) Use of data. Any agency that develops or compiles data during an interagency study or another independent study or analysis must make that data available to the Secretary to help carry out the Secretary's responsibilities for developing trade-offset and countertrade policy.

(c) Notice of offset agreements. (1) In general. If a United States firm contracts to sell a weapon system or defense-related item to a foreign country or foreign firm, and the contract is subject to an offset agreement worth more than $5,000,000, the firm must give information about the sale to the official designated in regulations under paragraph (2). (2) Regulations. The Secretary must prescribe the information in regulations. The regulations must protect the information from public disclosure unless the firm that supplied it later specifically authorizes disclosure.

(d) Contents of report. (1) Each report must include—(A) a net assessment of the industrial-base and technology-base elements covered by the report; (B) recommendations for suitable corrective action under this chapter or another law or regulation; (C) a summary of findings and recommendations from interagency studies conducted during the reporting period under subsection (b); (D) a summary of offset arrangements concluded during the reporting period for which information was supplied under subsection (c); and (E) a summary and analysis of bilateral and multilateral negotiations completed during the reporting period about using offsets. (2) The report must also include alternative findings or recommendations offered to the Secretary by any departmental Secretary, agency head, or the United States Trade Representative.

(e) Utilization of annual report in negotiations. United States representatives must consider the findings and recommendations in the reports required by subsection (a), and any interagency reports and analyses, during bilateral and multilateral negotiations to minimize offsets' harmful effects.