**TITLE 22\--FOREIGN RELATIONS**

**CHAPTER I\--DEPARTMENT OF STATE**

## PART 130 \-- POLITICAL CONTRIBUTIONS, FEES AND COMMISSIONS

**Section Contents**\
§ 130.1   Purpose.\
§ 130.2   Applicant.\
§ 130.3   Armed forces.\
§ 130.4   Defense articles and defense services.\
§ 130.5   Fee or commission.\
§ 130.6   Political contribution.\
§ 130.7   Supplier.\
§ 130.8   Vendor.\
§ 130.9   Obligation to furnish information to the Directorate of
Defense Trade Controls.\
§ 130.10   Information to be furnished by applicant or supplier to the
Directorate of Defense Trade Controls.\
§ 130.11   Supplementary reports.\
§ 130.12   Information to be furnished by vendor to applicant or
supplier.\
§ 130.13   Information to be furnished to applicant, supplier or vendor
by a recipient of a fee or commission.\
§ 130.14   Recordkeeping.\
§ 130.15   Confidential business information.\
§ 130.16   Other reporting requirements.\
§ 130.17   Utilization of and access to reports and records.

**Authority:**   Sec. 39, Arms Export Control Act, 90 Stat. 767 (22
U.S.C. 2779); E.O. 11958, 42 FR 4311, 3 CFR, 1977 Comp. p. 79; 22 U.S.C.
2651a.

**Source:**   58 FR 39323, July 22, 1993, unless otherwise noted.

##### § 130.1   Purpose.

Section 39(a) of the Arms Export Control Act (22 U.S.C. 2779) provides
that the Secretary of State shall prescribe regulations with respect to
reporting on certain payments relating to sales of defense articles and
defense services. The provisions of this part implement that
requirement. Definitions which apply to this part are contained in
§§130.2 through 130.8.

##### § 130.2   Applicant.

*Applicant* means any person who applies to the Directorate of Defense
Trade Controls for any license or approval required under this
subchapter for the export of defense articles or defense services valued
in an amount of \$500,000 or more which are being sold commercially to
or for the use of the armed forces of a foreign country or international
organization. This term also includes a person to whom the required
license or approval has been given.

\[71 FR 20554, Apr. 21, 2006\]

##### § 130.3   Armed forces.

*Armed forces* means the army, navy, marine, air force, or coast guard,
as well as the national guard and national police, of a foreign country.
This term also includes any military unit or military personnel
organized under or assigned to an international organization.

##### § 130.4   Defense articles and defense services.

*Defense articles and defense services* have the meaning given those
terms in paragraphs (3), (4) and (7) of section 47 of the Arms Export
Control Act (22 U.S.C. 2794 (3), (4), and (7)). When used with reference
to commercial sales, the definitions in §§120.6 and 120.9 of this
subchapter apply.

##### § 130.5   Fee or commission.

(a) *Fee or commission* means, except as provided in paragraph (b) of
this section, any loan, gift, donation or other payment of \$1,000 or
more made, or offered or agreed to be made directly or indirectly,
whether in cash or in kind, and whether or not pursuant to a written
contract, which is:

\(1\) To or at the direction of any person, irrespective of nationality,
whether or not employed by or affiliated with an applicant, a supplier
or a vendor; and

\(2\) For the solicitation or promotion or otherwise to secure the
conclusion of a sale of defense articles or defense services to or for
the use of the armed forces of a foreign country or international
organization.

\(b\) The term fee or commission does not include:

\(1\) A political contribution or a payment excluded by §130.6 from the
definition of political contribution;

\(2\) A normal salary (excluding contingent compensation) established at
an annual rate and paid to a regular employee of an applicant, supplier
or vendor;

\(3\) General advertising or promotional expenses not directed to any
particular sale or purchaser; or

\(4\) Payments made, or offered or agreed to be made, solely for the
purchase by an applicant, supplier or vendor of specific goods or
technical, operational or advisory services, which payments are not
disproportionate in amount with the value of the specific goods or
services actually furnished.

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20554, Apr. 21, 2006\]

##### § 130.6   Political contribution.

*Political contribution* means any loan, gift, donation or other payment
of \$1,000 or more made, or offered or agreed to be made, directly or
indirectly, whether in cash or in kind, which is:

\(a\) To or for the benefit of, or at the direction of, any foreign
candidate, committee, political party, political faction, or government
or governmental subdivision, or any individual elected, appointed or
otherwise designated as an employee or officer thereof; and

\(b\) For the solicitation or promotion or otherwise to secure the
conclusion of a sale of defense articles or defense services to or for
the use of the armed forces of a foreign country or international
organization. Taxes, customs duties, license fees, and other charges
required to be paid by applicable law or regulation are not regarded as
political contributions.

##### § 130.7   Supplier.

*Supplier* means any person who enters into a contract with the
Department of Defense for the sale of defense articles or defense
services valued in an amount of \$500,000 or more under section 22 of
the Arms Export Control Act (22 U.S.C. 2762).

##### § 130.8   Vendor.

(a) *Vendor* means any distributor or manufacturer who, directly or
indirectly, furnishes to an applicant or supplier defense articles
valued in an amount of \$500,000 or more which are end-items or major
components as defined in §121.8 of this subchapter. It also means any
person who, directly or indirectly, furnishes to an applicant or
supplier defense articles or services valued in an amount of \$500,000
or more when such articles or services are to be delivered (or
incorporated in defense articles or defense services to be delivered) to
or for the use of the armed forces of a foreign country or international
organization under:

\(1\) A sale requiring a license or approval from the Directorate of
Defense Trade Controls under this subchapter; or

\(2\) A sale pursuant to a contract with the Department of Defense under
section 22 of the Arms Export Control Act (22 U.S.C. 2762).

\(b\) \[Reserved\]

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20554, Apr. 21, 2006\]

##### 

##### 

##### 

##### § 130.9   Obligation to furnish information to the Directorate of Defense Trade Controls.

(a)(1) Each applicant must inform the Directorate of Defense Trade
Controls as to whether the applicant or its vendors have paid, or
offered or agreed to pay, in respect of any sale for which a license or
approval is requested:

\(i\) Political contributions in an aggregate amount of \$5,000 or more,
or

\(ii\) Fees or commissions in an aggregate amount of \$100,000 or more.
If so, applicant must furnish to the Directorate of Defense Trade
Controls the information specified in §130.10. The furnishing of such
information or an explanation satisfactory to the Managing Director of
the Directorate of Defense Trade Controls as to why all the information
cannot be furnished at that time is a condition precedent to the
granting of the relevant license or approval.

\(2\) The requirements of this paragraph do not apply in the case of an
application with respect to a sale for which all the information
specified in §130.10 which is required by this section to be reported
shall already have been furnished.

\(b\) Each supplier must inform the Directorate of Defense Trade
Controls as to whether the supplier or its vendors have paid, or offered
or agreed to pay, in respect of any sale:

\(1\) Political contributions in an aggregate amount of \$5,000 or more,
or

\(2\) Fees or commissions in an aggregate amount of \$100,000 or more.
If so, the supplier must furnish to the Directorate of Defense Trade
Controls the information specified in §130.10. The information required
to be furnished pursuant to this paragraph must be so furnished no later
than 30 days after the contract award to such supplier, or such earlier
date as may be specified by the Department of Defense. For purposes of
this paragraph, a contract award includes a purchase order, exercise of
an option, or other procurement action requiring a supplier to furnish
defense articles or defense services to the Department of Defense for
the purposes of §22 of the Arms Export Control Act (22 U.S.C. 2762).

\(c\) In determining whether an applicant or its vendors, or a supplier
or its vendors, as the case may be, have paid, or offered or agreed to
pay, political contributions in an aggregate amount of \$5,000 or more
in respect of any sale so as to require a report under this section,
there must be included in the computation of such aggregate amount any
political contributions in respect of the sale which are paid by or on
behalf of, or at the direction of, any person to whom the applicant,
supplier or vendor has paid, or offered or agreed to pay, a fee or
commission in respect of the sale. Any such political contributions are
deemed for purposes of this part to be political contributions by the
applicant, supplier or vendor who paid or offered or agreed to pay the
fee or commission.

\(d\) Any applicant or supplier which has informed the Directorate of
Defense Trade Controls under this section that neither it nor its
vendors have paid, or offered or agreed to pay, political contributions
or fees or commissions in an aggregate amount requiring the information
specified in §130.10 to be furnished, must subsequently furnish such
information within 30 days after learning that it or its vendors had
paid, or offered or agreed to pay, political contributions or fees or
commissions in respect of a sale in an aggregate amount which, if known
to applicant or supplier at the time of its previous communication with
the Directorate of Defense Trade Controls, would have required the
furnishing of information under §130.10 at that time. Any report
furnished under this paragraph must, in addition to the information
specified in §130.10, include a detailed statement of the reasons why
applicant or supplier did not furnish the information at the time
specified in paragraph (a) or paragraph (b) of this section, as
applicable.

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20554, Apr. 21, 2006\]

##### § 130.10   Information to be furnished by applicant or supplier to the Directorate of Defense Trade Controls.

(a) Every person required under §130.9 to furnish information specified
in this section in respect to any sale must furnish to the Directorate
of Defense Trade Controls:

\(1\) The total contract price of the sale to the foreign purchaser;

\(2\) The name, nationality, address and principal place of business of
the applicant or supplier, as the case may be, and, if applicable, the
employer and title;

\(3\) The name, nationality, address and principal place of business,
and if applicable, employer and title of each foreign purchaser,
including the ultimate end-user involved in the sale;

\(4\) Except as provided in paragraph (c) of this section, a statement
setting forth with respect to such sale:

\(i\) The amount of each political contribution paid, or offered or
agreed to be paid, or the amount of each fee or commission paid, or
offered or agreed to be paid;

\(ii\) The date or dates on which each reported amount was paid, or
offered or agreed to be paid;

\(iii\) The recipient of each such amount paid, or intended recipient if
not yet paid;

\(iv\) The person who paid, or offered or agreed to pay such amount; and

\(v\) The aggregate amounts of political contributions and of fees or
commission, respectively, which shall have been reported.

\(b\) In responding to paragraph (a)(4) of this section, the statement
must:

\(1\) With respect to each payment reported, state whether such payment
was in cash or in kind. If in kind, it must include a description and
valuation thereof. Where precise amounts are not available because a
payment has not yet been made, an estimate of the amount offered or
agreed to be paid must be provided;

\(2\) With respect to each recipient, state:

\(i\) Its name;

\(ii\) Its nationality;

\(iii\) Its address and principal place of business;

\(iv\) Its employer and title; and

\(v\) Its relationship, if any, to applicant, supplier, or vendor, and
to any foreign purchaser or end-user.

\(c\) In submitting a report required by §130.9, the detailed
information specified in paragraph (a)(4) and (b) of this section need
not be included if the payments do not exceed:

\(1\) \$2,500 in the case of political contributions; and

\(2\) \$50,000 in the case of fees or commissions.

In lieu of reporting detailed information with respect to such payments,
the aggregate amount thereof must be reported, identified as
miscellaneous political contributions or miscellaneous fees or
commissions, as the case may be.

\(d\) Every person required to furnish the information specified in
paragraphs (a) and (b) of this section must respond fully to each
subdivision of those paragraphs and, where the correct response is
"none" or "not applicable," must so state.

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20554, Apr. 21, 2006\]

##### § 130.11   Supplementary reports.

(a) Every applicant or supplier who is required under §130.9 to furnish
the information specified in §130.10 must submit a supplementary report
in connection with each sale in respect of which applicant or supplier
has previously been required to furnish information if:

\(1\) Any political contributions aggregating \$2,500 or more or fees or
commissions aggregating \$50,000 or more not previously reported or
paid, or offered or agreed to be paid by applicant or supplier or any
vendor;

\(2\) Subsequent developments cause the information initially reported
to be no longer accurate or complete (as in the case where a payment
actually made is substantially different in amount from a previously
reported estimate of an amount offered or agreed to be paid); or

\(3\) Additional details are requested by the Directorate of Defense
Trade Controls with respect to any miscellaneous payments reported under
§130.10(c).

\(b\) Supplementary reports must be sent to the Directorate of Defense
Trade Controls within 30 days after the payment, offer or agreement
reported therein or, when requested by the Directorate of Defense Trade
Controls, within 30 days after such request, and must include:

\(1\) Any information specified in §130.10 required or requested to be
reported and which was not previously reported; and

\(2\) The Directorate of Defense Trade Controls license number, if any,
and the Department of Defense contract number, if any, related to the
sale.

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20554, Apr. 21, 2006\]

##### § 130.12   Information to be furnished by vendor to applicant or supplier.

(a) In order to determine whether it is obliged under §130.9 to furnish
the information specified in §130.10 with respect to a sale, every
applicant or supplier must obtain from each vendor, from or through whom
the applicant acquired defense articles or defense services forming the
whole or a part of the sale, a full disclosure by the vendor of all
political contributions or fees or commission paid, by vendor with
respect to such sale. Such disclosure must include responses to all the
information pertaining to vendor required to enable applicant or
supplier, as the case may be, to comply fully with §§130.9 and 130.10.
If so required, they must include the information furnished by each
vendor in providing the information specified.

\(b\) Any vendor which has been requested by an applicant or supplier to
furnish an initial statement under paragraph (a) of this section must,
except as provided in paragraph (c) of this section, furnish such
statement in a timely manner and not later than 20 days after receipt of
such request.

\(c\) If the vendor believes that furnishing information to an applicant
or supplier in a requested statement would unreasonably risk injury to
the vendor\'s commercial interests, the vendor may furnish in lieu of
the statement an abbreviated statement disclosing only the aggregate
amount of all political contributions and the aggregate amount of all
fees or commissions which have been paid, or offered or agreed to be
paid, or offered or agreed to be paid, by the vendor with respect to the
sale. Any abbreviated statement furnished to an applicant or supplier
under this paragraph must be accompanied by a certification that the
requested information has been reported by the vendor directly to the
Directorate of Defense Trade Controls. The vendor must simultaneously
report fully to the Directorate of Defense Trade Controls all
information which the vendor would otherwise have been required to
report to the applicant or supplier under this section. Each such report
must clearly identify the sale with respect to which the reported
information pertains.

(d)(1) If upon the 25th day after the date of its request to vendor, an
applicant or supplier has not received from the vendor the initial
statement required by paragraph (a) of this section, the applicant or
supplier must submit to the Directorate of Defense Trade Controls a
signed statement attesting to:

\(i\) The manner and extent of applicant\'s or supplier\'s attempt to
obtain from the vendor the initial statement required under paragraph
(a) of this section;

\(ii\) Vendor\'s failure to comply with this section; and

\(iii\) The amount of time which has elapsed between the date of
applicant\'s or supplier\'s request and the date of the signed
statement;

\(2\) The failure of a vendor to comply with this section does not
relieve any applicant or supplier otherwise required by §130.9 to submit
a report to the Directorate of Defense Trade Controls from submitting
such a report.

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20555, Apr. 21, 2006\]

##### § 130.13   Information to be furnished to applicant, supplier or vendor by a recipient of a fee or commission.

(a) Every applicant or supplier, and each vendor thereof;

\(1\) In order to determine whether it is obliged under §130.9 or
§130.12 to furnish information specified in §130.10 with respect to a
sale; and

\(2\) Prior to furnishing such information, must obtain from each
person, if any, to whom it has paid, or offered or agreed to pay, a fee
or commission in respect of such sale, a timely statement containing a
full disclosure by such a person of all political contributions paid, or
offered or agreed to be paid, by it or on its behalf, or at its
direction, in respect of such sale. Such disclosure must include
responses to all the information required to enable the applicant,
supplier or vendor, as the case may be, to comply fully with §§130.9,
130.10, and 130.12.

\(b\) In obtaining information under paragraph (a) of this section, the
applicant, supplier or vendor, as the case may be, must also require
each person to whom a fee or commission is paid, or offered or agreed to
be paid, to furnish from time to time such reports of its political
contributions as may be necessary to enable the applicant, supplier or
vendor, as the case may be, to comply fully with §§130.9, 130.10,
130.11, and 130.12.

\(c\) The applicant supplier or vendor, as the case may be, must include
any political contributions paid, or offered or agreed to be paid, by or
on behalf of, or at the direction of, any person to whom it has paid, or
offered or agreed to pay a fee or commission in determining whether
applicant, supplier or vendor is required by §§130.9, 130.11, and 130.12
to furnish information specified in §130.10.

##### § 130.14   Recordkeeping.

Each applicant, supplier and vendor must maintain a record of any
information it was required to furnish or obtain under this part and all
records upon which its reports are based for a period of not less than
five years following the date of the report to which they pertain.

##### § 130.15   Confidential business information.

(a) Any person who is required to furnish information under this part
may identify any information furnished hereunder which the person
considers to be confidential business information. No person, including
any applicant or supplier, shall publish, divulge, disclose, or make
known in any manner, any information so identified by a vendor or other
person unless authorized by law or regulation.

\(b\) For purposes of this section, *confidential business information*
means commercial or financial information which by law is entitled to
protection from disclosure. (See, e.g., 5 U.S.C. 552(b) (3) and (4); 18
U.S.C. 1905; 22 U.S.C. 2778(e); Rule 26(c)(7), Federal Rules of Civil
Procedure.)

##### § 130.16   Other reporting requirements.

The submission of reports under this part does not relieve any person of
any requirements to furnish information to any federal, state, or
municipal agency, department or other instrumentality as required by
law, regulation or contract.

##### § 130.17   Utilization of and access to reports and records.

(a) All information reported and records maintained under this part will
be made available, upon request for utilization by standing committees
of the Congress and subcommittees thereof, and by United States
Government agencies, in accordance with §39(d) of the Arms Export
Control Act (22 U.S.C. 2779(d)), and reports based upon such information
will be submitted to Congress in accordance with sections 36(a)(7) and
36(b)(1) of that Act (22 U.S.C. 2776(a)(7) and (b)(1)) or any other
applicable law.

\(b\) All confidential business information provided pursuant to this
part shall be protected against disclosure to the extent provided by
law.

\(c\) Nothing in this section shall preclude the furnishing of
information to foreign governments for law enforcement or regulatory
purposes under international arrangements between the United States and
any foreign government.

\[58 FR 39323, July 22, 1993, as amended at 71 FR 20555, Apr. 21, 2006\]

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