§ 5401 — Support For East European Democracy (seed) Program

(a) The United States shall implement, beginning in fiscal year 1990, a concerted Program of Support for East European Democracy (which may also be referred to as the “SEED Program”). The SEED Program shall be comprised of diverse undertakings designed to provide cost-effective assistance to those countries of Eastern Europe that have taken substantive steps toward institutionalizing political democracy and economic pluralism. (b) The President should ensure that the assistance provided to East European countries pursuant to this chapter is designed— (1) to contribute to the development of democratic institutions and political pluralism characterized by— (A) the establishment of fully democratic and representative political systems based on free and fair elections, (B) effective recognition of fundamental liberties and individual freedoms, including freedom of speech, religion, and association, (C) termination of all laws and regulations which impede the operation of a free press and the formation of political parties, (D) creation of an independent judiciary, and (E) establishment of non-partisan military, security, and police forces; (2) to promote the development of a free market economic system characterized by— (A) privatization of economic entities, (B) establishment of full rights to acquire and hold private property, including land and the benefits of contractual relations, (C) simplification of regulatory controls regarding the establishment and operation of businesses, (D) dismantlement of all wage and price controls, (E) removal of trade restrictions, including on both imports and exports, (F) liberalization of investment and capital, including the repatriation of profits by foreign investors; (G) tax policies which provide incentives for economic activity and investment, (H) establishment of rights to own and operate private banks and other financial service firms, as well as unrestricted access to private sources of credit, and (I) access to a market for stocks, bonds, and other instruments through which individuals may invest in the private sector; and (3) not to contribute any substantial benefit— (A) to Communist or other political parties or organizations which are not committed to respect for the democratic process, or (B) to the defense or security forces of any member country of the Warsaw Pact. (c) Assistance and other activities under the SEED Program (which may be referred to as “SEED Actions”) shall include activities such as the following: (1) United States leadership in supporting— (A) loans by the International Bank for Reconstruction and Development and its affiliated institutions in the World Bank group that are designed to modernize industry, agriculture, and infrastructure, and (B) International Monetary Fund programs designed to stimulate sound economic growth. (2) United States leadership in supporting multilateral agreement to provide government-to-government loans for currency stabilization where such loans can reduce inflation and thereby foster conditions necessary for the effective implementation of economic reforms. (3) Participation in multilateral activities aimed at reducing and rescheduling a country’s international debt, when reduction and deferral of debt payments can assist the process of political and economic transition. (4) Assistance through the grant and concessional sale of food and other agricultural commodities and products when such assistance can ease critical shortages but not inhibit agricultural production and marketing in the recipient country. (5) Grants to support private, nonprofit “Enterprise Funds”, designated by the President pursuant to law and governed by a Board of Directors, which undertake loans, grants, equity investments, feasibility studies, technical assistance, training, and other forms of assistance to private enterprise activities in the Eastern European country for which the Enterprise Fund so is designated. (6) Technical assistance programs directed at promoting labor market reforms and facilitating economic adjustment. (7) Programs to provide technical skills to assist in the development of a market economy. (8) Establishment of Peace Corps programs. (9) Support for the establishment of indigenous credit unions. (10) Eligibility for trade benefits under the Generalized System of Preferences. (11) The granting of temporary or permanent nondiscriminatory treatment to the products of an East European country through the application of the criteria and procedures established by section 2432 of title 19 (commonly referred to as the “Jackson-Vanik amendment”). (12) Programs of the United States International Development Finance Corporation. (13) Programs of the Export-Import Bank of the United States. (14) Trade and Development Agency activities under the Foreign Assistance Act of 1961 [22 U.S.C. 2151 et seq.]. (15) Negotiation of bilateral investment treaties. (16) Exempting bonds from Internal Revenue Code [title 26] rules relating to below-market loans. (17) Expanded exchange activities under the Fulbright, International Visitors, and other programs conducted by the United States Information Agency. (18) Contributions toward the establishment of reciprocal cultural centers that can facilitate educational and cultural exchange and expanded understanding of Western social democracy. (19) Establishment of sister institution programs between American and East European schools and universities, towns and cities, and other organizations in such fields as medicine and health care, business management, environmental protection, and agriculture. (20) Scholarships to enable students to study in the United States. (21) Grants for the implementation of bilateral agreements providing for cooperation in science and technology exchange. (22) Assistance designed to support the development of legal, legislative, electoral, journalistic, and other institutions of free, pluralist societies. (23) Environmental assistance directed at overcoming crucial deficiencies in air and water quality and other determinants of a healthful society. (24) Medical assistance specifically targeted to overcome severe deficiencies in pharmaceuticals and other basic health supplies. (25) Encouraging private investment and voluntary private assistance, using a variety of means including a SEED Information Center System and the provision by the Department of Defense of transportation for private nonfinancial contributions.