(a) End Use Certificate (EUC). For the purposes of this part, a written agreement in connection with the transfer of military equipment or technical data to the United States that restricts the use or transfer of that item by the United States.

(b) Use for defense purposes. Includes direct use by or for the U.S. Government in any part of the world and transfer by means of grant aid, International Military Education and Training (IMET) programs, Foreign Military Sales (FMS), and other security assistance and armaments cooperation authorities.

$ 205.4 Background and policy.

This part is intended to authorize the execution of EUCS when such a certificate is necessary to facilitate purchases of foreign products when the purchase of such products is in the best interest of the United States.

(a) The Military Departments and other DoD Components purchase products produced by allies and friendly countries and participate in cooperative development programs to promote interoperability, standardization, and an expanded procurement base, and to obtain products that best meet U.S. needs at the lowest cost.

(b) U.S. worldwide security responsibilities are extensive and recognition of these special circumstances has resulted in long-time acceptance in international agreements, by allies and friends, of the need for flexibility in the authorized uses or transfer of purchased or co-developed articles and data. In various circumstances, international agreements have recognized that permissible use of an item or data for U.S. "defense purposes" as defined in § 205.3(b).

(c) Consistent with paragraphs (a) and (b) of this section, DoD Components may sign EUCs, in accordance with the policy and procedures outlined below. While most EUCS requested by foreign governments use general language, their effects may be divided into three categories, as described in the following paragraphs. Authority to approve their execution is limited as follows:

(1) Category I. Secretaries of the Military Departments and Directors of Defense Agencies may authorize EUCS:

(i) For acquisition of items classified for security purposes by a foreign government.

(ii) For the acquisition of items covered by the nonproliferation agreements to which the United States is a party, such as missile technology, or

(iii) That permit the item to be "used for defense purposes" as defined in § 205.3(b), by the United States.

(2) Category II. EUCs that are not Category I or III are Category II. Secretaries of the Military Departments and Directors of Defense Agencies may authorize Category II EUCS only after a determination is made through the coordination procedures set forth in § 205.6(a)(1) that, notwithstanding the use or transfer limitations, the purchase is in the U.S. national interest. The least restrictive provisions possible should be negotiated.

(3) Category III. Secretaries of Military Departments and Directors of Defense Agencies may not authorize the signature of EUCS which limit the right:

(i) For use by or for the U.S. Government in any part of the world, or

(ii) To provide the item to allies engaged together with the United States in armed conflict with a common enemy. Waivers to this prohibition may be granted by the Under Secretary of Defense (Acquisition) (USD(A)). Procedures for requesting such waivers are at § 205.6(a)(1).

§ 205.5 Responsibilities.

(a) The Under Secretary of Defense (Acquisition) shall:

(1) Monitor compliance with this part.

(2) Develop procedures to ensure timely review of Category II and III items with the Under Secretary of Defense for Policy (USD(P)).

(3) Upon obtaining the concurrence of the USD(P), waive the restrictions in § 205.4(c)(3) when purchase of the item is in the national interest.

(4) When requested, and in coordination with the USD(P), assist the Military Departments and Defense Agencies in negotiating the elimination or

amelioration of an EUC's restrictive language.

(b) The Under Secretary of Defense for Policy shall:

(1) Consult with the USD(A) on waivers authorized by this part and, if appropriate, coordinate with the Department of State.

(2) When requested, and in coordination with the USD(A), assist the Military Departments and Defense Agencies in negotiating the elimination or amelioration of the EUC's restrictive language.

(3) Develop procedures for coordination and review of EUC's internally and with the Department of State.

(4) Establish, with the concurrence of the USD(A), specific acceptable end use restrictions in addition to those set forth in Category I, which shall be added immediately to Category I and a corresponding administrative change made to § 205.4(c)(1).

(c) The Secretaries of the Military Departments and the Directors of the Defense Agencies shall:

(1) Authorize the execution of Category I and II EUCS in accordance with the procedures outlined in § 205.6. This responsibility may not be delegated by the Directors of Defense Agencies; it may be delegated by Secretaries of the Military Departments to civilian officers of their respective departments appointed by the President with the advice and consent of the Senate. Once EUC execution is authorized, the Director of a Defense Agency, or Military Department civilian official who has been delegated authorization authority may delegate the authority to sign individual EUCS.

(2) Establish procedures to ensure compliance with this part. These procedures should ensure compliance, for the life of the purchased item, with the transfer or use restrictions agreed to in signing an EUC. They should also ensure 21-calendar day notification to USD(A) before authorizing the execution of a Category II EUC.

$ 205.6 Procedures.

(a) Procedures for the three categories of EUCS established in § 205.4(c)

are:

(1) Category I. Secretaries of the Military Departments and Directors of

Defense Agencies may authorize Category I EUCS.

(2) Category II. Not less than 21 calendar days before authorizing the execution of a Category II EUC, Military Departments and Defense Agencies shall provide notification to the USD(A). The notification will contain a description of the item and the limitations to be imposed by the exporting government. The USD(A) shall coordinate with the USD(P), providing at least 14 days for review. If appropriate, the USD(P) shall coordinate with the Department of State. The USD(A) shall notify the submitting DoD Component of any further action required before final authorization of the EUC; otherwise, concurrence may be assumed after expiration of the 21-day period. (3) Category III. To acquire an item requiring a Category III EUC, the Secretary of a Military Department or Director of a Defense Agency must request a waiver from the USD(A). Requests for waivers should specify:

(i) Why it is in the interest of the U.S. Government to procure the item.

(ii) The limitations to be imposed by the exporting government and a justification for acceptance of those limitations by the U.S. Government.

(iii) A statement that no satisfactory alternative to the item, considering cost, schedule, or operational requirements, is available from domestic or foreign sources without equivalent limitations.

The USD(A) shall coordinate the waiver with the USD(P), who, if appropriate, shall then coordinate with the Department of State. USD(A) shall notify the submitting DoD Component of the results.

(b) Copies of signed EUCs of all three categories shall be provided promptly to USD(A).

(c) A record of any waivers or modifications of this policy shall be maintained by the USD(A).

PART 206-NATIONAL SECURITY EDUCATION PROGRAM (NSEP) GRANTS TO INSTITUTIONS OF HIGHER EDUCATION

Sec.

206.1 Major characteristics of the NSEP institutional grants program.

$206.1 Major characteristics of the NSEP institutional grants program. (a) The Institutional Grants Program provides support in the form of grants to U.S. institutions of higher education. During the 1994-95 and 1995-96 academic years, a program of pilot grants is being initiated with an annual competition for grants held during the spring of each year. Grants to institutions will complement NSEP scholarship and fellowship programs. NSEP encourages the development of programs and curricula which:

(1) Improves the quality and infrastructure of international education;

(2) Addresses issues of national capacity; and

(3) Defines innovative approaches to issues not addressed by NSEP scholarship and fellowship programs.

(b) The NSEP Grants Program is designed to address a number of important objectives critical to the United States:

(1) To equip Americans with an understanding of less commonly taught languages and cultures and enable them to become integrally involved in global issues.

(2) To build a critical base of future leaders in the marketplace and in government service who have cultivated international relationships and worked and studied along-side foreign experts.

(3) To develop a cadre of professionals with more than the traditional knowledge of language and culture who can use this ability to help the U.S. make sound decisions and deal effectively with global issues; and

(4) To enhance institutional capacity and increase the number of faculty who can educate U.S. citizens toward achieving these goals.

(c) Grants will be awarded for initial 1- or 2-year periods. Potential follow-on commitments will be based on a rigorous evaluation and assessment process. Between 15 and 25 awards are expected to be made in the first year

ranging from approximately $25,000 to $250,000. These are only estimates and do not bind the NSEP to a specific number of grants or to the amount of the grant.

(d) The following key characteristics will be emphasized in the NSEP Institutional Grants Program:

(1) Programmatic in emphasis. The purpose of the grants is to address weaknesses and gaps in programs and curricula. The grants should be used to strengthen the national capacity in international education. While "operational" support for already existing centers and projects may be a component of a grant, NSEP emphasizes commitment of its limited resources to projects that establish and improve educational programs available to students and teachers.

(2) Demand and requirements oriented. Grants are designed to address national needs. These needs must be clearly articulated and defended in a grant proposal. It must be clear that the following questions are addressed:

(i) Who will benefit from the program funded by the grant?

(ii) What need does the program address?

(iii) How will this program augment the capacity of the Federal Government or of the field of education in areas consistent with the objectives of the NSEP? How does it fit the national requirement?

(3) Cooperation and collaboration among institutions is mandated in order to ensure that a wider cross-section of colleges and universities benefit from a program funded under NSEP. NSEP is committed to providing opportunities to the widest cross-section of the higher education population as is feasible. Cooperation can be in the form of formal consortia arrangements or less formal but equally effective agreements among institutions. Both vertical (among different types of institutions) and horizontal (among similar institutions across functional areas) integration are encouraged. Outreach to institutions that do not normally benefit from such programs is also strongly favored.

(4) Complementary to other Federal programs such as Title VI of the Higher Education Act. NSEP is designed to

address gaps and shortfalls in Higher Education and to build and expand national capacity. NSEP recognizes that base capacity currently exists in some foreign languages and area studies. It also recognizes that funding shortfalls and other factors have contributed to tremendous gaps and weaknesses. Funding for expansion of the international education infrastructure remains limited. Duplication of effort is not affordable. NSEP encourages new initiatives as well as expansion of existing programs to increase supply in cases where the demand cannot be met and encourages efforts that increase demand.

(5) NSEP encourages proposals that address two categories of issues relating to the mission of NSEP:

(i) Programs in specific foreign languages, countries or areas; and/or

(ii) Programs addressing professional, disciplinary and/or interdisciplinary opportunities involving international education.

(6) NSEP views student funding as portable and hopes that universities will develop ways to move students to programs and to provide credit with these programs. NSEP believes that programs need to be developed that are available to a wider cross-section of students. Thus, they need to be "open" to students from other institutions. Programs might also be "transportable" from one institution to another.

(7) NSEP emphasizes leveraging of funds and cost-sharing in order to maximize the impact of NSEP funding. It encourages institutions to seek other sources of funding to leverage against NSEP funding and to commit institutional resources in support of the program as well. NSEP also emphasizes burden sharing between the institution and the Program. NSEP encourages institutions to demonstrate a commitment to international education and to present a plan for how funding for the proposed program will be achieved over a 3-5 year period so that NSEP can reduce its financial commitment to programs. The funds requested from NSEP should minimize costs allocated to unassigned institutional "overhead.” NSEP institutional grants are assumed to be for training programs. Consequently, university/

college indirect costs associated with training programs should be used as a general benchmark for determining appropriate overhead rates.

(8) NSEP encourages creativity and is responsive to the needs of higher education to expand the capacity to provide more opportunities for quality international education. We do not suggest that the guidelines presented in the grant solicitation will cover all problems and issues. Quite to the contrary, we encourage careful consideration of issues confronting international education in the U.S. and thoughtful proposals that address these issues, consistent with the overall mission of the NSEP.

§ 206.2 Eligibility.

Any accredited U.S. institution of higher education, as defined by section 1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1141(a)), may apply for and receive a grant. This includes 2and 4-year colleges and universities, both public and private. Other organizations, associations, and agencies may be included in proposals but may not be direct recipients of a grant. Foreign institutions may also be included in a proposal but may not be direct recipients of a grant. Only U.S. citizens and U.S. institutions may receive funds through a grant awarded by the NSEP. § 206.3 Overall program emphasis.

(a) The NSEP grants to institutions program focuses on two broad program areas that reflect the challenges to building the infrastructure for international education in U.S. higher education:

(1) Development and expansion to quality programs in overseas locations. (i) Programs that offer important opportunities for U.S. students, both undergraduate and graduate, to study in critical areas under-represented by U.S. students, and

(ii) Development of meaningful competencies in foreign languages and cultures.

(2) Development and implementation of programs and curricula on U.S. campuses that provide more opportunities for study of foreign languages and cultures and the integration of these studies into overall programs of study.