NUMBER 2030. 6 4-5,) /-J

DATE Mfarch 0, 1973

Department of Defense InstructionAsD(IsA)

SUBJECT Implementing Procedures for Security Trade Controls

LO on Sales for Foreign Excess Persunal Property

SRefs.: (a) DoD Directive 2030.2, "Security Trade Controls on_--- Foreign Excess Personal Property," March 10, 1961- (b) DoD Instruction 2030.3, subject as above, September 28,

1962 (hereby cancelled (see V., below))(c) DoD Directive 4160.21, "DoD Personal Property Disposal

(%J Program," February 23, 1972(d) DoD Instruction 2110.8, "Transfer of Releasable Assets

of the DoD to Eligible Foreign Countries & InternationalOrgainzations on a Foreign Military Sales Basis,"June 26, 1972

(e) Armed Services Procurement Regulations (ASPR)(f) Defense Disposal Manual, 4160.21-M, authorized by ref. (c)(g) Defense Demilitarization Manual, 4160.21-M-l, authorized

by reference (c)(h) DoD Directive 5105.22, "Defense Supply Agency," Dec. 9, 1965

I. REISSUANCE AND PURPOSE

A. This Instruction supplements the provisions of reference (a).It reissues reference (b) to incorporate changes which (1)clarify the procedures for handling Munitions List items; (2)concentrate controls on strategic items; and (3) provide minoradministrative amendments.

B. Reference (b) is superseded effective in accordance with the

provisions of Section V., below.

II. APPLICABILITY AND SCOPE (See Section V., below)

A. The provisions of this Instruction apply to Department ofDefense sales transaction of foreign exccss personal property(FEPP) , including property purchased with nonappropriatedfunds and MAP-returned material disposed of by Department ofDefense activities.

•i0 B. This Instruction does not encompass retail sales of foreign°non-excess personal property (exchange/sale property) or

excess personal property located in the Panama Canal Zone,

Puerto Rico and territories, dependencies, and possessions ofS... the United States.

III. DEFlIITIONS

Terms used in this Instruction are defined in enclosure (1).

9 3;-8-71,¢;•,•.,•,•• ••.,• • .•,?• I/

IV. SE cRITY TRADE CONTROL-PROCEDURES

To carry out the policy of the United States that military FEPPwill not be sold directly or indirectly to (a) Denied Areas (seeenclosure (1) for definition), or (b) other selected areasdesignated by the Assistant Secretary of Defense (InternationalSecurity Affairs'), DoD components will comply with the procedures!/of this Instruction.

A. General

i. For security trade control purposes, FEPP is classifiedinto the following three categories:

I. Undemilitarized Munitions List items requiringdemilitarization pursuant to ref. (g), regardlessof sales price.

II. Strategic List items and Munitions List items notrequiring demilitarization, regardless of salesprice. All other items and commodities (includingscrap and properly demilitarized Munitions Listitems) $100,000 or over in sales price.

III. All other items and commodities (including scrapand properly demilitarized Munitions List items)under $100,000 in sales price.

2. The following three levels of controls relate to thecategories above:

a. Category I items may not be sold to private firms orindividuals; and they may be sold to eligible foreigngovernments and international organizations onlypursuant to the procedures in DoD Instruction 2110.8(ref. (d)).

b. Category II items may be sold to private firms andindividuals who are not on a debarred or suspendedbidders list, and are not located in denied areas,subject to the restrictions -and security tradecontrol prccedures stipulated in subsections Bthrough K beiow. Category II items may be sold toforeign governments and international organizationssubject to the procedures in subsection L-below.

l/ The Security Trade Control Procedures applied by DoD are designed togenerally approximate those of the Department of Commerce's Officeof Export Control and the Department of State's Office of MunitionsControl.

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2030.6Continuation of IV.A. 2. Mar 20, 73

c. Category III items may be sold to private firms andindividuals who are not (1) on a debarred or suspendedbidders list, or (2) located in denied areas, andwho submit properly completed and signed End-useCertificates (enclosure 2). Category III items maybe sold to foreign governments and internationalorganizations subject to the procedures in zubsectionL below.

B. Statement Regarding Disposition and Use of Property (End-UseCertificate.

1. All private bidders will be required to complete and signan End-Use Certificate.

a. The format of the certificate, which has been approvedby the Office of Management and Budget in accordancewith the Federal Reports Act of 1942 (Budget BureauNo. 22-R200), is attached as enclosure (2).

b. This certificate will be completed in accordance withthe instructions contained therein, and the infnrma-tion furnished by the bidder will become a part ofthe bid and will be considered in determining whetheracceptance would be consistent with the securityrequirements of the United States.

c. The certificate of the successful bidder will be attachedto the original contract.

d. An authenticated copy of this certificate will be returnedto the successful bidder if and when his bid is acceptedfor retention as part of his contract.

e. A second copy of this certificate, and a copy of thecontract will be forwarded to the Central Unit designatedfor the EUCOM or PACOM areas respectively.

2. On sales of category II items, changes to the bidder's End-UseFTI3 GL • Certificate will require the prior written approval of the Sales!DtZ1 T•?. El Contracting Officer. The requirement for this prior approvalu ! ir , L will be indicated by the Sales Contracting Officer on DD Form

1427, Notice of Award.

3. If a bidder's End-Use Certificate indicates that he is buyingfor speculation and does not yet know the identity of thepurchaser or the country of importatiota, his subsequent

SAval"e ascertainment of specific purchasers and countries ofimportation should be regarded as a change of fact orintention within the meaning of paragraph 8 of the End-UseCertificate.

Sli 3

a. When requested on DD Form 1427, all such changeswill be brought to the attention of the SalesContracting Officer for his approval prior toeffecting such changes.

b. With respect to changes requested prior to delivfryof property to a successful bidder, delivery will bewithheld pending consideration of the requestedchange. The effect of a request for a change of'

destination shall be to require reapproval andreview of the contract.

c. If any subpurchaser or subreceiver not already thesubject of a satisfactory Integrity and ReliabilityCheck is named in a proposed change of destinationand use, the property shall not be released unless asatisfactory check is made as provided in subsectionD below.

d. No change shall be approved unless the changed sub-purchaser, destination or use would have beenapproved initially as an original part of the bid.

e. If the requested change is determined to be notacceptable and is disapproved, one of the followingactions will be taken, depending on the circumstances,unless the bidder withdraws the request for changeand agrees in writing to adhere to his original End-Use Certificate as accepted and to carry out theterms of the contract:

(1) If award has not been made the bid shall berejected.

(2) If award has been made but the property has notyet been remolred from the US installation, thecontract shall be cancelled.

(3) If the property concerned is already in thecustody of the successful bidder he will benotified in writing that the requested changeis not approved and he will be required totender a written acknowledgment of suchnotification. At this time the bidder may beafforded the opportunity of submitting anacceptable subpurchaser and destination; ifunable to do so the Central Unit shall be notifiedand, if warranted, appropriate action taken inaccordance with the provisions of subsection E.4or subsection H. In other than the EUCOM andPAC(M areas the selling activity will beresponsible for takir Rppropriate action.

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Continuation of IV.B.3.e. 2030.6

Mar 20, 73

4. The following applies to the EUCOM area only: Approvalor disapproval of changes to successful bidders End-UseCertificates and any follow-up requests to successful biddersfor information on property disposition are the responsibil.ityof the Central Unit in the EUCOM area. For use in that area,the End-Use Certificate (enclosure 2) and the DispositionRestriction Article (enrlosure 3) will be appropriately chantedto indicate that approval of changes to the End-Use Certificatemust be obtained from the Central Unit and that the centralunit will make any requests for additional information regardingdisposition. For these purposes, the words "Sales ContractingOfficer" will be replaced oy the name and address of the centralunit where appropriate. The Central Unit will take appropriateaction to insure compliance with the requirements stipulated insubsection B.3 above.

C. Article Restricting Disposition of FEPP Sales Items.

1. An article describing FEPP disposition restrictions and controlprocedures (enclosure 3) shall be included in all sales offerings.

2. To effectuate this provision and the End-Use Certificate, allitems of property known not to be of United States origin willbe specifically designated in sales offerings.

D. Integrity and Reliability (I&R) Check of Bidder(s).

1. On sales of Category II items a determination will be made ofthe acceptability of each successful bidder. To accomplishthis, the United States diplomatic mission in the countrywherein the bidder is located or conducts his major businesseffort will be required to make an I&R check. An I&R checkwill not be required if the bidder already appears on theCleared Bidders List (subsection E) unless there is indicationthat the bidder's status may have changed since the prior I&Rcheck. An Integrity and Reliability Check will alto be made onall subsequent subpurchasers and subreceivers as they arebrought to the attention of Central Unit or selling activity inresale approval requests. To the greatest extent feasible, thediplomatic mission should be given information on foreign excessproperty to be sold to each bidder.

2. On sales of Category III items an I&R check is not required andthe Sales Contracting Officer will award the contract providedthe bidder is not on a Debarred or Suspended Bidde:s List.

3. If a bidder cannot be identified by the diplomatic missionunder the name and address furnished, the sales office will beso notified and no award will' be made. Such additionalinformation as may be required by the diplomatic mission toconduct a meaningful I&R check will be furnished by the salesoffice.

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4. Based upon favorable information being provided bydiplomatic mission in its I&R check, the Sales ContractingOfficer may make the award. Final determination whetherthe bidder will or will not be placed on the ClearedBidders List will be made by the Central Unit or sellingactivity in other than the EUCOM or PACOM areas.

5. Whenever an I&R check develops derogatory information,only those bidders with sufficient derogatory informationto have them placed on the Debarred Bidders List will bedenied awards of sales for that reason. The Central Unitor selling activity in other than the EUC04 or PACO4 areasshall be responsible for initiating debarment proceduresin accordance with the procedures of Part 6 of Section Iof the ASPR (reference (e)).

6. Whene-ver inquiry is received regarding the denial ofawards, such inquiry will not be referred to the diplomaticmission. Clearance of any poztion of the derogatoryinformation that can be given to the bidder should beobtained from the Central Unit or selling activity inother than the EUCOM and PACOM areas. Unless reasonssuch as security or business confidentiality requireotherwise, information requests shall be complied with.

7. In no case should the diplomatic mission be requested toconduct an I&R check if the bidder in question appears ona Debarred or Suspended Bidders List. Copies of allDebarred and Suspended Bidders Lists will be maintainedin the Central Units(or selling activity in other thanthe EUCOM or PACOM areas) for reference. If the bidderappears on a Debarred or Suspended Bidders List the bidwill be rejected outright. Diplomatic missions will notbe requested to perform I&R checks on other than the high(and possibly second high) bidder, and the sub-purchaser(s)and subreceiver(s) concerned, if such are named.

E. Cleared Bidders List, Suspended Bidders List and Debarment.

1. Each Central Unit is responsible for compiling andmaintaining a consolidated list of cleared bidders foruse in its respective area. This list will include thenames and addresses of purchasers and subpurchasers ofCategory II items who have been checked by appropriateUnited States diplomatic missions for integrity andreliability and subsequently approved by the appropriateCentral Unit for inclusion in the list (see subsection D).Each clearance or reclearance shall be valid for one yearfrom the date of approval.

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. J

Continuation of IV.E. 2030.6

Mar 20, 73

2. Reclearance of bidders after the expiration of the one yearperiod is the responsibility of the Central Units. Thosebidders who have remained active and have established theirintegrity and reliability may be recleared automatically.Inactive bidders (no sales for one year) will. be dropped I'ronthe list. For those bidders of uncertain integrity andreliability the Central Unit will repeat the clearanceprocedures in subsection D.

3. Each Central Unit shall be responsible for distributing itsCleared Bidders List to the property disposal offices in itsrespective area. Information copies shall also be sent tothe other central unit and to other offices and agencies asdetermined to be necessary or desirable by the central unit.

4. Successful bidders who are guilty of a technical violation(s)

of Department of Defense security trade control regulations(e.g. failure to submit valid Delivery Verification Certificates,failure to obtain resale approval prior to resale to otherwiselegitimate subpurchasers, ignoring follow-up requests, etc.)but who are not suspected of diverting any property tounauthorized destinations or subpurchasers may be suspended frombidding on, or receiving FEPP by the Central Unit and removedfrom the Cleared Bidders List.

a. Suspension action will be taken by the Central Unit on thebasis of information from the sales contracting officers,diplomatic posts, or other competent source indicating thata technical violation has occurred and the nature thereof.

b. Reasonable opportunity shall be given to affected partiesto present information in opposition to a proposedsuspension. Proposed suspension actions will also besubject to the review of the legal office designated tosupport the Central Unit or selling activity in other thanthe EUCOM or PACOM areas.

c. The Central Unit will notify the appropriate SalesContracting Officer of the suspension and the basis therefor.

d. Suspended bidders will in turn be notified of the actionagainst them by the Sales Contracting Officer (by theCentral Unit in EUCOM).

e. The period of suspension may be indefinite, except that itshould not generally exceed one year and may be lifted whenthe bidder complies with the requirements whose violationresulted in the suspension.

f. If it is determined that the successful bidder has a historyof committing minor contract violations, appropriate steps

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may be taken by the Central Unit to place the bidderon the Debarred Bidders List in accordance with theprocedures of part 1-609 of the ASPR (ref. (e)).

g. For reference purposes, a list of all suspendedbidders, including length of suspension will beprepared by the Central Unit and appended to theCleared Bidders List.

5. Subpurchasers on the Cleared Bidders List who do notcomply with the security trade control requirements ofthe original sales contract, which have been passed onto them by the original purchaser, may be removed fromthe Cleared Bidders List and suspended from bidding onand receiving FEPP by the Central Unit under theprocedures in subsection E.4.

6. All inquiries regarding suspension actions will bereferred by the Sales Contracting Officer to the CentralUnit for clearance of any of the derogatory informationthat can be given to the bidder. Unless reasons such assecurity or business confidentiality require otherwise,information requests shall be complied with.

7. In order to insure proper dissemination of bidderinformation, property disposal offices in the field willforward to the Central Unit information copies of allderogatory informaticn received on current or prospectivebidders and on debarred or suspended bidders. The Central

y> Unit will use this data to make appropriate additions,deletions or corrections to the Cleared Bidders List orto recommend appropriate changes to the Debarred BiddersList.

8. Selling activities in other than the EUCOM and PACOM areaswill be required to develop and maintain Cleared BiddersLists in accordance with applicable sections of the fore-going subparagraphs 1 through 7.

F. Follow-Up Action

1. Follow-up action in the form of a letter along the linesoutlined in Enclosure 4 will be taken by the SalesContracting Officer no later than four months after thesale has been made whenever all of the followingconditions apply:

a. Resale approval requirement has been entered onDD Form 1427, Notice of Award.

Continuation of IV.F.l. 2030.6Mar 20, 73

b. Replies given on the End-Use Certificate indicate thatcustomers (subpurchasers) are unknown.

c. Replies given on the End-Use Certificate indicate thatproperty was bought for probable resale.

d. No permission to resell property has been requested.

2. Copies of the follow-up letters wiul be sent simultaneously tothe appropriate Central Usit if appropriate.

3. Additional folLow-up letters will be sent, if required, at30-day intervals and no additional awards will be made by theSales Contracting Officer to bidders involved until satisfactoryreplies are received. If no satisfactory reply is receivedthree months after the original letter is sent, a full reportwill be made to the Central Unit concerned if appropriate andthe bidder will be suspended from bidding on or receiving FEPPand removed from the Cleared Bidders List according to theprocedures in subsection E.4. If an unauthorized liversion issuspected, a full report will be forwarded by the Central Unit,or selling activity in other than the EUCOM and PACCM areas, tothe Office of the Assistant Secretary of Defense (ISA)IT,Washington, D. C. 20301, for institution of appropriateadministrative action.

4. Contracts remaining open after two fiscal years will beforwarded to the Central Unit for determination if (a) additionalfollow-up actions are necessary or (b) if the case may be closed.In other than the EUCOM and PACOM areas the selling activitywill be responsible for this determination.

5. Follow-up letters will be sent only to successful bidders andnot to subpurchasers or subreceivers, unless it is known atthe time of sale that the original purchaser is merely actingas a forwarding agent. In such cases follow-up letters will besent to the subpurciaser or subreceiver.

6. At any time contract violations are suspected the SalesContracting Officer or Central Unit will request from asuccessful bidder information regarding disposition of theproperty awarded to him.

7. The following applies to the EUCOM area only: Follow-up action

in this area is the responsibility of the Central Unit.

G. End-Use Check

1. In instances where it is suspected that diversions of propertyto Denied Areas or other unauthorized destinations may takeplace, an End-Use Check will be requested to determine if theproperty arrived at the destination designated in the End-UseCertificate.

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2. Requests for End-Use Checks will be initiated by the sell-ing activity or the Central Unit, and addressed to theappropriate United States diplomatic mission, accompaniedby as much pertinent information as possible, i.e.,ultimate consignee, description of the property, finaldestination, shipping data, date of shipment and statedend use. The selliri activity and Central Unit willcoordinate such action if appropriate.

3. In the EUCOM area the request for an End-Use Check andcoordination with the US diplomatic mission will be th,responsibility of the Central Unit.

4. End-Use Checks will be limited predominantly to sales ocStrategic List and Munitions List items. End-Use Check.son sales of items not on the Strategic List or MunitionsList can be authorized only by the Central Unit or sellingactivity in other than the EUCOM and PACOM areas and thenonly in cases of suspected diversions of very large sales.

H. Investigations

1. Initiation and coordination of investigations of actual orsuspected violations of the security trade controlprovisions and conditions of sales contracts, shall bethe responsibility of the designated Central Unit in thearea for which it is responsible. In other than theEUCC4 and PACOM area, this will be the responsibility ofthe selling activity.

2. When an investigation confirms that a contract violationhas occurred, appropriate action shall be taken by theCentral Unit in accordance with the procedures of sub-section E.4 above. In other than the EUCOM and PACOMarea, this will be the responsibility of the sellingactivity.

3. In the conduct of investigations, the Central Unit orsuch selling activity will be authorized to call on, inaddition to the appropriate embassies and consulates,United States Military Investigative and Intelligenceagencies for assistance. These agencies will alsoprovide the Central Unit (or selling activity outside thePACOM and EUCOM areas) with information indicating thatFEPP may be diverted to a prohibit,.d destination.Information copies of such reports will be sent directlyto the Office of the Assistant Secretary of Defense (ISA)IT, Washington, D.C. 20301.

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Continuation of IV. 2030.6Mar 20, 7`

I. Illegal Diversions of FEPP

1. When investigations are conducted under the supervision anddirection of the Central Unit, or selling activity in other thanthe EhTCOM and PACOM areas, to determine whether an attempt haLsbeen made to divert property, appropriate information will beforwarded directly to the Office of the Asoictarit Secretary -)fDefense (ISA) IT, Washington, D.C. ý031DI, for institution ofaction to prevent the diversion.

2. Whenever it has been established by satisfactory evidencce thatthe property was diverted, transshipped or re-exportedto aDenied Area or other unauthorized destination, or attempted tobe so diverted, transshipped or re-exported, contrary to theterms of the contract, a summary of the investigation aridrecommendation of the Central Unit or selling activity will beforwarded upon completion, directly to the Office of theAssistant Secretary of Defense (ISA) IT for institution ofappropriate debarment or suspension procedures in accordancewith the provisions of Part 6 of Section 1 of the ASPR (ref.(e)) or Administrative Action in accordance with the proceduresof the interagency Administrative Action Program.

J. Import Certificate - Delivery Verification (IC/DV) System

1. This system or a comparable system is applicable to FEPP on theStrategic List or Munitions List. It may be used for destinationcontrol purposes uhen items in Category 1I are to be importedinto a country which employs t he IC/DV system as part of itsexport controls. In such cases the purchaser is responsible forobtaining the appropriate IC/DV documents and providing them tothe Central Unit or selling activity. If the originalpurchaser does not intend to retain possession of IC/DVproperty and is authorized by the Central Unit or sellingactivity tc resell the property to a cleared subpurchaser(s)during the removal period specified in the contract, theoriginal purchaser shall be required to transfer responsibilityfor the fulfillment of any IC/DV requirements to thesubpurchaser(s).

2. When the IC/DV system is not applicable or is not used and whenitems in Category II have been released for export, thesuccessful purchaser (or subpurchaser(s) to whom this responsi-bility has been transferred as in subsection J.1) shall berequired to furnish the Sales Contracting Officer (Central Unitin European area) evidence of its arrival at the approveddestination and delivery to the approved consignee through areceipted copy of the bill of lading, a landing certificateissued by the country of import, or other appropriatedocumentation.

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K. United States Government as Shipper

1. When sales of Category II items are made in areas otherthan the EUCOM area and acceptable bidders propose totransport the property from the foreign country in whichit is located to an acceptable destination, they will berequired to authorize the Sales ContractinFl Officer toship the property, at the buyer'c risk and expense. on acommercial shipping document showing the United StatesGovern.ment as the shipper, to a consignee and destinationnaried by the buyer and acceptable to the United State's.

2. Each such shipping document shall include this statement:"Only the United STates Govenmnenem may divwrt this ship-ment to other than the named consignee or destination."

3. All costs of packing, handling and transportat.on,including desired insurance, will be borne and prepaidby the buyer.

4. Adequýie provisions will be made in the sale contract toindemnify the United States Government against all claimsor suits of any nature arising under or incidential tothe contract by reason of the fact that the United StatesGovernment appears as shipper on the commercial bill oflading.

5. When property has been relpased for export, the successfulbidder shall be required to furnish evidence of itsarrival at the approved destination and delivery to theapproved consignee through a receipted copy of the billof lading, a landing certificate issued by the country ofimport, or other appropriate documentation.

6. At the discretion of the Sales Contracting Officer, theabove procedures may also be applied to sales of CategoryIII items.

L. Sales to Friendly Foreign Government or InternationalOrganizations.

1. Sale:; made pursuant to DoD Directive 4160.21 (ref. (c))and the Defense Disposal Manual (ref. (f)).

a. For these sales the provisions of subsections Bthrough K above are not applicable, but contractswill include the following article: "The government(or agents) of (name of country or internationalorganization) certifies that the property covered bythis contract is intended for use in (name of country).

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Continuation of IV. L.l.a. 2030.6Mar 20, 73

However, in the event resale or export is to be affected ofany of the property, the government (kr aknt) of' (name •fcountry or international organization) agrees to obtairn theapproval of the Sales Contracting Officer unless specs iicailvexcepted in this contract."

b. The Sales Contracting Officer (Central Unit in the EUCO(iarea) will approve such resale only if' (a) the pr(%c:ý(7ý,'purchaser's name does not appear on the Delarrei orSuspended Bidders List and (b) if the government t rinterniational organization concernec ar rees to insert i% it:-sales contract a provision prohibitirng, exports by purchas,,:rcand subpurchasers to destinations named in paragraph (2) ofenclosure (3). In the event of a refusal to sign the abovearticle, the sale will be held in abeyance and the case• willbe referred to the Office of the Assistant Secretary ofDefense (ISA) IT, Washington, D.C., 20301, through theCentral Unit for decision.

c. Resale approval will not be required on sales of CategoryIII items.

2. This Instruction does not apply to sales made pursuant to DoDInstruction 2110.8 (ref. (d)). (Security trade control require-ments are fulfilled by use of DD Form 1513 in all suchtransactions.)

M. The Strategic List shall be compiled by the EUCOM area Central Unitand published as an enclosure to the appropriate security tradecontrol regulations in the European and Pacific Commands. TheStrategic List shall also be distributed to selling activitiesoutside of the EUCOM -nd PACOM areas.

N. Records of security trade control actions will be maintainedby the administering unit for a period of five years from the dateof shipment of the FEPP sold, provided all security trade controlrequirements have been met.

0. The Defense Supply Agency is responsible for implementation andenforcement of the policies and procedures prescribed herein andfor establishing Central Units (except for the Southern Command area)as defined in enclosure (i) of this Instruction.

V. EFFECTTVE DATE AND IMPLEMENTATION

The provisions of this Instruction are effective immediately. However,the responsibilities of the Defense Supply Agency (DSA) (see DoD Direc-tive 5105.22 (reference (h), as amended by Ch. 1, dated November 22,1972, which extended the DIA responsibilities overseas in the area ofproperty disposal operations and other logistics support areas) forthe implementation and enforcement of this Instruction shall

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not take effect until DSA officially assumes responsibility forDoD foreign disposal activities on or about 1 July 1973. In the

interim the Commander in Chief, US Air Force Europe, theCommander in Chief, US Army Pacific; and the Commander in Chief,US Army South will retain responsibility for the implementationand enforcement of this Instruction. Two copies of revisedimplementing instructirn- shall be submitted to the AssistantSecretary of Defense (ISA) by May 20, 1973.

LAWRENCE S. EAGLEBURGERAotiag Assistaat Secretary

Enclosures - 41. Definitions2. End-use Certificate

3. Disposition Restriction Article

4. Sample Follow-up Letter

7i - V Il ,I II I I II I I I I II I . .

2030. 6 (Enci i)Mar 20, 73

DEFINITIONS

I. Administrative Action. Action taken by one or more depart-ments of the Federal Government to deny United StatesGovernment privileges, including Defense contracts, to firmsand individuals, and which may include suspension or debarment.

2. Central Unit. Office designated by the Defense Supply Agencyto be responsible for (a) coordinating the efforts Qf allmilitary units, diplomatic missions and the Office of theAssistant Secretary of Defense (ISA) for the purpose ofpreventing diversions and following up on such diversionsto deiuied areas of FEPP sold in the EUCOM area (Europe,the Middle East, Africa, and Asia as far east as India andPakistan) or the PACOM area, and (b) the issuance of theCleared Bidders Lists. (See also additional responsibilitiesof EUCOM Central Unit as indicated in paragraphs IV.B.4.,IV.F.7., and IV.G.3.)

3. Cleared Bidders List. Consolidated List of bidders and sub-purchasers cleared by a Central Unit or selling activity tobuy FEPP in Category II.

4. Controlled Items. Commodities which have been determined tobe subject to specific export controls.

5. Debarred Bidders List. Consolidated list established underthe provisions of Section 1 Part 6 of the ASPR (reference(e)) of names of individuals or firms to whom contracts willnot be awarded and from whom bids or proposals will not besolicited.

6. Denied Areas. For the purpose of this Instruction, itincludes the following countries: Albania, Bulgaria, Cuba,Czechoslovakia, East Germany including East Berlin, Estonia,Hungary, Latvia, Lithuania, Mongolia, North Korea, NorthVietnam, Peoples Republic of China, Poland, Rumania,Southern Rhodesia, Union of Soviet Socialist Republics.

7. End-Use Check. A check made by local US diplomatic missionto verify the final destination and ultimate use of FEPP asoriginally authorized.

8. End-Use Certificate (Statement Regarding Disposition andUse of Property). The Statement submitted by a purchaserof FEPP which includes the intended destination anddisposition of the purchased property and which becomes apart of the sales contract.

2030 "'"rncl 1)Mar 20,73

9. Foreign Excess Personal Property (FEPP). DoD exces personalproperty located outside the United States, Panama Canal Zone,Puerto Rico and all territories, dependencies and poscesnujornof the United States.

10. Friendly Governments. Governments of countries notdesignated as a denied area (definition 6).

11. Import Certificate-Delivery Verification System (IC/DV).

The export control system established by cooperatingfriendly governments to preclude diversion of shipments cfFEPP, by purchasers, to other than approved destinationn.This system applies only to FEPP in Category II.

12. Integrity and Reliability Check. A check made by local USdiplomatic mission to establish or confirm the integrity andreliability of an individual or organization as a prospectivepurchaser of FEPP.

13. International Organizations. For the purpose of thisInstruction it includes the following: Central TreatyOrganization; Colombo Plan Council for TechnicalCooperation in South and Southeast Asia; EURATOM; IndusBasin Development; International Atomic Energy Agency;International Red Cross; NATO; Organization of AmericanStates; Pan American Health Organization; SEATO; UnitedNations; United Nations Emergency Force; United NationsChildren's Fund; United Nations Development Program;United Nations High Commissioner for Refugees Programs;United Nations Relief and Works Agency for Palestine

Refugees in the Near East; UNESCO; World HealthOrganization; and all other international organizationsapproved by a US diplomatic mission.

14. Munitions List. Export control list included in the

International Traffic in Arms Regulation (ITAR) publishedby the Department of State. (Title 22, CFR, Parts 121-128)

15. Sales Contracting Officer. An individual who has been dulyappointed and granted the authority conferred by law to sellsurplus, foreign excess and exchange/sale personal property

by any of the authorized prescribed methods of sale.

16. Strategic List. List of Items subject to additional securitytrade controls by DoD. It consists of the CommerceDepartment's Commodity Control List "A" items.

17. Suspended Bidders List. A list of bidders who have committedtechnical violations of DoD security trade control regulations.

This list is compiled by the Central Unit or selling activityand is appended to the Cleared Bidders List.

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2030.6 (Encl 2)Mar 20,73

Contract Nr. -_.......... ._-___

Invitation Nr.

Name and Address of Bidder as shownin Standard Form 114, Revised

Name: _

Address:._

STATEMENT REGARDING DISPOSITION AND USE OF PROPERTY

1. TnstructiQ=. This form must be submitted to the Sales

Contracting Officer of the United States Armed Forces prior to the

acceptance by the United States of America of the bid submitted by the

above-named bidder pursuant to the above-numbered invitation. One

authenticated copy of this Statement will be returned to the success-

ful bidder if and when his bid is accepted and should be retained by

him.

2. CQmmodities. This Statement applies to the commodities on

which we have submitted our bid pursuant to the above-numberedinvitation.

3. Nature of iusinesq.

(Use separate sheet if needed)

a. We are a_____________________________________(Sole Proprietorship, Partnership, Corporation,

other)

b. The names and addresses of our branch offices are:

c. The names and addresses of our partners or corporateofficers and directors are:

2030.6(Encl 2)Mar 20,73

d. If bidder is acting as an agent, the names and addressesof all principals are:_

e. The nature of our (and our principals) business is:

4. Disposition of Commodities: (Check and complete appropriateentry or entries. Entry c or dmust be checked)

a. The commodities, if sold to us, will not be sold or other-wise disposed of by us for use outside of_ ____

Name of country

or countries

b. May be re-exported in the form received to the followingcountry or countries: ofcountry

Name of country or countries

c. If sold by us, our buyer(s) may be

Give names and addresses

d. Our customers are unknown at the present time. Writtenapproval for the resale of any property covered by thiscontract will be required from the Sales ContractingOfficer prior to sale when indicated on DD Form 1427,Notice of Award, unless they are named in c above.

5. Specific end use: (Check and complete appropriate entry orentries)

a. We will use the commodities referred to in Item 2 for:

(1) Ej Resale in the form received.

(2) UD Production or manufacture of_Name of final product

in end distribution inName of country or countries

Name of country or•Z6"•......-

b. Our customers will use the commodities for:

(1) El Resale in the form received from us.

( 2 ) - - P r o d u c t i o n o r m a n u f a c t u r e o f N a m e o f _i n l _ r o u c

Name of final product

2030.6 (Encl 2)

Mar 20,73

in and distributionName of country or countries

inName of country or countries

c. Other end use by us or by our customers

6. Additional information: (State any other material factsrelating to the disposition and use of the commodities which may be ofvalue in conside-ing the bid.)

7. Understanding and notifications:

a. We understand that the property on which we are biddingoriginated in the United States unless otherwise specifically indicatedin the sales offering.

b. We acknowledge receipt of notification that use anddisposition, export and re-export of such property by ushor any otherperson will be subject to applicable United States laws and regulations,which, among other things, prohibit -

(i) The making of any false statements and the conceal-ment of any material information regarding the use or disposition,export and re-export, of this property, or any other subject matter ofthis Statement and

(2) Any use or disposition, export or re-export of theproperty not authorized in accordance with the provisions of the contractto be made if our bid is accepted.

c. We further acknowledge receipt of notification thatspecial United States restrictions bar unauthorized exports and re-exports of United States origin commodities directly or indirectlyto Albania, Bulgaria, Cuba, Czechoslovakia, East Germany includingEast Berlin, Estonia, Hungary, Latvia, Lithuania, Mongolia, NorthKorea, North Vietnam, Peoples Republic of China, PoLand, Rumania,Southem Rhodesia, USSR and other prohibited destinations which maybe specified in the contract of sale.

d. Sanctions may be imposed against any person whocontravenes any law relating to the United States export control. Suchsanctions will be in conformity with US laws and regulations (including50 U.S.C. Appl., sections 2401-2413, 15 Code of Federal Regulations,

3

2 o30. 6 (Ene 2)Mar 20,73

Chapter !II, Subchapter B, esp. section 370.7; Armed Services Procure-ment Regulations; and DoD Instruction 2030.3) and may include the denialof United States export privileges and of any participation in furtherUnited States Government contracts.

e. The information provided by us in this Statement will beconsidered a part of our bid under the above-numbered invitation, anda part of the contract of sale if and when our bid is accepted by theUnited States of America.

8. Certification. We certify that all of the information we havegiven in this Statement is true and correct to our best knowledge andbelief and that we do not know of and have not omitted any additionalinformation which is inconsistent with this Statement. We understandthat this Statement will be referred to and be a part of the contractof sale between us and the United States of America. If stipulated onDD Form 1427, Notice of Award, we agree to submit a written request foramendment of this Statement to the Property Disposal (Contracting)Officer prior to effecting any change of fact or intention from thatstated herein or in any prior amendment, whether occurring before orafter the release of the commodities to us, and not to effect suchchanges without first receiving the written approval of the PropertyDisposal (Contracting) Officer.

Sign here in ink:____________Signature ofOfficial Bidder

Print or type name ofSigner

Date of Signing

4

2030. 6 (Ecil 3)Mar 20,73

"ARTICLE DISPOSITION AND USE OF PROPERTY

(1) The bidder agrees to submit with his bid a completed StatementRegarding Disposition and Use of Property (End-Use Certificate) a.,prescribed by the Sales Contracting Officer. Because acceptanceof this bid will be based o, considerations of' security require-ments of the United States, the bidder understands and agrees thatthe ultimate destination, use, and disposition of the propertyshall be in accordance with the End-Use Certificate submitced toand approved by the Sales Contracting Officer. When specificallyrequested on DD Form 1427, Notice of Award, changes to the bidder'sEnd-Use Certificate will require the prior written approval of theSales Contracting Officer.

(2) The bidder understands and agrees that the ultimate destinationshall not be to Albania, Bulgaria, Cuba, Czechoslovakia, EastGermany including East Berlin, Estonia, Hungary, Latvia, Lithuania,Mongolia, North Korea, North Vietnam, Peoples Republic of China,Poland, Rumania, Southern Rhodesia, USSR, or any other prohibiteddestinations that may be specified in this contract.

(3) The bidder further agrees to notify in writting any and allsubsequent purchasers or receivers of this property from him ofthe provisions of this Article and his End-Use Certificate relativeto the authorized destination, the requirement for approval by theSales Contracting Officer of any change of such destination priorto exportation thereto; the spccific United States restrictions onexports and re-exports directly and indirectly to denied areas orother prohibited destinations that may have been specified in theoriginal contract; the documentation (e.g., IC/DV documents,answers to follow-up requests) that may be required; and UnitedStates sanctions against violators. Subsequent purchasers andreceivers who have been so notified shall be required to makesimilar notifications to purchasers and receivers from them. Anyunauthorized disposition of the property by a subpurchaser or sub-receiver of the property shall be the responsibility of such sub-purchaser or subreceiver, and where at fault, of the originalbuyer from the government.

(4) When property purchased under single contract is intended for morethan one destination, the bidder agrees to submit, with the End-Use Certificate a listing of those items specifying quantitiesintended for each destination and consignee. The bidder furtheragrees to furnish the listing referred to herein with each changeof export intent when specifically requested to do so on DD Form1427, Notice of Award.

(5) Whenever requested by the Sales Contracting Officer to furnishinformation regarding the actual disposition made of the propertyawarded to him, the bidder agrees to furnish the requestedinformation within 30 calendar days after the date of the request.

2030.6 (Encd 3)Mar 20,73

(6) On those items requiring resale approval as indicated on DDForm 1427, Notice of Award, the bidder agrees to maintaindetailed records of their disposition and to provide suchrecords to the Sales Contracting Officer whenever requestedto do so.

(7) The trade control actions required by paragraph (1) of thisarticle will be applied to all items included in theoriginal sale. Resale breakdowns of such sales will stillbe subject to the same control requirements applicable tothe original sale.

2

2030.6 (rnic l)Mar 20, 73

Dear

This query is being made as a result of your intended disposition of

excess property as stated in your "Statement Regarding Disposition and Use

of Property" which was filed under Invitation to Bid Nr. , Contract

Nr. , in accordance with Article D., "Disposition and Use of Property",

General Sales Terms and Conditions of that contract.

Request this office be advised as to the disposition made of Line Item

Nrs. , purchased under the above mentioned contract

as follows:

a. Has property been resold or is it still in your possession?

b. If it has been resold, please list the names and addresses of

the sub-purchaser(s):

Item Nr. Name and Address of Sub-Purchaser(s)

c. Was property resold in the form received, or was it dismantled

and/or modified?

d. If not resold, where is the property now located?

Item Nr. Location of Property

Please submit this information so as to arrive at this office on or

before__

Thauk you for your cooperation in this matter.

Sincerely yours,