During any fiscal year, funds that would otherwise be withheld from obligation or expenditure under section 2291j of this title may be obligated or expended beginning October 1 of such fiscal year provided that:

(1) Report

Not later than September 15 of the previous fiscal year the President has submitted to the appropriate congressional committees a report identifying each country determined by the President to be a major drug transit country or major illicit drug producing country as defined in section 2291(e) of this title.

(2) Designation and justification

In each report under paragraph (1), the President shall—

(A) designate each country, if any, identified in such report that has failed demonstrably, during the previous 12 months, to make substantial efforts—

(i) to adhere to its obligations under international counternarcotics agreements; and

(ii) to take the counternarcotics measures set forth in section 2291h(a)(1) of this title;

(B) designate each country, if any, identified under section 2291h(a)(10) of this title that has failed to adopt and utilize scheduling procedures for illicit drugs that are comparable to the procedures authorized under title II ¹ of the Controlled Substances Act (21 U.S.C. 811 et seq.) for adding drugs and other substances to the controlled substances schedules;

(C) designate each country, if any, identified under section 2291h(a)(10) of this title that has not taken significant steps to prosecute individuals involved in the illicit manufacture or distribution of controlled substance analogues (as defined in section 102(32) of the Controlled Substances Act (21 U.S.C. 802(32)) ²;

(D) include a justification for each country designated under subparagraph (A), (B), or (C).

(3) Limitation on assistance for designated countries

In the case of a country identified in a report under paragraph (1) that is designated in the report under paragraph (2)(A) or thrice designated during a 5-year period in the report under subparagraph (B) or (C) of paragraph (2), United States assistance may be provided to such country in the subsequent fiscal year only if the President determines and reports to the appropriate congressional committees that—

(A) provision of such assistance to the country in such fiscal year is vital to the national interests of the United States; or

(B) subsequent to the designation being made under paragraph (2)(A), the country has made substantial efforts—

(i) to adhere to its obligations under international counternarcotics agreements; and

(ii) to take the counternarcotics measures set forth in section 2291h(a)(1) of this title.

(4) International counternarcotics agreement defined

In this section, the term “international counternarcotics agreement” means—

(A) the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances; or

(B) any bilateral or multilateral agreement in force between the United States and another country or countries that addresses issues relating to the control of illicit drugs, such as—

(i) the production, distribution, and interdiction of illicit drugs;

(ii) demand reduction;

(iii) the activities of criminal organizations;

(iv) international legal cooperation among courts, prosecutors, and law enforcement agencies (including the exchange of information and evidence);

(v) the extradition of nationals and individuals involved in drug-related criminal activity;

(vi) the temporary transfer for prosecution of nationals and individuals involved in drug-related criminal activity;

(vii) border security;

(viii) money laundering;

(ix) illicit firearms trafficking;

(x) corruption;

(xi) control of precursor chemicals;

(xii) asset forfeiture; and

(xiii) related training and technical assistance,

and includes, where appropriate, timetables and objective and measurable standards to assess the progress made by participating countries with respect to such issues.

(5) Application

(A) Section 2291j(a) through (h) of this title shall not apply during any fiscal year with respect to any country identified in the report required by paragraph (1) of this section.

(B) Notwithstanding paragraphs (1) through (5)(A) of this section, the President may apply the procedures set forth in section 2291j(a) through (h) of this title during any fiscal year with respect to any country determined to be a major drug transit country or major illicit drug producing country as defined in section 2291(e) of this title.

(C) Notwithstanding paragraph (3), assistance to promote democracy (as described in section 2291(e)(4)(E) of this title) shall be provided to countries identified in a report under paragraph (1) and designated under subparagraph (B) or (C) of paragraph (2), to the extent such countries are otherwise eligible for such assistance, regardless of whether the President reports to the appropriate congressional committees in accordance with such paragraph.

(D) Notwithstanding paragraph (3), assistance to combat trafficking (as described in section 2291(e)(4)(F) of this title) shall be provided to countries identified in a report under paragraph (1) and designated under subparagraph (B) or (C) of paragraph (2), to the extent such countries are otherwise eligible for such assistance, regardless of whether the President reports to the appropriate congressional committees in accordance with such paragraph.

(E) Notwithstanding paragraph (3), global health assistance (as described in section 2291(e)(4)(G) of this title) shall be provided to countries identified in a report under paragraph (1) and designated under subparagraph (B) or (C) of paragraph (2), to the extent such countries are otherwise eligible for such assistance, regardless of whether the President reports to the appropriate congressional committees in accordance with such paragraph

(F) Nothing in this section shall affect the requirements of section 2291j of this title with respect to countries identified pursuant to clause (i) or (ii) of section 2291h(a)(8)(A) of this title.

(6) Statutory construction

Nothing in this section supersedes or modifies the requirement in section 2291h(a) of this title (with respect to the International Narcotics Control Strategy Report) for the transmittal of a report not later than March 1, each fiscal year under that section.

(7) Transition rule

For funds obligated or expended under this section in fiscal year 2003, the date for submission of the report required by paragraph (1) of this section shall be at least 15 days before funds are obligated or expended.

(8) Effective date

This section shall take effect September 30, 2002, and shall remain in effect thereafter unless Congress enacts subsequent legislation repealing such section.