Page:United States Statutes at Large Volume 87.djvu/48

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PUBLIC LAW 93-000—MMMM. DD, 1973

16

PUBLIC LAW 93-17-APR. 10, 1973

[87 STAT.

" (b) QUALIFICATION FOR EXCLUSION.—In order for any issue of stock or debt obligations to qualify for an exclusion under subsection (a), the foreign issuer or obligor (prior to the issuance of such stock or debt obligations) shall have established to the satisfaction of the Secretary or his delegate, pursuant to rules or regulations prescribed by the Secretary or his delegate, that— " (1) at least 50 percent of the total funds required for the direct investment involved will come from sources outside the United States; "(2) such investment will be made for a period of at least 10 years; "(3) during such 10-year period the aggregate amount of all investments in the United States by the foreign issuer or obligor will at no time be reduced below the aggregate amount of such investments as determined immediately after the investment to which the exclusion applies; "(4) during such 10-year period the foreign issuer or obligor will comply with such other conditions and requirements as the Secretary or his delegate may prescribe and make applicable to such issuer or obligor; and "(5) during such 10-year period the foreign issuer or obligor will submit such reports and information, in such form and manner, as may be required by the Secretary or his delegate to substantiate compliance by the foreign issuer or obligor with the requirements of the preceding paragraphs. For purposes of this subsection, a foreign issuer or obligor shall not be considered to have failed to meet the requirements of this subsection with respect to an issue of stock described in subsection (a)(2), or a debt obligation described in subsection (a)(3), if he continues to comply with the requirements imposed on him by this subsection with respect to the debt obligation converted, refunded, or refinanced, for the full 10-year period. "(c) Loss OF ENTITLEMENT TO EXCLUSION I N CASE OF SUBSEQUENT NONCOMPLIANCE.—

Ante, p. 12. 78 Stat. 809. "^^

68A Stat. 828; 1496.^ ' ' 26 USC 6671.

"(1) IN GENERAL.—Where an exclusion under subsection (a) has applied with respect to the acquisition of any stock or debt obligation, but the foreign issuer or obligor subsequently fails ( b c W e the termination date specified in section 4911(d)) to comply with any of the requirements enumerated in subsection (b) or made applicable to such issuer or obligor under paragraph ^4^ thereof, then liability for the tax imposed by section 4911 (in an amount determined under paragraph (2) of this subsection) shall be incurred by such foreign issuer or obligor (with T-espect to such stock or debt obligations) at the time such failure to comply occurs as determined by the Secretary or his delegate. "(2) AMOUNT OF TAX.—In any case where an exclusion under subsection (a) has applied with respect to an original or new issue of stock or debt obligations, but a subsequent failure to comply with the requirements enumerated in or made applicable to the foreign issuer or obligor under subsection (b) occurs and liability for the tax imposed by section 4911 is incurred by the issuer or obligor as a result thereof, the amount of such tax shall be equal to the amount of tax for which all persons acquiring such stock or debt obligations (as part of the original or new issue) would have been liable under such section upon their acquisition thereof if such exclusion had not applied to such acquisition." (£) PENALTY.—Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: