b. Authorization for Increased U.S. Participation (1) International Development and Finance Act of 1989 Partial text of Public Law 101-240 [H.R. 2494], 103 Stat. 2492, approved December 19, 1989 AN ACT To reauthorize the Export-Import Bank tied aid credit fund and pilot interest subsidy program, to provide for the participation of the United States in a replenishment of the Inter-American Development Bank and in the Enhanced Structural Adjustment Facility of the International Monetary Fund, to improve the safety and soundness of the United States banking system and encourage the reduction of the debt burdens of the highly indebted countries, to encourage the multilateral development banks to engage in environmentally sustainable lending practices and give greater priority to poverty alleviation, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1.1 SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.-This Act may be cited as the "International Development and Finance Act of 1989". (b) TABLE OF CONTENTS.— Sec. 1. Short title; table of contents. TITLE I-EXPORT-IMPORT BANK ACT AMENDMENTS Sec. 101. Export-Import Bank Act amendments. Sec. 102. Extension of credit by Export-Import Bank with respect to Angola prohibited unless certain conditions are met. Sec. 103. Export-import programs to the People's Republic of China prohibited unless certain conditions are met. TITLE II-INTER-AMERICAN DEVELOPMENT BANK Sec. 201. Participation by the United States in a capital increase of the Inter-American Development Bank; increase in resources of fund for special operations. Sec. 202. Investment in human capital. Sec. 203. Limitations on Inter-American Development Bank policy based lending. Sec. 204. Increase in Inter-American Development Bank lending to the Caribbean. Sec. 205. Sense of the Congress that Inter-American Development Bank loans should reduce dependence on illicit narcotics. Sec. 206. Directives regarding government-owned enterprises in countries receiving IADB loans. TITLE III-INTERNATIONAL MONETARY FUND ENHANCED STRUCTURAL ADJUSTMENT FACILITY Sec. 301. Contribution to the interest subsidy account of the Enhanced Structural Adjustment Facility of the International Monetary Fund. Sec. 302. Discussions to enhance the capacity of the International Monetary Fund to alleviate the potentially adverse impacts of Fund programs on the poor and the environment. TITLE IV-INTERNATIONAL DEBT PROVISIONS Sec. 401. Short title. 1 22 U.S.C. 2151 note. Sec. 402. Additional reserve requirements. Sec. 403. Report on mark to market accounting. Sec. 405. Factors to be taken into account in developing United States policy toward debt reduction for certain highly indebted countries; report to the Congress. Sec. 406. Sense of the Congress that agreements to reduce debt burden should be accompanied by trade liberalization. Sec. 407. Linkage of debt reduction loans to reduction in drug trafficking; report to Congress. TITLE V—ALLEVIATION OF POVERTY; ENVIRONMENTAL PROVISIONS; DEBT-FOR-DEVELOPMENT SWAPS; CONSOLIDATION OF REPORTING RE QUIREMENTS Subtitle A-Alleviation of Poverty Sec. 501. Increasing the productive economic participation of the poor. Subtitle B-International Debt Exchanges and the Environment Sec. 511. Sense of the Congress resolution regarding environmental policy and international debt exchanges. Sec. 512. Multilateral development banks and debt-for-nature exchanges. Subtitle C-Environmental Impact Assessments Sec. 521. Assessment of environmental impact of proposed multilateral development bank actions. Subtitle D-Debt-for-Development Swaps Sec. 531. Encouragement of debt-for-development swaps through local currency repayment. Subtitle E-Consolidation of Certain Reporting Requirements Sec. 541. Consolidation of certain reporting requirements. TITLE VI-MISCELLANEOUS PROVISIONS Sec. 601. Sense of the Congress that the International Bank for Reconstruction and Development and the International Monetary Fund should expeditiously act upon loan requests from Poland. Sec. 602. Sense of the Congress supporting assistance by multilateral lending institutions to establish financial institutions in Poland. Sec. 603. Sense of the Congress relating to conditional financial assistance by multilateral lending institutions to Poland. Sec. 604. Sense of the Congress opposing the making of certain loans or the extension of certain financial and technical assistance to the People's Republic of China. TITLE VII-MISCELLANEOUS Sec. 701. Short title. PART A-COMmercial Debt-for Nature Exchanges Sec. 711. Amendment to the Foreign Assistance Act. PART B-MULTILATERAL FOREIGN ASSISTANCE CORPORATION Sec. 721. General policy. Sec. 722. Policy on negotiations. TITLE VIII-EFFECTIVE DATE Sec. 801. Effective date. TITLE I-EXPORT-IMPORT BANK ACT AMENDMENTS SEC. 101.2 EXPORT-IMPORT BANK ACT AMENDMENTS. (e) REPORT WITH RESPECT TO LOAN LOSS RESERVES.-Before the end of the 6-month period beginning on the date of the enactment of this section, the Export-Import Bank of the United States shall submit a report to the Congress explaining why the Bank has not established a loan loss reserve. In preparing such report, the Bank shall (1) determine if the establishment of a loan loss reserve would result in the unproductive characterization of the creditworthiness of certain types of borrowers; (2) consult with the appropriate Executive branch entities to determine the budgeting and financial management implications of establishing a loan loss reserve; (3) review whether, and the extent to which similar bilateral and multilateral lending institutions make provision against loan losses; and (4) report on the steps needed to return the Bank to profitability. SEC. 103.3 EXPORT-IMPORT PROGRAMS TO THE PEOPLE'S REPUBLIC OF CHINA PROHIBITED UNLESS CERTAIN CONDITIONS ARE MET. (a) Notwithstanding any other provision of law and subject to the provisions of subsections (b) and (c), the Export-Import Bank of the United States shall not finance any trade with, nor extend any loan, credit, credit guarantee, insurance or reinsurance to the People's Republic of China. (b) The prohibitions described in subsection (a) of this section shall not apply to food or agricultural commodities. (c) The President may waive the prohibitions in subsection (a) if he makes a report to Congress either (1) that the Government of the People's Republic of China has made progress on a program of political reform throughout the country, as well as in Tibet, which includes (A) lifting of martial law; (B) halting of executions and other reprisals against individuals for the nonviolent expression of their political beliefs; (C) release of political prisoners; (D) increased respect for internationally recognized human rights, including freedom of expression, the press, assembly, and association; and (E) permitting a freer flow of information, including an end to the jamming of Voice of America and greater access for foreign journalists; or 2 The Export-Import Bank Act of 1945 may be found beginning at page 3. 312 U.S.C. 635 note. (2) it is in the national interest of the United States to terminate a suspension under subsection (a). TITLE II-INTER-AMERICAN DEVELOPMENT BANK 5 SEC. 205. SENSE OF THE CONGRESS THAT INTER-AMERICAN DEVELOPMENT BANK LOANS SHOULD REDUCE DEPENDENCE ON ILLICIT NARCOTICS. It is the sense of the Congress that, whenever possible and appropriate, loans made by the Inter-American Development Bank during the 4-year period beginning on January 1, 1990, should promote economic development which will reduce the growing economic dependence on the production and transit of illicit narcotics in certain borrower countries. SEC. 206. DIRECTIVES REGARDING GOVERNMENT-OWNED ENTERPRISES IN COUNTRIES RECEIVING IADB LOANS. TITLE III-INTERNATIONAL MONETARY FUND ENHANCED STRUCTURAL ADJUSTMENT FACILITY 7 TITLE IV—INTERNATIONAL DEBT PROVISIONS ® SEC. 401. SHORT TITLE. This title may be cited as the "Foreign Debt Reserving Act of 1989". SEC. 402.9 ADDITIONAL RESERVE REQUIREMENTS. (a) FINDINGS.-The Congress finds that (1) since the adoption of the International Lending Supervision Act of 1983, the credit quality of loans by United States banking institutions to highly indebted countries has deteriorated and the prospects for full repayment of such loans have diminished; (2) in general during this period, the level of country exposure and transfer risk associated with loans by United States banking institutions to highly indebted countries has not been * On December 19, 1989 (same date as enactment of this Act), the President reported to the Speaker of the House of Representatives and President of the Senate the following: "Pursuant to the authority vested in me by subsection 103(c)2) of the International Development and Finance Act of 1989 (the 'Act'), and as President of the United States, I hereby report that it is in the national interest of the United States to terminate the suspensions under subsection 103(a) of the Act of programs of the Export-Import Bank of the United States for the People's Republic of China. I am thereby waiving the prohibitions on the Export-Import Bank's financing any trade with, and on extending any loan, credit, credit guarantee, insurance or reinsurance to the People's Republic of China as provided in subsection 103(a)." [Weekly Compilation of Presidential Documents. December 25, 1989, vol. 235, no. 51, p. 1973.] 12.. Secs. 201-204 amended the Inter-American Development Bank Act; see beginning at page Sec. 206 amended the International Financial Institutions Act by adding a new sec. 1612. For text, see page 213. 7 Title III added new secs. 54 and 55 to the Bretton Woods Agreements Act. For text, see beginning at page 93. 12 U.S.C. 3901 note. 12 U.S.C. 3904a note. adequately reflected in the reserve levels established by many individual United States banking institutions or the reserve requirements imposed by Federal banking agencies pursuant to such Act; (3) during the last 3 years and particularly in recent months, United States banking institutions have increased their reserves for possible losses from loans to highly indebted countries but such reserves remain, in some cases, significantly lower than reserves established by banking institutions in a number of foreign countries and may not be adequate to deal with potential risks; and (4) in order to fulfill the purposes of such Act, the Federal banking agencies should take a more active role in reviewing reserve levels established by United States banking institutions for potential losses from loans to highly indebted countries and in requiring appropriate levels of both special and general reserves to reflect the increased risk of such loans. (b) 10 IN GENERAL. - SEC. 403. REPORT ON MARK TO MARKET ACCOUNTING. (a) REPORT REQUIRED.-Before the end of the 90-day period beginning on the date of the enactment of this section, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency shall jointly report to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the merits of mark to market accounting treatment as an appropriate accounting treatment for the sovereign debt of highly indebted countries which is held by United States commercial banks. (b) CONTENTS OF REPORT.-The report required under subsection (a) shall include_ (1) a discussion of the merits of mark to market accounting treatment as the appropriate accounting treatment for the sovereign debt of highly indebted countries which is held by United States commercial banks; and (2) a description of the factors which the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency will consider in future assessments of the applicability of mark to market accounting to such debt. SEC. 404. STUDY ON ELIMINATION OF CAPITAL FLIGHT. (a) IN GENERAL.-The Secretary of the Treasury shall instruct the United States Executive Director of the International Monetary Fund to propose that the Fund conduct a study on multilateral means by which the banking industry might help reverse capital flight from countries which are engaged in debt restructuring, including (1) the feasibility of disclosing the names of account holders whose accounts may consist of flight capital, and the balances of such accounts; 10 Sec. 402(b) amended the International Lending Supervision Act of 1983 (12 U.S.C. 3901 et seq.) by inserting a new sec. 905A. For text, see page 232. |