I 

108TH CONGRESS 

1ST SESSION H. R. 1376

To improve the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 20, 2003

Mr. SMITH of New Jersey (for himself, Mr. FRANK of Massachusetts, Mr. 

LEACH, Mr. LANTOS, Mr. SHAYS, Mr. BACHUS, and Mrs. MALONEY) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on International Relations, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

A BILL

To improve the Enhanced Heavily Indebted Poor Countries 

(HIPC) Initiative.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. AUTHORIZATIONS OF APPROPRIATIONS FOR 

4 THE HIPC TRUST FUND. 

5 (a) AUTHORIZATION TO MEET FINANCING GAP IN

6 THE ENHANCED HIPC INITIATIVE.—In order to meet the 

7 President’s commitment to fund the United States share 

8 of the additional financing needs of the current HIPC pro-
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1 gram, there are authorized to be appropriated to the 

2 President $75,000,000 for fiscal year 2004, for payment 

3 to the Heavily Indebted Poor Countries Trust Fund ad4 ministered by the International Bank for Reconstruction 

5 and Development. 

6 (b) ADDITIONAL AUTHORIZATION FOR FUNDING

7 CONDITIONED UPON IMPROVEMENT OF THE ENHANCED

8 HIPC INITIATIVE.—In addition to the amounts author9 ized to be appropriated under subsection (a), on a deter10 mination by the Secretary of the Treasury that the agree11 ment described in section 1625 of the International Finan12 cial Institutions Act has been reached, there are author13 ized to be appropriated to the President such sums as may 

14 be necessary for payment to the Heavily Indebted Poor 

15 Countries Trust Fund administered by the International 

16 Bank for Reconstruction and Development to meet the ad17 ditional financing needs of the Enhanced HIPC Initiative 

18 that result from the implementation of the agreement. 

19 SEC. 2. IMPROVEMENT OF THE ENHANCED HIPC INITIA20 TIVE. 

21 Title XVI of the International Financial Institutions 

22 Act (22 U.S.C. 262p–262p–5) is amended by adding at 

23 the end the following new section: 
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1 ‘‘SEC. 1625. IMPROVEMENT OF THE ENHANCED HIPC INI2 TIATIVE. 

3 ‘‘(a) IN GENERAL.—In order to ensure that the En4 hanced HIPC Initiative achieves the objective of substan5 tially increasing resources available for human develop6 ment and poverty reduction in heavily indebted poor coun7 tries, the Secretary of the Treasury shall immediately 

8 commence efforts within the Paris Club of Official Credi9 tors, as well as the International Bank for Reconstruction 

10 and Development (World Bank), the International Mone11 tary Fund, and other appropriate multilateral develop12 ment institutions, to reach an agreement to modify the 

13 Enhanced HIPC Initiative so that the Initiative is carried 

14 out in accordance with the provisions set forth in sub15 section (b). 

16 ‘‘(b) MODIFICATIONS.—The provisions set forth in 

17 this subsection are the following: 

18 ‘‘(1) LEVEL OF EXPORTS AND REVENUES.—

19 ‘‘(A) IN GENERAL.—The amount of debt 

20 stock reduction approved for a country eligible 

21 for debt relief under the Enhanced HIPC Ini22 tiative shall be sufficient to reduce, for at least 

23 each year through 2006, or each of the first 3 

24 years after the Decision Point, whichever is 

25 later—
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1 ‘‘(i) the net present value of the out2 standing public and publicly guaranteed 

3 debt of the country to not more than 150 

4 percent of the annual value of exports of 

5 the country for the year preceding the De6 cision Point; and 

7 ‘‘(ii) the annual payments due on such 

8 public and publicly guaranteed debt to not 

9 more than—

10 ‘‘(I) 10 percent or, in the case of 

11 a country suffering a public health 

12 crisis, not more than 5 percent, of the 

13 amount of the annual current reve14 nues received by the country from in15 ternal sources; or 

16 ‘‘(II) a percentage of gross na17 tional product or other benchmark 

18 which will yield a result substantially 

19 equivalent to that which would be 

20 achieved through application of sub21 clause (I). 

22 ‘‘(B) LIMITATION.—In financing the objec23 tives of the Enhanced HIPC Initiative, an 

24 international financial institution shall give pri25 ority to using its own resources.
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1 ‘‘(2) RELATION TO POVERTY AND THE ENVI2 RONMENT.—The debt cancellation under the En3 hanced HIPC Initiative shall not be conditioned on 

4 any agreement by an impoverished country to imple5 ment or comply with policies that deepen poverty or 

6 degrade the environment, including any policy 

7 that—

8 ‘‘(A) implements or extends user fees on 

9 primary education or primary health care, in10 cluding prevention and treatment efforts for 

11 HIV/AIDS, tuberculosis, malaria, and infant, 

12 child, and maternal well-being; 

13 ‘‘(B) provides for increased cost recovery 

14 from poor people to finance basic public services 

15 such as education, health care, or sanitation; 

16 ‘‘(C) would have the effect of increasing 

17 the cost to consumers with incomes of less than 

18 $2.00 per day for access to clean drinking 

19 water through—

20 ‘‘(i) decreased public subsidy for 

21 water supply, treatment, disposal, distribu22 tion, or management; or 

23 ‘‘(ii) reduced intrasectoral or intersec24 toral subsidization of residential water con-
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1 sumers with incomes of less than $2.00 per 

2 day; or 

3 ‘‘(D) undermines workers’ ability to exer4 cise effectively their internationally recognized 

5 worker rights, as defined under section 526(e) 

6 of the Foreign Operations, Export Financing 

7 and Related Programs Appropriations Act, 

8 1995 (22 U.S.C. 262p–4p). 

9 ‘‘(3) FOREIGN GOVERNMENT POLICIES.—A 

10 country shall not be eligible for cancellation of debt 

11 under the Enhanced HIPC Initiative if the govern12 ment of the country—

13 ‘‘(A) supports acts of international ter14 rorism, as determined by the Secretary of State 

15 under section 6(j)(1) of the Export Administra16 tion Act of 1979 (50 U.S.C. App. 2405(j)(1)) 

17 or section 620A(a) of the Foreign Assistance 

18 Act of 1961 (22 U.S.C. 2371(a)); 

19 ‘‘(B) engages in gross violations of inter20 nationally recognized human rights, such as 

21 torture (as defined in section 2340 of title 18, 

22 United States Code) or violations of the Con23 vention Against Torture and Other Cruel, Inhu24 mane, or Degrading Treatment or Punishment; 

25 or 
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1 ‘‘(C) has been designated, in the most re2 cent Department of State ‘Trafficking in Per3 sons Report’, as a ‘Tier 3’ nation pursuant to 

4 the Victims of Trafficking and Violence Protec5 tion Act of 2000 (Public Law 106–386) for its 

6 failure to cooperate on international trafficking 

7 in persons prevention efforts. 

8 ‘‘(4) PROGRAMS TO COMBAT POVERTY.—A 

9 country that is otherwise eligible to receive cancella10 tion of debt under the Enhanced HIPC Initiative 

11 may receive such cancellation only if the country has 

12 agreed—

13 ‘‘(A) to ensure that the financial benefits 

14 of debt cancellation are applied to programs to 

15 combat poverty (in particular through concrete 

16 measures to improve basic services in education, 

17 nutrition, and health), and to redress environ18 mental degradation; 

19 ‘‘(B) to ensure that the financial benefits 

20 of debt cancellation are in addition to the gov21 ernment’s total spending on programs to com22 bat poverty for the previous year or the average 

23 total of such expenditures for the previous 3 

24 years, whichever is greater; 
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1 ‘‘(C) to implement transparent and 

2 participatory policymaking and budget proce3 dures, good governance, and effective 

4 anticorruption measures; and 

5 ‘‘(D) to broaden public participation and 

6 popular understanding of the principles and 

7 goals of poverty reduction. 

8 ‘‘(c) DEFINITIONS.—In this section: 

9 ‘‘(1) AIDS.—The term ‘‘AIDS’’ means the ac10 quired immune deficiency syndrome. 

11 ‘‘(2) PUBLIC HEALTH CRISIS.—A country is 

12 deemed to be suffering ‘a public health crisis’ if—

13 ‘‘(A) the nationwide HIV/AIDS infection 

14 rate for the country, as reported in the most re15 cent epidemiological data as compiled by the 

16 Joint United Nations Program on HIV/AIDS, 

17 is at least 5 percent among women attending 

18 prenatal clinics, or 20 percent or more among 

19 individuals in groups with high-risk behavior; or 

20 ‘‘(B) the country is suffering a health cri21 sis or epidemic, as defined by the World Health 

22 Organization. 

23 ‘‘(3) DECISION POINT.—The term ‘Decision 

24 Point’ means the date on which the executive boards 

25 of the World Bank and the International Monetary 
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1 Fund review the debt sustainability analysis for a 

2 country and determine that the country is eligible 

3 for debt relief under the Enhanced HIPC Initiative. 

4 ‘‘(4) ENHANCED HIPC INITIATIVE.—The term 

5 ‘Enhanced HIPC Initiative’ means the multilateral 

6 debt initiative for heavily indebted poor countries 

7 presented in the Report of G–7 Finance Ministers 

8 on the Cologne Debt Initiative to the Cologne Eco9 nomic Summit, Cologne, June 18–20, 1999. 

10 ‘‘(5) HIV.—The term ‘HIV’ means the human 

11 immunodeficiency virus, the pathogen that causes 

12 AIDS. 

13 ‘‘(6) HIV/AIDS.—The term ‘HIV/AIDS’ 

14 means, with respect to an individual, an individual 

15 who is infected with HIV or living with AIDS.’’. 

16 SEC. 3. MODIFICATION OF DETERMINATION OF COUNTRIES 

17 SUPPORTING TERRORISM UNDER CERTAIN 

18 INTERNATIONAL AFFAIRS LAWS. 

19 (a) FOREIGN ASSISTANCE ACT OF 1961.—

20 (1) GENERAL PROHIBITION ON ASSISTANCE.—

21 Section 620A(a) of the Foreign Assistance Act of 

22 1961 (22 U.S.C. 2371(a)) is amended by inserting 

23 after ‘‘international terrorism’’ the following: ‘‘or 

24 has failed to cooperate with the United States on ef25 forts to combat international terrorism’’.
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1 (2) ENTERPRISE FOR THE AMERICAS INITIA2 TIVE.—Section 703(a)(2) of such Act (22 U.S.C. 

3 2430b(a)(2)) is amended by inserting after ‘‘inter4 national terrorism’’ the following: ‘‘and has cooper5 ated with the United States on efforts to combat 

6 international terrorism’’. 

7 (b) ARMS EXPORT CONTROL ACT.—

8 (1) GENERAL PROHIBITION ON TRANS9 ACTIONS.—Section 40(d) of the Arms Export Con10 trol Act (22 U.S.C. 2780(d)) is amended in the first 

11 sentence by inserting after ‘‘international terrorism’’ 

12 the following: ‘‘or has failed to cooperate with the 

13 United States on efforts to combat international ter14 rorism’’. 

15 (2) TRANSFER OF MISSILE EQUIPMENT OR

16 TECHNOLOGY BY UNITED STATES PERSON.—Section 

17 72(c) of such Act (22 U.S.C. 2797a(c)) is amended 

18 by inserting after ‘‘international terrorism’’ the fol19 lowing: ‘‘or has failed to cooperate with the United 

20 States on efforts to combat international terrorism’’. 

21 (3) TRANSFER OF MISSILE EQUIPMENT OR

22 TECHNOLOGY BY FOREIGN PERSON.—Section 73(f) 

23 of such Act (22 U.S.C. 2797b(f)) is amended by in24 serting after ‘‘international terrorism’’ the following: 
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1 ‘‘or has failed to cooperate with the United States 

2 on efforts to combat international terrorism’’. 

3 (4) TRANSFER OF CHEMICAL OR BIOLOGICAL

4 WEAPONS BY FOREIGN PERSON.—Section 

5 81(a)(2)(B) of such Act (22 U.S.C. 2798(a)(2)(B)) 

6 is amended by inserting after ‘‘international ter7 rorism’’ the following: ‘‘or has failed to cooperate 

8 with the United States on efforts to combat inter9 national terrorism’’. 

10 (c) EXPORT ADMINISTRATION ACT OF 1979.—

11 (1) GENERAL REQUIREMENTS.—Section 

12 6(j)(1)(A) of the Export Administration Act of 1979 

13 (50 U.S.C. app. 2405(j)(1)(A)) is amended—

14 (A) in subsection (j)(1)(A), by inserting 

15 after ‘‘international terrorism’’ the following: 

16 ‘‘or has failed to cooperate with the United 

17 States on efforts to combat international ter18 rorism’’; and 

19 (B) in subsection (l)(3)(B), by inserting 

20 after ‘‘international terrorism’’ the following: 

21 ‘‘or to have failed to cooperate with the United 

22 States on efforts to combat international ter23 rorism’’. 

24 (2) TRANSFER OF CHEMICAL OR BIOLOGICAL

25 WEAPONS BY FOREIGN PERSON.—Section 
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1 11C(a)(2)(B) of such Act (50 U.S.C. app. 

2 2410c(a)(2)(B)) is amended by inserting after 

3 ‘‘international terrorism’’ the following: ‘‘or has 

4 failed to cooperate with the United States on efforts 

5 to combat international terrorism’’. 

6 SEC. 4. REPORTS ON IMPLEMENTATION OF IMPROVE7 MENTS TO THE ENHANCED HIPC INITIATIVE. 

8 (a) INITIAL REPORT.—Not later than 180 days after 

9 the date of enactment of this Act, the Secretary of the 

10 Treasury shall submit to the appropriate congressional 

11 committees a report describing the progress made in con12 cluding the agreement described in section 1625(b) of the 

13 International Financial Institutions Act (as added by sec14 tion 1 of this Act). 

15 (b) SUBSEQUENT REPORT.—Not later than 1 year 

16 after the date of submission of the initial report under 

17 subsection (a), the Secretary of the Treasury shall submit 

18 to the Committee on Foreign Relations of the Senate and 

19 the Committee on International Relations of the House 

20 of Representatives a report describing the actions taken 

21 by countries to satisfy the conditions set forth in the 

22 agreement referred to in subsection (a). 
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1 SEC. 5. REPORT ON EXPANSION OF DEBT RELIEF TO NON2 HIPC COUNTRIES. 

3 (a) IN GENERAL.—Within 90 days after the date of 

4 the enactment of this Act, the Secretary of the Treasury 

5 shall submit to the Congress a report on—

6 (1) the options and costs associated with ex7 panding debt relief to include poor countries who 

8 were not eligible for inclusion in the Enhanced 

9 HIPC Initiative; 

10 (2) options for burden-sharing among donor 

11 countries and multilateral institutions of costs asso12 ciate with expanding debt relief; and 

13 (3) options, in addition to the Enhanced HIPC 

14 Initiative, to ensure debt sustainability in poor coun15 tries, particularly in cases when the poor country 

16 has suffered an external economic shock or a natural 

17 disaster. 

18 (b) SPECIFIC OPTIONS TO BE CONSIDERED.—

19 Among the options for expansion of debt relief, consider20 ation should be given to making eligible for the relief poor 

21 countries for which outstanding public and publicly guar22 anteed debt requires annual payments in excess of 10 per23 cent or, in the case of countries suffering a public health 

24 crisis, 5 percent of the amount of the annual current reve25 nues received by the countries from internal sources. 
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1 (c) ENHANCED HIPC INITIATIVE DEFINED.—In this 

2 section, the term ‘‘Enhanced HIPC Initiative’’ means the 

3 multilateral debt initiative for heavily indebted poor coun4 tries presented in the Report of G–7 Finance Ministers 

5 on the Cologne Debt Initiative to the Cologne Economic 

6 Summit, Cologne, June 18–20, 1999.

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