§ 286hh TITLE 22—FOREIGN RELATIONS AND INTERCOURSE Page 140

(2) In the event that the United States supports a request for loans or drawing by a country that has not achieved the bank and Fund

targets relating to such practices specified in its

program, the Secretary of the Treasury shall report to the appropriate committees of the Congress the reasons for the United States position.

(d) ‘‘Multilateral development banks’’ defined

For purposes of this section, the term ‘‘multilateral development banks’’ means the International Bank for Reconstruction and Development, the Inter-American Development Bank,

the African Development Bank, and the Asian

Development Bank.

(July 31, 1945, ch. 339, §49, as added Pub. L.

98–181, title VIII, §812, Nov. 30, 1983, 97 Stat. 1275;

amended Pub. L. 99–500, §101(f) [title V, §555],

Oct. 18, 1986, 100 Stat. 1783–213, 1783–240, and Pub.

L. 99–591, §101(f) [title V, §555], Oct. 30, 1986, 100

Stat. 3341–214, 3341–240.)

CODIFICATION

Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

AMENDMENTS

1986—Subsec. (a)(1). Pub. L. 99–500 and Pub. L. 99–591,

§101(f) [title V, §555(b)], inserted ‘‘each of the multilateral development banks (in this section referred to

as the ‘banks’) and of’’, ‘‘each of the banks and of’’, and

‘‘banks and of the’’, and substituted ‘‘development of financial’’ for ‘‘development of Fund financial’’.

Subsec. (a)(3). Pub. L. 99–500 and Pub. L. 99–591, §101(f)

[title V, §555(c)], inserted ‘‘each of the banks and of’’

and substituted ‘‘their staff’’ for ‘‘Fund staff’’.

Subsec. (b)(1). Pub. L. 99–500 and Pub. L. 99–591, §101(f)

[title V, §555(d)], inserted ‘‘each of the banks and of’’,

‘‘the banks and by’’, and ‘‘the banks and’’.

Subsec. (c). Pub. L. 99–500 and Pub. L. 99–591, §101(f)

[title V, §555(e), (f)], inserted ‘‘bank and’’ and ‘‘loans

or’’ in pars. (1) and (2).

Subsec. (d). Pub. L. 99–500 and Pub. L. 99–591, §101(f)

[title V, §555(a)], added subsec. (d).

§ 286hh. Policy based lending for debt reduction

(a) Criteria

The Secretary of the Treasury shall instruct

the United States Executive Director of the

International Bank for Reconstruction and Development to initiate discussions with other directors of such bank and to advocate and support the facilitation of voluntary market-based

programs for the reduction of sovereign debt and

the promotion of sustainable economic development, which, if implemented, would—

(1) not require any organization or government to participate in such a program;

(2) result in debt reduction for each participating country tailored to the particular situation of each country;

(3) provide assistance to participating countries conditioned on the implementation of

economic reforms, and the preservation of economic reforms previously implemented, by the

country that are consistent with the principles of sustainable development;

(4) encourage participating countries to

make economic adjustments steadily and over

a period of time in order to achieve policy reform;

(5) use debt reduction techniques that would

not compensate commercial banks for the reduction in the value of such debt, but would

serve as a catalyst for new lending;

(6) involve such bank in lending for purposes

of debt reduction and conversion only where

such involvement would not lower the credit

rating of such bank;

(7) not require public sector funding beyond

that provided through any capital increase for

such bank, and any replenishment for the

International Development Association, which

is agreed to by the member countries of such

institutions; and

(8) accomplish debt reduction, not as an end,

but as a means to greater growth and investment in, and the restoration of voluntary private lending to, participating countries for environmentally and economically sustainable

development.

(b) Policy based lending for debt reduction and

sustainable growth

The Secretary of the Treasury shall instruct

the United States Executive Director of the

International Bank for Reconstruction and Development to initiate discussions with other directors of such bank and to propose that policy

based loans be made by such bank for, among

other reasons, facilitating a reduction in the

debt service burden of any country which is participating in a voluntary market-based program

for debt reduction described in subsection (c) of

this section.

(c) Voluntary market-based program for debt reduction and sustainable growth

In connection with the discussions initiated

pursuant to subsection (b) of this section, the

Secretary shall instruct the United States Executive Director of the International Bank for Reconstruction and Development to propose that a

country be considered to be participating in a

voluntary market-based program of debt reduction for purposes of subsection (b) of this section

if the creditors of such country agree to significantly reduce the debt service of such country

through forgiveness of a percentage of the interest owed by such country on any sovereign debt

or through any other means.

(d) Reports

Not later than March 1, 1989, March 1, 1991, and

March 1, 1993, respectively, the Secretary of the

Treasury shall submit to the Committee on

Banking, Finance and Urban Affairs of the

House of Representatives and the Committee on

Foreign Relations of the Senate 3 reports each

of which—

(1) describes the long term strategy and

lending programs of the International Bank

for Reconstruction and Development for reducing and managing the debt burden of the

countries designated as ‘‘Highly Indebted

Countries’’ in the 1987–1988 World Debt Tables

published by such bank, and summarize the

long term strategy and lending programs of

such bank for other seriously indebted countries;

(2) contains an explanation of the measures

taken by such bank to facilitate the reduction

of the debt burden of the countries designated

as ‘‘Highly Indebted Countries’’ in the
Page 141 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 286kk

1So in original. Probably should be capitalized.

1987–1988 World Debt tables 1 published by such

bank;

(3) describes the extent (if any) to which

such bank has implemented the measures described in subsections (b) and (c) of this section; and

(4) describes the success each of such countries has had in managing and reducing their

debt burdens and achieving sustainable and

equitable economic growth as measured by

criteria including the ratio of debt service to

exports, the ratio of debt to gross national

product, net resource flows, and per capita income.

(e) Review by House Banking Committee

On receipt of each report required to be submitted pursuant to subsection (d) of this section, and after consultation with the Secretary

of the Treasury, the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall forward such report to the

Committee on Appropriations of the House of

Representatives with an assessment by the Committee on Banking, Finance and Urban Affairs

describing the effect on the international debt

situation of funding the subscription of the

United States to the shares of capital stock of

the International Bank for Reconstruction and

Development due for payment by the United

States in the then next fiscal year.

(Pub. L. 100–461, title V, §555, Oct. 1, 1988, 102

Stat. 2268–36.)

CODIFICATION

Section is based on section 3 of H.R. 4645, One Hundredth Congress, as reported Sept. 28, 1988, and enacted

into law by Pub. L. 100–461.

Section was not enacted as part of act July 31, 1945,

ch. 339, 59 Stat. 512, known as the Bretton Woods Agreements Act, which comprises this subchapter.

CHANGE OF NAME

Committee on Banking, Finance and Urban Affairs of

House of Representatives treated as referring to Committee on Banking and Financial Services of House of

Representatives by section 1(a) of Pub. L. 104–14, set

out as a note preceding section 21 of Title 2, The Congress.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 286ii of this title.

§ 286ii. Limitations on Bank policy based lending;

actions required to be taken to oppose excessive policy based lending by Bank

The Secretary of the Treasury shall—

(1) take all necessary steps to encourage the

International Bank for Reconstruction and

Development to limit—

(A) the aggregate value of the policy based

loans made by such bank (other than for the

purpose described in section 286hh(b) of this

title) in any fiscal year of such bank beginning after June 30, 1989, to 25 percent of the

aggregate value of all loans made by such

bank in such fiscal year; and

(B) the aggregate value of the policy based

loans made by such bank to the government

of a particular country (other than for the

purpose described in section 286hh(b) of this

title) in any fiscal year of such bank beginning after June 30, 1989, and occurring during any period of 3 consecutive fiscal years

of such bank (determined after disregarding

any such fiscal year in which such bank did

not make a policy based loan to such government), to 50 percent of the aggregate

value of all loans made by such bank to such

government during such 3-year period;

(2) instruct the United States Executive Director of such bank to propose and actively

seek the adoption by the board of Executive

Directors of such bank of a resolution establishing as official bank operating policy for

fiscal years 1990 through 1995 of such bank the

limits specified in paragraph (1); and

(3) until the resolution described in paragraph (2) is adopted, undertake, in consultation with the Secretary of State, discussions

with other member country governments to

secure the consent and cooperation of such

governments with respect to the adoption of

the limits specified in paragraph (1).

(Pub. L. 100–461, title V, §555, Oct. 1, 1988, 102

Stat. 2268–36.)

CODIFICATION

Section is based on section 4 of H.R. 4645, One Hundredth Congress, as reported Sept. 28, 1988, and enacted

into law by Pub. L. 100–461.

Section was not enacted as part of act July 31, 1945,

ch. 339, 59 Stat. 512, known as the Bretton Woods Agreements Act, which comprises this subchapter.

§ 286jj. Partial guarantees in connection with

debt reduction for borrower countries

The Secretary of the Treasury shall instruct

the United States Executive Director of the

International Bank for Reconstruction and Development to initiate discussions with other directors of such bank and to propose that such

bank establish criteria under which such bank

would provide partial guarantees on debt service

payments by borrower countries to private

creditors when such guarantees would serve a

catalytic role in facilitating final agreement on

financing packages which involve significant

debt reduction.

(Pub. L. 100–461, title V, §555, Oct. 1, 1988, 102

Stat. 2268–36.)

CODIFICATION

Section is based on section 5 of H.R. 4645, One Hundredth Congress, as reported Sept. 28, 1988, and enacted

into law by Pub. L. 100–461.

Section was not enacted as part of act July 31, 1945,

ch. 339, 59 Stat. 512, known as the Bretton Woods Agreements Act, which comprises this subchapter.

§ 286kk. Discussions to enhance capacity of Fund

to alleviate potentially adverse impacts of

Fund programs on poor and environment

The Secretary of the Treasury shall instruct

the United States Executive Director of the

Fund to seek policy changes by the Fund,

through formal initiatives and through bilateral

discussions, which will result in—

(1) the initiation of a systematic review of

policy prescriptions implemented by the Fund,