Page 1175 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE § 5331

increase production for export, help to depress

world commodity prices and limit the growth

of export markets for United States industries;

(7) the United States has borne a disproportionate share of the burden of absorbing increased exports from debtor countries, while

other industrialized countries have increased

their imports from developing countries only

slightly;

(8) current approaches to the debt problem

should not rely solely on new lending as a solution to the debt problem, and should focus

on other financing alternatives including a reduction in current debt service obligations;

(9) new international mechanisms to improve the management of the debt problem

and to expand the range of financing options

available to developing countries should be explored; and

(10) industrial countries with strong current

account surpluses have a disproportionate

share of the world’s capital resources, and bear

an additional responsibility for contributing

to a viable long-term solution to the debt

problem.

(Pub. L. 100–418, title III, §3102, Aug. 23, 1988, 102

Stat. 1375.)

§ 5323. Purposes

The purposes of this subchapter are—

(1) to expand the world trading system and

raise the level of exports from the United

States to the developing countries in order to

reduce the United States trade deficit and foster economic expansion and an increase in the

standard of living throughout the world;

(2) to alleviate the current international

debt problem in order to make the debt situation of developing countries more manageable

and permit the resumption of sustained

growth in those countries; and

(3) to increase the stability of the world financial system and ensure the safety and

soundness of United States depository institutions.

(Pub. L. 100–418, title III, §3103, Aug. 23, 1988, 102

Stat. 1376.)

§ 5324. Statement of policy

It is the policy of the United States that—

(1) increasing growth in the developing

world is a major goal of international economic policy;

(2) it is necessary to broaden the range of options in dealing with the debt problem to include improved mechanisms to restructure existing debt;

(3) active consideration of a new multilateral authority to improve the management

of the debt problem and to share the burdens

of adjustment more equitably must be undertaken; and

(4) countries with strong current account

surpluses bear a major responsibility for providing the financial resources needed for

growth in the developing world.

(Pub. L. 100–418, title III, §3104, Aug. 23, 1988, 102

Stat. 1376.)

PART B—INTERNATIONAL DEBT MANAGEMENT

AUTHORITY

§ 5331. International initiative

(a) Directive

(1) Study

The Secretary of the Treasury shall study

the feasibility and advisability of establishing

the International Debt Management Authority described in this section.

(2) Explanation of determinations

If the Secretary of the Treasury determines

that initiation of international discussions

with regard to such authority would (A) result

in material increase in the discount at which

sovereign debt is sold, (B) materially increase

the probability of default on such debt, or (C)

materially enhance the likelihood of debt

service failure or disruption, the Secretary

shall include in his interim reports to the Congress an explanation in detail of the reasons

for such determination.

(3) Initiation of discussions

Unless such a determination is made, the

Secretary of the Treasury shall initiate discussions with such industrialized and developing countries as the Secretary may determine

to be appropriate with the intent to negotiate

the establishment of the International Debt

Management Authority, which would undertake to—

(A) purchase sovereign debt of less developed countries from private creditors at an

appropriate discount;

(B) enter into negotiations with the debtor

countries for the purpose of restructuring

the debt in order to—

(i) ease the current debt service burden

on the debtor countries; and

(ii) provide additional opportunities for

economic growth in both debtor and industrialized countries; and

(C) assist the creditor banks in the voluntary disposition of their Third World loan

portfolio.

(b) Objectives

In any discussions initiated under subsection

(a) of this section, the Secretary should include

the following specific proposals:

(1) That any loan restructuring assistance

provided by such an authority to any debtor

nation should involve substantial commitments by the debtor to (A) economic policies

designed to improve resource utilization and

minimize capital flight, and (B) preparation of

an economic management plan calculated to

provide sustained economic growth and to

allow the debtor to meet its restructured debt

obligations.

(2) That support for such an authority

should come from industrialized countries,

and that greater support should be expected

from countries with strong current account

surpluses.

(3) That such an authority should have a

clearly defined close working relationship

with the International Monetary Fund and the

International Bank for Reconstruction and
§ 5332 TITLE 22—FOREIGN RELATIONS AND INTERCOURSE Page 1176

Development and the various regional development banks.

(4) That such an authority should be designed to operate as a self-supporting entity,

requiring no routine appropriation of resources from any member government, and to

function subject to the prohibitions contained

in the first sentence of section 5332(a) of this

title.

(5) That such an authority should have a defined termination date and a clear proposal for

the restoration of creditworthiness to debtor

countries within this timeframe.

(c) Interim reports

At the end of the 6-month period beginning on

August 23, 1988, and at the end of the 12-month

period beginning on August 23, 1988, the Secretary of the Treasury shall submit a report on

the progress being made on the study or in discussions described in subsection (a) of this section to the Committee on Banking, Finance and

Urban Affairs of the House of Representatives

and the Committee on Banking, Housing, and

Urban Affairs and the Committee on Foreign

Relations of the Senate, and shall consult with

such committees after submitting each such report.

(d) Final report

On the conclusion of the study or of discussions described in subsection (a) of this section,

the Secretary shall transmit a report containing

a detailed description thereof to the Committee

on Banking, Finance and Urban Affairs of the

House of Representatives and the Committee on

Banking, Housing, and Urban Affairs and the

Committee on Foreign Relations of the Senate,

together with such recommendations for legislation which the Secretary may determine to be

necessary or appropriate for the establishment

of the International Debt Management Authority.

(Pub. L. 100–418, title III, §3111, Aug. 23, 1988, 102

Stat. 1376.)

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 sections 5332, 5333 of this

title.

§ 5332. Actions to facilitate creation of Authority

(a) In general

No funds, appropriations, contributions, callable capital, financial guarantee, or any other

financial support or obligation or contingent

support or obligation on the part of the United

States Government may be used for the creation, operation, or support of the International

Debt Management Authority specified in section

5331 of this title, without the express approval of

the Congress through subsequent law, nor shall

any expenses associated with such authority, either directly or indirectly, accrue to any United

States person without the consent of such person. Except as restricted in the preceding sentence, the Secretary of the Treasury shall review all potential resources available to the

multilateral financial institutions which could

be used to support the creation of the International Debt Management Authority. In the

course of this review, the Secretary shall direct—

(1) the United States Executive Director of

the International Monetary Fund to determine the amount of, and alternative methods

by which, gold stock of the Fund which, subject to action by its Board of Governors, could

be pledged as collateral to obtain financing for

the activities of the authority specified in section 5331 of this title; and

(2) the United States Executive Director to

the International Bank for Reconstruction and

Development to determine the amount of, and

alternative methods by which, liquid assets

controlled by such Bank and not currently

committed to any loan program which, subject

to action by its Board of Governors, could be

pledged as collateral for obtaining financing

for the activities of the authority specified in

section 5331 of this title.

The Secretary of the Treasury shall include a

report on the results of the review in the first

report submitted under section 5331(c) of this

title.

(b) Construction of section

Subsection (a) of this section shall not be construed to affect any provision of the Articles of

Agreement of the International Monetary Fund

or of the International Bank for Reconstruction

and Development or any agreement entered into

under either of such Agreements.

(Pub. L. 100–418, title III, §3112, Aug. 23, 1988, 102

Stat. 1378.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 5331 of this title.

§ 5333. IMF-World Bank review

(a) IMF review

The United States Executive Director of the

International Monetary Fund shall request the

management of the International Monetary

Fund to prepare a review and analysis of the

debt burden of the developing countries, with

particular attention to alternatives for dealing

with the debt problem including new lending instruments, rescheduling and refinancing of existing debt, securitization and debt conversion

techniques, discounted debt repurchases, and

the International Debt Management Authority

described in section 5331 of this title no later

than 1 year after August 23, 1988.

(b) World Bank review

The United States Executive Director to the

International Bank for Reconstruction and Development shall request the management of the

International Bank for Reconstruction and Development to prepare a review and analysis of

the debt burden of the developing countries,

with particular attention to alternatives for

dealing with the debt problem including new