IIB 

110TH CONGRESS 

2D SESSION H. R. 2634 

IN THE SENATE OF THE UNITED STATES 

APRIL 24, 2008 

Received; read twice and referred to the Committee on Foreign Relations 

AN ACT 

To provide for greater responsibility in lending and expanded 

cancellation of debts owed to the United States and 

the international financial institutions by low-income 

countries, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Jubilee Act for Re3 sponsible Lending and Expanded Debt Cancellation of 

4 2008’’. 

5 SEC. 2. FINDINGS. 

6 The Congress finds the following: 

7 (1) Many low-income countries have been strug8 gling under the burden of international debts for 

9 many years. 

10 (2) Since 1996, when the Heavily Indebted 

11 Poor Countries Initiative (HIPC) was created, more 

12 than 30 nations have seen some form of debt relief 

13 totaling approximately $80,000,000,000. 

14 (3) Congress has demonstrated its support for 

15 bilateral and multilateral debt relief through the en16 actment of comprehensive debt relief initiatives for 

17 heavily indebted low-income countries in— 

18 (A) title V of H.R. 3425 of the 106th Con19 gress, as enacted into law by section 1000(a)(5) 

20 of the Act entitled ‘‘An Act making consoli21 dated appropriations for the fiscal year ending 

22 September 30, 2000, and for other purposes’’, 

23 approved November 29, 1999 (Public Law 106– 

24 113; 113 Stat. 1501–311) and the amendments 

25 made by such title; 


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1 (B) title II of H.R. 5526 of the 106th 

2 Congress, as enacted into law by section 101(a) 

3 of the Act entitled ‘‘An Act making appropria4 tions for foreign operations, export financing, 

5 and related programs for the fiscal year ending 

6 September 30, 2001, and for other purposes’’, 

7 approved November 6, 2000 (Public Law 106– 

8 429; 114 Stat. 1900A–5); and 

9 (C) title V of the United States Leadership 

10 Against HIV/AIDS, Tuberculosis, and Malaria 

11 Act of 2003 (Public Law 108–25; 117 Stat. 

12 747) and the amendment made by such title. 

13 (4) In 2005, the United States and other G–8 

14 nations reached an agreement to provide cancellation 

15 of 100 percent of the debts owed by eligible poor na16 tions to Paris Club members, the IMF, the World 

17 Bank, and the African Development Bank. The 

18 Inter-American Development Bank reached an 

19 agreement in early 2007 to provide similar treat20 ment. 

21 (5) The 2005 agreement led to the creation of 

22 the Multilateral Debt Relief Initiative (MDRI). As of 

23 April 2007, 22 nations have seen the majority of 

24 their debts to the IMF, World Bank, and African 

25 Development Bank cancelled under the terms of the 


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1 MDRI. In March 2007, the Inter-American Develop2 ment Bank announced it would provide full debt 

3 cancellation to 5 Latin American countries on MDRI 

4 terms. 

5 (6) Resources released by debt relief efforts to 

6 date are reaching the poor. Cameroon is using the 

7 $29,800,000 of savings it will gain from the MDRI 

8 in 2006 for national poverty reduction priorities, in9 cluding infrastructure, social sector and governance 

10 reforms. Uganda is using its $57,900,000 savings in 

11 2006 on improving energy infrastructure to try to 

12 ease acute electricity shortages, as well as primary 

13 education, malaria control, healthcare and water in14 frastructure (specifically targeting the poor and 

15 under-served villages). Zambia is using its savings of 

16 $23,800,000 under the MDRI in 2006 to increase 

17 spending on agricultural projects, such as 

18 smallholder irrigation and livestock disease control, 

19 as well as to eliminate fees for healthcare in rural 

20 areas. 

21 (7) While debt cancellation has a record of suc22 cess, there remains an unfinished agenda on inter23 national debt. There are a number of challenges to 

24 both the effective reduction of poverty and inequality 

25 and the achievement of broader debt cancellation. 


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1 (8) 2007 is an important year to address the 

2 unfinished agenda on international debt as the glob3 al Jubilee debt campaign has declared 2007 a ‘‘Sab4 bath year’’, 7 years after the historic Jubilee 2000 

5 campaign. 

6 (9) A critical issue which needs to be addressed 

7 on debt is the way that non-concessional lenders 

8 stand to gain financially from lending to poor coun9 tries that have benefited from debt relief without 

10 having paid for past debt relief or facing the pros11 pect of paying for the future relief of unsustainable 

12 and irresponsible new lending. In these cases, the 

13 gains of debt relief for poor debtor countries are at 

14 risk of being eroded. This takes the form of new 

15 lending to countries that have received debt cancella16 tion from countries including China. 

17 (10) It is also essential that all lenders and bor18 rowers accept co-responsibility and learn from past 

19 mistakes—as evidenced by the debt crisis itself—by 

20 making more productive investment choices and en21 gaging in more responsible lending and borrowing in 

22 the future. In October 2006, Norway became the 

23 first creditor to accept co-responsibility for past 

24 lending mistakes and cancelled the debt of 5 nations 


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1 on the grounds that the loans reflected poor develop2 ment policy. 

3 (11) A growing number of governments and 

4 intergovernmental bodies, including the United 

5 Kingdom, the European Commission, and Norway, 

6 are raising concerns about the harmful impacts of 

7 certain economic policy conditionalities. Many impov8 erished countries that have received debt cancella9 tion under the HIPC and MDRI initiatives have 

10 done so at a high social cost, because they have had 

11 to implement certain economic policy conditions, in12 cluding the privatization of essential basic services 

13 such as water, and comply with other harmful re14 quirements. Some of these policies have had the ef15 fect of limiting fiscal space for productive investment 

16 and threatening growth and human development. 

17 Several countries currently eligible for debt cancella18 tion under the HIPC or MDRI programs are facing 

19 extended delays in receiving cancellation because 

20 they are struggling to comply with such require21 ments from the IMF and World Bank. 

22 (12) There is also an urgent need to look be23 yond the constraints of current debt relief initiatives 

24 to address the need for expanded debt cancellation. 

25 The current initiatives allow countries to qualify for 


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1 relief based on economic criteria rather than human 

2 needs. A January 2007 report by the United Na3 tions Human Rights Council found that eligibility 

4 for debt cancellation should be expanded to cover all 

5 low-income countries. 

6 (13) The Government of the United Kingdom 

7 has proposed that qualification for the MDRI be ex8 tended to the 67 nations which qualify for assistance 

9 exclusively from the International Development As10 sociation. To be eligible for cancellation, countries 

11 must meet economic criteria pertaining to public fi12 nancial management, anti-corruption measures, and 

13 budget transparency. 

14 (14) Since debt cancellation is an essential com15 ponent of the United States development assistance 

16 strategy and the United States has been able to lead 

17 the debt cancellation efforts of the international 

18 community by example, the United States should 

19 continue to work to improve and expand initiatives 

20 in this area. 

21 (15) The United States has been a leader in 

22 supporting debt relief efforts to date and should con23 tinue to work to improve and expand initiatives in 

24 this area. 


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1 SEC. 3. CANCELLATION OF DEBT OWED BY ELIGIBLE LOW2 INCOME COUNTRIES. 

3 Title XVI of the International Financial Institutions 

4 Act (22 U.S.C. 262p—262p–8) is amended by adding at 

5 the end the following: 

6 ‘‘SEC. 1626. CANCELLATION OF DEBT OWED BY ELIGIBLE 

7 LOW-INCOME COUNTRIES. 

8 ‘‘(a) IN GENERAL.—The Secretary of the Treasury 

9 shall commence immediate efforts, within the Paris Club 

10 of Official Creditors, the International Monetary Fund 

11 (IMF), the International Bank for Reconstruction and De12 velopment (World Bank), and the other international fi13 nancial institutions (as defined in section 1701(c)(2)), to 

14 negotiate an agreement to accomplish the following: 

15 ‘‘(1) Cancellation by each international finan16 cial institution of all debts owed to the institution by 

17 eligible low-income countries, and, to the extent pos18 sible, financing the debt cancellation from the ongo19 ing operations, procedures, and accounts of the insti20 tution, without undermining the financial integrity 

21 of the institution. 

22 ‘‘(2) Cancellation by the United States of all 

23 debts owed to it by eligible low-income countries. 

24 ‘‘(3) Ensuring that any waiting period for the 

25 enhanced debt cancellation is not excessive. 


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1 ‘‘(4) Ensuring that the provision of debt can2 cellation to eligible low-income countries is not fol3 lowed by a reduction in the provision of any other 

4 development assistance to the countries by inter5 national financial institutions and bilateral creditors, 

6 or to other countries eligible for assistance from the 

7 International Development Association. 

8 ‘‘(5) Encouraging the government of each eligi9 ble low-income country to allocate at least 20 per10 cent of its national budget towards poverty-allevi11 ation programs such as the provision of basic health 

12 care services, education services, and clean water 

13 services to all individuals in the country. 

14 This subsection shall not be interpreted to authorize the 

15 Secretary of the Treasury to enter into an agreement to 

16 accomplish any of the foregoing without express congres17 sional authorization to do so. 

18 ‘‘(b) ESTABLISHMENT OF FRAMEWORK FOR CRED19 ITOR TRANSPARENCY.—The Secretary of the Treasury 

20 shall commence immediate efforts, within the Paris Club 

21 of Official Creditors, the International Monetary Fund, 

22 the World Bank, and the other international financial in23 stitutions (as so defined), to ensure that each of the insti24 tutions— 


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1 ‘‘(1) continues to make efforts to promote 

2 greater transparency regarding the activities of the 

3 institution, including credit, grant, guarantee, and 

4 technical assistance operations, following a policy of 

5 maximum disclosure; and 

6 ‘‘(2) supports continued efforts to allow in7 formed participation and input by affected commu8 nities, including translation of information on pro9 posed projects, provision of information (including 

10 draft documents) through information technology 

11 application, oral briefings, and outreach to and dia12 logue with community organizations and institutions 

13 in affected areas. 

14 ‘‘(c) ESTABLISHMENT OF FRAMEWORK FOR RESPON15 SIBLE LENDING.—The Secretary of the Treasury shall 

16 commence immediate efforts to— 

17 ‘‘(1) develop and promote policies to ensure all 

18 creditors, with no distinction, will contribute to pre19 serving the gains of debt relief for low-income debtor 

20 countries; 

21 ‘‘(2) provide that the external financing needs 

22 of low-income countries are met primarily through 

23 grant financing rather than new lending; 

24 ‘‘(3) seek the international adoption of a bind25 ing legal framework on new lending that— 


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1 ‘‘(A) guarantees that no creditor can take 

2 or expect to take financial advantage of ac3 quired or newly awarded debt relief through the 

4 terms and rates of such lending to beneficiary 

5 countries; 

6 ‘‘(B) is binding on all creditors, whether 

7 multilateral, bilateral or private; 

8 ‘‘(C) foresees, as a sanction for creditors 

9 who violate it, an equitable share in the burden 

10 of the losses from any future debt relief needed 

11 by the sovereign debtor to whom lending was ir12 responsibly provided; 

13 ‘‘(D) provides for decisions on irresponsible 

14 lending to be made by an entity independent 

15 from the creditors; and 

16 ‘‘(E) enables fair opportunities for the peo17 ple of the affected country to be heard; and 

18 ‘‘(4) support the development of responsible fi19 nancing standards where creditors and aid/loan re20 cipients alike adhere to standards to assure trans21 parency and accountability to citizens, human rights, 

22 and the avoidance of new odious debt, while encour23 aging the development of renewable energy and help24 ing countries to transition away from dependence on 

25 oil. 


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1 ‘‘(d) GAO AUDIT OF DEBT PORTFOLIOS OF COUN2 TRIES WITH QUESTIONABLE LOANS.— 

3 ‘‘(1) IN GENERAL.—The Comptroller General of 

4 the United States shall undertake an audit of the 

5 debt portfolios of previous governments in countries 

6 such as the Democratic Republic of Congo and 

7 South Africa, where there is significant evidence 

8 that odious, onerous, or illegal loans were made to 

9 the government. Each such audit shall— 

10 ‘‘(A) consider debt owed to the World 

11 Bank, the IMF, and the other international fi12 nancial institutions (as so defined), export cred13 it debts owed to governments, and debts owed 

14 to commercial creditors, and assess whether or 

15 not past investments produced the intended re16 sults; 

17 ‘‘(B) investigate the process by which the 

18 loans were contracted, how the funds were used, 

19 and determine whether United States or inter20 national laws were violated in the contraction of 

21 these loans, and whether any of the loans were 

22 odious or onerous; and 

23 ‘‘(C) be planned and executed in a trans24 parent and consultative manner, engaging conVerDate Aug 31 2005 01:32 Apr 25, 2008 Jkt 069200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2634.RFS H2634

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1 gressional bodies and civil society groups in the 

2 countries. 

3 ‘‘(2) REPORT.—Within 2 years after the date of 

4 the enactment of this section, the Comptroller Gen5 eral of the United States shall prepare and submit 

6 to the Committees on Financial Services and on 

7 Foreign Affairs of the House of Representatives and 

8 the Committees on Banking, Housing, and Urban 

9 Affairs and on Foreign Relations of the Senate a re10 port that contains the results of the audits under11 taken under paragraph (1). 

12 ‘‘(e) AVAILABILITY ON TREASURY DEPARTMENT

13 WEBSITE OF REMARKS OF UNITED STATES EXECUTIVE

14 DIRECTORS AT MEETINGS OF INTERNATIONAL FINAN15 CIAL INSTITUTIONS’ BOARDS OF DIRECTORS.—The Sec16 retary of the Treasury shall make available on the website 

17 of the Department of the Treasury the full record of the 

18 remarks of the United States Executive Director at meet19 ings of the boards of directors of the International Mone20 tary Fund, the World Bank, and the other international 

21 financial institutions (as so defined), about cancellation or 

22 reduction of debts owed to the institution involved, with 

23 redaction by the Secretary of the Treasury of material 

24 deemed too sensitive for public distribution, but showing 


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1 the topic, amount of material redacted, and reason for the 

2 redaction. 

3 ‘‘(f) REPORT FROM THE COMPTROLLER GENERAL.— 

4 Within 1 year after the date of the enactment of this sec5 tion, the Comptroller General of the United States shall 

6 prepare and submit to the Committees on Financial Serv7 ices and on Foreign Affairs of the House of Representa8 tives and the Committees on Banking, Housing, and 

9 Urban Affairs and on Foreign Relations of the Senate a 

10 report on the availability of the ongoing operations, proce11 dures, and accounts of the IMF, the World Bank, and the 

12 other international financial institutions (as so defined) 

13 for canceling the debt of eligible low-income countries. 

14 ‘‘(g) ANNUAL REPORTS FROM THE PRESIDENT.— 

15 Not later than December 31 of each year, the President 

16 shall submit to the Committees on Financial Services and 

17 on Foreign Affairs of the House of Representatives and 

18 the Committees on Foreign Relations and on Banking, 

19 Housing, and Urban Affairs of the Senate a report, which 

20 shall be made available to the public, on the activities un21 dertaken under this section, and other progress made in 

22 accomplishing the purposes of this section, for the prior 

23 fiscal year. The report shall include a list of the countries 

24 that have received debt cancellation, a list of the countries 

25 whose request for debt cancellation has been denied and 


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1 the reasons therefor, and a list of the countries whose re2 quests for debt cancellation are under consideration. 

3 ‘‘(h) ELIGIBLE LOW-INCOME COUNTRY DEFINED.— 

4 In this section, the term ‘eligible low-income country’ 

5 means a country— 

6 ‘‘(1) that is eligible for financing from the 

7 International Development Association but not from 

8 the World Bank, and does not qualify for debt relief 

9 under the Enhanced HIPC Initiative (as defined in 

10 section 1625(e)(3)) and under the Multilateral Debt 

11 Relief Initiative; 

12 ‘‘(2) that has transparent and effective budget 

13 execution and public financial management systems 

14 which ensure that the savings from debt relief are 

15 spent on reducing poverty; 

16 ‘‘(3) the government of which does not have an 

17 excessive level of military expenditures; 

18 ‘‘(4) the government of which has not provided 

19 support for acts of international terrorism, as deter20 mined by the Secretary of State under section 

21 6(j)(1) of the Export Administration Act of 1979 

22 (50 U.S.C. App. 2405(j)(1)), or section 620A(a) of 

23 the Foreign Assistance Act of 1961 (22 U.S.C. 

24 2371(a)); 


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1 ‘‘(5) the government of which is cooperating 

2 with the United States on international narcotics 

3 control matters; 

4 ‘‘(6) the government of which (including its 

5 military or other security forces) does not engage in 

6 a pattern of gross violations of internationally recog7 nized human rights (as defined in section 116 of the 

8 Foreign Assistance Act of 1961 (Public Law 87– 

9 195)); 

10 ‘‘(7) the government of which has not been 

11 identified in the most recent Trafficking in Persons 

12 Report issued by the Department of State as not 

13 fully complying with minimum standards for elimi14 nating human trafficking and not making significant 

15 efforts to do so; 

16 ‘‘(8) the government of which has been deter17 mined by the President to be cooperating with 

18 United States efforts to stop illegal immigration to 

19 the United States; 

20 ‘‘(9) the government of which has been deter21 mined by the President to be committed to free and 

22 fair elections; 

23 ‘‘(10) the government of which was chosen by 

24 and permits free and fair elections; and 


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1 ‘‘(11) the government of which does not have 

2 business interests with Iran.’’. 

3 SEC. 4. LIMITATION ON CONDITIONALITY OF DEBT RELIEF 

4 FOR ELIGIBLE LOW-INCOME COUNTRIES. 

5 Title XVI of the International Financial Institutions 

6 Act (22 U.S.C. 262p—262p–8) is further amended by 

7 adding at the end the following: 

8 ‘‘SEC. 1627. LIMITATION ON CONDITIONALITY OF DEBT RE9 LIEF FOR ELIGIBLE LOW-INCOME COUN10 TRIES. 

11 ‘‘(a) IN GENERAL.—The Secretary of the Treasury 

12 shall commence immediate efforts within the Paris Club 

13 of Official Creditors, the International Monetary Fund 

14 (IMF), the International Bank for Reconstruction and De15 velopment (World Bank), and the other international fi16 nancial institutions (as defined in section 1701(c)(2)), to 

17 ensure that debt cancellation is provided to eligible low18 income countries (as defined in section 1626(h)) subject 

19 to all and only the following conditions: That the govern20 ment of such a country— 

21 ‘‘(1) take steps so that the financial benefits of 

22 debt relief are applied to programs to combat pov23 erty (in particular through concrete measures to im24 prove economic infrastructure, basic services in edu25 cation, nutrition, and health, particularly treatment 


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1 and prevention of the leading causes of mortality) 

2 and to redress environmental degradation; 

3 ‘‘(2) make policy decisions through transparent 

4 and participatory processes; 

5 ‘‘(3) adopt an integrated development strategy 

6 to support poverty reduction through economic 

7 growth, that includes monitorable poverty reduction 

8 goals; 

9 ‘‘(4) implement transparent policy making and 

10 budget procedures, good governance, and effective 

11 anticorruption measures; 

12 ‘‘(5) broaden public participation and popular 

13 understanding of the principles and goals of poverty 

14 reduction, particularly through economic growth, 

15 and good governance; 

16 ‘‘(6) promote the participation of citizens and 

17 nongovernmental organizations in the economic pol18 icy choices of the government; and 

19 ‘‘(7) produce an annual report disclosing how 

20 the savings from debt cancellation were used, and 

21 make the report publicly available and easily acces22 sible to all interested parties, including civil society 

23 groups and the media. 

24 ‘‘(b) ANNUAL REPORTS TO THE CONGRESS.—Not 

25 later than December 31 of each year, the President shall 


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1 submit to the Committees on Financial Services and on 

2 International Relations of the House of Representatives 

3 and the Committees on Foreign Relations and on Bank4 ing, Housing, and Urban Affairs of the Senate a report, 

5 which shall be made available to the public, on the activi6 ties undertaken under this section, and other progress 

7 made in accomplishing the purposes of this section, for 

8 the prior fiscal year.’’. 

9 SEC. 5. SENSE OF THE CONGRESS. 

10 It is the sense of the Congress that to further the 

11 goals of debt reduction for low-income countries, in addi12 tion to the efforts described in this Act, the United States 

13 should pay off outstanding arrearages of $595,800,000 to 

14 the International Development Association and regional 

15 development banks, and become current on all debt reduc16 tion efforts, including those carried out by the Inter17 national Development Association and under the En18 hanced Heavily Indebted Poor Countries Initiative and the 

19 Multilateral Debt Relief Initiative. 

20 SEC. 6. SENSE OF THE CONGRESS. 

21 (a) FINDING.—The Congress finds that Haiti is 

22 scheduled to send $48,700,000 in debt payments to multi23 lateral financial institutions in 2008. 

24 (b) SENSE OF THE CONGRESS.—It is the sense of 

25 the Congress that, due to the current humanitarian and 


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1 political instability in Haiti, including food shortages and 

2 political turmoil, the Secretary of the Treasury should use 

3 his influence to expedite the complete and immediate can4 cellation of Haiti’s debts to all international financial in5 stitutions, or if such debt cancellation cannot be provided, 

6 to urge the institutions to immediately suspend the re7 quirement that Haiti make further debt service payments 

8 on debts owed to the institutions. 

Passed the House of Representatives April 16, 2008. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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