II 

112TH CONGRESS 

1ST SESSION S. 1388 

To support private sector development, employment growth, rule of law, 

democratic reform, and accountable government in qualified transition 

countries in the Middle East and North Africa through the authorization 

of the participation by the United States in the general capital increase 

of the European Bank for Reconstruction and Development, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 19, 2011 

Mr. KERRY (for himself, Mr. MCCAIN, and Mr. LIEBERMAN) introduced the 

following bill; which was read twice and referred to the Committee on 

Foreign Relations 

A BILL 

To support private sector development, employment growth, 

rule of law, democratic reform, and accountable government in qualified transition countries in the Middle East 

and North Africa through the authorization of the participation by the United States in the general capital 

increase of the European Bank for Reconstruction and 

Development, 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 ‘‘Middle East and North 

3 Africa Transition and Development Act’’. 

4 SEC. 2. FINDINGS. 

5 Congress makes the following findings: 

6 (1) The European Bank for Reconstruction and 

7 Development was created to support the transition 

8 of command economies to market economies fol9 lowing the collapse of communist regimes in 1989. 

10 (2) The Bank is the only international financial 

11 institution that— 

12 (A) has a transition mandate; 

13 (B) includes political aspects to its man14 date; and 

15 (C) seeks to assist only those countries 

16 that are committed to, and are applying, the 

17 principles of multiparty democracy, pluralism, 

18 and development of market economics in ac19 cordance with Article 1 of the Agreement Es20 tablishing the European Bank for Reconstruc21 tion and Development. 

22 (3) Egypt, which is a current shareholder of the 

23 Bank, has requested that the Bank consider Egypt’s 

24 candidacy for becoming a country of activity. Con25 sideration for including Egypt in the Bank’s geoVerDate Mar 15 2010 03:24 Jul 20, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1388.IS S1388

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1 graphic mandate has been accelerated at the request 

2 of Egypt’s interim government. 

3 (4) Other countries from the Middle East and 

4 North Africa, including Tunisia, have requested that 

5 the Bank consider their potential to become coun6 tries of activity. 

7 (5) The Bank estimates that approximately 

8 $4,000,000,000 per year could be provided for finan9 cial investment in new countries of activity in North 

10 Africa from the Bank’s existing financial resources, 

11 without the need to call on its shareholders for addi12 tional capital. 

13 (6) The functions of the Bank are consistent 

14 with the critical and rising economic needs of Egypt 

15 and the Middle East and North Africa. 

16 SEC. 3. DEFINITIONS. 

17 In this Act: 

18 (1) AGREEMENT ESTABLISHING THE EUROPEAN

19 BANK FOR RECONSTRUCTION AND DEVELOPMENT.— 

20 The term ‘‘Agreement Establishing the European 

21 Bank for Reconstruction and Development’’ means 

22 the Agreement establishing the European Bank for 

23 Reconstruction and Development, done at Paris May 

24 29, 1990, and entered into force March 28, 1991. 


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1 (2) APPROPRIATE CONGRESSIONAL COMMIT2 TEES.—The term ‘‘appropriate congressional com3 mittees’’ means— 

4 (A) the Committee on Foreign Relations 

5 and the Committee on Appropriations of the 

6 Senate; and 

7 (B) the Committee on Financial Services 

8 and the Committee on Appropriations of the 

9 House of Representatives. 

10 (3) BANK.—The term ‘‘Bank’’ means the Euro11 pean Bank for Reconstruction and Development. 

12 (4) COUNTRY OF ACTIVITY.—The term ‘‘coun13 try of activity’’ means a country in which the Bank 

14 provides its resources for loans or other assistance, 

15 including through the use of special funds. 

16 (5) INTERNATIONAL FINANCIAL INSTITU17 TION.—The term ‘‘international financial institu18 tion’’ has the meaning given that term in section 

19 1701(c)(2) of the International Financial Institu20 tions Act (22 U.S.C. 262r(c)(2)). 

21 (6) MULTILATERAL DEVELOPMENT BANK.— 

22 The term ‘‘multilateral development bank’’ has the 

23 meaning given that term in section 1701(c)(4) of the 

24 International Financial Institutions Act (22 U.S.C. 

25 262r(c)(4)). 


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1 SEC. 4. UNITED STATES POLICY WITH RESPECT TO COUN2 TRIES LOCATED IN THE MIDDLE EAST AND 

3 NORTH AFRICA. 

4 (a) POLICY DECLARATION.—It is the policy of the 

5 United States— 

6 (1) to support a successful and sustainable 

7 transition to democracy in the Middle East and 

8 North Africa, including Egypt and Tunisia, that re9 flects the legitimate aspirations of the people in that 

10 region for greater political freedom and economic op11 portunity; and 

12 (2) to increase economic prosperity in that re13 gion through financial investment and technical as14 sistance and by utilizing the resources of appropriate 

15 multilateral development banks. 

16 (b) PROMOTION OF UNITED STATES POLICY.—The 

17 Secretary of the Treasury should instruct the United 

18 States Executive Director of the European Bank for Re19 construction and Development to use the voice and vote 

20 of the United States to promote the policies described in 

21 subsection (a). 


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1 SEC. 5. NEGOTIATING OBJECTIVES WITH RESPECT TO AN 

2 AGREEMENT TO EXPAND THE MANDATE OF 

3 THE EUROPEAN BANK FOR RECONSTRUC4 TION AND DEVELOPMENT TO COUNTRIES LO5 CATED IN THE MIDDLE EAST AND NORTH AF6 RICA. 

7 (a) IN GENERAL.—The negotiating objectives of the 

8 United States with respect to an agreement described in 

9 subsection (b) should be to seek— 

10 (1) criteria that are consistent with the criteria 

11 described in section 6(b) for the approval of loans or 

12 other assistance by the Bank for countries that be13 come countries of activity as a result of the imple14 mentation of the agreement; and 

15 (2) the establishment by the Bank of a credible 

16 mechanism to ensure that countries of activity that 

17 are not committed to the fundamental principles of 

18 multiparty democracy, pluralism, and market eco19 nomics do not continue to benefit from the resources 

20 of the Bank. 

21 (b) AGREEMENT DESCRIBED.—An agreement de22 scribed in this subsection is an agreement to expand the 

23 use of the resources of the Bank for countries located in 

24 the Middle East or North Africa, including through an 

25 amendment to the Agreement Establishing the European 

26 Bank for Reconstruction and Development. 


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1 SEC. 6. SUPPORT FOR LOANS AND OTHER ASSISTANCE 

2 PROVIDED BY THE BANK TO COUNTRIES OF 

3 ACTIVITY THAT MEET CERTAIN CRITERIA. 

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

5 should instruct the United States Executive Director of 

6 the Bank to use the voice and vote of the United States 

7 to oppose the approval of a loan or other assistance from 

8 the Bank to a country of activity in the Middle East or 

9 North Africa if the country does not meet the criteria de10 scribed in subsection (b). 

11 (b) CRITERIA DESCRIBED.—A country of activity 

12 meets the criteria described in this subsection if the gov13 ernment of the country— 

14 (1) requests the Bank to conduct activities in 

15 the country; 

16 (2) meets, or is demonstrably committed to 

17 meeting, the criteria set forth in Article 1 of the 

18 Agreement Establishing the European Bank for Re19 construction and Development, including a commit20 ment to ‘‘the principles of multiparty democracy, 

21 pluralism and market economics’’; 

22 (3) demonstrates a commitment to free, fair, 

23 and inclusive elections that meet international stand24 ards; 

25 (4) has a public commitment to universally rec26 ognized human rights and freedoms, including freeVerDate Mar 15 2010 03:24 Jul 20, 2011 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1388.IS S1388

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1 dom of religion, association, assembly, and expres2 sion, and demonstrates a commitment to respect 

3 those rights and freedoms in practice; and 

4 (5) implements, or is demonstrably committed 

5 to implementing, economic reforms that advance pri6 vate sector growth, improve the investment climate, 

7 increase transparency, especially transparency in 

8 public finances, and foster job creation. 

9 (c) CONSULTATIONS WITH CONGRESS WITH RE10 SPECT TO NEW COUNTRIES OF ACTIVITY.—Not later than 

11 10 days before a vote of the Board of Directors or the 

12 Board of Governors of the Bank to approve a country lo13 cated in the Middle East or in North Africa as a new coun14 try of activity, the Secretary of the Treasury shall— 

15 (1) notify the appropriate congressional com16 mittees of the vote; and 

17 (2) consult with those committees and describe 

18 to those committees how that country meets the cri19 teria established by the Bank for being a country of 

20 activity. 

21 (d) ANNUAL REPORT.—Not later than one year after 

22 the date of the enactment of this Act, and annually there23 after until the fifth year after such date of enactment, the 

24 Secretary of the Treasury shall submit to the appropriate 


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1 congressional committees a report that includes the fol2 lowing: 

3 (1) A description of the activities of the Bank 

4 in each country of activity that is located in the Mid5 dle East or in North Africa. 

6 (2) The assessment of the Bank with respect to 

7 the ongoing eligibility of each such country to receive 

8 assistance from the Bank. 

9 (3) A description of how the activities carried 

10 out by the Bank in each such country during the 

11 preceding year served to promote the functions of 

12 the Bank, as described in Article 2 of the Agreement 

13 Establishing the European Bank for Reconstruction 

14 and Development. 

15 (4) An assessment of— 

16 (A) the extent to which the activities of the 

17 Bank are complementary to the activities of 

18 other international financial institutions oper19 ating in the Middle East and North Africa; and 

20 (B) the extent of cooperation between the 

21 Bank and those other international financial in22 stitutions. 

23 (5) A list of any countries being considered to 

24 be new countries of activity. 


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1 SEC. 7. SUPPORT FOR CLEAR STANDARDS FOR GRADUA2 TION OF COUNTRIES OF ACTIVITY. 

3 The Secretary of the Treasury should instruct the 

4 United States Executive Director of the Bank to use the 

5 voice and vote of the United States to seek the adoption 

6 by the Bank of clear standards for the successful gradua7 tion of countries of activity if those countries have sub8 stantially achieved the transition objectives of the Bank. 

9 SEC. 8. AUTHORIZATION FOR THE EUROPEAN BANK FOR 

10 RECONSTRUCTION AND DEVELOPMENT. 

11 (a) FINDINGS.—Congress makes the following find12 ings: 

13 (1) The request by the European Bank for Re14 construction and Development for subscription of 

15 capital is for callable shares only. Historically, call16 able shares, while requiring an authorization of 

17 funds, do not require an appropriation. 

18 (2) The International Programs Justification 

19 for Appropriations and Fiscal Year 2012 Budget 

20 Request of the Department of the Treasury for the 

21 European Bank for Reconstruction and Development 

22 is $0, stating that ‘‘[t]his callable capital does not 

23 require appropriated funds’’. 

24 (b) AUTHORIZATION.—The European Bank for Re25 construction and Development Act (section 562(c) of PubVerDate Mar 15 2010 03:24 Jul 20, 2011 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1388.IS S1388

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1 lic Law 101–531; 22 U.S.C. 290l et seq.) is amended by 

2 adding at the end the following: 

3 ‘‘(12) CAPITAL INCREASE.— 

4 ‘‘(A) SUBSCRIPTION AUTHORIZED.— 

5 ‘‘(i) IN GENERAL.—The United States 

6 Governor of the Bank may subscribe on 

7 behalf of the United States to not more 

8 than 90,044 additional callable shares of 

9 capital stock of the Bank, in accordance 

10 with Resolution 128, as adopted by the 

11 Board of Governors of the Bank at the an12 nual meeting in Zagreb, Croatia, on May 

13 14, 2010. 

14 ‘‘(ii) CONDITION.—Any subscription 

15 by the United States to additional capital 

16 stock of the Bank shall be effective only to 

17 such extent and in such amounts as are 

18 provided for in advance by appropriations 

19 Acts. 

20 ‘‘(B) AUTHORIZATION OF APPROPRIA21 TIONS.—In order to pay for the increase in the 

22 United States subscription to capital stock of 

23 the Bank authorized under subparagraph (A), 

24 there are authorized to be appropriated 


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1 $1,252,331,952, without fiscal year limitation, 

2 for payment by the Secretary of the Treasury.’’. 

3 SEC. 9. STATUS OF COUNTRIES AS CANDIDATE COUNTRIES 

4 UNDER THE MILLENNIUM CHALLENGE ACT 

5 OF 2003. 

6 Section 606 of the Millennium Challenge Act of 2003 

7 (22 U.S.C. 7705) is amended— 

8 (1) in subsection (a)— 

9 (A) in paragraph (1)— 

10 (i) by amending the paragraph head11 ing to read as follows: 

12 ‘‘(1) IN GENERAL.—’’; 

13 (ii) in the matter preceding subpara14 graph (A), by striking ‘‘fiscal year 2004’’ 

15 and inserting ‘‘any fiscal year’’; 

16 (iii) by amending subparagraph (A) to 

17 read as follows: 

18 ‘‘(A) the country— 

19 ‘‘(i) has a per capita income that is 

20 not greater than the World Bank’s lower 

21 middle income country threshold for such 

22 fiscal year; and 

23 ‘‘(ii) is among the 75 lowest per cap24 ita income countries, as identified by the 

25 World Bank; and’’; and 


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1 (iv) in subparagraph (B), by striking 

2 ‘‘subject to paragraph (3)’’ and inserting 

3 ‘‘subject to paragraph (2)’’; 

4 (B) by striking paragraph (2); and 

5 (C) by redesignating paragraph (3) as 

6 paragraph (2); 

7 (2) in subsection (b)— 

8 (A) in paragraph (1)— 

9 (i) in the matter preceding subpara10 graph (A), by striking ‘‘for fiscal year 

11 2006 or a subsequent fiscal year’’ and in12 serting ‘‘for any fiscal year’’; and 

13 (ii) by striking subparagraphs (A) and 

14 (B) and inserting the following: 

15 ‘‘(A) has a per capita income that is not 

16 greater than the World Bank’s lower middle in17 come country threshold for such fiscal year; 

18 ‘‘(B) is not among the 75 lowest per capita 

19 income countries as identified by the World 

20 Bank; and 

21 ‘‘(C) meets the requirements under sub22 section (a)(1)(B).’’; and 

23 (B) in paragraph (2)— 


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1 (i) by striking ‘‘for fiscal year 2006 or 

2 any subsequent fiscal year’’ and inserting 

3 ‘‘for any fiscal year’’; and 

4 (ii) by striking ‘‘for fiscal year 2006 

5 or the subsequent fiscal year, as the case 

6 may be’’ and inserting ‘‘for such fiscal 

7 year’’; 

8 (3) by redesignating subsection (c) as sub9 section (d); and 

10 (4) by inserting after subsection (b) the fol11 lowing: 

12 ‘‘(c) MAINTAINING CANDIDATE STATUS.—Beginning 

13 in fiscal year 2012, a country the per capita income of 

14 which changes during a fiscal year so that the country 

15 no longer meets the requirements for being a candidate 

16 country under subsection (a)(1) or (b)(1) shall, notwith17 standing that change in per capita income, continue to be 

18 eligible to be a candidate country under subsection (a)(1) 

19 or (b)(1) (as the case may be) during that fiscal year and 

20 the 3 fiscal years thereafter to the same extent and in 

21 the same manner as if the per capita income of the coun22 try had not changed.’’. 

Æ 


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