Calendar No. 48

104TH CONGRESS

1ST SESSION S. 384

A BILL

To require a report on United States support for

poses.Mexico during its debt crisis, and for other purAPRIL 4 (legislative day, MARCH 27), 1995

Reported with an amendment and an amendment to the

title
II

Calendar No. 48

104TH CONGRESS

1ST SESSION S. 384

To require a report on United States support for Mexico during its debt

crisis, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 10 (legislative day, JANUARY 30), 1995

Mr. BROWN (for himself and Mr. HELMS) introduced the following bill; which

was read twice and referred to the Committee on Foreign Relations

APRIL 4 (legislative day, MARCH 27), 1995

Reported by Mr. HELMS, with an amendment and an amendment to the title

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To require a report on United States support for Mexico

during its debt crisis, 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,

3 SECTION 1. REPORT REQUIRED.

4 (a) REPORT.—Not later than March 1, 1995, and

5 every six months thereafter, the President shall transmit

6 a report to the appropriate congressional committees con7 cerning all United States Government loans, credits, guar-
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1 antees, and short-term and long-term currency swaps with

2 Mexico.

3 (b) CONTENTS OF REPORT.—The report described in

4 subsection (a) shall include the following:

5 (1) A breakdown of all outstanding United

6 States Government loans, credits, and guarantees

7 provided to the Government of Mexico.

8 (2) A detailed list of all Federal Reserve cur9 rency swaps designed to support indebtedness of the

10 Government of Mexico, and the cost or benefit to the

11 United States Treasury from each such transaction.

12 (3) A description of any payments by creditors

13 of Mexican petroleum companies into the petroleum

14 finance facility established to ensure repayment of

15 United States loans or guarantees.

16 (4) A description of any disbursement by the

17 United States Government from the petroleum fi18 nance facility.

19 (5) Once payments have been diverted from

20 PEMEX to the United States Treasury through the

21 petroleum finance facility, a description of the status

22 of petroleum deliveries to those customers whose

23 payments were diverted.
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1 (6) A description of the risk factors used in cal2 culations concerning Mexican repayment of indebted3 ness.

4 (7) A statement of the progress the Govern5 ment of Mexico has made in reforming its currency

6 and establishing an independent central bank or cur7 rency board.

8 (8) A description of specific actions taken by

9 the Government of Mexico to further privatize the

10 economy of Mexico.

11 SEC. 2. PRESIDENTIAL CERTIFICATION.

12 Notwithstanding any other provision of law, before

13 extending any loan, credit, guarantee, or arrangement for

14 a swap of currencies to Mexico through any United States

15 Government monetary facility, the President shall certify

16 to the appropriate congressional committees that—

17 (1) there is no projected cost to the United

18 States from the proposed loan, credit, guarantee, or

19 currency swap;

20 (2) all loans, credits, guarantees, and currency

21 swaps are adequately collateralized to ensure that

22 United States funds will be repaid;

23 (3) the Government of Mexico has undertaken

24 effective efforts to establish an independent central
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1 bank or an independent currency control mechanism;

2 and

3 (4) Mexico has in effect a significant economic

4 reform effort.

5 SEC. 3. DEFINITION.

6 As used in this Act, the term ‘‘appropriate congres7 sional committees’’ means the Committees on Appropria8 tions, Ways and Means, and International Relations of the

9 House of Representatives and the Committees on Appro10 priations, Finance, and Foreign Relations of the Senate.

11 SECTION 1. SHORT TITLE.

12 This Act may be cited as the ‘‘Mexican Debt Disclosure

13 Act of 1995’’.

14 SEC. 2. FINDINGS.

15 The Congress finds that—

16 (1) Mexico is an important neighbor and trading

17 partner of the United States;

18 (2) on January 31, 1995, the President approved

19 a program of assistance to Mexico, in the form of

20 swap facilities and securities guarantees in the

21 amount of $20,000,000,000, using the Exchange Sta22 bilization Fund;

23 (3) the program of assistance involves the par24 ticipation of the Federal Reserve System, the Inter25 national Monetary Fund, the Bank for International
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1 Settlements, the World Bank, the Inter-American De2 velopment Bank, the Bank of Canada, and several

3 Latin American countries;

4 (4) the involvement of the Exchange Stabiliza5 tion Fund and the Federal Reserve System means

6 that United States taxpayer funds will be used in the

7 assistance effort to Mexico;

8 (5) assistance provided by the International

9 Monetary Fund, the World Bank, and the Inter10 American Development Bank may require additional

11 United States contributions of taxpayer funds to those

12 entities;

13 (6) the immediate use of taxpayer funds and the

14 potential requirement for additional future United

15 States contributions of taxpayer funds necessitates

16 Congressional oversight of the disbursement of funds;

17 and

18 (7) the efficacy of the assistance to Mexico is con19 tingent on the pursuit of sound economic policy by

20 the Government of Mexico.

21 SEC. 3. PRESIDENTIAL REPORTS.

22 (a) REPORTING REQUIREMENT.—Not later than June

23 30, 1995, and every six months thereafter, the President

24 shall transmit a report to the appropriate congressional

25 committees concerning all United States Government guar-
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1 antees to, and short-term and long-term currency swaps

2 with, Mexico.

3 (b) CONTENTS OF REPORTS.—Each report described in

4 subsection (a) shall contain a description of the following

5 actions taken, or economic situations existing, during the

6 preceding six month period or, in the case of the initial

7 report, during the period beginning on the date of enact8 ment of this Act:

9 (1) Changes in wage, price, and credit controls

10 in the Mexican economy.

11 (2) Changes in Mexican taxation policy.

12 (3) Specific actions taken by the Government of

13 Mexico to further privatize the economy of Mexico.

14 (4) Actions taken by the Government of Mexico

15 in the development of regulatory policy that signifi16 cantly affected the performance of the Mexican econ17 omy.

18 (5) Consultations concerning the program ap19 proved by the President, including advice on eco20 nomic, monetary, and fiscal policy, held between the

21 Government of Mexico and the Department of the

22 Treasury and the conclusions of any periodic reviews

23 undertaken by the International Monetary Fund pur24 suant to the Fund’s loan agreements with Mexico.
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1 (6) All outstanding United States Government

2 loans, credits, and guarantees provided to the Govern3 ment of Mexico, set forth by category of financing.

4 (7) The progress the Government of Mexico has

5 made in stabilizing the peso and establishing an inde6 pendent central bank or currency board.

7 (c) SUMMARY OF TREASURY DEPARTMENT RE8 PORTS.—In addition to the information required to be in9 cluded under subsection (b), each report required under this

10 section shall contain a summary of the information con11 tained in all reports submitted under section 4 during the

12 period covered by the report required under this section.

13 SEC. 4. REPORTS BY THE SECRETARY OF THE TREASURY.

14 (a) REPORTING REQUIREMENT.—Beginning on the

15 last day of the first month which begins after the date of

16 enactment of this Act, and on the last day of every month

17 thereafter, the Secretary of the Treasury shall transmit a

18 report to the appropriate congressional committees concern19 ing all United States Government guarantees to, and short20 term and long-term currency swaps with, Mexico.

21 (b) CONTENTS OF REPORTS.—Each report described in

22 subsection (a) shall include a description of the following

23 actions taken, or economic situations existing, during the

24 month in which the report is required to be submitted:
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1 (1) The current condition of the Mexican econ2 omy.

3 (2) The reserve positions of the Mexican Central

4 Bank and data relating to the functioning of Mexican

5 monetary policy.

6 (3) The amount of any funds disbursed from the

7 Exchange Stabilization Fund pursuant to the ap8 proval of the President issued on January 31, 1995.

9 (4) The amount of any funds disbursed from the

10 Federal Reserve pursuant to the approval of the

11 President issued on January 31, 1995.

12 (5) Financial transactions, both inside and out13 side of Mexico, made during the reporting period in14 volving funds disbursed to Mexico from the Exchange

15 Stabilization Fund or proceeds of Mexican Govern16 ment securities guaranteed by the Exchange Sta17 bilization Fund.

18 (6) All outstanding Treasury guarantees and

19 short-term and medium-term currency swaps pro20 vided to the Government of Mexico, set forth by cat21 egory of financing.

22 (7) All outstanding Federal Reserve currency

23 swaps provided to the Banco de Mexico and the ra24 tionale for, and any expected costs of, such trans25 actions.
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1 (8) The amount of payments made by customers

2 of Mexican petroleum companies that have been de3 posited in the account at the Federal Reserve Bank of

4 New York established to ensure repayment of United

5 States guarantees or swaps.

6 (9) Any set-off by the Federal Reserve Bank of

7 New York against funds in the account of the Bank

8 established to ensure repayment of United States

9 guarantees or swaps.

10 (10) To the extent such information is available,

11 once there has been a set-off by the Federal Reserve

12 Bank of New York, any interruption in deliveries of

13 petroleum products to existing customers whose pay14 ments were set-off.

15 (11) The interest rates and fees charged to com16 pensate the Department of the Treasury for the risk

17 of providing financing.

18 SEC. 5. TERMINATION OF REPORTING REQUIREMENTS.

19 The requirements of sections 3 and 4 shall terminate

20 on the date that the Government of Mexico has paid all

21 obligations with respect to swap facilities and guarantees

22 of securities made available under the program approved

23 by the President on January 31, 1995.
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1 SEC. 6. PRESIDENTIAL CERTIFICATION.

2 Notwithstanding any other provision of law, before ex3 tending any guarantee or swap of currencies to Mexico

4 through the Exchange Stabilization Fund or the Federal

5 Reserve under the program approved by the President on

6 January 31, 1995, the President shall certify to the appro7 priate congressional committees that—

8 (1) there is no projected cost (as defined in the

9 Credit Reform Act of 1990) to the United States from

10 the proposed guarantee or currency swap;

11 (2) the proposed guarantee or currency swap is

12 adequately backed to ensure that United States funds

13 will be repaid;

14 (3) the Government of Mexico is making progress

15 in ensuring an independent central bank or an inde16 pendent currency control mechanism; and

17 (4) Mexico has in effect a significant economic

18 reform effort.

19 SEC. 7. REPORT ON INVOLVEMENT BY SENIOR MEXICAN

20 GOVERNMENT OFFICIALS IN ILLEGAL DRUG

21 TRAFFICKING.

22 (a) REPORT.—Not later than 30 days after the date

23 of enactment of this Act, the President shall transmit a re24 port to the appropriate congressional committees setting

25 forth all information available to the United States Govern26 ment with respect to the involvement, since March 1, 1991,
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1 by senior officials of the Government of Mexico, their rel2 atives, and close associates, including any involvement by

3 Presidents of Mexico, cabinet ministers, and military offi4 cers, in the illegal trafficking in controlled substances (as

5 defined in section 102(6) of the Controlled Substances Act

6 (21 U.S.C. 802(6)) or in any act to aid or abet such illegal

7 trafficking.

8 (b) DEFINITIONS.—As used in this section:

9 (1) AID OR ABET.—The phrase ‘‘aid or abet’’ in10 cludes any act to facilitate illegal trafficking in con11 trolled substances, including any solicitation or re12 ceipt of anything of value in consideration of aiding

13 a person to engage in illegal trafficking of such sub14 stances.

15 (2) TRAFFICKING.—The term ‘‘trafficking’’

16 means transporting, transferring, or otherwise dispos17 ing of, to another, as consideration for anything of

18 value, or making or obtaining control of with the in19 tent to so transport, transfer, or dispose of.

20 SEC. 8. DEFINITION.

21 As used in this Act, the term ‘‘appropriate congres22 sional committees’’ means the Committees on International

23 Relations and Banking and Financial Services of the House

24 of Representatives and the Committees on Foreign Relations

25 and Banking, Housing and Urban Affairs of the Senate.
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Amend the title so as to read: ‘‘A bill to require reports on United States support for Mexico during its

debt crisis, and for other purposes.’’.