II

Calendar No. 844

106TH CONGRESS

2D SESSION S. 3129

[Report No. 106–425]

To provide for international debt forgiveness and the strengthening of

anticorruption measures and accountability at international financial institutions.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 28 (legislative day, SEPTEMBER 22), 2000

Mr. HELMS, from the Committee on Foreign Relations, reported the following

bill; which was read twice and placed on the calendar

A BILL

To provide for international debt forgiveness and the

strengthening of anticorruption measures and accountability at international financial institutions.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘International Debt

5 Forgiveness and International Financial Institutions Re6 form Act of 2000’’.
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1 SEC. 2. DEBT RELIEF UNDER THE HEAVILY INDEBTED

2 POOR COUNTRIES (HIPC) INITIATIVE.

3 (a) REPEAL OF LIMITATION ON AVAILABILITY OF

4 EARNINGS ON PROFITS OF NONPUBLIC GOLD SALES.—

5 Paragraph (1) of section 62 of the Bretton Woods Agree6 ments Act, as added by section 503(a) of H.R. 3425 of

7 the 106th Congress (as enacted by section 1000(a)(5) of

8 Public Law 106–113 (113 Stat. 1536)), is amended—

9 (1) by adding ‘‘and’’ at the end of subpara10 graph (B); and

11 (2) by striking subparagraph (D).

12 (b) CONTRIBUTIONS TO HIPC TRUST FUND.—

13 (1) AUTHORIZATION OF APPROPRIATIONS FOR

14 CONTRIBUTIONS.—There is authorized to be appro15 priated for the period beginning October 1, 1999,

16 and ending September 30, 2003, $600,000,000 for

17 purposes of United States contributions to the Heav18 ily Indebted Poor Countries (HIPC) Trust Fund ad19 ministered by the Bank.

20 (2) AVAILABILITY OF AMOUNTS.—Amounts ap21 propriated pursuant to the authorization of appro22 priations in paragraph (1) shall remain available

23 until expended.

24 (c) CERTIFICATION REQUIRED.—

25 (1) IN GENERAL.—Except as provided in para26 graph (2), not later than 30 days after the date of
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1 enactment of this Act, the Secretary shall certify to

2 the appropriate congressional committees that the

3 following requirements are satisfied:

4 (A) ACCESS TO CERTAIN INFORMATION

5 AND DOCUMENTS.—The Bank and the Fund

6 have given the Comptroller General access to

7 information and documents of the Bank and

8 the Fund necessary in order for the Comp9 troller General to audit and monitor the oper10 ations of such institutions. The Secretary shall

11 consult with the Comptroller General prior to

12 making a certification under this subparagraph.

13 (B) IMPLEMENTATION BY THE BANK OF

14 CERTAIN POLICIES.—The Bank is

15 implementing—

16 (i) policies providing for the suspen17 sion of a loan if funds are being diverted

18 for purposes other than the purpose for

19 which the loan was intended;

20 (ii) policies seeking to prevent loans

21 from displacing private sector financing;

22 (iii) policies requiring that loans other

23 than project loans must be disbursed—

24 (I) on the basis of specific prior

25 reforms; or
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1 (II) incrementally upon imple2 mentation of specific reforms after

3 initial disbursement;

4 (iv) policies seeking to minimize the

5 number of projects receiving financing that

6 would displace a population involuntarily

7 or be to the detriment of the people or cul8 ture of the area into which the displaced

9 population is to be moved;

10 (v) policies vigorously promoting open

11 markets and liberalization of trade in

12 goods and services;

13 (vi) policies providing that financing

14 by the Bank concentrates chiefly on

15 projects and programs that promote eco16 nomic and social progress rather than

17 short-term liquidity financing; and

18 (vii) policies providing for the estab19 lishment of appropriate qualitative and

20 quantitative indicators to measure progress

21 toward graduation from receiving financing

22 on concessionary terms, including an esti23 mated timetable by which countries may

24 graduate over the next 15 years.
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1 (C) IMPLEMENTATION BY THE FUND OF

2 CERTAIN POLICIES.—The Fund is

3 implementing—

4 (i) policies providing for the suspen5 sion of a financing if funds are being di6 verted for purposes other than the purpose

7 for which the financing was intended;

8 (ii) policies seeking to ensure that fi9 nancing by the Fund normally serves as a

10 catalyst for private sector financing and

11 does not displace such financing;

12 (iii) policies requiring that financing

13 must be disbursed—

14 (I) on the basis of specific prior

15 reforms; or

16 (II) incrementally upon imple17 mentation of specific reforms after

18 initial disbursement;

19 (iv) policies vigorously promoting open

20 markets and liberalization of trade in

21 goods and services;

22 (v) policies providing that financing

23 by the Fund concentrates chiefly on short24 term balance of payments financing; and
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1 (vi) policies providing for the use, in

2 conjunction with the Bank, of appropriate

3 qualitative and quantitative indicators to

4 measure progress toward graduation from

5 receiving financing on concessionary terms,

6 including an estimated timetable by which

7 countries may graduate over the next 15

8 years.

9 (2) EXCEPTION.—In the event that the Sec10 retary cannot certify that the Comptroller General

11 has obtained the access described in paragraph

12 (1)(A) to information and documents, or that a pol13 icy described in paragraph (1)(B) or (1)(C) is being

14 implemented, the Secretary shall, not later than 30

15 days after the date of enactment of this Act, submit

16 a report to the appropriate congressional committees

17 on the progress, if any, made by the Bank and the

18 Fund in providing such access to the Comptroller

19 General, or in adopting and implementing such pol20 icy, as the case may be.

21 (3) SUBSEQUENT REPORTING ON DENIAL OF

22 ACCESS.—

23 (A) REPORT REQUIRED.—In the event that

24 the Comptroller General is denied the access de25 scribed in paragraph (1)(A) to information and
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1 documents of the Bank or the Fund on or after

2 the date specified in subparagraph (B), the

3 Comptroller General shall submit a report to

4 the appropriate congressional committees and

5 the Secretary notifying the committees and the

6 Secretary of such fact.

7 (B) DATE OF SUBMISSION OF REPORT.—

8 The date specified in this subparagraph is the

9 earlier of—

10 (i) the date a certification is made

11 under paragraph (1) or, if a certification

12 cannot be made, the date on which a re13 port is submitted under paragraph (2); or

14 (ii) the date that is 30 days after the

15 date of enactment of this Act.

16 SEC. 3. STRENGTHENING PROCEDURES FOR MONITORING

17 USE OF FUNDS BY MULTILATERAL DEVELOP18 MENT BANKS.

19 (a) IN GENERAL.—The Secretary shall instruct the

20 United States Executive Director of each multilateral de21 velopment bank to exert the influence of the United States

22 to strengthen the bank’s procedures and management con23 trols intended to ensure that funds disbursed by the bank

24 to borrowing countries are used as intended and in a man-
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1 ner that complies with the conditions of the bank’s loan

2 to that country.

3 (b) INFORMATION TO APPROPRIATE COMMITTEES.—

4 Upon the request of the chairman or ranking minority

5 member of an appropriate congressional committee, the

6 Secretary shall obtain from the bank and make available

7 to such committee, on a confidential basis if necessary,

8 data existing at the time of the request concerning the

9 objectives described in subsection (a). In the event the

10 Secretary is unable to obtain such existing data within 30

11 days of such request, the Secretary shall submit, within

12 an additional period of 30 days, a report to the appro13 priate congressional committees setting forth the reasons

14 for the failure to obtain such data.

15 (c) PROGRESS EVALUATION.—Not later than 180

16 days after the date of enactment of this Act, the Secretary

17 shall submit to the appropriate congressional committees

18 a report evaluating the progress made toward achieving

19 the objectives of subsection (a), including a description

20 of—

21 (1) any progress made in improving the super22 vision, monitoring, and auditing of programs and

23 projects supported by each multilateral development

24 bank, in order to identify and reduce bribery and

25 corruption;
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1 (2) any progress made in developing each multi2 lateral development bank’s priorities for allocating

3 anticorruption assistance;

4 (3) country-specific anticorruption programs

5 supported by each multilateral development bank;

6 (4) actions taken to identify and discipline mul7 tilateral development bank employees suspected of

8 knowingly being involved in corrupt activities; and

9 (5) the outcome of efforts to harmonize pro10 curement practices across all multilateral develop11 ment banks.

12 SEC. 4. REPORTS ON POLICIES, OPERATIONS, AND MAN13 AGEMENT OF INTERNATIONAL FINANCIAL IN14 STITUTIONS.

15 (a) ANNUAL REPORT ON FINANCIAL OPERATIONS.—

16 Beginning 180 days after the date of enactment of this

17 Act, or October 31, 2000, whichever is later, and on Octo18 ber 31 of each year thereafter, the Comptroller General

19 shall submit to the appropriate congressional committees

20 a report on the sufficiency of audits of the financial oper21 ations of each multilateral development bank conducted by

22 persons or entities outside such bank.

23 (b) ANNUAL REPORT ON UNITED STATES SUP24 PORTED POLICIES.—Beginning 180 days after the date of

25 enactment of this Act, or October 31, 2000, whichever is
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1 later, and on October 31 of each year thereafter, the Sec2 retary shall submit a report to the appropriate congres3 sional committees on—

4 (1) the actions taken by recipient countries, as

5 a result of the assistance allocated to them by the

6 multilateral development banks under programs re7 ferred to in section 3(c)(1), to strengthen govern8 ance and reduce the opportunity for bribery and cor9 ruption; and

10 (2) how International Development Association11 financed projects contribute to the eventual gradua12 tion of a representative sample of countries from re13 liance on financing on concessionary terms and

14 international development assistance.

15 (c) AMENDMENT OF REPORT ON FUND.—Section

16 1705(a) of the International Financial Institutions Act

17 (22 U.S.C. 262r–4(a)) is amended—

18 (1) by inserting ‘‘(1)’’ before ‘‘the progress’’;

19 and

20 (2) by inserting before the period at the end the

21 following: ‘‘, and (2) the progress made by the Inter22 national Monetary Fund in adopting and imple23 menting the policies described in section 3(c)(1)(C)

24 of the International Debt Forgiveness and Inter-
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1 national Financial Institutions Reform Act of

2 2000’’.

3 (d) REPORT ON DEBT RELIEF.—Not later than 90

4 days after the date of enactment of this Act, the Secretary

5 shall submit a report to the appropriate congressional

6 committees on the history of debt relief programs led by,

7 or coordinated with, international financial institutions,

8 including but not limited to—

9 (1) the extent to which poor countries and the

10 poorest-of-the-poor benefit from debt relief, includ11 ing measurable evidence of any such benefits; and

12 (2) the extent to which debt relief contributes

13 to the graduation of a country from reliance on fi14 nancing on concessionary terms and international

15 development assistance.

16 (e) REPORT ON OPERATING EXPENSES.—Not later

17 than 180 days after the date of enactment of this Act,

18 the Comptroller General shall submit a report to the ap19 propriate congressional committees describing the salaries,

20 benefits, and operating expense account of each inter21 national financial institution for the preceding fiscal year.
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1 SEC. 5. REPEAL OF BILATERAL FUNDING FOR INTER2 NATIONAL FINANCIAL INSTITUTIONS.

3 Section 209(d) of the Foreign Assistance Act of 1961

4 (22 U.S.C. 2169(d); relating to bilateral funding for inter5 national financial institutions) is repealed.

6 SEC. 6. DEFINITIONS.

7 In this title:

8 (1) APPROPRIATE CONGRESSIONAL COMMIT9 TEES.—The term ‘‘appropriate congressional com10 mittees’’ means the Committee on Foreign Relations

11 and the Committee on Appropriations of the Senate,

12 and the Committee on Banking and Financial Serv13 ices and the Committee on Appropriations of the

14 House of Representatives.

15 (2) BANK.—The term ‘‘Bank’’ means the Inter16 national Bank for Reconstruction and Development.

17 (3) COMPTROLLER GENERAL.—The term

18 ‘‘Comptroller General’’ means the Comptroller Gen19 eral of the United States.

20 (4) FUND.—The term ‘‘Fund’’ means the Inter21 national Monetary Fund.

22 (5) INTERNATIONAL FINANCIAL INSTITU23 TIONS.—The term ‘‘international financial institu24 tions’’ means the multilateral development banks

25 and the International Monetary Fund.
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1 (6) MULTILATERAL DEVELOPMENT BANKS.—

2 The term ‘‘multilateral development banks’’ means

3 the International Bank for Reconstruction and De4 velopment, the International Development Associa5 tion, the International Finance Corporation, the

6 Inter-American Development Bank, the Asian Devel7 opment Bank, the Inter-American Investment Cor8 poration, the African Development Bank, the Afri9 can Development Fund, the European Bank for Re10 construction and Development, and the Multilateral

11 Investment Guaranty Agency.

12 (7) SECRETARY.—The term ‘‘Secretary’’ means

13 the Secretary of the Treasury.
Calendar No. 844

106TH CONGRESS

2D SESSION S. 3129

[Report No. 106–425]

A BILL

To provide for international debt forgiveness and

the strengthening of anticorruption measures andaccountability at international financial institutions.

SEPTEMBER 28 (legislative day, SEPTEMBER 22), 2000

Read twice and placed on the calendar