II 

Calendar No. 293 

110TH CONGRESS 

1ST SESSION S. 1607 

To provide for identification of misaligned currency, require action to correct 

the misalignment, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 13, 2007 

Mr. BAUCUS (for himself, Mr. GRASSLEY, Mr. SCHUMER, Mr. GRAHAM, Mr. 

HATCH, Mrs. CLINTON, Mr. OBAMA, Mr. KERRY, Mr. ISAKSON, Mr. 

COCHRAN, Mr. SALAZAR, and Mr. ROCKEFELLER) introduced the following bill; which was read twice and referred to the Committee on Finance 

JULY 31, 2007 

Reported by Mr. BAUCUS, with an amendment 

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

A BILL 

To provide for identification of misaligned currency, require 

action to correct the misalignment, 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. SHORT TITLE. 

4 This Act may be cited as the ‘‘Currency Exchange 

5 Rate Oversight Reform Act of 2007’’. 

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1 TITLE I—CURRENCY EXCHANGE 

2 RATE OVERSIGHT REFORM 

3 SEC. 111. DEFINITIONS. 

4 In this Act: 

5 (1) ADMINISTERING AUTHORITY.—The term 

6 ‘‘administering authority’’ means the authority re7 ferred to in section 771(1) of the Tariff Act of 1930 

8 (19 U.S.C. 1677(1)). 

9 (2) AGREEMENT ON GOVERNMENT PROCURE10 MENT.—The term ‘‘Agreement on Government Pro11 curement’’ means the agreement referred to in sec12 tion 101(d)(17) of the Uruguay Round Agreements 

13 Act (19 U.S.C. 3511(d)(17)). 

14 (3) COUNTRY.—The term ‘‘country’’ means a 

15 foreign country, dependent territory, or possession of 

16 a foreign country, and may include an association of 

17 2 or more foreign countries, dependent territories, or 

18 possessions of countries into a customs union out19 side the United States. 

20 (4) EXPORTING COUNTRY.—The term ‘‘export21 ing country’’ means the country in which the subject 

22 merchandise is produced or manufactured. 

23 (5) FUNDAMENTAL MISALIGNMENT.—The term 

24 ‘‘fundamental misalignment’’ means a significant 

25 and prolonged undervaluation of the prevailing real 

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1 exchange rate between the United States dollar and 

2 a foreign currency from its medium-term equilibrium 

3 level. 

4 (6) FUNDAMENTALLY MISALIGNED CUR5 RENCY.—The term ‘‘fundamentally misaligned cur6 rency’’ means a foreign currency that is in funda7 mental misalignment. 

8 (7) REAL EXCHANGE RATE.—The term ‘‘real 

9 exchange rate’’ means a nominal exchange rate, ex10 pressed in price-adjusted terms. 

11 (8) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of the Treasury. 

13 (9) SUBJECT MERCHANDISE.—The term ‘‘sub14 ject merchandise’’ means the merchandise subject to 

15 an antidumping investigation, review, suspension 

16 agreement, or order referred to in section 771(25) of 

17 the Tariff Act of 1930 (19 U.S.C. 1677(25)). 

18 (10) WTO AGREEMENT.—The term ‘‘WTO 

19 Agreement’’ means the agreement referred to in sec20 tion 2(9) of the Uruguay Round Agreements Act (19 

21 U.S.C. 3501(9)). 

22 SEC. 112. REPORT ON INTERNATIONAL MONETARY POLICY 

23 AND CURRENCY EXCHANGE RATES. 

24 (a) REPORTS REQUIRED.— 

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1 (1) IN GENERAL.—Not later than March 15 

2 and September 15 of each calendar year, the Sec3 retary, after consulting with the Chairman of the 

4 Board of Governors of the Federal Reserve System 

5 and the Advisory Committee on International Ex6 change Rate Policy, shall submit to Congress, a 

7 written report on international monetary policy and 

8 currency exchange rates. 

9 (2) CONSULTATIONS.—On or before March 30 

10 and September 30 of each year, the Secretary shall 

11 appear, if requested, before the Committee on Bank12 ing, Housing, and Urban Affairs of the Senate and 

13 the Committee on Financial Services of the House of 

14 Representatives to provide testimony on the reports 

15 submitted pursuant to paragraph (1). 

16 (b) CONTENT OF REPORTS.—Each report submitted 

17 under subsection (a) shall contain— 

18 (1) an analysis of currency market develop19 ments and the relationship between the United 

20 States dollar and the currencies of major economies 

21 and trading partners of the United States; 

22 (2) a review of the economic and monetary poli23 cies of major economies and trading partners of the 

24 United States, and an evaluation of how such poli25 cies impact currency exchange rates; 

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1 (3) a description of any currency intervention 

2 by the United States or other major economies or 

3 trading partners of the United States, or other ac4 tions undertaken to adjust the actual exchange rate 

5 relative to the United States dollar; 

6 (4) an evaluation of the domestic and global 

7 factors that underlie the conditions in the currency 

8 markets, including— 

9 (A) monetary and financial conditions; 

10 (B) accumulation of foreign assets; 

11 (C) macroeconomic trends; 

12 (D) trends in current and financial ac13 count balances; 

14 (E) the size, composition, and growth of 

15 international capital flows; 

16 (F) the impact of the external sector on 

17 economic growth; 

18 (G) the size and growth of external indebt19 edness; 

20 (H) trends in the net level of international 

21 investment; and 

22 (I) capital controls, trade, and exchange 

23 restrictions; 

24 (5) a list of currencies designated as fundamen25 tally misaligned currencies pursuant to section 

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1 113(a)(2), and a description of any economic models 

2 or methodologies used to establish the list; 

3 (6) a list of currencies designated for priority 

4 action pursuant to section 113(a)(3); 

5 (7) an identification of the nominal value asso6 ciated with the medium-term equilibrium exchange 

7 rate, relative to the United States dollar, for each 

8 currency listed under paragraph (6); 

9 (8) a description of any consultations conducted 

10 or other steps taken pursuant to section 114, 115, 

11 or 116; and 

12 (9) a description of any determination made 

13 pursuant to section 118(a). 

14 (c) CONSULTATIONS.—The Secretary shall consult 

15 with the Chairman of the Board of Governors of the Fed16 eral Reserve System and the Advisory Committee on 

17 International Exchange Rate Policy with respect to the 

18 preparation of each report required under subsection (a). 

19 Any comments provided by the Chairman of the Board 

20 of Governors of the Federal Reserve System or the Advi21 sory Committee on International Exchange Rate Policy 

22 shall be submitted to the Secretary not later than the date 

23 that is 15 days before the date each report is due under 

24 subsection (a). The Secretary shall submit the report to 

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1 Congress after taking into account all such comments re2 ceived. 

3 SEC. 113. IDENTIFICATION OF FUNDAMENTALLY MIS4 ALIGNED CURRENCIES. 

5 (a) IDENTIFICATION.— 

6 (1) IN GENERAL.—The Secretary shall analyze 

7 on a semiannual basis the prevailing real exchange 

8 rates between the United States dollar and foreign 

9 currencies. 

10 (2) DESIGNATION OF FUNDAMENTALLY MIS11 ALIGNED CURRENCIES.—As a result of the analysis 

12 conducted under paragraph (1), the Secretary shall 

13 identify any foreign currency that is in fundamental 

14 misalignment and shall designate such currency as a 

15 fundamentally misaligned currency. 

16 (3) DESIGNATION OF CURRENCIES FOR PRI17 ORITY ACTION.—The Secretary shall designate a 

18 currency identified under paragraph (2) for priority 

19 action if the country that issues such currency is— 

20 (A) engaging in protracted large-scale 

21 intervention in one direction in the currency ex22 change market; 

23 (B) engaging in excessive reserve accumu24 lation; 

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1 (C) introducing or substantially modifying 

2 for balance of payments purposes a restriction 

3 on, or incentive for, the inflow or outflow of 

4 capital, that is inconsistent with the goal of 

5 achieving full currency convertibility; or 

6 (D) pursuing any other policy or action 

7 that, in the view of the Secretary, warrants des8 ignation for priority action. 

9 (b) REPORTS.—The Secretary shall include a list of 

10 any foreign currency designated under paragraph (2) or 

11 (3) of subsection (a) in each report required by section 

12 112. 

13 SEC. 114. NEGOTIATIONS AND CONSULTATIONS. 

14 (a) IN GENERAL.—Upon designation of a currency 

15 pursuant to section 113(a)(2), the Secretary shall seek bi16 lateral consultations with the country that issues such cur17 rency in order to facilitate the adoption of appropriate 

18 policies to address the fundamental misalignment. 

19 (b) CONSULTATIONS INVOLVING CURRENCIES DES20 IGNATED FOR PRIORITY ACTION.—With respect to each 

21 currency designated for priority action pursuant to section 

22 113(a)(3), the Secretary shall, in addition to the consulta23 tions with the country described in subsection (a)— 

24 (1) seek the advice of the International Mone25 tary Fund with respect to the Secretary’s findings in 

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1 the report submitted to Congress pursuant to section 

2 112(a); and 

3 (2) encourage other governments, whether bilat4 erally or in appropriate multinational fora, to join 

5 the United States in seeking the adoption of appro6 priate policies by the country described in subsection 

7 (a) to eliminate the fundamental misalignment. 

8 SEC. 115. FAILURE TO ADOPT APPROPRIATE POLICIES. 

9 (a) IN GENERAL.—Not later than 180 days after the 

10 date on which a currency is designated for priority action 

11 pursuant to section 113(a)(3), the Secretary shall deter12 mine whether the country that issues such currency has 

13 adopted appropriate policies to eliminate the fundamental 

14 misalignment. The Secretary shall promptly notify Con15 gress of such determination and publish notice of the de16 termination in the Federal Register. If the Secretary de17 termines that the country that issues such currency has 

18 failed to adopt appropriate policies to eliminate the funda19 mental misalignment, the following shall apply with re20 spect to the country until a notification described in sec21 tion 116(b) is published in the Federal Register: 

22 (1) ADJUSTMENT UNDER ANTIDUMPING LAW.— 

23 For purposes of an antidumping investigation or re24 view under title VII of the Tariff Act of 1930 (19 

25 U.S.C. 1673 et seq.) the following shall apply: 

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1 (A) IN GENERAL.—The administering au2 thority shall ensure a fair comparison between 

3 the export price and the normal value by ad4 justing the price used to establish export price 

5 or constructed export price to reflect the funda6 mental misalignment of the currency of the ex7 porting country. 

8 (B) SALES SUBJECT TO ADJUSTMENT.— 

9 The adjustment described in subparagraph (A) 

10 shall apply with respect to subject merchandise 

11 sold on or after the date that is 30 days after 

12 the date the currency of the exporting country 

13 is designated for priority action pursuant to 

14 section 113(a)(3). 

15 (2) FEDERAL PROCUREMENT.— 

16 (A) IN GENERAL.—The President shall 

17 prohibit the procurement by the Federal Gov18 ernment of products or services from the coun19 try. 

20 (B) EXCEPTION.—The prohibition pro21 vided for in subparagraph (A) shall not apply 

22 with respect to a country that is a party to the 

23 Agreement on Government Procurement. 

24 (3) REQUEST FOR IMF ACTION.—The United 

25 States shall inform the Managing Director of the 

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1 International Monetary Fund of the failure of the 

2 country to adopt appropriate policies to eliminate 

3 the fundamental misalignment, and the actions the 

4 country is engaging in that are identified in section 

5 113(a)(3), and shall request that the Managing Di6 rector of the International Monetary Fund— 

7 (A) consult with such country regarding 

8 the observance of the country’s obligations 

9 under article IV of the International Monetary 

10 Fund Articles of Agreement, including through 

11 special consultations, if necessary; and 

12 (B) formally report the results of such con13 sultations to the Executive Board of the Inter14 national Monetary Fund within 180 days of the 

15 date of such request. 

16 (4) OPIC FINANCING.—The Overseas Private 

17 Investment Corporation shall not approve any new 

18 financing (including insurance, reinsurance, or guar19 antee) with respect to a project located within the 

20 country. 

21 (5) MULTILATERAL BANK FINANCING.—The 

22 Secretary shall instruct the United States Executive 

23 Director at each multilateral bank to oppose the ap24 proval of any new financing (including loans, other 

25 credits, insurance, reinsurance, or guarantee) to the 

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1 government of the country or for a project located 

2 within the country. 

3 (b) WAIVER.— 

4 (1) IN GENERAL.—The President may waive 

5 any action provided for under subsection (a) if the 

6 President determines that— 

7 (A) taking such action would cause serious 

8 harm to the national security of the United 

9 States; or 

10 (B) it is in the vital economic interest of 

11 the United States to do so and taking such ac12 tion would have an adverse impact on the 

13 United States economy greater than the bene14 fits of such action. 

15 (2) NOTIFICATION.—The President shall 

16 promptly notify Congress of a determination under 

17 paragraph (1) (and the reasons for the determina18 tion, if made under paragraph (1)(B)) and shall 

19 publish notice of the determination in the Federal 

20 Register. 

21 (c) REPORTS.—The Secretary shall describe any ac22 tion or determination pursuant to subsection (a) or (b) 

23 in the first semiannual report required by section 112 

24 after the date of such action or determination. 

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1 SEC. 116. PERSISTENT FAILURE TO ADOPT APPROPRIATE 

2 POLICIES. 

3 (a) PERSISTENT FAILURE TO ADOPT APPROPRIATE

4 POLICIES.—Not later than 360 days after the date on 

5 which a currency is designated for priority action pursuant 

6 to section 113(a)(3), the Secretary shall determine wheth7 er the country that issues such currency has adopted ap8 propriate policies to eliminate the fundamental misalign9 ment. The Secretary shall promptly notify Congress of 

10 such determination and shall publish notice of the deter11 mination in the Federal Register. If the Secretary deter12 mines that the country that issues such currency has 

13 failed to adopt appropriate policies to eliminate the funda14 mental misalignment, in addition to the provisions of sec15 tion 115(a), the following shall apply with respect to the 

16 country until a notification described in subsection (b) is 

17 published in the Federal Register: 

18 (1) ACTION AT THE WTO.—The United States 

19 Trade Representative shall request consultations in 

20 the World Trade Organization with the country re21 garding the consistency of the country’s actions with 

22 its obligations under the WTO Agreement. 

23 (2) REMEDIAL INTERVENTION.— 

24 (A) IN GENERAL.—The Secretary shall 

25 consult with the Board of Governors of the 

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1 taking remedial intervention in international 

2 currency markets in response to the funda3 mental misalignment of the currency designated 

4 for priority action, and coordinating such inter5 vention with other monetary authorities and the 

6 International Monetary Fund. 

7 (B) NOTICE TO COUNTRY.—At the same 

8 time the Secretary takes action under subpara9 graph (A), the Secretary shall notify the coun10 try that issues such currency of the consulta11 tions under subparagraph (A). 

12 (b) NOTIFICATION.—The Secretary shall promptly 

13 notify Congress when a country that issues a currency des14 ignated for priority action pursuant to section 113(a)(3) 

15 adopts appropriate policies to eliminate the fundamental 

16 misalignment, and publish notice of the action of that 

17 country in the Federal Register. 

18 (c) WAIVER.— 

19 (1) IN GENERAL.—The President may waive 

20 any action provided for under this section, or extend 

21 any waiver provided for pursuant to section 115(b), 

22 if the President determines that— 

23 (A) taking such action would cause serious 

24 harm to the national security of the United 

25 States; or 

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1 (B) it is in the vital economic interest of 

2 the United States to do so, and that taking 

3 such action would have an adverse impact on 

4 the United States economy substantially out of 

5 proportion to the benefits of such action. 

6 (2) NOTIFICATION.—The President shall 

7 promptly notify Congress of a determination under 

8 paragraph (1) (and the reasons for the determina9 tion, if made under paragraph (1)(B)) and shall 

10 publish notice of the determination in the Federal 

11 Register. 

12 (d) REPORTS.—The Secretary shall describe any ac13 tion or determination pursuant to subsection (a), (b), or 

14 (c) in the first semiannual report required by section 112 

15 after the date of such action or determination. 

16 SEC. 117. CONGRESSIONAL DISAPPROVAL OF WAIVER. 

17 (a) RESOLUTION OF DISAPPROVAL.— 

18 (1) INTRODUCTION.—If a resolution of dis19 approval is introduced in the House of Representa20 tives or the Senate during the 90-day period (not 

21 counting any day which is excluded under section 

22 154(b)(1) of the Trade Act of 1974 (19 U.S.C. 

23 2194(b)(1)), beginning on the date on which the 

24 President first notifies the Congress of a determina25 tion to waive action with respect to a country pursummaher on PROD1PC69 with BILLS

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1 ant to section 116(c)(1)(B), that resolution of dis2 approval shall be considered in accordance with this 

3 subsection. 

4 (2) RESOLUTION OF DISAPPROVAL.—In this 

5 subsection, the term ‘‘resolution of disapproval’’ 

6 means only a concurrent resolution of the two 

7 Houses of the Congress, the sole matter after the re8 solving clause of which is as follows: ‘‘That the Con9 gress does not approve the determination of the 

10 President under section 116(c)(1)(B) of the Cur11 rency Exchange Rate Oversight Reform Act of 2007 

12 with respect to llllll, of which Congress 

13 was notified on lllll.’’, with the first blank 

14 space being filled with the name of the appropriate 

15 country and the second blank space being filled with 

16 the appropriate date. 

17 (3) PROCEDURES FOR CONSIDERING RESOLU18 TIONS.— 

19 (A) INTRODUCTION AND REFERRAL.—Res20 olutions of disapproval— 

21 (i) in the House of Representatives— 

22 (I) may be introduced by any 

23 Member of the House; 

24 (II) shall be referred to the Com25 mittee on Financial Services and, in 

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1 addition, to the Committee on Rules; 

2 and 

3 (III) may not be amended by ei4 ther Committee; and 

5 (ii) in the Senate— 

6 (I) may be introduced by any 

7 Member of the Senate; 

8 (II) shall be referred to the Com9 mittee on Banking, Housing, and 

10 Urban Affairs; and 

11 (III) may not be amended. 

12 (B) COMMITTEE DISCHARGE AND FLOOR

13 CONSIDERATION.—The provisions of sub14 sections (c) through (f) of section 152 of the 

15 Trade Act of 1974 (other than paragraph (3) 

16 of such subsection (f)) (19 U.S.C. 2192(c) 

17 through (f)) (relating to committee discharge 

18 and floor consideration of certain resolutions in 

19 the House and Senate) apply to a concurrent 

20 resolution of disapproval under this section to 

21 the same extent as such subsections apply to 

22 joint resolutions under such section 152. 

23 (b) RULES OF HOUSE OF REPRESENTATIVES AND

24 SENATE.—This section is enacted by the Congress— 

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1 (1) as an exercise of the rulemaking power of 

2 the House of Representatives and the Senate, re3 spectively, and as such are deemed a part of the 

4 rules of each House, respectively, and such proce5 dures supersede other rules only to the extent that 

6 they are inconsistent with such other rules; and 

7 (2) with the full recognition of the constitu8 tional right of either House to change the rules (so 

9 far as relating to the procedures of that House) at 

10 any time, in the same manner, and to the same ex11 tent as any other rule of that House. 

12 SEC. 118. INTERNATIONAL FINANCIAL INSTITUTION GOV13 ERNANCE ARRANGEMENTS. 

14 (a) INITIAL REVIEW.—Notwithstanding any other 

15 provision of law, before the United States approves a pro16 posed change in the governance arrangement of any inter17 national financial institution, as defined in section 

18 1701(c)(2) of the International Financial Institutions Act 

19 (22 U.S.C. 262r(c)(2)), the Secretary shall determine 

20 whether any member of the international financial institu21 tion that would benefit from the proposed change, in the 

22 form of increased voting shares or representation, has a 

23 currency that was designated a currency for priority action 

24 pursuant to section 113(a)(3) in the most recent report 

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1 required by section 112. The determination shall be re2 ported to Congress. 

3 (b) SUBSEQUENT ACTION.—The United States shall 

4 oppose any proposed change in the governance arrange5 ment of the international financial institution (as defined 

6 in subsection (a)), if the Secretary renders an affirmative 

7 determination pursuant to subsection (a). 

8 (c) FURTHER ACTION.—The United States shall con9 tinue to oppose any proposed change in the governance 

10 arrangement of the international financial institution, pur11 suant to subsection (b), until the Secretary determines 

12 and reports to Congress that the proposed change would 

13 not benefit any member of the international financial insti14 tution, in the form of increased voting shares or represen15 tation, that has a currency that is designated a currency 

16 for priority action pursuant to section 113(a)(3). 

17 SEC. 119. ADJUSTMENT FOR FUNDAMENTALLY MIS18 ALIGNED CURRENCY DESIGNATED FOR PRI19 ORITY ACTION. 

20 (a) IN GENERAL.—Subsection (c)(2) of section 772 

21 of the Tariff Act of 1930 (19 U.S.C. 1677a(c)(2)) is 

22 amended— 

23 (1) by striking ‘‘and’’ at the end of subpara24 graph (A); 

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1 (2) by striking the period at the end of sub2 paragraph (B) and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(C) if required by section 115(a)(1) of the 

5 Currency Exchange Rate Oversight Reform Act 

6 of 2007, the percentage by which the domestic 

7 currency of the producer or exporter is under8 valued in relation to the United States dollar.’’. 

9 (b) CALCULATION METHODOLOGY.—Section 771 of 

10 the Tariff Act of 1930 (19 U.S.C. 1677) is amended by 

11 adding at the end the following: 

12 ‘‘(37) PERCENTAGE UNDERVALUATION.—The 

13 administering authority shall determine the percent14 age by which the domestic currency of the producer 

15 or exporter is undervalued in relation to the United 

16 States dollar by comparing the nominal value associ17 ated with the medium-term equilibrium exchange 

18 rate of the domestic currency of the producer or ex19 porter, identified by the Secretary pursuant to sec20 tion 112(b)(7) of the Currency Exchange Rate Over21 sight Reform Act of 2007, to the exchange rate used 

22 by the administering authority to convert the domes23 tic currency to United States dollars.’’. 

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1 SEC. 120. NONMARKET ECONOMY STATUS. 

2 Paragraph (18)(B) of section 771 of the Tariff Act 

3 of 1930 (19 U.S.C. 1677(18)(B)) is amended— 

4 (1) by striking ‘‘and’’ at the end of clause (v); 

5 and 

6 (2) by redesignating clause (vi) as clause (vii) 

7 and inserting after clause (v) the following: 

8 ‘‘(vi) whether the currency of the for9 eign country is designated a currency for 

10 priority action pursuant to section 

11 113(a)(3) of the Currency Exchange Rate 

12 Oversight Reform Act of 2007, and’’. 

13 SEC. 121. APPLICATION TO CANADA AND MEXICO. 

14 Pursuant to article 1902 of the North American Free 

15 Trade Agreement and section 408 of the North American 

16 Free Trade Agreement Implementation Act (19 U.S.C. 

17 3438), section 115(a)(1) and the amendments made by 

18 sections 119 and 120 shall apply with respect to goods 

19 from Canada and Mexico. 

20 SEC. 122. ADVISORY COMMITTEE ON INTERNATIONAL EX21 CHANGE RATE POLICY. 

22 (a) ESTABLISHMENT.— 

23 (1) IN GENERAL.—There is established an Ad24 visory Committee on International Exchange Rate 

25 Policy (in this section referred to as the ‘‘Com26 mittee’’) The Committee shall be responsible for— 

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1 (A) advising the Secretary in the prepara2 tion of each report to Congress on international 

3 monetary policy and currency exchange rates, 

4 provided for in section 112; and 

5 (B) advising the Congress and the Presi6 dent with respect to— 

7 (i) international exchange rates and 

8 financial policies; and 

9 (ii) the impact of such policies on the 

10 economy of the United States. 

11 (2) MEMBERSHIP.— 

12 (A) IN GENERAL.—The Committee shall be 

13 composed of 9 members as follows, none of 

14 whom shall be from the Federal Government: 

15 (i) CONGRESSIONAL APPOINTEES.— 

16 (I) SENATE APPOINTEES.—Four 

17 persons shall be appointed by the 

18 President pro tempore of the Senate, 

19 upon the recommendation of the 

20 Chairmen and Ranking Members of 

21 the Committee on Banking, Housing, 

22 and Urban Affairs and the Committee 

23 on Finance of the Senate. 

24 (II) HOUSE APPOINTEES.—Four 

25 persons shall be appointed by the 

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1 Speaker of the House of Representa2 tives upon the recommendation of the 

3 Chairmen and Ranking Members of 

4 the Committee on Financial Services 

5 and the Committee on Ways and 

6 Means of the House of Representa7 tives. 

8 (ii) PRESIDENTIAL APPOINTEE.—One 

9 person shall be appointed by the President. 

10 (B) QUALIFICATIONS.—Persons shall be 

11 selected under subparagraph (A) on the basis of 

12 their objectivity and demonstrated expertise in 

13 finance, economics, or currency exchange. 

14 (3) TERMS.—Members shall be appointed for a 

15 term of 4 years or until the Committee terminates. 

16 An individual may be reappointed to the Committee 

17 for additional terms. 

18 (4) VACANCIES.—Any vacancy in the Com19 mittee shall not affect its powers, but shall be filled 

20 in the same manner as the original appointment. 

21 (b) DURATION OF COMMITTEE.—The Committee 

22 shall terminate on the date that is 4 years after the date 

23 of the enactment of this Act unless renewed by the Presi24 dent pursuant to section 14 of the Federal Advisory Com25 mittee Act (5 U.S.C. App.) for a subsequent 4-year period. 

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1 The President may continue to renew the Committee for 

2 successive 4-year periods by taking appropriate action 

3 prior to the date on which the Committee would otherwise 

4 terminate. 

5 (c) PUBLIC MEETINGS.—The Committee shall hold 

6 at least 1 public meeting each year for the purpose of ac7 cepting public comments. The Committee shall also meet 

8 as needed at the call of the Secretary or at the call of 

9 two-thirds of the members of the Committee. 

10 (d) CHAIRPERSON.—The Committee shall elect from 

11 among its members a chairperson for a term of 4 years 

12 or until the Committee terminates. A chairperson of the 

13 Committee may be reelected chairperson but is ineligible 

14 to serve consecutive terms as chairperson. 

15 (e) STAFF.—The Secretary shall make available to 

16 the Committee such staff, information, personnel, admin17 istrative services, and assistance as the Committee may 

18 reasonably require to carry out its activities. 

19 (f) APPLICATION OF FEDERAL ADVISORY COM20 MITTEE ACT.— 

21 (1) IN GENERAL.—The provisions of the Fed22 eral Advisory Committee Act (5 U.S.C. App.) shall 

23 apply to the Committee. 

24 (2) EXCEPTION.—Except for the annual public 

25 meeting required under subsection (c), meetings of 

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1 the Committee shall be exempt from the require2 ments of subsections (a) and (b) of sections 10 and 

3 11 of the Federal Advisory Committee Act (relating 

4 to open meetings, public notice, public participation, 

5 and public availability of documents), whenever and 

6 to the extent it is determined by the President or the 

7 Secretary that such meetings will be concerned with 

8 matters the disclosure of which would seriously com9 promise the development by the United States Gov10 ernment of monetary and financial policy. 

11 SEC. 123. REPEAL OF THE EXCHANGE RATES AND INTER12 NATIONAL ECONOMIC POLICY COORDINA13 TION ACT OF 1988. 

14 The Exchange Rates and International Economic 

15 Policy Coordination Act of 1988 (22 U.S.C. 5301–5306) 

16 is repealed. 

17 TITLE II—TAX REFORM 

18 SEC. 201. PERMANENT SUBPART F EXEMPTION FOR ACTIVE 

19 FINANCING INCOME. 

20 (a) BANKING, FINANCING, OR SIMILAR BUSI21 NESSES.—Subsection (h) of section 954 of the Internal 

22 Revenue Code of 1986 (relating to special rule for income 

23 derived in the active conduct of banking, financing, or 

24 similar businesses) is amended by striking paragraph (9). 

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1 (b) INSURANCE BUSINESSES.—Subsection (e) of sec2 tion 953 of such Code (relating to exempt insurance in3 come) is amended by striking paragraph (10) and by re4 designating paragraph (11) as paragraph (10). 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years of a foreign cor7 poration beginning after the date of the enactment of this 

8 Act, and to taxable years of United States shareholders 

9 with or within which such taxable years of such foreign 

10 corporation end. 

11 SECTION 1. SHORT TITLE. 

12 This Act may be cited as the ‘‘Currency Exchange Rate 

13 Oversight Reform Act of 2007’’. 

14 SEC. 2. DEFINITIONS. 

15 In this Act: 

16 (1) ADMINISTERING AUTHORITY.—The term ‘‘ad17 ministering authority’’ means the authority referred 

18 to in section 771(1) of the Tariff Act of 1930 (19 

19 U.S.C. 1677(1)). 

20 (2) AGREEMENT ON GOVERNMENT PROCURE21 MENT.—The term ‘‘Agreement on Government Pro22 curement’’ means the agreement referred to in section 

23 101(d)(17) of the Uruguay Round Agreements Act (19 

24 U.S.C. 3511(d)(17)). 

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1 (3) COUNTRY.—The term ‘‘country’’ means a for2 eign country, dependent territory, or possession of a 

3 foreign country, and may include an association of 2 

4 or more foreign countries, dependent territories, or 

5 possessions of countries into a customs union outside 

6 the United States. 

7 (4) EXPORTING COUNTRY.—The term ‘‘exporting 

8 country’’ means the country in which the subject mer9 chandise is produced or manufactured. 

10 (5) FUNDAMENTAL MISALIGNMENT.—The term 

11 ‘‘fundamental misalignment’’ means a significant 

12 and sustained undervaluation of the prevailing real 

13 effective exchange rate, adjusted for cyclical and tran14 sitory factors, from its medium-term equilibrium 

15 level. 

16 (6) FUNDAMENTALLY MISALIGNED CURRENCY.— 

17 The term ‘‘fundamentally misaligned currency’’ 

18 means a foreign currency that is in fundamental mis19 alignment. 

20 (7) REAL EFFECTIVE EXCHANGE RATE.—The 

21 term ‘‘real effective exchange rate’’ means a weighted 

22 average of bilateral exchange rates, expressed in price23 adjusted terms. 

24 (8) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of the Treasury. 

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1 (9) STERILIZATION.—The term ‘‘sterilization’’ 

2 means domestic monetary operations taken to neu3 tralize the monetary impact of increases in reserves 

4 associated with intervention in the currency exchange 

5 market. 

6 (10) SUBJECT MERCHANDISE.—The term ‘‘sub7 ject merchandise’’ means the merchandise subject to 

8 an antidumping investigation, review, suspension 

9 agreement, or order referred to in section 771(25) of 

10 the Tariff Act of 1930 (19 U.S.C. 1677(25)). 

11 (11) WTO AGREEMENT.—The term ‘‘WTO Agree12 ment’’ means the agreement referred to in section 2(9) 

13 of the Uruguay Round Agreements Act (19 U.S.C. 

14 3501(9)). 

15 SEC. 3. REPORT ON INTERNATIONAL MONETARY POLICY 

16 AND CURRENCY EXCHANGE RATES. 

17 (a) REPORTS REQUIRED.— 

18 (1) IN GENERAL.—Not later than March 15 and 

19 September 15 of each calendar year, the Secretary, 

20 after consulting with the Chairman of the Board of 

21 Governors of the Federal Reserve System and the Ad22 visory Committee on International Exchange Rate 

23 Policy, shall submit to Congress, a written report on 

24 international monetary policy and currency exchange 

25 rates. 

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1 (2) CONSULTATIONS.—On or before March 30 

2 and September 30 of each calendar year, the Sec3 retary shall appear, if requested, before the Committee 

4 on Banking, Housing, and Urban Affairs and the 

5 Committee on Finance of the Senate and the Com6 mittee on Financial Services and the Committee on 

7 Ways and Means of the House of Representatives to 

8 provide testimony on the reports submitted pursuant 

9 to paragraph (1). 

10 (b) CONTENT OF REPORTS.—Each report submitted 

11 under subsection (a) shall contain— 

12 (1) an analysis of currency market developments 

13 and the relationship between the United States dollar 

14 and the currencies of major economies and trading 

15 partners of the United States; 

16 (2) a review of the economic and monetary poli17 cies of major economies and trading partners of the 

18 United States, and an evaluation of how such policies 

19 impact currency exchange rates; 

20 (3) a description of any currency intervention by 

21 the United States or other major economies or trading 

22 partners of the United States, or other actions under23 taken to adjust the actual exchange rate relative to the 

24 United States dollar; 

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1 (4) an evaluation of the domestic and global fac2 tors that underlie the conditions in the currency mar3 kets, including— 

4 (A) monetary and financial conditions; 

5 (B) accumulation of foreign assets; 

6 (C) macroeconomic trends; 

7 (D) trends in current and financial account 

8 balances; 

9 (E) the size, composition, and growth of 

10 international capital flows; 

11 (F) the impact of the external sector on eco12 nomic growth; 

13 (G) the size and growth of external indebt14 edness; 

15 (H) trends in the net level of international 

16 investment; and 

17 (I) capital controls, trade, and exchange re18 strictions; 

19 (5) a list of currencies designated as fundamen20 tally misaligned currencies pursuant to section 

21 4(a)(2), and a description of any economic models or 

22 methodologies used to establish the list; 

23 (6) a list of currencies designated for priority ac24 tion pursuant to section 4(a)(3); 

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1 (7) an identification of the nominal value associ2 ated with the medium-term equilibrium exchange 

3 rate, relative to the United States dollar, for each cur4 rency listed under paragraph (6); 

5 (8) a description of any consultations conducted 

6 or other steps taken pursuant to section 5, 6, or 7, in7 cluding any actions taken to eliminate the funda8 mental misalignment; and 

9 (9) a description of any determination made 

10 pursuant to section 9(a). 

11 (c) CONSULTATIONS.—The Secretary shall consult 

12 with the Chairman of the Board of Governors of the Federal 

13 Reserve System and the Advisory Committee on Inter14 national Exchange Rate Policy with respect to the prepara15 tion of each report required under subsection (a). Any com16 ments provided by the Chairman of the Board of Governors 

17 of the Federal Reserve System or the Advisory Committee 

18 on International Exchange Rate Policy shall be submitted 

19 to the Secretary not later than the date that is 15 days 

20 before the date each report is due under subsection (a). The 

21 Secretary shall submit the report to Congress after taking 

22 into account all such comments received. 

23 SEC. 4. IDENTIFICATION OF FUNDAMENTALLY MISALIGNED 

24 CURRENCIES. 

25 (a) IDENTIFICATION.— 

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1 (1) IN GENERAL.—The Secretary shall analyze 

2 on a semiannual basis the prevailing real effective ex3 change rates of foreign currencies. 

4 (2) DESIGNATION OF FUNDAMENTALLY MIS5 ALIGNED CURRENCIES.—With respect to the cur6 rencies of countries that have significant bilateral 

7 trade flows with the United States, and currencies 

8 that are otherwise significant to the operation, sta9 bility, or orderly development of regional or global 

10 capital markets, the Secretary shall determine wheth11 er any such currency is in fundamental misalignment 

12 and shall designate such currency as a fundamentally 

13 misaligned currency. 

14 (3) DESIGNATION OF CURRENCIES FOR PRIORITY

15 ACTION.—The Secretary shall designate a currency 

16 identified under paragraph (2) for priority action if 

17 the country that issues such currency is— 

18 (A) engaging in protracted large-scale inter19 vention in one direction in the currency ex20 change market, particularly if accompanied by 

21 partial or full sterilization; 

22 (B) engaging in excessive and prolonged of23 ficial or quasi-official accumulation of foreign 

24 assets, for balance of payments purposes; 

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1 (C) introducing or substantially modifying 

2 for balance of payments purposes a restriction 

3 on, or incentive for, the inflow or outflow of cap4 ital, that is inconsistent with the goal of achiev5 ing full currency convertibility; or 

6 (D) pursuing any other policy or action 

7 that, in the view of the Secretary, warrants des8 ignation for priority action. 

9 (b) REPORTS.—The Secretary shall include a list of 

10 any foreign currency designated under paragraph (2) or (3) 

11 of subsection (a) in each report required by section 3. 

12 SEC. 5. NEGOTIATIONS AND CONSULTATIONS. 

13 (a) IN GENERAL.—Upon designation of a currency 

14 pursuant to section 4(a)(2), the Secretary shall seek to con15 sult bilaterally with the country that issues such currency 

16 in order to facilitate the adoption of appropriate policies 

17 to address the fundamental misalignment. 

18 (b) CONSULTATIONS INVOLVING CURRENCIES DES19 IGNATED FOR PRIORITY ACTION.—With respect to each cur20 rency designated for priority action pursuant to section 

21 4(a)(3), the Secretary shall, in addition to seeking to con22 sult with a country pursuant to subsection (a)— 

23 (1) seek the advice of the International Monetary 

24 Fund with respect to the Secretary’s findings in the 

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1 report submitted to Congress pursuant to section 3(a); 

2 and 

3 (2) encourage other governments, whether bilat4 erally or in appropriate multinational fora, to join 

5 the United States in seeking the adoption of appro6 priate policies by the country described in subsection 

7 (a) to eliminate the fundamental misalignment. 

8 SEC. 6. FAILURE TO ADOPT APPROPRIATE POLICIES. 

9 (a) IN GENERAL.—Not later than 90 days after the 

10 date on which a currency is designated for priority action 

11 pursuant to section 4(a)(3), the Secretary shall determine 

12 whether the country that issues such currency has adopted 

13 appropriate policies, and taken identifiable action, to elimi14 nate the fundamental misalignment. The Secretary shall 

15 promptly notify Congress of such determination and pub16 lish notice of the determination in the Federal Register. If 

17 the Secretary determines that the country that issues such 

18 currency has failed to adopt appropriate policies, or take 

19 identifiable action, to eliminate the fundamental misalign20 ment, the following shall apply with respect to the country 

21 until a notification described in section 7(b) is published 

22 in the Federal Register: 

23 (1) ADJUSTMENT UNDER ANTIDUMPING LAW.— 

24 For purposes of an antidumping investigation or re25 view under subtitle B of title VII of the Tariff Act of 

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1 1930 (19 U.S.C. 1673 et seq.) the following shall 

2 apply: 

3 (A) IN GENERAL.—The administering au4 thority shall ensure a fair comparison between 

5 the export price and the normal value by adjust6 ing the price used to establish export price or 

7 constructed export price to reflect the funda8 mental misalignment of the currency of the ex9 porting country. 

10 (B) SALES SUBJECT TO ADJUSTMENT.—The 

11 adjustment described in subparagraph (A) shall 

12 apply with respect to subject merchandise sold on 

13 or after the date that is 30 days after the date 

14 the currency of the exporting country is des15 ignated for priority action pursuant to section 

16 4(a)(3). 

17 (2) FEDERAL PROCUREMENT.— 

18 (A) IN GENERAL.—The President shall pro19 hibit the procurement by the Federal Government 

20 of products or services from the country. 

21 (B) EXCEPTION.—The prohibition provided 

22 for in subparagraph (A) shall not apply with re23 spect to a country that is a party to the Agree24 ment on Government Procurement. 

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1 (3) REQUEST FOR IMF ACTION.—The United 

2 States shall inform the Managing Director of the 

3 International Monetary Fund of the failure of the 

4 country to adopt appropriate policies, or to take iden5 tifiable action, eliminate the fundamental misalign6 ment, and the actions the country is engaging in that 

7 are identified in section 4(a)(3), and shall request 

8 that the Managing Director of the International Mon9 etary Fund— 

10 (A) consult with such country regarding the 

11 observance of the country’s obligations under ar12 ticle IV of the International Monetary Fund Ar13 ticles of Agreement, including through special 

14 consultations, if necessary; and 

15 (B) formally report the results of such con16 sultations to the Executive Board of the Inter17 national Monetary Fund within 180 days of the 

18 date of such request. 

19 (4) OPIC FINANCING.—The Overseas Private In20 vestment Corporation shall not approve any new fi21 nancing (including insurance, reinsurance, or guar22 antee) with respect to a project located within the 

23 country. 

24 (5) MULTILATERAL BANK FINANCING.—The Sec25 retary shall instruct the United States Executive Dimmaher on PROD1PC69 with BILLS

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1 rector at each multilateral bank to oppose the ap2 proval of any new financing (including loans, other 

3 credits, insurance, reinsurance, or guarantee) to the 

4 government of the country or for a project located 

5 within the country. 

6 (b) WAIVER.— 

7 (1) IN GENERAL.—The President may waive any 

8 action provided for under subsection (a) if the Presi9 dent determines that— 

10 (A) taking such action would cause serious 

11 harm to the national security of the United 

12 States; or 

13 (B) it is in the vital economic interest of the 

14 United States to do so and taking such action 

15 would have an adverse impact on the United 

16 States economy greater than the benefits of such 

17 action. 

18 (2) NOTIFICATION.—The President shall prompt19 ly notify Congress of a determination under para20 graph (1) (and the reasons for the determination, if 

21 made under paragraph (1)(B)) and shall publish no22 tice of the determination (and the reasons for the de23 termination, if made under paragraph (1)(B)) in the 

24 Federal Register. 

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1 (c) REPORTS.—The Secretary shall describe any ac2 tion or determination pursuant to subsection (a) or (b) in 

3 the first semiannual report required by section 3 after the 

4 date of such action or determination. 

5 SEC. 7. PERSISTENT FAILURE TO ADOPT APPROPRIATE 

6 POLICIES. 

7 (a) PERSISTENT FAILURE TO ADOPT APPROPRIATE

8 POLICIES.—Not later than 360 days after the date on which 

9 a currency is designated for priority action pursuant to 

10 section 4(a)(3), the Secretary shall determine whether the 

11 country that issues such currency has adopted appropriate 

12 policies, and taken identifiable action, to eliminate the fun13 damental misalignment. The Secretary shall promptly no14 tify Congress of such determination and shall publish notice 

15 of the determination in the Federal Register. If the Sec16 retary determines that the country that issues such currency 

17 has failed to adopt appropriate policies, or take identifiable 

18 action, to eliminate the fundamental misalignment, in ad19 dition to the provisions of section 6(a), the following shall 

20 apply with respect to the country until a notification de21 scribed in subsection (b) is published in the Federal Reg22 ister: 

23 (1) ACTION AT THE WTO.—The United States 

24 Trade Representative shall request consultations in 

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1 garding the consistency of the country’s actions with 

2 its obligations under the WTO Agreement. 

3 (2) REMEDIAL INTERVENTION.— 

4 (A) IN GENERAL.—The Secretary shall con5 sult with the Board of Governors of the Federal 

6 Reserve System to consider undertaking remedial 

7 intervention in international currency markets 

8 in response to the fundamental misalignment of 

9 the currency designated for priority action, and 

10 coordinating such intervention with other mone11 tary authorities and the International Monetary 

12 Fund. In doing so, the Secretary shall consider 

13 the impact of such intervention on domestic eco14 nomic growth and stability, including the im15 pact on interest rates. 

16 (B) NOTICE TO COUNTRY.—At the same 

17 time the Secretary takes action under subpara18 graph (A), the Secretary shall notify the country 

19 that issues such currency of the consultations 

20 under subparagraph (A). 

21 (b) NOTIFICATION.—The Secretary shall promptly no22 tify Congress when a country that issues a currency des23 ignated for priority action pursuant to section 4(a)(3) 

24 adopts appropriate policies, or takes identifiable action, to 

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1 eliminate the fundamental misalignment, and publish no2 tice of the action of that country in the Federal Register. 

3 (c) WAIVER.— 

4 (1) IN GENERAL.—The President may waive any 

5 action provided for under this section, or extend any 

6 waiver provided for under section 6(b), if the Presi7 dent determines that— 

8 (A) taking such action would cause serious 

9 harm to the national security of the United 

10 States; or 

11 (B) it is in the vital economic interest of the 

12 United States to do so, and that taking such ac13 tion would have an adverse impact on the 

14 United States economy substantially out of pro15 portion to the benefits of such action. 

16 (2) NOTIFICATION.—The President shall prompt17 ly notify Congress of a determination under para18 graph (1) (and the reasons for the determination, if 

19 made under paragraph (1)(B)) and shall publish no20 tice of the determination (and the reasons for the de21 termination, if made under paragraph (1)(B)) in the 

22 Federal Register. 

23 (d) DISAPPROVAL OF WAIVER.—If the President 

24 waives an action pursuant to subsection (c)(1)(B), or ex25 tends a waiver provided for under section 6(b)(1)(B), the 

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1 waiver shall cease to have effect upon the enactment of a 

2 joint resolution described in section 8(a)(2). 

3 (e) REPORTS.—The Secretary shall describe any action 

4 or determination pursuant to subsection (a), (b), or (c) in 

5 the first semiannual report required by section 3 after the 

6 date of such action or determination. 

7 SEC. 8. CONGRESSIONAL DISAPPROVAL OF WAIVER. 

8 (a) RESOLUTION OF DISAPPROVAL.— 

9 (1) INTRODUCTION.—If a resolution of dis10 approval is introduced in the House of Representa11 tives or the Senate during the 90-day period (not 

12 counting any day which is excluded under section 

13 154(b)(1) of the Trade Act of 1974 (19 U.S.C. 

14 2194(b)(1)), beginning on the date on which the 

15 President first notifies Congress of a determination to 

16 waive action with respect to a country pursuant to 

17 section 7(c)(1)(B), that resolution of disapproval shall 

18 be considered in accordance with this subsection. 

19 (2) RESOLUTION OF DISAPPROVAL.—In this sub20 section, the term ‘‘resolution of disapproval’’ means 

21 only a joint resolution of the two Houses of the Con22 gress, the sole matter after the resolving clause of 

23 which is as follows: ‘‘That Congress does not approve 

24 the determination of the President under section 

25 7(c)(1)(B) of the Currency Exchange Rate Oversight 

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1 Reform Act of 2007 with respect to llllll, of 

2 which Congress was notified on lllll.’’, with 

3 the first blank space being filled with the name of the 

4 appropriate country and the second blank space being 

5 filled with the appropriate date. 

6 (3) PROCEDURES FOR CONSIDERING RESOLU7 TIONS.— 

8 (A) INTRODUCTION AND REFERRAL.—Reso9 lutions of disapproval— 

10 (i) in the House of Representatives— 

11 (I) may be introduced by any 

12 Member of the House; 

13 (II) shall be referred to the Com14 mittee on Financial Services and, in 

15 addition, to the Committee on Rules; 

16 and 

17 (III) may not be amended by ei18 ther Committee; and 

19 (ii) in the Senate— 

20 (I) may be introduced by any 

21 Member of the Senate; 

22 (II) shall be referred to the Com23 mittee on Banking, Housing, and 

24 Urban Affairs; and 

25 (III) may not be amended. 

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1 (B) COMMITTEE DISCHARGE AND FLOOR

2 CONSIDERATION.—The provisions of subsections 

3 (c) through (f) of section 152 of the Trade Act of 

4 1974 (other than paragraph (3) of such sub5 section (f)) (19 U.S.C. 2192(c) through (f)) (re6 lating to committee discharge and floor consider7 ation of certain resolutions in the House and 

8 Senate) apply to a joint resolution of dis9 approval under this section to the same extent as 

10 such subsections apply to joint resolutions under 

11 such section 152. 

12 (b) RULES OF HOUSE OF REPRESENTATIVES AND

13 SENATE.—This section is enacted by Congress— 

14 (1) as an exercise of the rulemaking power of the 

15 House of Representatives and the Senate, respectively, 

16 and as such is deemed a part of the rules of each 

17 House, respectively, and the rules provided for in this 

18 section supersede other rules only to the extent that 

19 they are inconsistent with such other rules; and 

20 (2) with the full recognition of the constitutional 

21 right of either House to change the rules provided for 

22 in this section (so far as relating to the procedures of 

23 that House) at any time, in the same manner, and 

24 to the same extent as any other rule of that House. 

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1 SEC. 9. INTERNATIONAL FINANCIAL INSTITUTION GOVERN2 ANCE ARRANGEMENTS. 

3 (a) INITIAL REVIEW.—Notwithstanding any other pro4 vision of law, before the United States approves a proposed 

5 change in the governance arrangement of any international 

6 financial institution, as defined in section 1701(c)(2) of the 

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

8 262r(c)(2)), the Secretary shall determine whether any 

9 member of the international financial institution that 

10 would benefit from the proposed change, in the form of in11 creased voting shares or representation, has a currency that 

12 was designated a currency for priority action pursuant to 

13 section 4(a)(3) in the most recent report required by section 

14 3. The determination shall be reported to Congress. 

15 (b) SUBSEQUENT ACTION.—The United States shall 

16 oppose any proposed change in the governance arrangement 

17 of the international financial institution (described in sub18 section (a)), if the Secretary renders an affirmative deter19 mination pursuant to subsection (a). 

20 (c) FURTHER ACTION.—The United States shall con21 tinue to oppose any proposed change in the governance ar22 rangement of the international financial institution, pursu23 ant to subsection (b), until the Secretary determines and 

24 reports to Congress that the proposed change would not ben25 efit any member of the international financial institution, 

26 in the form of increased voting shares or representation, 

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1 that has a currency that is designated a currency for pri2 ority action pursuant to section 4(a)(3). 

3 SEC. 10. ADJUSTMENT FOR FUNDAMENTALLY MISALIGNED 

4 CURRENCY DESIGNATED FOR PRIORITY AC5 TION. 

6 (a) IN GENERAL.—Subsection (c)(2) of section 772 of 

7 the Tariff Act of 1930 (19 U.S.C. 1677a(c)(2)) is amend8 ed— 

9 (1) by striking ‘‘and’’ at the end of subpara10 graph (A); 

11 (2) by striking the period at the end of subpara12 graph (B) and inserting ‘‘; and’’; and 

13 (3) by adding at the end the following: 

14 ‘‘(C) if required by section 6(a)(1) of the 

15 Currency Exchange Rate Oversight Reform Act 

16 of 2007, the percentage by which the domestic 

17 currency of the producer or exporter is under18 valued in relation to the United States dollar.’’. 

19 (b) CALCULATION METHODOLOGY.—Section 771 of the 

20 Tariff Act of 1930 (19 U.S.C. 1677) is amended by adding 

21 at the end the following: 

22 ‘‘(37) PERCENTAGE UNDERVALUATION.—The ad23 ministering authority shall determine the percentage 

24 by which the domestic currency of the producer or ex25 porter is undervalued in relation to the United States 

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1 dollar by comparing the nominal value associated 

2 with the medium-term equilibrium exchange rate of 

3 the domestic currency of the producer or exporter, 

4 identified by the Secretary pursuant to section 3(b)(7) 

5 of the Currency Exchange Rate Oversight Reform Act 

6 of 2007, to the official daily exchange rate identified 

7 by the administering authority for purposes of anti8 dumping proceedings.’’. 

9 SEC. 11. NONMARKET ECONOMY STATUS. 

10 Paragraph (18)(B) of section 771 of the Tariff Act of 

11 1930 (19 U.S.C. 1677(18)(B)) is amended— 

12 (1) by striking ‘‘and’’ at the end of clause (v); 

13 and 

14 (2) by redesignating clause (vi) as clause (vii) 

15 and inserting after clause (v) the following: 

16 ‘‘(vi) whether the currency of the for17 eign country is designated a currency for 

18 priority action pursuant to section 4(a)(3) 

19 of the Currency Exchange Rate Oversight 

20 Reform Act of 2007, and’’. 

21 SEC. 12. APPLICATION TO CANADA AND MEXICO. 

22 Pursuant to article 1902 of the North American Free 

23 Trade Agreement and section 408 of the North American 

24 Free Trade Agreement Implementation Act (19 U.S.C. 

25 3438), section 6(a)(1) and the amendments made by secmmaher on PROD1PC69 with BILLS

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1 tions 10 and 11 shall apply with respect to goods from Can2 ada and Mexico. 

3 SEC. 13. ADVISORY COMMITTEE ON INTERNATIONAL EX4 CHANGE RATE POLICY. 

5 (a) ESTABLISHMENT.— 

6 (1) IN GENERAL.—There is established an Advi7 sory Committee on International Exchange Rate Pol8 icy (in this section referred to as the ‘‘Committee’’) 

9 The Committee shall be responsible for— 

10 (A) advising the Secretary in the prepara11 tion of each report to Congress on international 

12 monetary policy and currency exchange rates, 

13 provided for in section 3; and 

14 (B) advising Congress and the President 

15 with respect to— 

16 (i) international exchange rates and fi17 nancial policies; and 

18 (ii) the impact of such policies on the 

19 economy of the United States. 

20 (2) MEMBERSHIP.— 

21 (A) IN GENERAL.—The Committee shall be 

22 composed of 9 members as follows, none of whom 

23 shall be from the Federal Government: 

24 (i) CONGRESSIONAL APPOINTEES.— 

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1 (I) SENATE APPOINTEES.—Four 

2 persons shall be appointed by the 

3 President pro tempore of the Senate, 

4 upon the recommendation of the Chair5 men and Ranking Members of the 

6 Committee on Banking, Housing, and 

7 Urban Affairs and the Committee on 

8 Finance of the Senate. 

9 (II) HOUSE APPOINTEES.—Four 

10 persons shall be appointed by the 

11 Speaker of the House of Representa12 tives upon the recommendation of the 

13 Chairmen and Ranking Members of the 

14 Committee on Financial Services and 

15 the Committee on Ways and Means of 

16 the House of Representatives. 

17 (ii) PRESIDENTIAL APPOINTEE.—One 

18 person shall be appointed by the President. 

19 (B) QUALIFICATIONS.—Persons shall be se20 lected under subparagraph (A) on the basis of 

21 their objectivity and demonstrated expertise in 

22 finance, economics, or currency exchange. 

23 (3) TERMS.—Members shall be appointed for a 

24 term of 4 years or until the Committee terminates. An 

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1 individual may be reappointed to the Committee for 

2 additional terms. 

3 (4) VACANCIES.—Any vacancy in the Committee 

4 shall not affect its powers, but shall be filled in the 

5 same manner as the original appointment. 

6 (b) DURATION OF COMMITTEE.—Notwithstanding sec7 tion 14(c) of the Federal Advisory Committee Act (5 U.S.C. 

8 App.), the Committee shall terminate on the date that is 

9 4 years after the date of the enactment of this Act unless 

10 renewed by the President pursuant to section 14 of the Fed11 eral Advisory Committee Act (5 U.S.C. App.) for a subse12 quent 4-year period. The President may continue to renew 

13 the Committee for successive 4-year periods by taking ap14 propriate action prior to the date on which the Committee 

15 would otherwise terminate. 

16 (c) PUBLIC MEETINGS.—The Committee shall hold at 

17 least 2 public meetings each year for the purpose of accept18 ing public comments, including comments from small busi19 ness owners. The Committee shall also meet as needed at 

20 the call of the Secretary or at the call of two-thirds of the 

21 members of the Committee. 

22 (d) CHAIRPERSON.—The Committee shall elect from 

23 among its members a chairperson for a term of 4 years or 

24 until the Committee terminates. A chairperson of the Commmaher on PROD1PC69 with BILLS

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1 mittee may be reelected chairperson but is ineligible to serve 

2 consecutive terms as chairperson. 

3 (e) STAFF.—The Secretary shall make available to the 

4 Committee such staff, information, personnel, administra5 tive services, and assistance as the Committee may reason6 ably require to carry out its activities. 

7 (f) APPLICATION OF FEDERAL ADVISORY COMMITTEE

8 ACT.— 

9 (1) IN GENERAL.—The provisions of the Federal 

10 Advisory Committee Act (5 U.S.C. App.) shall apply 

11 to the Committee. 

12 (2) EXCEPTION.—Except for the 2 annual public 

13 meetings required under subsection (c), meetings of 

14 the Committee shall be exempt from the requirements 

15 of subsections (a) and (b) of sections 10 and 11 of the 

16 Federal Advisory Committee Act (relating to open 

17 meetings, public notice, public participation, and 

18 public availability of documents), whenever and to the 

19 extent it is determined by the President or the Sec20 retary that such meetings will be concerned with mat21 ters the disclosure of which would seriously com22 promise the development by the United States Govern23 ment of monetary and financial policy. 

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51 

•S 1607 RS

1 SEC. 14. REPEAL OF THE EXCHANGE RATES AND INTER2 NATIONAL ECONOMIC POLICY COORDINA3 TION ACT OF 1988. 

4 The Exchange Rates and International Economic Pol5 icy Coordination Act of 1988 (22 U.S.C. 5301 et seq.) is 

6 repealed. 

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Calendar No. 293 

110TH CONGRESS 

1ST SESSION S. 1607 

A BILL 

To provide for identification of misaligned currency, 

for other purposes. require action to correct the misalignment, and 

JULY 31, 2007 

Reported with an amendment 

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