I 

108TH CONGRESS 

2D SESSION H. R. 4364 

To amend the Foreign Assistance Act of 1961 to require the governments 

of low income oil-producing countries to meet certain requirements relating to their oil revenues in order to be eligible to receive United States 

economic assistance. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 13, 2004 

Mr. HYDE introduced the following bill; which was referred to the Committee 

on International Relations, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Foreign Assistance Act of 1961 to require 

the governments of low income oil-producing countries 

to meet certain requirements relating to their oil revenues in order to be eligible to receive United States 

economic assistance. 

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 ‘‘United States Eco5 nomic Assistance Conditionality Act of 2004’’. 
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1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) The governments of low income oil-pro4 ducing countries often do not provide information to 

5 the people of such countries regarding their oil reve6 nues. Such opacity can hide billions of dollars worth 

7 of financial impropriety. 

8 (2) The governments of such countries have 

9 generally refused to disclose information regarding 

10 their oil revenues when pressed by international or11 ganizations and others, proclaiming that such disclo12 sure is an infringement on national sovereignty. 

13 (3) As a result, the people of such countries are 

14 left without the necessary information to ensure 

15 proper management and accountability regarding 

16 such oil revenues. Dispossessed, the people of such 

17 countries are often left marginalized and at the 

18 mercy of donor assistance. In Angola, for example, 

19 one in every four oil dollars earned is unaccounted 

20 for. At the same time, one in four Angolan children 

21 dies before the age of five from preventable diseases. 

22 (4) In some low income oil-producing countries, 

23 government-imposed royalties and fees on the reve24 nues of business enterprises engaged in oil produc25 tion are often misappropriated and squandered. 
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1 These businesses are then left vulnerable to accusa2 tions of complicity with corruption. 

3 (5) The governments of low income oil-pro4 ducing countries that mismanage oil revenues are 

5 often unstable and do not survive, creating further 

6 instability that threatens the supply of vital indus7 trial commodities and forcing the international com8 munity to respond with costly emergency assistance 

9 to those countries. 

10 (6) A key to promoting political, economic, and 

11 social reform in low income oil-producing is trans12 parency in public finances. 

13 (7) If the governments of such countries tell 

14 their people how much oil revenue the government 

15 receives and how that revenue is allocated and ex16 pended, the resulting transparency will engender 

17 more realistic public expectations, more plausible na18 tional development programs, and better means to 

19 combat corruption and promote democracy, respect 

20 for human rights, and the rule of law. 

21 (8) Transparency by such foreign governments 

22 will benefit United States business enterprises as 

23 well. Respect for the rule of law, codified regulatory 

24 practices, and transparent bidding and award prac25 tices deter corruption and encourage a level playing 
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1 field in such countries for United States business en2 terprises. 

3 (9) Export credit activities and other bilateral 

4 concessional loan programs of the United States 

5 Government for low income oil-producing countries 

6 should require that any assistance under such activi7 ties and programs be conditional on appropriate 

8 transparency by the governments of such countries 

9 relating to oil revenues. 

10 (10) International financial institutions such as 

11 the World Bank should incorporate revenue trans12 parency across their lending and technical assistance 

13 portfolios by making full transparency a condition of 

14 all their financial support and by including it in 

15 their national poverty reduction strategy consulta16 tions. 

17 (11) One bold and promising model is the 

18 Chad/Cameroon Pipeline Project, under which the 

19 Government of Chad, private investors, and the 

20 World Bank Group have established an account21 ability and oversight mechanism for the country’s 

22 revenues derived from oil production. 

23 (12) Donald Norland, former United States 

24 Ambassador to Chad, in testimony on April 18, 

25 2002, before the Committee on International Rela-
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1 tions of the House of Representatives stated that the 

2 Chad/Cameroon Pipeline Project ‘‘has addressed 

3 these extraordinarily challenging issues in ways that 

4 may well serve as a model for developing natural re5 sources in other countries’’. 

6 (13) Ambassador Norland further testified that: 

7 ‘‘Success will require keeping the project in the spot8 light of public attention as well as under constant 

9 scrutiny and monitoring by outside groups . . . Scru10 tiny is the key to transparency. Transparency is, in 

11 turn, indispensable in guaranteeing that oil re12 sources go . . . to projects that reduce poverty while 

13 preserving the environment and advancing human 

14 rights . . . to make sure that revenues go to benefit 

15 the people of Chad and not to private bank ac16 counts.’’. 

17 SEC. 3. LIMITATION ON UNITED STATES ECONOMIC ASSIST18 ANCE FOR LOW INCOME OIL-PRODUCING 

19 COUNTRIES. 

20 Chapter 1 of part III of the Foreign Assistance Act 

21 of 1961 (22 U.S.C. 2351 et seq.) is amended— 

22 (1) by redesignating the second section 620G 

23 (as added by section 149 of Public Law 104–164 

24 (110 Stat. 1436)) as section 620J; and 
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1 (2) by adding at the end the following new sec2 tion: 

3 ‘‘SEC. 620K. LIMITATION ON UNITED STATES ECONOMIC AS4 SISTANCE FOR LOW INCOME OIL-PRODUCING 

5 COUNTRIES. 

6 ‘‘(a) DEFINITIONS.—In this section: 

7 ‘‘(1) LOW INCOME COUNTRY.—The term ‘low 

8 income country’ means a country that has a per cap9 ita income equal to or less than the historical ceiling 

10 of the International Development Association, as de11 fined by the International Bank for Reconstruction 

12 and Development. 

13 ‘‘(2) LOW INCOME OIL PRODUCING COUNTRY.— 

14 The term ‘low income oil-producing country’ means 

15 a low-income country that produces an average of 

16 not less than 100,000 barrels of oil or equivalent per 

17 day based on the most recent information available 

18 by the Energy Information Administration of the 

19 Department of Energy. 

20 ‘‘(3) OIL.—The term ‘oil’ includes crude oil, 

21 natural gas plant liquids, other petroleum-based liq22 uids, and petroleum-based refinery byproducts. 

23 ‘‘(4) UNITED STATES ECONOMIC ASSISTANCE.— 

24 The term ‘United States economic assistance’ means 

25 any of the following: 
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1 ‘‘(A) Bilateral economic, development, or 

2 technical assistance (other than military assist3 ance, humanitarian assistance, or assistance to 

4 prevent, treat, and monitor HIV/AIDS) pro5 vided by any department or agency of the 

6 United States Government to a foreign country 

7 under any program, project, or activity that is 

8 contained within the major budget functional 

9 category 150 (relating to International Affairs), 

10 including assistance under— 

11 ‘‘(i) chapter 1 of part I of the Foreign 

12 Assistance Act of 1961 (relating to devel13 opment assistance); 

14 ‘‘(ii) chapter 10 of part I of that Act 

15 (relating to the Development Fund for Af16 rica); 

17 ‘‘(iii) chapter 11 of part I of that Act 

18 (relating to assistance for the independent 

19 states of the former Soviet Union); 

20 ‘‘(iv) chapter 12 of part I of that Act 

21 (relating to assistance for the countries of 

22 the South Caucasus and Central Asia re23 gion); 
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1 ‘‘(v) chapter 4 of part II of that Act 

2 (relating to the Economic Support Fund); 

3 or 

4 ‘‘(vi) the Support for East European 

5 Democracy (SEED) Act of 1989. 

6 ‘‘(B) Bilateral economic, development, or 

7 technical assistance (other than military assist8 ance, humanitarian assistance, or assistance to 

9 prevent, treat, and monitor HIV/AIDS) pro10 vided by any department or agency of the 

11 United States Government to a foreign country 

12 under any program, project, or activity that is 

13 contained within any of the following major 

14 budget functional categories: 

15 ‘‘(i) 270 (relating to Energy). 

16 ‘‘(ii) 300 (relating to Natural Re17 sources and the Environment), including 

18 programs, projects, and activities of the 

19 Environmental Protection Agency, the De20 partment of the Interior, and the United 

21 States Army Corps of Engineers). 

22 ‘‘(iii) 350 (relating to Agriculture), in23 cluding assistance provided under title I of 

24 the Agricultural Trade Development and 

25 Assistance Act of 1954, the Food for 
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1 Progress program, and other programs ad2 ministered by the Department of Agri3 culture, such as programs administered by 

4 the Commodity Credit Corporation. 

5 ‘‘(iv) 370 (relating to Commerce and 

6 Housing Credit). 

7 ‘‘(v) 400 (relating to Transportation). 

8 ‘‘(vi) 500 (relating to Education, 

9 Training, Employment, and Social Serv10 ices). 

11 ‘‘(vii) 550 (relating to Health). 

12 ‘‘(viii) 750 (relating to the Adminis13 tration of Justice). 

14 ‘‘(ix) 800 (relating to the General 

15 Government). 

16 ‘‘(b) IDENTIFICATION; DETERMINATIONS.—Not later 

17 than October 1, 2005, and not later than each October 

18 1 thereafter, the President, acting through the Board of 

19 Directors of the Millennium Challenge Corporation— 

20 ‘‘(1) shall identify all countries in the world 

21 that are low income oil-producing countries (as de22 fined in subsection (a)(1)); and 

23 ‘‘(2) for each country identified under para24 graph (1)— 
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1 ‘‘(A) shall determine whether or not the 

2 country scores in the top quartile of all low in3 come countries in each of the three indicators 

4 described in subsection (d), as required under 

5 subsection (c)(1)(A); and 

6 ‘‘(B) shall determine whether or not the 

7 government of the country meets the require8 ments of subsection (e), as required under sub9 section (c)(1)(B). 

10 ‘‘(c) LIMITATION ON ECONOMIC ASSISTANCE.— 

11 ‘‘(1) LIMITATION.—Notwithstanding any other 

12 provision of law (other than a provision of this sec13 tion), United States economic assistance may be pro14 vided for fiscal year 2007 and each subsequent fiscal 

15 year for a low income oil-producing country only if 

16 the President, acting through the Board of Directors 

17 of the Millennium Challenge Corporation, determines 

18 that— 

19 ‘‘(A) the country scores in the top quartile 

20 of all low income countries in each of the three 

21 indicators described in subsection (d); and 

22 ‘‘(B) the government of the country meets 

23 the requirements of subsection (e). 

24 ‘‘(2) RULE OF CONSTRUCTION.—The limitation 

25 on assistance under paragraph (1) shall not apply to 
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1 a low income oil-producing country that is deter2 mined by the Board of Directors of the Millennium 

3 Challenge Corporation to be an eligible country 

4 under section 607 of the Millennium Challenge Act 

5 of 2003 (22 U.S.C. 7706) and is identified as such 

6 by the Chief Executive Officer of the Corporation 

7 under section 608(d) of such Act (22 U.S.C. 

8 7707(d)). 

9 ‘‘(d) INDICATORS.—The indicators referred to in sub10 section (c)(1)(A) are the following: 

11 ‘‘(1) TOTAL EXPENDITURES ON HEALTH.—The 

12 amount expended by the government of the country 

13 at all levels on health divided by the gross domestic 

14 product of the country. 

15 ‘‘(2) TOTAL EXPENDITURES ON PRIMARY EDU16 CATION.—The amount expended by the government 

17 of the country at all levels on primary education di18 vided by the gross domestic product of the country. 

19 ‘‘(3) PRIMARY EDUCATION COMPLETION

20 RATE.—The number of students who complete pri21 mary education divided by the total population of in22 dividuals of the same age in the country. 

23 ‘‘(e) REQUIREMENTS.—The requirements referred to 

24 in subsection (c)(1)(B) are the following: 
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1 ‘‘(1) TRANSPARENCY RELATING TO OIL REVE2 NUES.—The government of the country makes pub3 licly available information on— 

4 ‘‘(A) the amount of revenues received by 

5 the government through the production of oil in 

6 the country for the preceding calendar year, 

7 whether through royalties, rents, taxes, cus8 toms, duties, or otherwise; and 

9 ‘‘(B) the allocation of such revenues among 

10 the various departments and agencies of the 

11 government. 

12 ‘‘(2) ALLOCATION AND EXPENDITURE OF OIL

13 REVENUES.—The government of the country allo14 cates and expends an appropriate amount of the rev15 enues referred to in paragraph (1) on education, 

16 food and nutrition assistance, and public health pro17 grams for the people of the country. 

18 ‘‘(3) UN CONVENTION AGAINST CORRUPTION.— 

19 The country is a signatory to the United Nations 

20 Convention Against Corruption (Document A/58/ 

21 422), as adopted by the United Nations General As22 sembly on October 31, 2003. 

23 ‘‘(f) REPORT.— 

24 ‘‘(1) IN GENERAL.—Not later than October 1, 

25 2006, and not later than October 1 of each year 
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1 thereafter, the President, acting through the Board 

2 of Directors of the Millennium Challenge Corpora3 tion, shall prepare and transmit to Congress a re4 port that contains— 

5 ‘‘(A) for the fiscal year beginning on the 

6 applicable October 1— 

7 ‘‘(i) the identification each low income 

8 oil-producing country, as required under 

9 subsection (b)(1); and 

10 ‘‘(ii) the determinations with respect 

11 to each such low income oil-producing 

12 country, as required under subparagraphs 

13 (A) and (B) of subsection (b)(2); and 

14 ‘‘(B) for the prior fiscal year, an identifica15 tion of each low income oil-producing country 

16 that received United States economic assistance 

17 by reason of the application of subsection (c)(1) 

18 and the amounts and purposes of such assist19 ance. 

20 ‘‘(2) SPECIAL RULE FOR INITIAL REPORT.— 

21 The requirement to include information described in 

22 subparagraph (B) of paragraph (1) shall not apply 

23 to the initial report required to be submitted under 

24 such paragraph.’’. 
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1 SEC. 4. LIMITATION ON UNITED STATES SUPPORT FOR 

2 MULTILATERAL ASSISTANCE FOR CERTAIN 

3 COUNTRIES. 

4 The Bretton Woods Agreements Act (22 U.S.C. 286– 

5 286oo) is amended by adding at the end the following: 

6 ‘‘SEC. 64. LIMITATION ON UNITED STATES SUPPORT FOR 

7 MULTILATERAL ASSISTANCE FOR CERTAIN 

8 COUNTRIES. 

9 ‘‘The Secretary of the Treasury shall instruct the 

10 United States Executive Directors at the Fund and at the 

11 Bank to use the voice, vote, and influence of the United 

12 States to oppose the making of a loan by the Fund or 

13 the Bank, respectively, to the government of any country 

14 not eligible to receive United States economic assistance 

15 by reason of section 620K of the Foreign Assistance Act 

16 of 1961.’’. 

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