[Federal Register Volume 82, Number 169 (Friday, September 1, 2017)]
[Notices]
[Pages 41664-41666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18657]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 17-04]


Report on Countries That Are Candidates for Millennium Challenge 
Account Eligibility in Fiscal Year 2018 and Countries That Would Be 
Candidates but for Legal Prohibitions

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: Section 608(a) of the Millennium Challenge Act of 2003 
requires the Millennium Challenge Corporation to publish a report that 
identifies countries that are ``candidate countries'' for Millennium 
Challenge Account assistance during FY 2018. The report is set forth in 
full below.

    Dated: August 28, 2017.
Jeanne M. Hauch,
VP/General Counsel and Corporate Secretary, Millennium Challenge 
Corporation.

Report on Countries That Are Candidates for Millennium Challenge 
Compact Eligibility for Fiscal Year 2018 and Countries That Would Be 
Candidates but for Legal Prohibitions

Summary

    This report to Congress is provided in accordance with section 
608(a) of the Millennium Challenge Act of 2003, as amended, 22 U.S.C. 
7701, 7707(a) (the Act).
    The Act authorizes the provision of assistance for global 
development through the Millennium Challenge Corporation (MCC) for 
countries that enter into a Millennium Challenge Compact with the 
United States to support policies and programs that advance the 
progress of such countries to achieve lasting economic growth and 
poverty reduction. The Act requires MCC to take a number of steps in 
selecting countries with which MCC will seek to enter into a compact, 
including determining the countries that will be eligible countries for 
fiscal year (FY) 2018 based on (a) a country's demonstrated commitment 
to (i) just and democratic governance, (ii) economic freedom, and (iii) 
investments in its people; and (b) the opportunity to reduce poverty 
and generate economic growth in the country, and (c) the availability 
of funds to MCC. These steps include the submission of reports to the 
congressional committees specified in the Act and the publication of 
notices in the Federal Register that identify:
    The countries that are ``candidate countries'' for FY 2018 based on 
their per capita income levels and their eligibility to receive 
assistance under U.S. law and countries that would be candidate 
countries but for specified legal prohibitions on assistance (section 
608(a) of the Act);
    The criteria and methodology that the MCC Board of Directors 
(Board) will use to measure and evaluate the relative policy 
performance of the ``candidate countries'' consistent with the 
requirements of subsections (a) and (b) of section 607 of the Act in 
order to determine ``eligible countries'' from among the ``candidate 
countries'' (section 608(b) of the Act); and
    The list of countries determined by the Board to be ``eligible 
countries'' for FY 2018, identification of such countries with which 
the Board will seek to enter into compacts, and a justification for 
such eligibility

[[Page 41665]]

determination and selection for compact negotiation (section 608(d) of 
the Act).
    This report is the first of three required reports listed above.

Candidate Countries for FY 2018

    The Act requires the identification of all countries that are 
candidate countries for FY 2018 and the identification of all countries 
that would be candidate countries but for specified legal prohibitions 
on assistance. Under the terms of the Act, sections 606(a) and (b) set 
forth the two income tests countries must satisfy to be candidate 
countries.\1\ However for FY 2017, those categories are defined by 
MCC's FY 2017 appropriations act, the Department of State, Foreign 
Operations, and Related Programs Appropriations Act, 2017 (the FY 2017 
SFOAA). Specifically, the FY 2017 SFOAA used the same definitions that 
have been used since the FY 2012 appropriations act and defines low 
income candidate countries as the 75 poorest countries as identified by 
the World Bank and provided that a country that changes during the 
fiscal year from low income to lower middle income (or vice versa) will 
retain its candidacy status in its former income category for the 
fiscal year and two subsequent fiscal years. Assuming these definitions 
will be used again in FY 2018, MCC is using them for purposes of this 
report.\2\
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    \1\ Sections 606(a) and (b) of the Act provide that a country 
will be a candidate country for purposes of eligibility if it (1) 
has a per capita income equal to or less than the historical ceiling 
of the International Development Association eligibility for the 
fiscal year involved (the ``low income category'') or (2) is 
classified as a lower middle income country in the then most recent 
edition of the World Development Report for Reconstruction and 
Development published by the International Bank for Reconstruction 
and Development and has an income greater than the historical 
ceiling for International Development Association eligibility for 
the fiscal year involved (the ``lower middle income category''); and 
is not ineligible to receive U.S. economic assistance under part I 
of the Foreign Assistance Act of 1961, as amended (the Foreign 
Assistance Act), by reason of the application of the Foreign 
Assistance Act or any other provision of law.
    \2\ If the language relating to the definition of low income 
candidate countries is not enacted or is changed for MCC's FY 2018 
appropriations act, MCC will revisit the selection process once the 
FY 2018 appropriations act is enacted and will conduct the selection 
process in accordance with the Act and applicable provisions for FY 
2018.
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    Under the redefined categories, a country will be a candidate 
country for FY 2018 if it:
    Meets one of the following tests:
    Has a per capita income that is not greater than the World Bank's 
lower middle income country threshold for such fiscal year ($3,955 
gross national income per capita for FY 2018); and is among the 75 
lowest per capita income countries, as identified by the World Bank; or
    Has a per capita income that is not greater than the World Bank's 
lower middle income country threshold for such fiscal year ($3,955 
gross national income per capita for FY 2018); but is not among the 75 
lowest per capita income countries as identified by the World Bank; and
    Is not ineligible to receive U.S. economic assistance under part I 
of the Foreign Assistance Act of 1961, as amended (the Foreign 
Assistance Act), by reason of the application of the Foreign Assistance 
Act or any other provision of law.
    Due to the provisions requiring countries to retain their former 
income classification for three fiscal years, changes from the low 
income to lower middle income categories or vice versa for FY 2018 will 
go into effect for FY 2021. Countries transitioning to the upper middle 
income category do not remain in the candidate pool.\3\
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    \3\ In FY 2018, the World Bank updated its estimates of gross 
national incomes per capita resulting in Georgia re-entering the 
candidate pool. However, Georgia was classified as a low income 
country as recently as FY 2015. Due to Georgia's transition to upper 
middle income status in FY 2017, the provision for gradual 
reclassification between LIC the LMIC pools does not apply to it. 
Although Georgia has re-entered the candidate pool in FY 2018, it 
does so as a lower middle income country and does not retain the 
gradual reclassification treatment it would have received this 
fiscal year if it had not exited the candidate pool in FY 2017. As a 
result, the removal of Georgia from the low income category due to 
its exiting of the candidate pool in FY 2017 means that there are 
only 74 low income countries for FY 2018 (8 of which are legally 
prohibited).
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    Pursuant to section 606(c) of the Act, the Board identified the 
following countries as candidate countries under the Act for FY 2018. 
In so doing, the Board referred to the prohibitions on assistance to 
countries for FY 2017 under the FY 2017 SFOAA.
Candidate Countries: Low Income Category
1. Afghanistan
2. Angola
3. Bangladesh
4. Benin
5. Bhutan
6. Burkina Faso
7. Burundi
8. Cambodia
9. Cameroon
10. Central African Republic
11. Chad
12. Comoros
13. Congo, Dem. Rep.
14. Congo, Rep.
15. C[ocirc]te d'Ivoire
16. Djibouti
17. Egypt, Arab Rep.
18. Ethiopia
19. Gambia, The
20. Ghana
21. Guatemala
22. Guinea
23. Guinea-Bissau
24. Haiti
25. Honduras
26. India
27. Indonesia
28. Kenya
29. Kiribati
30. Kyrgyz Republic
31. Lao PDR
32. Lesotho
33. Liberia
34. Madagascar
35. Malawi
36. Mali
37. Mauritania
38. Micronesia, Fed. Sts.
39. Moldova
40. Morocco
41. Mozambique
42. Nepal
43. Nicaragua
44. Niger
45. Nigeria
46. Pakistan
47. Papua New Guinea
48. Philippines
49. Rwanda
50. S[atilde]o Tom[eacute] and Principe
51. Senegal
52. Sierra Leone
53. Solomon Islands
54. Somalia
55. Sri Lanka
56. Swaziland
57. Tajikistan
58. Tanzania
59. Timor-Leste
60. Togo
61. Uganda
62. Uzbekistan
63. Vanuatu
64. Vietnam
65. Yemen, Rep.
66. Zambia
Candidate Countries: Lower Middle Income Category
1. Armenia
2. Cabo Verde
3. El Salvador
4. Georgia
5. Jordan
6. Kosovo
7. Mongolia
8. Tunisia
9. Ukraine

Countries That Would Be Candidate Countries but for Legal Provisions 
That Prohibit Assistance

    Countries that would be considered candidate countries for FY 2018, 
but are ineligible to receive United States economic assistance under 
part I of the

[[Page 41666]]

Foreign Assistance Act by reason of the application of any provision of 
the Foreign Assistance Act or any other provision of law are listed 
below. This list is based on legal prohibitions against economic 
assistance that apply as of July 21, 2017.
Prohibited Countries: Low Income Category
    Bolivia is ineligible to receive U.S. economic assistance pursuant 
to section 706(3) of the Foreign Relations Authorization Act, Fiscal 
Year 2003 (Pub. L. 107-228), regarding adherence to obligations under 
international counternarcotics agreements and other counternarcotics 
measures.
    Burma is ineligible to receive U.S. economic assistance, absent 
special authority, because of concerns relative to its record on human 
rights.
    Eritrea is ineligible to receive U.S. economic assistance, 
including due to its status as a Tier 3 country under the Victims of 
Trafficking and Violence Protection Act of 2000 (22 U.S.C. 7101 et 
seq.).
    North Korea is ineligible to receive U.S. economic assistance, 
including pursuant to section 7007 of the FY 2017 SFOAA, which 
prohibits direct assistance to the government of North Korea.
    South Sudan is ineligible to receive U.S. economic assistance 
pursuant to section 7042(i)(2) of the FY 2017 SFOAA, which prohibits, 
with limited exceptions, assistance to the central government of South 
Sudan until the Secretary of State certifies and reports to Congress 
that such government is taking effective steps to end hostilities and 
pursue good faith negotiations for a political settlement of the 
internal conflict; provide access for humanitarian organizations; end 
the recruitment and use of child soldiers; protect freedoms of 
expression, association, and assembly; reduce corruption related to the 
extraction and sale of oil and gas; establish democratic institutions; 
establish accountable military and police forces under civilian 
authority; and investigate and prosecute individuals credibly alleged 
to have committed gross violations of human rights, including at the 
Terrain compound in Juba, South Sudan on July 11, 2016.
    Sudan is ineligible to receive U.S. economic assistance, including 
pursuant to section 7042(j) of the FY 2017 SFOAA, which prohibits (with 
limited exceptions) assistance to the government of Sudan.
    Syria is ineligible to receive U.S. economic assistance, including 
pursuant to section 7007 of the FY 2017 SFOAA, which prohibits direct 
assistance to the government of Syria.
    Zimbabwe is ineligible to receive U.S. economic assistance, 
including pursuant to section 7042(k)(2) of the FY 2017 SFOAA, which 
prohibits (with limited exceptions) assistance for the central 
government of Zimbabwe unless the Secretary of State certifies and 
reports to Congress that the rule of law has been restored, including 
respect for ownership and title to property, and freedoms of 
expression, association, and assembly.
    Countries identified above as candidate countries, as well as 
countries that would be considered candidate countries but for the 
applicability of legal provisions that prohibit U.S. economic 
assistance, may be the subject of future statutory restrictions or 
determinations, or changed country circumstances, that affect their 
legal eligibility for assistance under part I of the Foreign Assistance 
Act by reason of application of the Foreign Assistance Act or any other 
provision of law for FY 2018.

[FR Doc. 2017-18657 Filed 8-31-17; 8:45 am]
 BILLING CODE 9211-03-P