Taiwan Non-Discrimination Act of 2020

To require the Secretary of the Treasury to pursue more equitable treatment of Taiwan at the international financial institutions, and for other purposes. 1. Short title This Act may be cited as the Taiwan Non-Discrimination Act of 2020 2. Findings The Congress finds as follows: (1) As enshrined in its Articles of Agreement, the International Monetary Fund (IMF) is devoted to promoting international monetary cooperation, facilitating the expansion and balanced growth of international trade, encouraging exchange stability, and avoiding competitive exchange depreciation. (2) Taiwan is the 22nd largest economy in the world and the 10th largest goods trading partner of the United States. (3) Although Taiwan is not an IMF member, it is a member of the World Trade Organization, the Asian Development Bank, and the Asia-Pacific Economic Cooperation forum. (4) According to the January 2020 Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, published by the Department of the Treasury, Taiwan held $471,900,000,000 in foreign exchange reserves, more than major economies such as India, South Korea, and Brazil. (5) According to section 4(d) of the Taiwan Relations Act ( Public Law 96–8 Nothing in this Act may be construed as a basis for supporting the exclusion or expulsion of Taiwan from continued membership in any international financial institution or any other international organization. (6) Taiwan held membership in the IMF for 9 years following the recognition of the People’s Republic of China (PRC) by the United Nations, and 16 Taiwan staff members at the Fund were allowed to continue their employment after the PRC was seated at the IMF in 1980. As James M. Boughton has noted in his Silent Revolution: The International Monetary Fund 1979–1989, even as the PRC was seated, the United States Executive Director to the IMF, Sam Y. Cross, expressed support on behalf of the United States government for some kind of association between Taiwan and the Fund (7) On September 27, 1994, in testimony before the Senate Committee on Foreign Relations regarding the 1994 Taiwan Policy Review, then-Assistant Secretary of State for East Asian and Pacific Affairs Winston Lord stated: Recognizing Taiwan’s important role in transnational issues, we will support its membership in organizations where statehood is not a prerequisite, and we will support opportunities for Taiwan’s voice to be heard in organizations where its membership is not possible. (8) The Congress has repeatedly reaffirmed support for this policy, including in Public Laws 107–10, 107–158, 108–28, 108–235, 113–17, and 114–139, and the unanimous House and Senate passage of the Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act of 2019. (9) In its fact sheet, entitled U.S. Relations with Taiwan The United States supports Taiwan’s membership in international organizations that do not require statehood as a condition of membership and encourages Taiwan’s meaningful participation in international organizations where its membership is not possible. (10) According to the Articles of Agreement of the IMF, membership shall be open to other countries (11) In the IMF publication Membership and Nonmembership in the International Monetary Fund: A Study in International Law and Organization countries states the word country state countries the absence of any adjective in the Articles emphasizes the breadth of the discretion that the Fund may exercise in admitting countries to membership the desire to give the Fund flexibility in dealing with applications may explain not only the absence of any adjective that qualifies countries (12) In his IMF study, Mr. Gold further observes, in the practice of the Fund the concepts of independence and sovereignty have been avoided on the whole as a mode of expressing a criterion for membership in the Fund Although the Fund usually takes into account the recognition or nonrecognition of an entity as a state, there are no rules or even informal understandings on the extent to which an applicant must have been recognized by members or other international organizations before the Fund will regard it as eligible for membership. there have been occasions on which the Fund has made a finding before decisions had been taken by the United Nations or by most members or by members with a majority of the total voting power. the Fund makes its own findings on whether an applicant is a country (13) Although not a member state of the United Nations, the Republic of Kosovo is a member of both the IMF and the World Bank, having joined both organizations on June 29, 2009. 3. Sense of the Congress It is the sense of the Congress that— (1) the size, significance, and connectedness of the Taiwan economy highlight the importance of greater participation by Taiwan in the International Monetary Fund, given the purposes of the Fund articulated in its Articles of Agreement; and (2) the experience of Taiwan in developing a vibrant and advanced economy under democratic governance and the rule of law should inform the work of the international financial institutions, including through increased participation by Taiwan in the institutions. 4. Condition on IMF quota increase for the People’s Republic of China (a) In general The United States Governor of the International Monetary Fund (in this section referred to as the Fund (1) the Board of Governors of the Fund is considering admission of Taiwan as a member of the Fund, pursuant to the recommendation of the Board of Executive Directors of the Fund; or (2) Taiwan enjoys meaningful participation in the Fund, including through— (A) participation in regular surveillance activities of the Fund with respect to the economic and financial policies of Taiwan, consistent with Article IV consultation procedures of the Fund; (B) employment opportunities for Taiwan nationals, without regard to any consideration that, in the determination of the Secretary, does not generally restrict the employment of nationals of member countries of the Fund; and (C) the ability to receive appropriate technical assistance and training by the Fund. (b) Waiver The Secretary of the Treasury may waive subsection (a) of this section with respect to a proposal on reporting to the Congress that providing the waiver will substantially promote the objective of securing more equitable treatment of Taiwan at each international financial institution (as defined in section 1701(c)(2) of the International Financial Institutions Act). (c) Sunset This section shall have no force or effect beginning with the date that is 7 years after the date of the enactment of this Act. 5. Ensuring non-discrimination with respect to travel policies at the international financial institutions (a) In general The Secretary shall instruct the United States Executive Director at each international financial institution to use the voice and vote of the United States to ensure that the travel policies and procedures of the respective institution with respect to Taiwan as a destination or transit point do not impose any administrative conditions, including through restrictions on logistical arrangements or meeting participants, that do not generally apply to a member country of the institution as a destination or transit point, except as required temporarily for reasons of public safety or public health. (b) Definitions In this section: (1) International financial institution The term international financial institution (2) Secretary The term Secretary (c) Waiver The Secretary may waive subsection (a) with respect to an international financial institution for up to 1 year at a time on reporting to the Congress that providing the waiver— (1) will substantially promote the objective of securing more equitable treatment of Taiwan at the international financial institution; or (2) is in the national interest of the United States, with a detailed explanation of the reasons therefor. (d) Progress report The Chairman of the National Advisory Council on International Monetary and Financial Policies shall submit to the Congress an annual report that describes the progress made in advancing the travel policies and procedures described in subsection (a), and may consolidate that report with the annual report required by section 1701 of the International Financial Institutions Act or any other report required to be submitted to the Secretary. (e) Sunset This section shall have no force or effect beginning with the earlier of— (1) the date that is 7 years after the date of the enactment of this Act; or (2) the date on which the Secretary reports to the Congress that each international financial institution has adopted the travel policies and procedures described in subsection (a). 6. Testimony requirement In each of the next 7 years in which the Secretary of the Treasury is required by section 1705(b) of the International Financial Institutions Act to present testimony, the Secretary shall include in the testimony a description of the efforts of the United States to support the greatest participation practicable by Taiwan at each international financial institution (as defined in section 1701(c)(2) of such Act).

Summary: Taiwan Non-Discrimination Act of 2020 This bill requires actions to improve Taiwan's standing in international financial institutions such as the International Monetary Fund (IMF). The U.S. Governor of the IMF shall oppose any increase in China's IMF quota unless certain conditions are met. (A country's quota generally reflects its economic strength and affects factors such as that country's voting power within the IMF.) Specifically, the governor shall oppose such a quota increase unless the Department of the Treasury reports to Congress that (1) the IMF is considering admitting Taiwan as a member, (2) Taiwan enjoys meaningful participation in the IMF, or (3) not opposing a quota increase will substantially support the objective of securing Taiwan's more equitable treatment in international financial institutions. (Taiwan is not a member of the IMF due to China's opposition, based on its position that Taiwan is part of China and not a separate country.) Treasury shall instruct U.S. representatives at international financial institutions to oppose travel policies that impose conditions on Taiwan as a destination or transit point, if such conditions do not generally apply to a member of the institution as a destination or transit point. Treasury may waive this instruction if such a waiver (1) substantially supports the goal of improving Taiwan's position within that institution, or (2) is in U.S. national interest.