I 
111TH CONGRESS 
2D SESSION 
H. R. 5564 
To prevent wealthy and middle-income foreign states that do business, issue 
securities, or borrow money in the United States, and then fail to 
satisfy United States court judgments totaling $100,000,000 or more 
based on such activities, from inflicting further economic injuries in 
the United States, from undermining the integrity of United States 
courts, and from discouraging responsible lending to poor and developing 
nations by undermining the secondary and primary markets for sovereign 
debt. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 22, 2010 
Mr. MCMAHON (for himself, Mr. CARNAHAN, Mrs. MALONEY, Mr. TOWNS, 
Mr. HIGGINS, Ms. MARKEY of Colorado, Ms. KOSMAS, Mr. BURTON of 
Indiana, Mr. SHULER, Mr. GARRETT of New Jersey, Mr. WILSON of 
South Carolina, Mr. HALL of New York, Mr. OWENS, Ms. FALLIN, Mr. 
MAFFEI, Mr. MURPHY of New York, Ms. LORETTA SANCHEZ of Cali-
fornia, Mr. JOHNSON of Georgia, Mr. BACA, Mr. TONKO, and Mr. 
POSEY) introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on For-
eign Affairs, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To prevent wealthy and middle-income foreign states that 
do business, issue securities, or borrow money in the 
United States, and then fail to satisfy United States 
court judgments totaling $100,000,000 or more based 
on such activities, from inflicting further economic inju-
ries in the United States, from undermining the integrity 
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of United States courts, and from discouraging respon-
sible lending to poor and developing nations by under-
mining the secondary and primary markets for sovereign 
debt. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Judgment Evading 
Foreign States Accountability Act of 2010’’. 
SEC. 2. STATEMENT OF PURPOSE. 
The purpose of this Act is to prevent certain wealthy 
and middle-income foreign states that do business, issue 
securities, or borrow money in the United States, and then 
fail to satisfy United States court judgments totaling 
$100,000,000 or more based on such activities, from in-
flicting further economic injuries in the United States, 
from undermining the integrity of United States courts, 
and from discouraging responsible lending to poor and de-
veloping nations by undermining the secondary and pri-
mary markets for sovereign debt. 
SEC. 3. FINDINGS. 
Congress finds the following: 
(1) Foreign states that do business, issue secu-
rities, or borrow money in the United States, and 
then refuse to satisfy judgments of United States 
courts entered against them in connection with dis-
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putes resulting from these or other commercial ac-
tivities, directly or indirectly inflict billions of dollars 
of damage in United States, and undermine the 
credibility of the United States courts. 
(2) Foreign states that engage in such behavior 
can infect the management of corporations and 
other entities that they own or control with their 
profligate and irresponsible habits. When the lax 
ethical standards that permit government officials to 
flout lawful judgments corrupt the behavior of the 
management of their state-owned corporations, the 
injury to United States taxpayers is multiplied. 
(3) The Republic of Argentina is a primary ex-
ample of a foreign state that has incurred large 
debts in the United States, defaulted on those debts, 
and then refused to honor lawful judgments of 
United States and other courts ordering repayment. 
In 2001, Argentina defaulted on more than 
$81,000,000,000 in sovereign debt, the largest such 
default in history. In 2005, after refusing all efforts 
by creditors to negotiate the terms of an exchange 
offer, Argentina unilaterally offered lenders approxi-
mately 27 cents on the dollar in its restructuring 
deal, far below the international norm for sovereign 
debt restructurings. Argentina repudiated the debts 
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owed to the unprecedented proportion of bondholders 
who rejected that offer. 
(4) Argentina still owes United States bond-
holders more than $3,500,000,000. Overall, the de-
fault and restructuring by Argentina have cost 
United States bondholders, taxpayers, and share-
holders more than $10,000,000,000. 
(5) Argentina has the capacity to pay its exter-
nal creditors. The nation now holds more than 
$45,000,000,000 in reserves. Argentina chose to pay 
off its $9,800,000,000 debt to the International 
Monetary Fund in full in 2005, years before it was 
due, and has similarly announced an intention to 
pay sovereign creditors of the Paris Club of Official 
Creditors in full and partially in advance. 
(6) United States bondholders have won numer-
ous court rulings against Argentina relating to Ar-
gentina’s default on debt owed to such bondholders, 
and Argentina’s decision to repeatedly ignore these 
judgments undermines respect for the United States 
legal system. Despite having agreed to submit to the 
jurisdiction of the State of New York and to waive 
claims of sovereign immunity, Argentina is now con-
testing at least 163 lawsuits and refusing to honor 
88 judgments against it. 
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(7) Argentina has demonstrated a similar dis-
regard for claims brought by United States investors 
before the International Centre for Settlement of In-
vestment Disputes (ICSID). Argentina is the re-
spondent in more ICSID cases than any other na-
tion, now accounting for more than a quarter of the 
tribunal’s caseload. Argentina has behaved in a man-
ner that undermines the viability of the ICSID proc-
ess, thereby endangering the worldwide investments 
of United States businesses that rely upon this 
forum for adjudication of disputes. 
(8) Argentina’s debts are legitimate, though the 
country has attempted to argue that the borrowings 
it seeks to repudiate are somehow ‘‘odious’’. Any as-
sertion that the Argentine debt now outstanding was 
incurred by the repressive, nondemocratic regimes 
that ruled Argentina in the late 1970s and early 
1980s is inaccurate. The bonds currently held by 
United States creditors were not incurred by non-
democratic regimes; rather, they were issued by 
democratically elected Argentine governments. 
(9) While it is true that the Argentine military 
junta—which caused tremendous suffering during a 
tyrannical 7-year reign—borrowed from foreign 
banks, 96 percent of that debt was refinanced in 
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1993 when Argentina’s ‘‘Brady Plan’’ restructuring 
was completed. That restructuring was underwritten 
by the United States Government. Prior to the 
Brady Plan restructuring, Argentina had undergone 
two ‘‘major restructurings’’ of its foreign debt—the 
first in 1985, and the second in 1987. 
(10) None of the debt now held by United 
States creditors dates from the days of the Argen-
tine military junta. Further, even if it were fair to 
characterize the debt issued in the 1993 Brady Plan 
restructuring as somehow derivative of junta-era 
debt—a notion that maligns the United States pol-
icymakers who approved and underwrote the Brady 
Plan on behalf of the American people—only 5 per-
cent of the defaulted debt now held by United States 
creditors was issued during or before 1993. Fully 95 
percent of the defaulted debt held by United States 
creditors was incurred after 1993 by freely elected 
Argentine governmental officials and has no rela-
tionship to the military junta. 
(11) Argentina’s defaults have badly under-
mined its own economy. According to a team of Ar-
gentine economists led by Martin Krause, Argentina 
loses more than $6,000,000,000 in foreign direct in-
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vestment every year as a result of its default and 
debt repudiation and the resultant risk profile. 
(12) Argentina’s serial defaults have encour-
aged other nations to take the same course. On De-
cember 12, 2008, Ecuador selectively defaulted on 
$3,800,000,000 in obligations to investors—includ-
ing United States creditors—who had purchased its 
sovereign bonds, citing Argentina as its example. Ec-
uador earned record income from oil exports in 2008 
and has ample funds to honor its debts. Ecuadorian 
President Rafael Correa apparently plans to force its 
foreign bondholders (including United States bond-
holders) to accept restructuring terms that will re-
sult in substantial losses to foreign investors who 
lent Ecuador funds in good faith. 
(13) Unfortunately, many persons in the United 
States are unaware of this irresponsible behavior 
and disregard for the rule of law, and continue to 
invest in, lend to, and do business with Argentina 
and other foreign states and their state-owned cor-
porations, unaware of the associated risks. 
(14) Worse still, those who are injured as a re-
sult of this conduct often have little or no recourse. 
Judgment evading foreign states and their state- 
owned corporations enjoy a safe haven within their 
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national borders, and this fact often presents an in-
surmountable obstacle to recovery for those who are 
injured by the behavior of those states. 
(15) The absence of a remedy for defaults by 
such foreign states undermines nations that badly 
need to access capital from foreign lenders, with dis-
proportionate harm falling on responsible and demo-
cratic poor nations. By undermining confidence in 
the secondary market for sovereign debt, judgment 
evading foreign states significantly increase the risk 
that primary lending to less-advantaged nations will 
be curtailed, depriving deserving sovereign borrowers 
of access to the international capital markets. 
(16) Action by the United States Government 
to combat this growing problem must include meas-
ures that both protect against the irresponsible con-
duct of judgment evading foreign states and their 
state-owned corporations, and motivate such states 
and corporations to raise their standards of behav-
ior. 
(17) An effective means of achieving this impor-
tant objective is to deprive judgment evading foreign 
states and their state-owned corporations of the 
privilege of issuing securities or borrowing in the 
United States, and requiring that warnings of their 
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irresponsible behavior be given to persons in the 
United States who are contemplating investing in, 
lending to, or doing business with such states and 
businesses, until those states demonstrate that such 
measures are no longer necessary. 
SEC. 4. DEFINITIONS. 
For purposes of this Act: 
(1) AGENCY OR INSTRUMENTALITY OF A FOR-
EIGN STATE.—The term ‘‘agency or instrumentality 
of a foreign state’’ has the meaning given that term 
in section 1603(b) of title 28, United States Code. 
(2) FINAL JUDGMENT.—The term ‘‘final judg-
ment’’ means any judgment of a United States dis-
trict court, the Court of International Trade, or the 
court of any State, that is no longer eligible to be 
appealed to any court in the United States. 
(3) FOREIGN STATE.—The term ‘‘foreign state’’ 
has the meaning given that term in section 1603(a) 
of title 28, United States Code, except that it does 
not include an agency or instrumentality of a foreign 
state. 
(4) INTERNATIONAL ORGANIZATION.—The term 
‘‘international organization’’ means an entity des-
ignated by the President as being entitled to enjoy 
the privileges, exemptions, and immunities provided 
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by the International Organizations Immunities Act 
(22 U.S.C. 288 et seq.). 
(5) JUDGMENT
EVADING
FOREIGN
STATE.— 
The term ‘‘judgment evading foreign state’’ means 
any foreign state that— 
(A) has one or more judgments entered 
against it by any United States district court, 
the Court of International Trade, or the court 
of any State, the combined amount of which 
judgments exceeds $100,000,000; 
(B) fails to satisfy in full any such judg-
ment for a period of more than 2 years after 
the judgment becomes a final judgment, regard-
less of whether such judgment became a final 
judgment before the date of the enactment of 
this Act; 
(C) is not a foreign state eligible for— 
(i) 
financing 
through 
the 
Inter-
national Development Association but not 
from the International Bank for Recon-
struction and Development; and 
(ii) debt relief under the Enhanced 
HIPC Initiative (as defined in section 
1625(e)(3) of the International Financial 
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Institutions Act) or under the Multilateral 
Debt Relief Initiative. 
(6) STATE-OWNED CORPORATION OF A JUDG-
MENT EVADING FOREIGN STATE.—The term ‘‘state- 
owned corporation of a judgment evading foreign 
state’’ means any corporation or entity, other than 
a natural person— 
(A) that is an agency or instrumentality of 
a foreign state that is a judgment evading for-
eign state; or 
(B) a majority of the shares or other own-
ership interest of which is held, either directly 
or indirectly, by a judgment evading foreign 
state or by an agency or instrumentality of a 
foreign state that is a judgment evading foreign 
state. 
(7) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, and any 
commonwealth, territory, or possession of the United 
States. 
SEC. 5. STATEMENT OF POLICY. 
It shall be the policy of the United States— 
(1) to advocate within the governing bodies of 
international organizations and in other foreign pol-
icy settings for the full compensation and fair treat-
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ment of United States taxpayers and other persons 
in whose favor judgments have been awarded by the 
United States courts; 
(2) to seek to protect the economic interests of 
such taxpayers and other persons and of nations 
that benefit from a reliable flow of foreign capital 
by— 
(A) restricting the access to the United 
States capital markets of judgment evading for-
eign states and their state-owned corporations; 
(B) requiring that such persons be warned 
of the dangers of investing in, lending to, or 
doing business with such states and state-owned 
corporations; and 
(C) subjecting to congressional scrutiny re-
quests for aid made by judgment evading for-
eign states to the United States Government; 
and 
(3) to seek to protect the authority of the 
United States courts by preventing judgment evad-
ing foreign states from willfully flouting the judg-
ments of those courts. 
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SEC. 6. BAR ON ACCESS TO UNITED STATES LENDERS AND 
INVESTORS. 
(a) MEASURES WITH RESPECT TO JUDGMENT EVAD-
ING FOREIGN STATES.—The Securities and Exchange 
Commission shall— 
(1) take all necessary measures to deny every 
judgment evading foreign state access to United 
States capital markets, including the ability, directly 
or indirectly, to borrow money or sell securities in 
the United States, unless the proceeds of such bor-
rowing or securities issuance are to be used, in the 
first instance, to satisfy in full all final judgments 
entered against such judgment evading foreign state 
that form the basis of the state’s designation as a 
judgment evading foreign state; and 
(2) require that all periodic filings made by the 
judgment evading foreign state with the Securities 
and Exchange Commission under the securities laws 
bear the following legend prominently on the cover 
page: ‘‘WARNING: THIS REPORT IS SUB-
MITTED BY A FOREIGN STATE THAT HAS 
BEEN 
DETERMINED 
BY 
THE 
UNITED 
STATES DEPARTMENT OF THE TREASURY 
TO BE A JUDGMENT EVADING FOREIGN 
STATE BASED UPON ITS FAILURE TO SAT-
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ISFY 
OUTSTANDING 
UNITED 
STATES 
COURT JUDGMENTS.’’. 
(b) MEASURES WITH RESPECT TO STATE-OWNED 
CORPORATIONS
OF
JUDGMENT
EVADING
FOREIGN 
STATES.—If any judgment evading foreign state remains 
in default on any final judgment for more than 3 years, 
irrespective of whether such judgment became final before 
the date of the enactment of this Act, the Securities and 
Exchange Commission shall— 
(1) take all necessary measures to deny any 
state-owned corporation of a judgment evading for-
eign state access to the United States capital mar-
kets, including the ability to issue debt, equity or 
other securities, or borrow money, unless the pro-
ceeds of such borrowing of securities issuance are to 
be used, in the first instance, to satisfy in full all 
final judgment against its parent judgment evading 
foreign state; and 
(2) require that all periodic filings made by 
each state-owned corporation of a judgment evading 
foreign state with the Securities and Exchange Com-
mission under the securities laws bear the following 
legend prominently on the cover page: ‘‘WARNING: 
THIS REPORT IS SUBMITTED BY A STATE– 
OWNED 
CORPORATION 
OF 
A 
FOREIGN 
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STATE THAT HAS BEEN DETERMINED BY 
THE DEPARTMENT OF THE TREASURY TO 
BE A JUDGMENT EVADING FOREIGN STATE 
BASED UPON ITS FAILURE TO SATISFY 
OUTSTANDING 
UNITED 
STATES 
COURT 
JUDGMENTS.’’. 
SEC. 7. REQUESTS FOR AID OR ASSISTANCE FROM JUDG-
MENT EVADING FOREIGN STATES. 
(a) BILATERAL ASSISTANCE.—Whenever any pro-
posal is made to a department, agency, or other instru-
mentality of the United States Government to extend aid, 
a loan, or any other form of assistance to a judgment 
evading foreign state, the head of the department, agency, 
or other instrumentality may consider the proposal only 
if it bears prominently the legend described in subsection 
(c). 
(b) MULTILATERAL
ASSISTANCE.—Whenever any 
proposal is made to an international organization to ex-
tend aid, a loan, or any other form of assistance to a judg-
ment evading foreign state, the Secretary of State shall 
provide prompt notice of such proposal to the Congress. 
Such notice shall bear prominently the legend described 
in subsection (c). 
(c) LEGEND DESCRIBED.—The legend of a proposal 
referred to in subsection (a) and the legend of a notice 
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referred to in subsection (b) is the following: ‘‘REQUEST 
FOR GRANT–IN–AID OR LOAN BY A JUDGMENT 
EVADING FOREIGN STATE.’’. 
SEC. 8. REPORTS; RECOMMENDATIONS OF ADDITIONAL 
MEASURES. 
(a) ANNUAL REPORTS
TO CONGRESS.—Not later 
than January 31 of each year, the Secretary of the Treas-
ury shall provide a report, in writing, to the Congress 
identifying each judgment evading foreign state, and, for 
each such judgment evading foreign state— 
(1) quantifying the impact on the United States 
economy, and cost to United States taxpayers, of the 
unsatisfied final judgments outstanding against the 
judgment evading foreign state; and 
(2) describing all measures that the Secretary 
of the Treasury and the Securities and Exchange 
Commission have taken in the preceding year to 
carry out this Act. 
(b) CONSIDERATION OF DOCUMENTS AND OTHER IN-
FORMATION.—The Secretary of the Treasury may con-
sider documents and other information received from third 
parties and from judgment evading foreign states in pre-
paring each report under subsection (a). 
(c) TERMINATION OF DESIGNATION.—At such time 
as the Secretary of the Treasury determines that any 
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judgment evading foreign state no longer qualifies as a 
judgment evading foreign state, the Secretary shall so cer-
tify to the Congress no later than in the next annual re-
port to Congress under subsection (a), at which time the 
requirements and prohibitions under this Act shall no 
longer apply to such former judgment evading foreign 
state, or to any state-owned corporation of such judgment 
avoiding foreign state. The Secretary may consider docu-
ments and other information received from third parties 
and from the judgment evading foreign state in making 
this determination. 
(d) OTHER PUBLIC REPORTS TO INCLUDE INFORMA-
TION ABOUT JUDGMENT EVADING FOREIGN STATES.— 
The Secretary of State, the Secretary of the Treasury, and 
the Secretary of Commerce shall each reference the find-
ings of the Secretary of the Treasury from the Secretary’s 
most recent annual report to Congress under subsection 
(a) relating to the unsatisfied final judgments outstanding 
against the judgment evading foreign state in every report 
prepared for the public relating to the country risk or in-
vestment climate of such judgment evading foreign state. 
(e) ADDITIONAL MEASURES.—The Secretary of the 
Treasury shall recommend to the Congress in writing ad-
ditional measures to carry out the purposes of this Act. 
Æ 
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