I 
111TH CONGRESS 
1ST SESSION H. R. 4405 
To provide for greater responsibility in lending and expanded cancellation 
of debts owed to the United States and the international financial institu-
tions by low-income countries, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 16, 2009 
Ms. WATERS (for herself, Mr. FRANK of Massachusetts, Mr. BACHUS, Mrs. 
MALONEY, Mrs. BIGGERT, Mr. GUTIERREZ, Mr. PAYNE, Ms. LEE of Cali-
fornia, Mr. CLEAVER, and Mr. WALDEN) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To provide for greater responsibility in lending and expanded 
cancellation of debts owed to the United States and 
the international financial institutions by low-income 
countries, and for other purposes. 
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 ‘‘Jubilee Act for Re-
sponsible Lending and Expanded Debt Cancellation of 
2009’’. 
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SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) Many low-income countries have been strug-
gling under the burden of international debts for 
many years. 
(2) Since 1996, when the Heavily Indebted 
Poor Countries Initiative (HIPC) was created, more 
than 30 nations have seen some form of debt relief 
totaling more than $100,000,000,000. 
(3) Congress has demonstrated its support for 
bilateral and multilateral debt relief through the en-
actment of comprehensive debt relief initiatives for 
heavily indebted low-income countries in— 
(A) title V of H.R. 3425 of the 106th Con-
gress, as enacted into law by section 1000(a)(5) 
of the Act entitled ‘‘An Act making consoli-
dated appropriations for the fiscal year ending 
September 30, 2000, and for other purposes’’, 
approved November 29, 1999 (Public Law 106– 
113; 113 Stat. 1501–311) and the amendments 
made by such title; 
(B) title II of H.R. 5526 of the 106th 
Congress, as enacted into law by section 101(a) 
of the Act entitled ‘‘An Act making appropria-
tions for foreign operations, export financing, 
and related programs for the fiscal year ending 
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September 30, 2001, and for other purposes’’, 
approved November 6, 2000 (Public Law 106– 
429; 114 Stat. 1900A–5); and 
(C) title V of the United States Leadership 
Against HIV/AIDS, Tuberculosis, and Malaria 
Act of 2003 (Public Law 108–25; 117 Stat. 
747) and the amendment made by such title. 
(4) In 2005, the United States and other G–8 
nations reached an agreement to provide cancellation 
of 100 percent of the debts owed by eligible poor na-
tions to Paris Club members, the IMF, the World 
Bank, and the African Development Bank. The 
Inter-American Development Bank reached an 
agreement in early 2007 to provide similar treat-
ment. 
(5) The 2005 agreement led to the creation of 
the Multilateral Debt Relief Initiative (MDRI). As of 
August 2009, 26 nations have seen the majority of 
their debts to the IMF, World Bank, and African 
Development Bank cancelled under the terms of the 
MDRI. In March 2007, the Inter-American Develop-
ment Bank announced it would provide full debt 
cancellation to 5 Latin American countries on MDRI 
terms. 
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(6) Resources released by debt relief efforts to 
date are reaching the poor. Cameroon used the 
$29,800,000 of savings it gained from the MDRI in 
2006 for national poverty reduction priorities, in-
cluding infrastructure, social sector and governance 
reforms. Uganda used its $57,900,000 savings in 
2006 on improving energy infrastructure to try to 
ease acute electricity shortages, as well as primary 
education, malaria control, healthcare and water in-
frastructure (specifically targeting the poor and 
under-served villages). Zambia used its savings of 
$23,800,000 under the MDRI in 2006 to increase 
spending 
on 
agricultural 
projects, 
such 
as 
smallholder irrigation and livestock disease control, 
as well as to eliminate fees for healthcare in rural 
areas. 
(7) While debt cancellation has a record of suc-
cess, there remains an unfinished agenda on inter-
national debt. There are a number of challenges to 
both the effective reduction of poverty and inequality 
and the achievement of broader debt cancellation. 
(8) A critical issue which needs to be addressed 
on debt is the way that non-concessional lenders 
stand to gain financially from lending to poor coun-
tries that have benefited from debt relief without 
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having paid for past debt relief or facing the pros-
pect of paying for the future relief of unsustainable 
and irresponsible new lending. In these cases, the 
gains of debt relief for poor debtor countries are at 
risk of being eroded. This takes the form of new 
lending to countries that have received debt cancella-
tion from countries including China. 
(9) It is also essential that all lenders and bor-
rowers accept co-responsibility and learn from past 
mistakes—as evidenced by the debt crisis itself—by 
making more productive investment choices and en-
gaging in more responsible lending and borrowing in 
the future. In October 2006, Norway became the 
first creditor to accept co-responsibility for past 
lending mistakes and cancelled the debt of 5 nations 
on the grounds that the loans reflected poor develop-
ment policy. 
(10) A growing number of governments and 
intergovernmental bodies, including the United 
Kingdom, the European Commission, and Norway, 
are raising concerns about the harmful impacts of 
certain economic policy conditionalities. Many impov-
erished countries that have received debt cancella-
tion under the HIPC and MDRI initiatives have 
done so at a high social cost, because they have had 
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to implement certain economic policy conditions, in-
cluding the privatization of essential basic services 
such as water, and comply with other harmful re-
quirements. Some of these policies have had the ef-
fect of limiting fiscal space for productive investment 
and threatening growth and human development. 
Several countries currently eligible for debt cancella-
tion under the HIPC or MDRI programs are facing 
extended delays in receiving cancellation because 
they are struggling to comply with such require-
ments from the IMF and World Bank. 
(11) There is also an urgent need to look be-
yond the constraints of current debt relief initiatives 
to address the need for expanded debt cancellation. 
The current initiatives allow countries to qualify for 
relief based on economic criteria rather than human 
needs. A January 2007 report by the United Na-
tions Human Rights Council found that eligibility 
for debt cancellation should be expanded to cover all 
low-income countries. 
(12) The Government of the United Kingdom 
has proposed that qualification for the MDRI be ex-
tended to the 67 nations which qualify for assistance 
exclusively from the International Development As-
sociation. To be eligible for cancellation, countries 
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must meet economic criteria pertaining to public fi-
nancial management, anti-corruption measures, and 
budget transparency. 
(13) Since debt cancellation is an essential com-
ponent of the United States development assistance 
strategy and the United States has been able to lead 
the debt cancellation efforts of the international 
community by example, the United States should 
continue to work to improve and expand initiatives 
in this area. 
(14) The United States has been a leader in 
supporting debt relief efforts to date and should con-
tinue to work to improve and expand initiatives in 
this area. 
SEC. 3. CANCELLATION OF DEBT OWED BY ELIGIBLE LOW- 
INCOME COUNTRIES. 
Title XVI of the International Financial Institutions 
Act (22 U.S.C. 262p—262p–8) is amended by adding at 
the end the following: 
‘‘SEC. 1626. CANCELLATION OF DEBT OWED BY ELIGIBLE 
LOW-INCOME COUNTRIES. 
‘‘(a) IN GENERAL.—The Secretary of the Treasury 
shall commence immediate efforts, within the Paris Club 
of Official Creditors, the International Monetary Fund 
(IMF), the International Bank for Reconstruction and De-
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velopment (World Bank), and the other international fi-
nancial institutions (as defined in section 1701(c)(2)), to 
negotiate an agreement to accomplish the following: 
‘‘(1) Cancellation by each international finan-
cial institution of all debts owed to the institution by 
eligible low-income countries, and, to the extent pos-
sible, financing the debt cancellation from the ongo-
ing operations, procedures, and accounts of the insti-
tution, without undermining the financial integrity 
of the institution. 
‘‘(2) Cancellation by the United States of all 
debts owed to it by eligible low-income countries. 
‘‘(3) Ensuring that any waiting period for the 
enhanced debt cancellation is not excessive. 
‘‘(4) Ensuring that the provision of debt can-
cellation to eligible low-income countries is not fol-
lowed by a reduction in the provision of any other 
development assistance to the countries by inter-
national financial institutions and bilateral creditors, 
or to other countries eligible for assistance from the 
International Development Association. 
‘‘(5) Encouraging the government of each eligi-
ble low-income country to allocate at least 20 per-
cent of its national budget towards poverty-allevi-
ation programs such as the provision of basic health 
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care services, education services, and clean water 
services to all individuals in the country. 
This subsection shall not be interpreted to authorize the 
Secretary of the Treasury to enter into an agreement to 
accomplish any of the foregoing without express congres-
sional authorization to do so. 
‘‘(b) ESTABLISHMENT OF FRAMEWORK FOR CRED-
ITOR TRANSPARENCY.—The Secretary of the Treasury 
shall commence immediate efforts, within the Paris Club 
of Official Creditors, the International Monetary Fund, 
the World Bank, and the other international financial in-
stitutions (as so defined), to ensure that each of the insti-
tutions— 
‘‘(1) continues to make efforts to promote 
greater transparency regarding the activities of the 
institution, including credit, grant, guarantee, and 
technical assistance operations, following a policy of 
maximum disclosure; and 
‘‘(2) supports continued efforts to allow in-
formed participation and input by affected commu-
nities, including translation of information on pro-
posed projects, provision of information (including 
draft documents) through information technology 
application, oral briefings, and outreach to and dia-
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logue with community organizations and institutions 
in affected areas. 
‘‘(c) ESTABLISHMENT OF A FRAMEWORK FOR RE-
SPONSIBLE LENDING.—The Secretary of the Treasury 
shall commence immediate efforts to— 
‘‘(1) Support international efforts to address 
the continued challenges associated with lending and 
borrowing, and work to ensure debt sustainability in 
the future, including constructively engaging in on-
going initiatives such as efforts by the United Na-
tions Conference on Trade and Development 
(UNCTAD) to develop a code of conduct for respon-
sible lending and borrowing. 
‘‘(2) Work to ensure that the external financing 
needs of low-income countries are met primarily 
through grant financing rather than new lending. 
‘‘(3) Work within the IMF and World Bank to 
reform the Low Income Country Debt Sustainability 
Framework, including the establishment of inde-
pendent entities, which should be comprised of rep-
resentatives from individual countries, creditors, aca-
demic experts, civil society, and other experts, to 
provide oversight and input into country debt sus-
tainability assessments. 
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‘‘(d) GAO AUDIT OF DEBT PORTFOLIOS OF COUN-
TRIES WITH QUESTIONABLE LOANS.— 
‘‘(1) IN GENERAL.—The Comptroller General of 
the United States shall undertake an audit of the 
debt portfolios of previous governments in countries 
such as the Democratic Republic of Congo and 
South Africa, where there is significant evidence 
that odious, onerous, or illegal loans were made to 
the government. Each such audit shall— 
‘‘(A) consider debt owed to the World 
Bank, the IMF, and the other international fi-
nancial institutions (as so defined), export cred-
it debts owed to governments, and debts owed 
to commercial creditors, and assess whether or 
not past investments produced the intended re-
sults; 
‘‘(B) investigate the process by which the 
loans were contracted, how the funds were used, 
and determine whether United States or inter-
national laws were violated in the contraction of 
these loans, and whether any of the loans were 
odious or onerous; and 
‘‘(C) be planned and executed in a trans-
parent and consultative manner, engaging con-
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gressional bodies and civil society groups in the 
countries. 
‘‘(2) REPORT.—Within 2 years after the date of 
the enactment of this section, the Comptroller Gen-
eral of the United States shall prepare and submit 
to the Committee on Financial Services of the House 
of Representatives and the Committee on Foreign 
Relations of the Senate a report that contains the 
results of the audits undertaken under paragraph 
(1). 
‘‘(e) REPORT
FROM
THE
COMPTROLLER
GEN-
ERAL.—Within 1 year after the date of the enactment of 
this section, the Comptroller General of the United States 
shall prepare and submit to the Committee on Financial 
Services of the House of Representatives and the Com-
mittee on Foreign Relations of the Senate a report on the 
availability of the ongoing operations, procedures, and ac-
counts of the IMF, the World Bank, and the other inter-
national financial institutions (as so defined) for canceling 
the debt of eligible low-income countries. 
‘‘(f) ANNUAL REPORTS FROM THE PRESIDENT.— 
Not later than December 31 of each year, the President 
shall submit to the Committee on Financial Services of 
the House of Representatives and the Committee on For-
eign Relations of the Senate a report, which shall be made 
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available to the public, on the activities undertaken under 
this section, and other progress made in accomplishing the 
purposes of this section, for the prior fiscal year. The re-
port shall include a list of the countries that have received 
debt cancellation, a list of the countries whose request for 
debt cancellation has been denied and the reasons there-
for, and a list of the countries whose requests for debt 
cancellation are under consideration. 
‘‘(g) ELIGIBLE LOW-INCOME COUNTRY DEFINED.— 
In this section, the term ‘eligible low-income country’ 
means a country— 
‘‘(1) that is eligible for financing from the 
International Development Association but not from 
the World Bank, and does not qualify for debt relief 
under the Enhanced HIPC Initiative (as defined in 
section 1625(e)(3)) and under the Multilateral Debt 
Relief Initiative; 
‘‘(2) that has transparent and effective budget 
execution and public financial management systems 
which ensure that the savings from debt relief are 
spent on reducing poverty; 
‘‘(3) the government of which does not have an 
excessive level of military expenditures; 
‘‘(4) the government of which has not provided 
support for acts of international terrorism, as deter-
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mined by the Secretary of State under section 
6(j)(1) of the Export Administration Act of 1979 
(50 U.S.C. App. 2405(j)(1)), or section 620A(a) of 
the Foreign Assistance Act of 1961 (22 U.S.C. 
2371(a)); 
‘‘(5) the government of which is cooperating 
with the United States on international narcotics 
control matters; 
‘‘(6) the government of which (including its 
military or other security forces) does not engage in 
a pattern of gross violations of internationally recog-
nized human rights (as defined in section 116 of the 
Foreign Assistance Act of 1961 (Public Law 87– 
195)); 
‘‘(7) the government of which has not been 
identified in the most recent Trafficking in Persons 
Report issued by the Department of State as not 
fully complying with minimum standards for elimi-
nating human trafficking and not making significant 
efforts to do so; 
‘‘(8) the government of which has been deter-
mined by the President to be cooperating with 
United States efforts to stop illegal immigration to 
the United States; 
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‘‘(9) the government of which has been deter-
mined by the President to be committed to free and 
fair elections; and 
‘‘(10) the government of which was chosen by 
and permits free and fair elections.’’. 
SEC. 4. LIMITATION ON CONDITIONALITY OF DEBT RELIEF 
FOR ELIGIBLE LOW-INCOME COUNTRIES. 
Title XVI of the International Financial Institutions 
Act (22 U.S.C. 262p—262p–8) is further amended by 
adding at the end the following: 
‘‘SEC. 1627. LIMITATION ON CONDITIONALITY OF DEBT RE-
LIEF 
FOR 
ELIGIBLE 
LOW-INCOME 
COUN-
TRIES. 
‘‘(a) IN GENERAL.—The Secretary of the Treasury 
shall commence immediate efforts within the Paris Club 
of Official Creditors, the International Monetary Fund 
(IMF), the International Bank for Reconstruction and De-
velopment (World Bank), and the other international fi-
nancial institutions (as defined in section 1701(c)(2)), to 
ensure that debt cancellation is provided to eligible low- 
income countries (as defined in section 1626(g)) subject 
to all and only the following conditions: That the govern-
ment of such a country— 
‘‘(1) take steps so that the financial benefits of 
debt relief are applied to programs to combat pov-
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erty (in particular through concrete measures to im-
prove economic infrastructure, basic services in edu-
cation, nutrition, and health, particularly treatment 
and prevention of the leading causes of mortality) 
and to redress environmental degradation; 
‘‘(2) make policy decisions through transparent 
and participatory processes; 
‘‘(3) adopt an integrated development strategy 
to support poverty reduction through economic 
growth, that includes monitorable poverty reduction 
goals; 
‘‘(4) implement transparent policy making and 
budget procedures, good governance, and effective 
anticorruption measures; 
‘‘(5) broaden public participation and popular 
understanding of the principles and goals of poverty 
reduction, particularly through economic growth, 
and good governance; 
‘‘(6) promote the participation of citizens and 
nongovernmental organizations in the economic pol-
icy choices of the government; and 
‘‘(7) produce an annual report disclosing how 
the savings from debt cancellation were used, and 
make the report publicly available and easily acces-
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sible to all interested parties, including civil society 
groups and the media. 
‘‘(b) ANNUAL REPORTS TO THE CONGRESS.—Not 
later than December 31 of each year, the President shall 
submit to the Committee on Financial Services of the 
House of Representatives and the Committee on Foreign 
Relations of the Senate a report, which shall be made 
available to the public, on the activities undertaken under 
this section, and other progress made in accomplishing the 
purposes of this section, for the prior fiscal year.’’. 
SEC. 5. SENSE OF THE CONGRESS. 
It is the sense of the Congress that to further the 
goals of debt reduction for low-income countries, in addi-
tion to the efforts described in this Act, the United States 
should pay off outstanding arrearages to the International 
Development Association and regional development banks, 
and become current on all debt reduction efforts, including 
those carried out by the International Development Asso-
ciation and under the Enhanced Heavily Indebted Poor 
Countries Initiative and the Multilateral Debt Relief Ini-
tiative. 
SEC. 6. SENSE OF THE CONGRESS. 
(a) FINDINGS.—A March 2009 IMF report on the 
impact of the global financial crisis found that the crisis 
is expected to have a major impact on low-income coun-
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tries, especially in sub-Saharan Africa. The report noted 
that over the past decade, debt relief initiatives have sig-
nificantly reduced the large external debts with which low 
income countries have often struggled, and that a lower 
debt servicing burden has also freed greater resources for 
development spending. The report also found that the 
global financial crisis has led to lower levels of remit-
tances, lower aid inflows and reduced revenues from for-
eign direct investment, which has put pressure on low in-
come countries to undertake new borrowing. According to 
the report, 31 low income countries are projected to be 
at high risk of debt distress in 2009. Countries at risk 
of debt distress face an increased risk of defaulting on 
their foreign debts, posing high risks for consumers and 
bondholders in the United States and elsewhere. 
(b) SENSE OF THE CONGRESS.—It is the sense of 
the Congress that— 
(1) in order to help avoid a chaotic series of de-
faults, both creditors and debtors should have the 
opportunity to turn to an international mechanism 
to seek orderly debt work-outs; and 
(2) the Secretary of the Treasury should sup-
port the establishment of such a mechanism for or-
derly, quick, predictable, and equitable resolutions of 
sovereign debt disputes under the form of ad hoc ar-
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bitration panels, a standing insolvency court under 
the administration of a specialized United Nations 
body such as the Permanent Court on Arbitration, 
or similar alternatives. 
Æ 
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