I 
112TH CONGRESS 
1ST SESSION H. R. 1798 
To prevent foreign states that do business, issue securities, or borrow money 
in the United States, and then fail to satisfy United States court judg-
ments totaling $100,000,000 or more based on such activities, from 
inflicting further economic injuries in the United States, from under-
mining 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 
MAY 6, 2011 
Mr. MACK (for himself, Mr. KING of New York, Ms. LORETTA SANCHEZ of 
California, Mr. CARNAHAN, and Mrs. MALONEY) introduced the following 
bill; which was referred to the Committee on Financial Services, and in 
addition to the Committee on Foreign Affairs, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To prevent 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. 
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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 2011’’. 
SEC. 2. STATEMENT OF PURPOSE. 
The purpose of this Act is to prevent 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 sec-
ondary and primary 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-
putes resulting from these or other commercial ac-
tivities, directly or indirectly inflict billions of dollars 
of damage in the United States, and undermine the 
credibility of the United States courts. 
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(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 negligent 
ethical standards permit government officials to re-
pudiate lawful judgments, 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 
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 
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United States bondholders, taxpayers, and share 
holders more than $10,000,000,000. 
(5) Argentina has the capacity to pay its exter-
nal creditors. Argentina now holds more than 
$54,000,000,000 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 which 
the United States is owed $360,000,000. 
(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 threatens the United States legal system. 
Despite having agreed to submit to the jurisdiction 
of the State of New York and to waive claims of sov-
ereign immunity, Argentina is now contesting at 
least 170 lawsuits and refusing to honor 100 judg-
ments 
against 
it, 
totaling 
more 
than 
$7,000,000,000. 
(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), a tribunal of the World 
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Bank. Argentina is the respondent in more ICSID 
cases than any other nation, now accounting for 
more than a quarter of the tribunal’s caseload. It is 
important to note that Argentina’s arguments for 
nonpayment have been outright rejected by both the 
Department of State and the ICSID. Argentina is 
currently receiving $5,810,000,000 from the World 
Bank 
and 
has 
requested 
an 
additional 
$1,630,000,000 in funding. Argentina has behaved 
in a manner that undermines the viability of the 
ICSID process, thereby alarming the worldwide in-
vestments of United States businesses that rely upon 
this forum for adjudication of disputes. 
(8) Argentina’s debts are legitimate. Any asser-
tion 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 five 
percent of the defaulted debt now held by United 
States creditors was issued during or before 1993. 
Ninety-five percent of the defaulted debt held by 
United States creditors was incurred after 1993 by 
freely elected Argentine governmental officials and 
has no relationship to the military junta. 
(11) Argentina’s defaults have raised the costs 
of borrowing for both the public and private sectors. 
If the country took action to remediate its debts, its 
annual interest expense would certainly decline. Ar-
gentina’s defaults have discouraged foreign direct in-
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vestment. One study from 2007 states that Argen-
tina loses over $6,000,000,000 in foreign direct in-
vestment every year as a result of its default and 
debt repudiation and the resultant risk profile. 
(12) An October 2010 evaluation report by the 
Financial Action Task Force (FATF), an intergov-
ernmental body that analyzes financial systems for 
criminal activity, gave Argentina the most negative 
evaluation of any G–20 nation. FATF evaluated Ar-
gentina on 49 financial standards, of which Argen-
tina failed to meet 47 out of the 49 standards. Ar-
gentina was given an original timeline of three 
months, then an additional ten months to dem-
onstrate compliance to the standards or face being 
blacklisted due to financial corruption and defi-
ciencies in combating financing of terrorism (CFT) 
and anti-money laundering (AML) systems. 
(13) Drawing further conclusions, FATF re-
ported several shortcomings in Argentina’s financial 
sector, most notably corruption and the poor en-
forcement of Argentine financial laws. The lack of 
enforcement has prompted wide-spread money laun-
dering in Argentina’s financial sector creating an en-
vironment that puts Argentina at risk of becoming 
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a hub for terrorism and drug trafficking in the 
Western Hemisphere. 
(14) Many persons in the United States are un-
aware of Argentina’s irresponsible behavior and dis-
regard for the rule of law. Further, United States 
citizens continue to invest in, lend to, and do busi-
ness with Argentina and are unfamiliar with the as-
sociated risks. 
(15) Those who are injured as a result of this 
conduct often have little or no recourse. Judgment 
evading foreign states and their state owned cor-
porations enjoy a safe haven within their national 
borders, and this fact often presents an insurmount-
able obstacle to recovery for those who are injured 
by the behavior of those states. 
(16) 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 nations. By undermining confidence in the 
secondary market for sovereign debt, judgment evad-
ing 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. 
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(17) 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. 
(18) 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 
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-
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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 
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 two years after 
the judgment becomes a final judgment, regard-
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less of whether such judgment became a final 
judgment before the date of the enactment of 
this Act; and 
(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 
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 
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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, international financial 
institutions such as the World Bank and the Inter-
national Monetary Fund, and other foreign policy 
settings for the full compensation and fair treatment 
of United States taxpayers 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 
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