vide to the Committee on Appropriations and the
Committee on Foreign Relations of the Senate and
the Committee on Appropriations and the Commit-
tee on Banking and Financial Services of the House
of Representatives a written justification for the pro-
posed assistance, including an explanation of the
United States position regarding any such vote, as
well as a description of the location of the proposed
assistance by municipality, its purpose, and its in-
tended beneficiaries.
(3) DEFINITION.—The term ‘‘international fi-
nancial institution’’ includes the International Mone-
tary Fund, the International Bank for Reconstruc-
tion and Development, the International Develop-
ment Association, the International Finance Cor-
poration, the Multilateral Investment Guaranty
Agency, and the European Bank for Reconstruction
and Development.
(c) EXCEPTIONS.—
(1) IN GENERAL.—Subject to paragraph (2),
subsections (a) and (b) shall not apply to the provi-
sion of—
(A) humanitarian assistance;
(B) democratization assistance;
100
(C) assistance for cross border physical in-
frastructure projects involving activities in both
a sanctioned country, entity, or canton and a
nonsanctioned contiguous country, entity, or
canton, if the project is primarily located in and
primarily benefits the nonsanctioned country,
entity, or canton and if the portion of the
project located in the sanctioned country, en-
tity, or canton is necessary only to complete the
project;
(D) small-scale assistance projects or ac-
tivities requested by United States Armed
Forces that promote good relations between
such forces and the officials and citizens of the
areas in the United States SFOR sector of Bos-
nia;
(E) implementation of the Brcko Arbitral
Decision;
(F) lending by the international financial
institutions to a country or entity to support
common monetary and fiscal policies at the na-
tional level as contemplated by the Dayton
Agreement; or
101
(G) direct lending to a non-sanctioned en-
tity, or lending passed on by the national gov-
ernment to a non-sanctioned entity.
(2) FURTHER
LIMITATIONS.—Notwithstanding
paragraph (1)—
(A) no assistance may be made available
by this Act, or any prior Act making appropria-
tions for foreign operations, export financing
and related programs, in any country, entity, or
canton described in subsection (d), for a pro-
gram, project, or activity in which a publicly in-
dicted war criminal is known to have any finan-
cial or material interest; and
(B) no assistance (other than emergency
foods or medical assistance or demining assist-
ance) may be made available by this Act, or any
prior Act making appropriations for foreign op-
erations, export financing and related programs
for any program, project, or activity in a com-
munity within any country, entity or canton de-
scribed in subsection (d) if competent authori-
ties within that community are not complying
with the provisions of Article IX and Annex 4,
Article II, paragraph 8 of the Dayton Agree-
ment relating to war crimes and the Tribunal.
102
(d) SANCTIONED COUNTRY, ENTITY, OR CANTON.—
A sanctioned country, entity, or canton described in this
section is one whose competent authorities have failed, as
determined by the Secretary of State, to take necessary
and significant steps to apprehend and transfer to the Tri-
bunal all persons who have been publicly indicted by the
Tribunal.
(e) WAIVER.—
(1) IN GENERAL.—The Secretary of State may
waive the application of subsection (a) or subsection
(b) with respect to specified bilateral programs or
international financial institution projects or pro-
grams in a sanctioned country, entity, or canton
upon providing a written determination to the Com-
mittee on Appropriations and the Committee on
Foreign Relations of the Senate and the Committee
on Appropriations and the Committee on Inter-
national Relations of the House of Representatives
that such assistance directly supports the implemen-
tation of the Dayton Agreement and its Annexes,
which include the obligation to apprehend and trans-
fer indicted war criminals to the Tribunal.
(2) REPORT.—Not later than 15 days after the
date of any written determination under paragraph
(e)(1), the Secretary of State shall submit a report
103
to the Committee on Appropriations and the Com-
mittee on Foreign Relations of the Senate and the
Committee on Appropriations and the Committee on
International Relations of the House of Representa-
tives regarding the status of efforts to secure the
voluntary surrender or apprehension and transfer of
persons indicted by the Tribunal, in accordance with
the Dayton Agreement, and outlining obstacles to
achieving this goal.
(3) ASSISTANCE PROGRAMS AND PROJECTS AF-
FECTED.—Any waiver made pursuant to this sub-
section shall be effective only with respect to a speci-
fied bilateral program or multilateral assistance
project or program identified in the determination of
the Secretary of State to Congress.
(f ) TERMINATION
OF SANCTIONS.—The sanctions
imposed pursuant to subsections (a) and (b) with respect
to a country or entity shall cease to apply only if the Sec-
retary of State determines and certifies to Congress that
the authorities of that country, entity, or canton have ap-
prehended and transferred to the Tribunal all persons who
have been publicly indicted by the Tribunal.
(g) DEFINITIONS.—As used in this section—
104
(1) COUNTRY.—The term ‘‘country’’ means
Bosnia-Herzegovina, Croatia, Serbia, and Montene-
gro.
(2) ENTITY.—The term ‘‘entity’’ refers to the
Federation of Bosnia and Herzegovina and the
Republika Srpska.
(3) CANTON.—The term ‘‘canton’’ means the
administrative units in Bosnia and Herzegovina.
(4) DAYTON AGREEMENT.—The term ‘‘Dayton
Agreement’’ means the General Framework Agree-
ment for Peace in Bosnia and Herzegovina, together
with annexes relating thereto, done at Dayton, No-
vember 10 through 16, 1995.
(5) TRIBUNAL.—The term ‘‘Tribunal’’ means
the International Criminal Tribunal for the Former
Yugoslavia.
(h) ROLE OF HUMAN RIGHTS ORGANIZATIONS AND
GOVERNMENT AGENCIES.—In carrying out this section,
the Secretary of State, the Administrator of the Agency
for International Development, and the executive directors
of the international financial institutions shall consult with
representatives of human rights organizations and all gov-
ernment agencies with relevant information to help pre-
vent publicly indicted war criminals from benefitting from
105
any financial or technical assistance or grants provided to
any country or entity described in subsection (d).
ADDITIONAL REQUIREMENTS RELATING TO STOCKPILING
OF DEFENSE ARTICLES FOR FOREIGN COUNTRIES
SEC. 568. (a) VALUE
OF ADDITIONS
TO STOCK-
PILES.—Section 514(b)(2)(A) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2321h(b)(2)(A)) is amended by
inserting before the period at the end the following: ‘‘and
$340,000,000 for fiscal year 1999’’.
(b) REQUIREMENTS RELATING TO THE REPUBLIC OF
KOREA AND THAILAND.—Section 514(b)(2)(B) of such
Act (22 U.S.C. 2321h(b)(2)(B)) is amended by adding at
the end the following: ‘‘Of the amount specified in sub-
paragraph (A) for fiscal year 1999, not more than
$320,000,000 may be made available for stockpiles in the
Republic of Korea and not more than $20,000,000 may
be made available for stockpiles in Thailand.’’.
REQUIREMENTS FOR THE REPORTING TO CONGRESS OF
THE COSTS TO THE FEDERAL GOVERNMENT ASSOCI-
ATED WITH THE PROPOSED AGREEMENT TO REDUCE
GREENHOUSE GAS EMISSIONS
SEC. 569. The President shall provide to the Con-
gress a detailed account of all Federal agency obligations
and expenditures for climate change programs and activi-
ties, domestic and international, for fiscal year 1998,
planned obligations for such activities in fiscal year 1999,
106
and any plan for programs thereafter in the context of
negotiations to amend the Framework Convention on Cli-
mate Change (FCCC) to be provided to the appropriate
congressional committees no later than November 15,
1998.
WITHHOLDING ASSISTANCE TO COUNTRIES VIOLATING
UNITED NATIONS SANCTIONS AGAINST LIBYA
SEC. 570. (a) WITHHOLDING OF ASSISTANCE.—Ex-
cept as provided in subsection (b), whenever the President
determines and certifies to Congress that the government
of any country is violating any sanction against Libya im-
posed pursuant to United Nations Security Council Reso-
lution 731, 748, or 883, then not less than 5 percent of
the funds allocated for the country under section 653(a)
of the Foreign Assistance Act of 1961 out of appropria-
tions in this Act shall be withheld from obligation and ex-
penditure for that country.
(b) EXCEPTION.—The requirement to withhold funds
under subsection (a) shall not apply to funds appropriated
in this Act for allocation under section 653(a) of the For-
eign Assistance Act of 1961 for development assistance
or for humanitarian assistance.
(c) WAIVER.—Funds may be provided for a country
without regard to subsection (a) if the President deter-
mines that to do so is in the national security interest of
the United States.
107
AID TO THE GOVERNMENT OF THE DEMOCRATIC
REPUBLIC OF CONGO
SEC. 571. None of the funds appropriated by this Act
may be provided for assistance for the central Government
of the Democratic Republic of Congo until such time as
the President reports in writing to the Congress that the
central Government of the Democratic Republic of Congo
is cooperating fully with investigators from the United Na-
tions in accounting for human rights violations committed
in the Democratic Republic of Congo or adjacent coun-
tries.
ASSISTANCE FOR THE MIDDLE EAST
SEC. 572. Of the funds appropriated by this Act
under the headings ‘‘Economic Support Fund’’, ‘‘Foreign
Military Financing ’’, ‘‘International Military Education
and Training ’’, ‘‘Peacekeeping Operations’’, for refugees
resettling in Israel under the heading ‘‘Migration and Ref-
ugee Assistance’’, and for assistance for Israel to carry
out provisions of chapter 8 of part II of the Foreign As-
sistance Act of 1961 under the heading ‘‘Nonproliferation,
Anti-Terrorism, Demining, and Related Programs’’, not
more than a total of $5,402,850,000 may be made avail-
able for Israel, Egypt, Jordan, Lebanon, the West Bank
and Gaza, the Israel-Lebanon Monitoring Group, the Mul-
tinational Force and Observers, the Middle East Regional
Democracy Fund, Middle East Regional Cooperation, and
108
Middle East Multilateral Working Groups: Provided, That
any funds that were appropriated under such headings in
prior fiscal years and that were at the time of enactment
of this Act obligated or allocated for other recipients may
not during fiscal year 1999 be made available for activities
that, if funded under this Act, would be required to count
against this ceiling: Provided further, That funds may be
made available notwithstanding the requirements of this
section if the President determines and certifies to the
Committees on Appropriations that it is important to the
national security interest of the United States to do so
and any such additional funds shall only be provided
through the regular notification procedures of the Com-
mittees on Appropriations.
ENTERPRISE FUND RESTRICTIONS
SEC. 573. Prior to the distribution of any assets re-
sulting from any liquidation, dissolution, or winding up
of an Enterprise Fund, in whole or in part, the President
shall submit to the Committees on Appropriations, in ac-
cordance with the regular notification procedures of the
Committees on Appropriations, a plan for the distribution
of the assets of the Enterprise Fund.
CAMBODIA
SEC. 574. (a) None of the funds appropriated in this
Act may be made available for assistance for the Govern-
ment of Cambodia: Provided, That the restrictions under
109
this heading shall not apply to humanitarian, demining or
election-related programs or activities: Provided further,
That the provision of such assistance shall be made avail-
able subject to the regular notification procedures of the
Committees on Appropriations.
(b) The Secretary of the Treasury should instruct the
United States executive directors of the international fi-
nancial institutions to use the voice and vote of the United
States to oppose loans to the Government of Cambodia,
except loans to support basic human needs.
EXPORT FINANCING TRANSFER AUTHORITIES
SEC. 575. Not to exceed 5 percent of any appropria-
tion other than for administrative expenses made available
for fiscal year 1999 for programs under title I of this Act
may be transferred between such appropriations for use
for any of the purposes, programs and activities for which
the funds in such receiving account may be used, but no
such appropriation, except as otherwise specifically pro-
vided, shall be increased by more than 25 percent by any
such transfer: Provided, That the exercise of such author-
ity shall be subject to the regular notification procedures
of the Committees on Appropriations.
AUTHORIZATION FOR POPULATION PLANNING
SEC. 576. Not to exceed $385,000,000 of the funds
appropriated in title II of this Act may be available for
110
population planning activities or other population assist-
ance.
REPORT ON FOREIGN MILITARY TRAINING
SEC. 577. The Secretary of Defense and the Sec-
retary of State shall jointly provide to the Congress by
January 31, 1999, a report on all overseas military train-
ing provided to foreign military personnel under programs
administered by the Department of Defense and the De-
partment of State during fiscal years 1998 and 1999, in-
cluding those proposed for fiscal year 1999. This report
shall include, for each such military training activity, the
foreign policy justification and purpose for the training ac-
tivity, the cost of the training activity, the number of for-
eign students trained and their units of operation, and the
location of the training. In addition, this report shall also
include, with respect to United States personnel, the oper-
ational benefits to United States forces derived from each
such training activity and the United States military units
involved in each such training activity. This report may
include a classified annex if deemed necessary and appro-
priate.
KOREAN PENINSULA ENERGY DEVELOPMENT
ORGANIZATION
SEC. 578. Notwithstanding sections 614 and 451 of
the Foreign Assistance Act of 1961, as amended, or any
other provision of law, none of the funds appropriated by
111
this Act may be used for a voluntary contribution to, or
assistance for, the Korean Peninsula Energy Development
Organization.
TITLE VI
FUNDS APPROPRIATED TO THE PRESIDENT
INTERNATIONAL MONETARY PROGRAMS
LOANS TO THE INTERNATIONAL MONETARY FUND
For loans to the International Monetary Fund under
section 17 of the Bretton Woods Agreements Act pursuant
to the New Arrangements to Borrow, the dollar equivalent
of 2,462,000,000 Special Drawing Rights, to remain avail-
able until expended. In addition, the amounts appro-
priated by title III of the Foreign Aid and Related Agen-
cies Appropriations Act, 1963 (Public Law 87–872) and
section 1101(b) of the Supplemental Appropriations Act,
1984 (Public Law 98–181) may also be used under section
17 of the Bretton Woods Agreements Act pursuant to the
New Arrangements to Borrow.
GENERAL PROVISIONS—THIS TITLE
CONDITIONS FOR THE USE OF APPROPRIATED FUNDS
SEC. 601. (a) CONDITION FOR THE USE OF APPRO-
PRIATED FUNDS FOR QUOTA INCREASE.—None of the
funds appropriated after July 15, 1998, under the heading
‘‘United States Quota in the International Monetary
Fund’’ may be obligated or made available to the Inter-
national Monetary Fund until 15 days after the Secretary
112
of the Treasury and the Chairman of the Board of Gov-
ernors of the Federal Reserve System jointly provide writ-
ten notification to the appropriate committees that the
major shareholders of the International Monetary Fund
have publicly agreed to, and will act to implement in the
Fund policies providing that for conditions in standby
agreements or other arrangements regarding the use of
Fund resources include requirements that the recipient
country—
(1) liberalize restrictions on trade in goods and
services and on investment, at a minimum consistent
with the terms of all international trade agreements
of which the borrowing country is a signatory;
(2) eliminate the pervasive practice or policy of
government directed lending on non-commercial
terms or provision of market distorting subsidies to
favored industries, enterprises, parties, or institu-
tions; and
(3) guarantee nondiscriminatory treatment in
insolvency proceedings between domestic and foreign
creditors, and for debtors and other concerned per-
sons.
(b) CONDITION FOR THE USE OF APPROPRIATED
FUNDS FOR LOANS TO THE IMF.—
113
(1) IN GENERAL.—None of the funds appro-
priated in this title under the heading ‘‘Loans to the
International Monetary Fund’’ may be obligated or
made available to the International Monetary Fund
unless—
(A) there is in effect a written certifi-
cation, made by the Secretary of the Treasury,
to the appropriate committees that the Inter-
national Monetary Fund has met the require-
ments of paragraph (2); and
(B) the Congress has enacted legislation
approving the certification.
(2) REQUIREMENTS.—The requirements of this
paragraph are that the International Monetary Fund
has in effect policies that are designed to ensure the
following:
(A) Within 3 months after any meeting of
the Executive Board of the International Mone-
tary Fund at which a Letter of Intent, a Policy
Framework Paper, an Article IV economic re-
view consultation with a member country, or a
change in a general policy of the International
Monetary Fund is discussed, a full written sum-
mary of the meeting shall be made available for
114
public inspection, with the following information
redacted:
(i) Information which, if released,
would adversely affect the national security
of a country, and which is of the type that
would be classified by United States Gov-
ernment.
(ii) Market-sensitive information.
(iii) Proprietary information.
(B) Within 3 months after the Executive
Board of the International Monetary Fund at
which a Letter of Intent or a Policy Framework
Paper is discussed, a copy of the Letter of In-
tent or Policy Framework Paper shall be made
available for public inspection with the following
information redacted:
(i) Information which, if released,
would adversely affect the national security
of a country, and which is of the type that
would be classified by United States Gov-
ernment.
(ii) Market-sensitive information.
(iii) Proprietary information.
(C) Interest charges on loans to member
countries shall be based on the International
115
Monetary Fund’s market-determined cost of fi-
nancing, adjusted weekly, and loans from any
facility established to address circumstances of
exceptional balance of payments difficulties and
impaired access to capital due to a sudden loss
of market confidence should carry a substantial
surcharge that serves to provide an incentive
for early repayment and encourage private mar-
ket refinancing, and that reflects risk.
REPORTS ON FINANCIAL STABILIZATION PROGRAMS LED
BY THE INTERNATIONAL MONETARY FUND IN CON-
NECTION WITH FINANCING FROM THE EXCHANGE
STABILIZATION FUND
SEC. 602. (a) IN GENERAL.—The Secretary of the
Treasury shall submit to the appropriate committees 2 re-
ports on the implementation of financial stabilization pro-
grams led by the International Monetary Fund in any
country in connection with which the United States has
made a commitment to provide or has provided financing
from the stabilization fund established under section 5302
of title 31, United States Code. A report shall include the
following with respect to each such country:
(1) The extent that the country has made
progress in making conglomerate business practices
more transparent through the application of inter-
nationally accepted accounting practices, independ-
116
ent external audits, full disclosure, and provision of
consolidated statements.
(2) The success of measures undertaken by the
United States Government and the International
Monetary Fund to ensure that the country will not
provide Government-subsidized support or tax privi-
leges to bail out individual corporations, particularly
in the semiconductor, steel, plywood, paper, and
glassware industries.
(3) Whether International Monetary Fund in-
volvement in labor market flexibility measures has
had a negative effect on worker rights in the coun-
try, and the nature of any such negative effects.
(b) TIMING OF REPORTS.—The first report required
by subsection (a) shall be due by December 1, 1998, and
the second such report shall be due by May 1, 1999.
(c) 
NOTIFICATION
OF
IMPENDING
DISBURSE-
MENTS.—Not later than 36 hours before the disbursement
to a country with respect to which a report is required
by subsection (a) of any resources from the stabilization
fund referred to in subsection (a) in connection with the
implementation of a financial stabilization program de-
scribed in subsection (a), the Secretary of the Treasury
shall notify the appropriate committees of the impending
disbursement.
117
ADVISORY COMMISSION
SEC. 603. (a) IN GENERAL.—The Secretary of the
Treasury shall establish an International Financial Insti-
tution Advisory Commission (in this section referred to as
the ‘‘Commission’’).
(b) MEMBERSHIP.—The Commission shall include—
(1) six individuals appointed by the Congress,
including at least two former Secretaries of the
Treasury, one of whom shall serve as the chairman
of the Commission; and
(2) not to exceed two members as designated by
the Secretary.
(c) RECOMMENDATIONS.—Within 180 days after the
appointment of Commission members, the Commission
shall submit to the appropriate committees a report that
contains the recommendations of the Commission regard-
ing the future role and responsibilities of the International
Monetary Fund and the International Bank for Recon-
struction and Development, including changes to the pol-
icy goals set forth for the International Monetary Fund
and the International Bank for Reconstruction and Devel-
opment in the Bretton Woods Agreements Act and the
International Financial Institutions Act.
(d) INTERNATIONAL ADVISORY COMMITTEE.—The
Secretary of the Treasury shall instruct the United States
118
Executive Director at the International Monetary Fund to
use the voice and vote of the United States to seek the
establishment of a permanent advisory committee to the
Interim Committee of the Board of Governors of the Inter-
national Monetary Fund, that is to consist of elected mem-
bers of the national legislatures of the member countries
directly represented by appointed members of the Execu-
tive Board of the International Monetary Fund.
DEFINITIONS
SEC. 604. For purposes of sections 601 through 603
of this chapter, the term ‘‘appropriate committees’’ means
the Committees on Appropriations, Foreign Relations, and
Banking, Housing, and Urban Affairs of the Senate and
the Committees on Appropriations and Banking and Fi-
nancial Services of the House of Representatives.
PARTICIPATION IN QUOTA INCREASE
SEC. 605. (a) IN GENERAL.—The Bretton Woods
Agreements Act (22 U.S.C. 286–286mm) is amended by
adding at the end the following:
‘‘SEC. 61. QUOTA INCREASE.
‘‘(a) IN GENERAL.—The United States Governor of
the Fund may consent to an increase in the quota of the
United States in the Fund equivalent to 10,622,500,000
Special Drawing Rights.
‘‘(b) SUBJECT TO APPROPRIATIONS.—The authority
provided by subsection (a) shall be effective only to such
119
extent or in such amounts as are provided in advance in
appropriations Acts.’’.
(b) EFFECTIVENESS SUBJECT TO CERTIFICATION.—
The amendment made by subsection (a) shall not take ef-
fect until the Secretary of the Treasury certifies to the
Committee on Banking and Financial Services of the
House of Representatives and the Committee on Foreign
Relations of the Senate that the investors and banks have
made a significant contribution in conjunction with a fi-
nancing package that, in the context of an international
financial crisis, might include taxpayer supported official
financing.
NEW ARRANGEMENTS TO BORROW
SEC. 606. section 17 of the Bretton Woods Agree-
ments Act (22 U.S.C. 286e–2 et seq.) is amended—
(1) in subsection (a)—
(A) by striking ‘‘and February 24, 1983’’
and inserting ‘‘February 24, 1983, and Janu-
ary 27, 1997’’; and
(B) by striking ‘‘4,250,000,000’’ and in-
serting ‘‘6,712,000,000’’;
(2) 
in 
subsection 
(b), 
by 
striking
‘‘4,250,000,000’’ and inserting ‘‘6,712,000,000’’;
and
(3) in subsection (d)—
120
(A) by inserting ‘‘or the Decision of Janu-
ary 27, 1997,’’ after ‘‘February 24, 1983,’’;
and
(B) by inserting ‘‘or the New Arrange-
ments to Borrow, as applicable’’ before the pe-
riod at the end.
ADVOCACY OF POLICIES TO ENHANCE THE GENERAL EF-
FECTIVENESS OF THE INTERNATIONAL MONETARY
FUND
SEC. 607. (a) IN GENERAL.—Title XV of the Inter-
national Financial Institutions Act (22 U.S.C. 262o–262o-
1) is amended by adding at the end the following:
‘‘SEC. 1503. ADVOCACY OF POLICIES TO ENHANCE THE
GENERAL EFFECTIVENESS OF THE INTER-
NATIONAL MONETARY FUND.
‘‘(a) IN GENERAL.—The Secretary of the Treasury
shall instruct the United States Executive Director of the
International Monetary Fund to use aggressively the voice
and vote of the Executive Director to do the following:
‘‘(1) Vigorously promote policies to increase the
effectiveness of the International Monetary Fund in
structuring programs and assistance so as to pro-
mote policies and actions that will contribute to ex-
change rate stability and avoid competitive devalu-
ations that will further destabilize the international
financial and trading systems.
121
‘‘(2) Vigorously promote policies to increase the
effectiveness of the International Monetary Fund in
promoting market-oriented reform, trade liberaliza-
tion, economic growth, democratic governance, and
social stability through—
‘‘(A) appropriate liberalization of pricing,
trade, investment, and exchange rate regimes of
countries to open countries to the competitive
forces of the global economy;
‘‘(B) opening domestic markets to fair and
open internal competition among domestic en-
terprises by eliminating inappropriate favor-
itism for small or large businesses, eliminating
elite monopolies, creating and effectively imple-
menting anti-trust and anti-monopoly laws to
protect free competition, and establishing fair
and accessible legal procedures for dispute set-
tlement among domestic enterprises;
‘‘(C) privatizing industry in a fair and eq-
uitable manner that provides economic opportu-
nities to a broad spectrum of the population,
eliminating government and elite monopolies,
closing loss-making enterprises, and reducing
government control over the factors of produc-
tion;
122
‘‘(D) economic deregulation by eliminating
inefficient and overly burdensome regulations
and strengthening the legal framework support-
ing private contract and intellectual property
rights;
‘‘(E) establishing or strengthening key ele-
ments of a social safety net to cushion the ef-
fects on workers of unemployment and disloca-
tion; and
‘‘(F) encouraging the opening of markets
for agricultural commodities and products by
requiring recipient countries to make efforts to
reduce trade barriers.
‘‘(3) Vigorously promote policies to increase the
effectiveness of the International Monetary Fund, in
concert with appropriate international authorities
and other international financial institutions (as de-
fined in section 1701(c)(2)), in strengthening finan-
cial systems in developing countries, and encourag-
ing the adoption of sound banking principles and
practices, including the development of laws and reg-
ulations that will help to ensure that domestic finan-
cial institutions meet strong standards regarding
capital reserves, regulatory oversight, and trans-
parency.
123
‘‘(4) Vigorously promote policies to increase the
effectiveness of the International Monetary Fund, in
concert with appropriate international authorities
and other international financial institutions (as de-
fined in section 1701(c)(2)), in facilitating the devel-
opment and implementation of internationally ac-
ceptable domestic bankruptcy laws and regulations
in developing countries, including the provision of
technical assistance as appropriate.
‘‘(5) Vigorously promote policies that aim at
appropriate burden-sharing by the private sector so
that investors and creditors bear more fully the con-
sequences of their decisions, and accordingly advo-
cate policies which include—
‘‘(A) strengthening crisis prevention and
early warning signals through improved and
more effective surveillance of the national eco-
nomic policies and financial market develop-
ment of countries (including monitoring of the
structure and volume of capital flows to identify
problematic imbalances in the inflow of short
and medium term investment capital, poten-
tially destabilizing inflows of offshore lending
and foreign investment, or problems with the
maturity profiles of capital to provide warnings
124
of imminent economic instability), and fuller
disclosure of such information to market par-
ticipants;
‘‘(B) accelerating work on strengthening fi-
nancial systems in emerging market economies
so as to reduce the risk of financial crises;
‘‘(C) consideration of provisions in debt
contracts that would foster dialogue and con-
sultation between a sovereign debtor and its
private creditors, and among those creditors;
‘‘(D) consideration of extending the scope
of the International Monetary Fund’s policy on
lending to members in arrears and of other
policies so as to foster the dialogue and con-
sultation referred to in subparagraph (C);
‘‘(E) intensified consideration of mecha-
nisms to facilitate orderly workout mechanisms
for countries experiencing debt or liquidity cri-
ses;
‘‘(F) consideration of establishing ad hoc
or formal linkages between the provision of offi-
cial financing to countries experiencing a finan-
cial crisis and the willingness of market partici-
pants to meaningfully participate in any sta-
125
bilization effort led by the International Mone-
tary Fund;
‘‘(G) using the International Monetary
Fund to facilitate discussions between debtors
and private creditors to help ensure that finan-
cial difficulties are resolved without inappropri-
ate resort to public resources; and
‘‘(H) the International Monetary Fund ac-
companying the provision of funding to coun-
tries experiencing a financial crisis resulting
from imprudent borrowing with efforts to
achieve a significant contribution by the private
creditors, investors, and banks which had ex-
tended such credits.
‘‘(6) Vigorously promote policies that would
make the International Monetary Fund a more ef-
fective mechanism, in concert with appropriate inter-
national authorities and other international financial
institutions (as defined in section 1701(c)(2)), for
promoting good governance principles within recipi-
ent countries by fostering structural reforms, includ-
ing procurement reform, that reduce opportunities
for corruption and bribery, and drug-related money
laundering.
126
‘‘(7) Vigorously promote the design of Inter-
national Monetary Fund programs and assistance so
that governments that draw on the International
Monetary Fund channel public funds away from un-
productive purposes, including large ‘show case’
projects and excessive military spending, and toward
investment in human and physical capital as well as
social programs to protect the neediest and promote
social equity.
‘‘(8) Work with the International Monetary
Fund to foster economic prescriptions that are ap-
propriate to the individual economic circumstances
of each recipient country, recognizing that inappro-
priate stabilization programs may only serve to fur-
ther destabilize the economy and create unnecessary
economic, social, and political dislocation.
‘‘(9) Structure International Monetary Fund
programs and assistance so that the maintenance
and improvement of core labor standards are rou-
tinely incorporated as an integral goal in the policy
dialogue with recipient countries, so that—
‘‘(A) recipient governments commit to af-
fording workers the right to exercise inter-
nationally recognized core worker rights, includ-
ing the right of free association and collective
127
bargaining through unions of their own choos-
ing;
‘‘(B) measures designed to facilitate labor
market flexibility are consistent with such core
worker rights; and
‘‘(C) the staff of the International Mone-
tary Fund surveys the labor market policies and
practices of recipient countries and recommends
policy initiatives that will help to ensure the
maintenance or improvement of core labor
standards.
‘‘(10) Vigorously promote International Mone-
tary Fund programs and assistance that are struc-
tured to the maximum extent feasible to discourage
practices which may promote ethnic or social strife
in a recipient country.
‘‘(11) Vigorously promote recognition by the
International Monetary Fund that macroeconomic
developments and policies can affect and be affected
by environmental conditions and policies, and urge
the International Monetary Fund to encourage mem-
ber countries to pursue macroeconomic stability
while promoting environmental protection.
‘‘(12) Facilitate greater International Monetary
Fund transparency, including by enhancing acces-
129
lending, especially in the world’s poorest, heavily in-
debted countries.
‘‘(b) COORDINATION WITH OTHER EXECUTIVE DE-
PARTMENTS.—To the extent that it would assist in achiev-
ing the goals described in subsection (a), the Secretary
of the Treasury shall pursue the goals in coordination with
the Secretary of State, the Secretary of Labor, the Sec-
retary of Commerce, the Administrator of the Environ-
mental Protection Agency, the Administrator of the Agen-
cy for International Development, and the United States
Trade Representative.’’.
(b) ADVISORY COMMITTEE ON IMF POLICY.—Sec-
tion 1701 of such Act (22 U.S.C. 262p–5) is amended
by adding at the end the following:
‘‘(e) ADVISORY COMMITTEE ON IMF POLICY.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall establish an International Monetary
Fund Advisory Committee (in this subsection re-
ferred to as the ‘Advisory Committee’).
‘‘(2) MEMBERSHIP.—The Advisory Committee
shall consist of nine members appointed by the Sec-
retary of the Treasury, after appropriate consulta-
tions with the relevant organizations, as follows:
‘‘(A) one member shall be a former Sec-
retary or Deputy Secretary of the Treasury,
130
who shall serve as the chairman of the Advisory
Committee.
‘‘(B) two members shall be representatives
from organized labor.
‘‘(C) two members shall be representatives
from banking and financial services.
‘‘(D) two members shall be representatives
from industry and agriculture.
‘‘(E) two members shall be representatives
from 
nongovernmental 
environmental 
and
human rights organizations.
‘‘(3) DUTIES.—Not less frequently than every 6
months, the Advisory Committee shall meet with the
Secretary of the Treasury or the Deputy Secretary
of the Treasury to review, and provide advice on, the
extent to which individual country International
Monetary Fund programs meet the policy goals set
forth in this Act regarding the International Mone-
tary Fund.
‘‘(4) INAPPLICABILITY OF TERMINATION PROVI-
SION
OF
THE
FEDERAL
ADVISORY
COMMITTEE
ACT.—Section 14(a)(2) of the Federal Advisory
Committee Act shall not apply to the Advisory Com-
mittee.’’.
131
SENSE OF THE CONGRESS ON THE ROLE OF JAPAN IN
RESTORING REGIONAL AND GLOBAL ECONOMIC GROWTH
SEC. 608. It is the sense of the Congress that Japan
should assume a greater regional leadership role, which
would coincide with Japan’s goal of promoting strong do-
mestic demand-led growth and avoiding a significant in-
crease in its external surplus with the United States and
the countries of the Asia-Pacific region.
SEMIANNUAL
REPORTS
ON
FINANCIAL
STABILIZATION
PROGRAMS LED BY THE INTERNATIONAL MONETARY
FUND IN CONNECTION WITH FINANCING FROM THE
EXCHANGE STABILIZATION FUND
SEC. 609. Title XVII of the International Financial
Institutions Act (22 U.S.C. 262r–262r-2) is amended by
adding at the end the following:
‘‘SEC. 1704. REPORTS ON FINANCIAL STABILIZATION PRO-
GRAMS LED BY THE INTERNATIONAL MONE-
TARY FUND IN CONNECTION WITH FINANC-
ING FROM THE EXCHANGE STABILIZATION
FUND.
‘‘(a) IN GENERAL.—The Secretary of the Treasury,
in consultation with the Secretary of Commerce and other
appropriate Federal agencies, shall prepare reports on the
implementation of financial stabilization programs (and
any material terms and conditions thereof) led by the
International Monetary Fund in countries in connection
132
with which the United States has made a commitment to
provide, or has provided financing from the stabilization
fund established under section 5302 of title 31, United
States Code. The reports shall include the following:
‘‘(1) A description of the condition of the econo-
mies of countries requiring the financial stabilization
programs, including the monetary, fiscal, and ex-
change rate policies of the countries.
‘‘(2) A description of the degree to which the
countries requiring the financial stabilization pro-
grams have fully implemented financial sector re-
structuring and reform measures required by the
International Monetary Fund, including—
‘‘(A) ensuring full respect for the commer-
cial orientation of commercial bank lending;
‘‘(B) ensuring that governments will not
intervene in bank management and lending de-
cisions (except in regard to prudential super-
vision);
‘‘(C) the enactment and implementation of
appropriate financial reform legislation;
‘‘(D) strengthening the domestic financial
system and improving transparency and super-
vision; and
133
‘‘(E) the opening of domestic capital mar-
kets.
‘‘(3) A description of the degree to which the
countries requiring the financial stabilization pro-
grams have fully implemented reforms required by
the International Monetary Fund that are directed
at corporate governance and corporate structure, in-
cluding—
‘‘(A) making nontransparent conglomerate
practices more transparent through the applica-
tion of internationally accepted accounting
practices, independent external audits, full dis-
closure, and provision of consolidated state-
ments; and
‘‘(B) ensuring that no government sub-
sidized support or tax privileges will be provided
to bail out individual corporations, particularly
in the semiconductor, steel, and paper indus-
tries.
‘‘(4) A description of the implementation of re-
form measures required by the International Mone-
tary Fund to deregulate and privatize economic ac-
tivity by ending domestic monopolies, undertaking
trade liberalization, and opening up restricted areas
134
of the economy to foreign investment and competi-
tion.
‘‘(5) A detailed description of the trade policies
of the countries, including any unfair trade practices
or adverse effects of the trade policies on the United
States.
‘‘(6) A description of the extent to which the fi-
nancial stabilization programs have resulted in ap-
propriate burden-sharing among private sector credi-
tors, including rescheduling of outstanding loans by
lengthening maturities, agreements on debt reduc-
tion, and the extension of new credit.
‘‘(7) A description of the extent to which the
economic adjustment policies of the International
Monetary Fund and the policies of the government
of the country adequately balance the need for finan-
cial stabilization, economic growth, environmental
protection, social stability, and equity for all ele-
ments of the society.
‘‘(8) Whether International Monetary Fund in-
volvement in labor market flexibility measures has
had a negative effect on core worker rights, particu-
larly the rights of free association and collective bar-
gaining.
135
‘‘(9) A description of any pattern of abuses of
core worker rights in recipient countries.
‘‘(10) The amount, rate of interest, and dis-
bursement and repayment schedules of any funds
disbursed from the stabilization fund established
under section 5302 of title 31, United States Code,
in the form of loans, credits, guarantees, or swaps,
in support of the financial stabilization programs.
‘‘(11) The amount, rate of interest, and dis-
bursement and repayment schedules of any funds
disbursed by the International Monetary Fund to
the countries in support of the financial stabilization
programs.
‘‘(b) TIMING.—Not later than October 1, 1998, and
semiannually thereafter, the Secretary of the Treasury
shall submit to the Committees on Banking and Financial
Services and International Relations of the House of Rep-
resentatives and the Committees on Foreign Relations,
and Banking, Housing, and Urban Affairs of the Senate
a report on the matters described in subsection (a).’’.
REPORTS ON REFORMING THE ARCHITECTURE OF THE
INTERNATIONAL FINANCIAL SYSTEM
SEC. 610. (a) FINDINGS.—The Congress finds that,
in order to ensure that the International Monetary Fund
does not become the global lender of last resort to private
sector corporations and financial institutions, and in order
136
to help prevent future threats to the international finan-
cial system, the Secretary of the Treasury and the Chair-
man of the Board of Governors of the Federal Reserve
System, working with their counterparts in other countries
and with international organizations as appropriate,
should—
(1) seek to establish a broad set of international
transparency principles on accounting and disclosure
policies and practices covering, in particular, private
sector financial organizations;
(2) promote improvements in the provision by
both borrowers and lenders of timely and com-
prehensive aggregate information on cross-border fi-
nancial stocks and flows;
(3) seek an international accord establishing
uniform minimum standards with respect to robust
banking and supervisory systems, which individual
countries should be required to meet as a condition
for the establishment of subsidiaries, branches, or
other offices of banking institutions from their coun-
tries in the jurisdictions of the countries participat-
ing in the accord;
(4) immediately initiate with appropriate rep-
resentatives of the countries that are members of the
International Monetary Fund discussions aimed at
137
securing national treatment for United States inves-
tors in such countries; and
(5) seek to establish internationally acceptable
bankruptcy standards and should work particularly
to have International Monetary Fund recipient coun-
tries adopt such standards.
(b) REPORTS.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall prepare 3 reports on progress made toward
achieving the objectives outlined in subsection (a),
which shall describe the steps taken by the United
States, other members of the world community, and
the international financial institutions to strengthen
safeguards in the global financial system, including
measures to promote more efficient functioning of
global markets, by—
(A) helping to develop effective legal and
regulatory frameworks, including appropriate
bankruptcy and foreclosure mechanisms;
(B) increasing transparency and disclosure
by both the private and public sectors;
(C) strengthening prudential standards,
both globally and in individual economies;
(D) improving domestic policy manage-
ment;
138
(E) strengthening the role of the inter-
national financial institutions in financial crisis
prevention and management; and
(F) ensuring appropriate burden-sharing
by the private sector, particularly commercial
banks and financial institutions, in the resolu-
tion of crises.
(2) TIMING.—The Secretary of the Treasury
shall submit to the Committees on Banking and Fi-
nancial Services and International Relations of the
House of Representatives and the Committees on
Foreign Relations and Banking, Housing, and
Urban Affairs of the Senate 2 interim reports on the
matters described in paragraph (1), the first of
which is due by October 1, 1998, and the second of
which is due on April 1, 1999, and a final report on
such matters, which is due on October 1, 1999.
ANNUAL
REPORT
AND
TESTIMONY
ON
THE
STATE
OF
THE INTERNATIONAL FINANCIAL SYSTEM, IMF RE-
FORM, AND COMPLIANCE WITH IMF AGREEMENTS
SEC. 611. Title XVII of the International Financial
Institutions Act (22 U.S.C. 262r–262r-2) is further
amended by adding at the end the following:
139
‘‘SEC. 1705. ANNUAL REPORT AND TESTIMONY ON THE
STATE OF THE INTERNATIONAL FINANCIAL
SYSTEM, IMF REFORM, AND COMPLIANCE
WITH IMF AGREEMENTS.
‘‘(a) REPORTS.—Not later than October 1 of each
year, the Secretary of the Treasury shall submit to the
Committee on Banking and Financial Services of the
House of Representatives and the Committee on Foreign
Relations of the Senate a written report on the progress
(if any) made by the United States Executive Director at
the International Monetary Fund in influencing the Inter-
national Monetary Fund to adopt the policies and reform
its internal procedures in the manner described in section
1503.
‘‘(b) TESTIMONY.—After submitting the report re-
quired by subsection (a) but not later than October 31
of each year, the Secretary of the Treasury shall appear
before the Committee on Banking and Financial Services
of the House of Representatives and the Committee on
Foreign Relations of the Senate and present testimony
on—
‘‘(1) any progress made in reforming the Inter-
national Monetary Fund;
‘‘(2) the status of efforts to reform the inter-
national financial system; and
140
‘‘(3) the compliance of countries which have re-
ceived assistance from the International Monetary
Fund with agreements made as a condition of receiv-
ing the assistance.’’.
AUDITS OF THE INTERNATIONAL MONETARY FUND
SEC. 612. Title XVII of the International Financial
Institutions Act (22 U.S.C. 262r–262r-2) is further
amended by adding at the end the following:
‘‘SEC. 1706. AUDITS OF THE INTERNATIONAL MONETARY
FUND.
‘‘(a) ACCESS TO MATERIALS.—Not later than 30
days after the date of the enactment of this section, the
Secretary of the Treasury shall certify to the Committee
on Banking and Financial Services of the House of Rep-
resentatives and the Committee on Foreign Relations of
the Senate that the Secretary has instructed the United
States Executive Director at the International Monetary
Fund to facilitate timely access by the General Accounting
Office to information and documents of the International
Monetary Fund needed by the Office to perform financial
reviews of the International Monetary Fund that will fa-
cilitate the conduct of United States policy with respect
to the Fund.
‘‘(b) REPORTS.—Not later than June 30, 1999, and
annually thereafter, the Comptroller General of the United
States shall prepare and submit to the committees speci-
141
fied in subsection (a) a report on the financial operations
of the Fund during the preceding year, which shall in-
clude—
‘‘(1) the current financial condition of the
International Monetary Fund;
‘‘(2) the amount, rate of interest, disbursement
schedule, and repayment schedule for any loans that
were initiated or outstanding during the preceding
calendar year, and with respect to disbursement
schedules, the report shall identify and discuss in de-
tail any conditions required to be fulfilled by a bor-
rower country before a disbursement is made;
‘‘(3) a detailed description of whether the trade
policies of borrower countries permit free and open
trade by the United States and other foreign coun-
tries in the borrower countries;
‘‘(4) a detailed description of the export policies
of borrower countries and whether the policies may
result in increased export of their products, goods,
or services to the United States which may have sig-
nificant adverse effects on, or result in unfair trade
practices against or affecting United States compa-
nies, farmers, or communities;
‘‘(5) a detailed description of any conditions of
International Monetary Fund loans which have not
142
been met by borrower countries, including a discus-
sion of the reasons why such conditions were not
met, and the actions taken by the International
Monetary Fund due to the borrower country’s non-
compliance;
‘‘(6) an identification of any borrower country
and loan on which any loan terms or conditions were
renegotiated in the preceding calendar year, includ-
ing a discussion of the reasons for the renegotiation
and any new loan terms and conditions; and
‘‘(7) a specification of the total number of loans
made by the International Monetary Fund from its
inception through the end of the period covered by
the report, the number and percentage (by number)
of such loans that are in default or arrears, and the
identity of the countries in default or arrears, and
the number of such loans that are outstanding as of
the end of period covered by the report and the ag-
gregate amount of the outstanding loans and the av-
erage yield (weighted by loan principal) of the his-
torical and outstanding loan portfolios of the Inter-
national Monetary Fund.’’.
SHORT TITLE
SEC. 613. Sections 605 through 613 of this title may
be cited as the ‘‘International Monetary Fund Reform and
Authorization Act of 1998’’.
143
TITLE VII—ADDITIONAL GENERAL PROVISIONS
NATIONAL COMMISSION ON TERRORISM
SEC. 701. (a) ESTABLISHMENT OF NATIONAL COM-
MISSION ON TERRORISM.—
(1) ESTABLISHMENT.—There is established a
national commission on terrorism to review counter-
terrorism policies regarding the prevention and pun-
ishment of international acts of terrorism directed at
the United States. The commission shall be known
as ‘‘The National Commission on Terrorism’’.
(2) COMPOSITION.—The commission shall be
composed of 15 members appointed as follows:
(A) Five members shall be appointed by
the President from among officers or employees
of the executive branch, private citizens of the
United States, or both. Not more than three
members selected by the President shall be
members of the same political party.
(B) Five members shall be appointed by
the Majority Leader of the Senate, in consulta-
tion with the Minority Leader of the Senate,
from among members of the Senate, private
citizens of the United States, or both. Not more
than three of the members selected by the Ma-
jority Leader shall be members of the same po-