(5) The debt overhang faced by these countries
blocks needed spending for development and discour-
ages productive investment.
(6) Efforts to promote good governance, ac-
countability, transparency, and active participation
of civil society in public decision making and dis-
courage corruption are undermined by diversion of
resources to debt service and by the micromanage-
ment of economic policy by external actors which is
currently part of debt negotiations.
(7) The Jubilee 2000 campaign, an inter-
national movement in over 40 countries supported
by many prominent religious leaders such as Pope
John Paul II, is calling for the cancellation of the
external debts of the poorest countries.
SEC. 3. ELIGIBLE COUNTRIES.
In this Act, the term ‘‘eligible country’’ means a heav-
ily indebted poor country, as determined by the Inter-
national Bank for Reconstruction and Development and
the International Monetary Fund for purposes of the
Heavily Indebted Poor Country (HIPC) Initiative, and
Haiti.
SEC. 4. CANCELLATION OF BILATERAL DEBT OWED TO THE
UNITED STATES GOVERNMENT BY HEAVILY
INDEBTED POOR COUNTRIES.
(a) CANCELLATION OF DEBT.—
(1) IN GENERAL.—The President shall cancel
all amounts owed to the United States (or any agen-
cy of the United States) by any eligible country as
a result of concessional and nonconcessional loans
made, guarantees issued, or credits extended under
any provision of law.
(2) REQUIREMENT TO PROMOTE DEMOCRACY.—
Paragraph (1) shall apply only to a country the gov-
ernment of which—
(A) was chosen by and permits free and
fair elections;
(B) promotes civilian control of the mili-
tary and security forces and has civilian institu-
tions controlling the policy, operation, and
spending of all law enforcement and security in-
stitutions, as well as the armed forces;
(C) promotes the rule of law, equality be-
fore the law, and respect for individual and mi-
nority rights, including freedom to speak, pub-
lish, associate, and organize; and
(D) promotes the strengthening of polit-
ical, legislative, and civil institutions of democ-
racy, as well as autonomous institutions to
monitor the conduct of public officials and to
combat corruption.
(b) ADDITIONAL REQUIREMENTS.—
(1) CANCELLATION OF DEBT NOT CONSIDERED
TO BE ASSISTANCE.—A debt cancellation under this
section shall not be considered to be assistance for
purposes of any provision of law limiting assistance
to a country.
(2) INAPPLICABILITY
OF
CERTAIN
PROHIBI-
TIONS
RELATING
TO
CANCELLATION
OF
DEBT.—
Debt may be cancelled under this section, notwith-
standing section 620(r) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2370(r)).
SEC. 5. CONDITIONAL BAN ON PROVIDING APPROPRIATED
FUNDS TO THE IMF UNTIL DEBT OWED TO
THE IMF BY HEAVILY INDEBTED POOR COUN-
TRIES HAS BEEN CANCELED.
None of the funds appropriated in any Act may be
obligated or made available to the International Monetary
Fund until the International Monetary Fund—
(1) has canceled all debts owed to the Inter-
national Monetary Fund by any eligible country;
(2) has terminated the Enhanced Structural
Adjustment Facility; and
(3) the Secretary of the Treasury has certified
to the Committee on Banking and Financial Services
of the House of Representatives and the Committee
on Foreign Relations of the Senate that—
(A) the debts referred to in paragraph (1)
have been canceled; and
(B) the International Monetary Fund has
ceased linking loans to any eligible country to
the implementation of structural adjustment
policies.
SEC. 6. ACTIVITIES OF OVERSEAS PRIVATE INVESTMENT
CORPORATION IN HEAVILY INDEBTED POOR
COUNTRIES CONTINGENT ON USE OF DEBT
RELIEF FOR POVERTY REDUCTION.
(a) IN GENERAL.—Title IV of chapter 2 of part I
of the Foreign Assistance Act of 1961 (22 U.S.C. 2191
et seq.) is amended by inserting after section 234A the
following:
‘‘SEC. 234B. ACTIVITIES OF CORPORATION IN CERTAIN
HEAVILY INDEBTED POOR COUNTRIES CON-
TINGENT ON USE OF DEBT RELIEF FOR POV-
ERTY REDUCTION.
‘‘The Corporation may issue insurance, guaranties, or
reinsurance, make loans, acquire any securities, or carry
out any other activity under section 234, or enter into risk
sharing arrangements authorized by section 234A, for a
heavily indebted poor country with respect to which the
United States has provided debt cancellation under section
4 of the Debt Emancipation for Emerging Democracies
(DEED) Act of 1999, or the International Monetary Fund
has provided debt cancellation in accordance with section
5 of such Act, only if the President certifies to the Con-
gress that the government of such country is using funds
available to the government because of such debt cancella-
tion for poverty reduction in the country.’’.
(b) EFFECTIVE DATE.—Section 234B of the Foreign
Assistance Act of 1961, as added by subsection (a), ap-
plies with respect to a contract or other agreement for in-
surance, guaranties, or reinsurance, loans, the acquisition
of securities, or any other activity authorized under section
234 of that Act, or for risk sharing arrangements author-
ized by section 234A of that Act, entered into on or after
the date of the enactment of this Act.
SEC. 7. NOTIFICATION.
Not less than 30 days after the date of the enactment
of this Act, the Secretary of the Treasury shall provide
written notice to each eligible country that it is the policy
of the United States—
(1) to cancel debts owed by the country to the
United States;
(2) to advocate at the International Monetary
Fund for the cancellation of the country’s debts;
(3) that the proceeds of such debt cancellation
should be used for poverty reduction; and
(4) to deny funding to such country from the
Overseas Private Investment Corporation if the
country does not use the proceeds of such debt can-
cellation for poverty reduction.
SEC. 8. ENFORCEMENT.
(a) PRIVATE
ENFORCEMENT.—A citizen of the
United States may bring an action in any United States
district court seeking compliance by the United States, or
any department, agency, or officer of the United States,
with any provision of this Act.
(b) APPROPRIATIONS LIMITATION.—None of the
funds appropriated in any Act may be obligated or made
available to the International Monetary Fund while any
action brought under subsection (a) is pending.
(c) EFFECTS OF FINDING OF ARBITRARY CERTIFI-
CATION BY THE SECRETARY OF THE TREASURY.—If, in
an action brought under subsection (a), the court finally
finds that the Secretary of the Treasury acted arbitrarily
in making a certification required by this Act—
(1) the court shall award the plaintiff $100,
plus reasonable attorneys’ fees and court costs; and
(2) no funds appropriated in any Act may be
obligated or made available to the International
Monetary Fund until the court subsequently finds
that the Secretary has replaced the arbitrarily made
certification with a certification that is not made ar-
bitrarily.
Æ