Title: Balkan Economic Partnership Act
Policy area: International Affairs

Summary:
Balkan Economic Partnership Act
This bill authorizes the President to designate a private, nonprofit organization to be known as the Bosnia and Herzegovina-American Enterprise Fund to promote private sector development through:
The Board of Directors of the fund should adopt the best practices and procedures used by investment funds authorized for the U.S. Agency for International Development through enactment of the Support for East European Democracy (SEED) Act of 1989 and the FREEDOM Support Act.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 864 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 864

   To promote development goals and the strengthening of the private 
                   sector in Bosnia and Herzegovina.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                April 6 (legislative day, April 4), 2017

  Mrs. Shaheen (for herself and Mr. Wicker) introduced the following 
  bill; which was read twice and referred to the Committee on Foreign 
                               Relations

_______________________________________________________________________

                                 A BILL


 
   To promote development goals and the strengthening of the private 
                   sector in Bosnia and Herzegovina.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Balkan Economic Partnership Act''.

SEC. 2. PURPOSE AND FINDINGS.

    (a) Purpose.--The purpose of this Act is to support economic 
opportunity and political progress in Bosnia and Herzegovina through 
the creation of an enterprise fund that will provide financial 
investment and technical assistance to small and medium-sized 
enterprises.
    (b) Findings.--Congress makes the following findings:
            (1) The United States has a strong interest in ensuring the 
        gains in stability and reconciliation made since the end of the 
        Bosnian War in 1995 are not overtaken by difficult economic 
        conditions.
            (2) In 2014, protests broke out across Bosnia and 
        Herzegovina as a result of widespread frustration among the 
        populace regarding the economy, which is currently experiencing 
        an unemployment rate of more than 40 percent.
            (3)(A) A crucial element for economic progress in Bosnia 
        and Herzegovina is robust growth among small and medium-sized 
        enterprises (SMEs), which have struggled to access necessary 
        financing.
            (B) Although the private sector credit-to-GDP ratio in 
        Bosnia and Herzegovina grew from 25 percent in 2001 to over 65 
        percent in 2008, it has failed to grow in the years since, and 
        is significantly less than the average for advanced economies.
            (C) Bank lending, which grew similarly rapidly before 2008, 
        has grown barely more than 1 percent per year since then.
            (D) International financial institutions and foreign-owned 
        private investment funds active in Bosnia and Herzegovina have 
        provided growth finance for larger companies and infrastructure 
        project financing, but have not substantially invested in SMEs.
            (4)(A) Bosnia and Herzegovina's demographic, income and 
        geographic characteristics are promising for SME growth.
            (B) Bosnia and Herzegovina is a market of almost 4,000,000 
        people, whose per capita income has grown by almost 50 percent 
        in less than a decade, and substantial growth remains in order 
        to achieve income parity with its Balkan neighbor economies.
            (C) Bosnia and Herzegovina currently imports almost 
        $10,000,000,000 of goods per year, a substantial portion of 
        which could be substituted for by domestic SME production.
            (5) To help foster and support the fledgling private sector 
        in Central and Eastern Europe after the fall of the Berlin 
        Wall, Congress, through enactment of the Support for East 
        European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et seq.) 
        and the FREEDOM Support Act (22 U.S.C. 5801 et seq.), 
        authorized nearly $1,200,000,000 for the United States Agency 
        for International Development (USAID) to establish 10 new 
        investment funds (collectively known as the ``Enterprise 
        Funds'') to both support economic development objectives and 
        realize substantial financial returns.
            (6) The Enterprise Funds--
                    (A) channeled approximately $10,000,000,000 of 
                public and private funding into more than 500 
                enterprises in 19 countries;
                    (B) leveraged $6,900,000,000 in private investment 
                capital from outside the United States Government;
                    (C) provided substantial development capital where 
                supply was limited;
                    (D) created or sustained more than 300,000 jobs 
                through investment and development activities;
                    (E) funded $80,000,000 in technical assistance to 
                strengthen the private sector; and
                    (F) are expected to recoup 177 percent of the 
                original USAID funding.
            (7) Enterprise funds established in partnership with United 
        States partners, such as Poland, Hungary, Albania, Russia, and 
        other European countries, have proven beneficial to the 
        economies of such countries.
            (8) Creating a similar fund in close partnership with the 
        people of Bosnia and Herzegovina would help sustain and expand 
        economic reform efforts in Bosnia and Herzegovina and empower 
        entrepreneurs to create urgently needed employment 
        opportunities.
            (9) Establishing an enterprise fund for Bosnia and 
        Herzegovina would--
                    (A) help improve financial institutions within the 
                country;
                    (B) provide debt, equity, and other investment 
                vehicles for commercially viable SMEs; and
                    (C) make the investment environment more attractive 
                to domestic and international investors.

SEC. 3. PURPOSES OF BOSNIA AND HERZEGOVINA-AMERICAN ENTERPRISE FUND.

    (a) In General.--The purpose of the Bosnia and Herzegovina-American 
Enterprise Fund is to promote more widely shared prosperity through 
private sector development and the policies and practices conducive 
thereto in Bosnia and Herzegovina, including through loans, microloans, 
equity investments, insurance, guarantees, grants, feasibility studies, 
technical assistance, capacity building of investees and other relevant 
organizations, joint ventures, and other measures.
    (b) Promotion of Private Sector Development.--The Bosnia and 
Herzegovina-American Enterprise Fund shall promote private sector 
development through--
            (1) the initiation and expansion of employment and 
        profitability of private enterprises, particularly small and 
        medium-sized enterprises;
            (2) the modeling, promotion, and dissemination of sound 
        corporate governance and law-abiding Western business 
        practices;
            (3) the promotion of policy reforms to improve the business 
        enabling environment and facilitate foreign and domestic 
        investment; and
            (4) the demonstration that private sector investment can be 
        undertaken profitably.

SEC. 4. BOSNIA AND HERZEGOVINA-AMERICAN ENTERPRISE FUND.

    (a) Designation.--The President is authorized to designate a 
private, nonprofit organization (to be known as the Bosnia and 
Herzegovina-American Enterprise Fund) to receive funds made available 
under this Act for the purposes specified in section 3.
    (b) Board of Directors.--
            (1) Appointment.--The Bosnia and Herzegovina-American 
        Enterprise Fund shall be governed by a Board of Directors, 
        which shall be comprised of 7 private citizens of the United 
        States appointed by the President of the United States in 
        consultation with the Administrator of the United States Agency 
        for International Development. The Board is authorized to elect 
        up to 3 additional members who are citizens of Bosnia and 
        Herzegovina if agreed to unanimously by all members of the 
        Board.
            (2) Qualifications.--
                    (A) Business experience.--Four members of the Board 
                of Directors shall be selected from among people who 
                have had successful business careers and demonstrated 
                experience and expertise in international and 
                particularly emerging markets investment activities, 
                such as private equity or venture capital investment, 
                banking, finance, strategic business consulting, or 
                entrepreneurial business creation, and backgrounds in 
                priority business sectors of the Fund.
                    (B) Development experience.--Three members of the 
                Board of Directors shall be selected from among people 
                with significant prior experience in development and an 
                expert understanding of development priorities for 
                Bosnia and Herzegovina.
            (3) United states government liaisons to the board.--The 
        President shall appoint the United States Ambassador to Bosnia 
        and Herzegovina, or the Ambassador's designee, as well as the 
        Assistant Administrator of the United States Agency for 
        International Development for Europe and Eurasia, or the 
        Assistant Administrator's designee, as liaisons to the board.
    (c) Grants.--
            (1) In general.--There is authorized to be appropriated for 
        the Department of State for fiscal year 2018 $30,000,000--
                    (A) to carry out the purposes set forth in section 
                3 through the Bosnia and Herzegovina-American 
                Enterprise Fund; and
                    (B) to pay for the administrative expenses of the 
                Bosnia and Herzegovina-American Enterprise Fund.
            (2) Compliance requirements.--
                    (A) In general.--Grants may not be awarded to the 
                Bosnia and Herzegovina-American Enterprise Fund under 
                this section unless the Fund agrees to comply with the 
                requirements under this section.
                    (B) Grant agreement.--The grant agreement between 
                the United States Agency for International Development 
                and the Bosnia and Herzegovina-American Enterprise Fund 
                shall state that the Fund shall end its reinvestment 
                cycle not later than December 31, 2033, unless the 
                Secretary of State, in consultation with the 
                Administrator of the United States Agency for 
                International Development, and after consultation with 
                the appropriate congressional committees, determines 
                that the Fund should be extended.
                    (C) Prevention of money laundering and terrorist 
                financing.--The grant agreement between the United 
                States Agency for International Development and the 
                Bosnia and Herzegovina-American Enterprise Fund shall 
                state that the Fund shall comply with procedures 
                specified by the Secretary of State to ensure that 
                grant funds are not provided by the Fund to or through 
                any individual, private or government entity, or 
                educational institution that advocates, plans, 
                sponsors, engages in, or has engaged in, money 
                laundering or terrorist activity or, with respect to a 
                private entity or educational institution, that has as 
                a principal officer of the entity's governing board or 
                governing board of trustees any individual that has 
                been determined to be involved in or advocating money 
                laundering or terrorist activity or determined to be a 
                member of a designated foreign terrorist organization.
                    (D) Disposition of assets.--The assets of the 
                Bosnia and Herzegovina-American Enterprise Fund at the 
                time the Fund is dissolved shall be returned to the 
                General Fund of the United States Treasury and used to 
                reduce the debt of the United States.
                    (E) Authorization of legacy foundation.--In the 
                event the assets of the Fund at the end of the 
                reinvestment cycle specified in subparagraph (B) exceed 
                the total amount appropriated or otherwise made 
                available to the Fund by the United States Government, 
                the Secretary of State, in consultation with the 
                Administrator of the United States Agency for 
                International Development, is authorized to direct any 
                such excess funds to a foundation for activities 
                consistent with the purposes specified in section 3.
    (d) Notification.--
            (1) In general.--Not later than 15 days before designating 
        an organization to operate as the Bosnia and Herzegovina-
        American Enterprise Fund pursuant to subsection (a), the 
        President shall provide the information described in paragraph 
        (2) to the Chairman and Ranking Member of the appropriate 
        congressional committees.
            (2) Information.--The information described in this 
        paragraph is--
                    (A) the identity of the organization to be 
                designated to operate as the Bosnia and Herzegovina-
                American Enterprise Fund pursuant to subsection (a);
                    (B) the name and qualifications of the individual 
                who will serve as Chairman of the Board of Directors; 
                and
                    (C) the amount of the grant intended to fund the 
                Bosnia and Herzegovina-American Enterprise Fund over 
                the lifetime of the fund.

SEC. 5. REPORTS.

    (a) Administrative Expenses.--Not later than 1 year after the date 
of the enactment of this Act, and annually thereafter until the Fund is 
dissolved, the Fund shall submit to the appropriate congressional 
committees a report detailing the administrative expenses of the Fund, 
including any costs incurred by private firms hired to aid in the 
management of the fund.
    (b) GAO Report.--
            (1) Initial report.--Not later than 3 years after the date 
        of the enactment of this Act, the Comptroller General of the 
        United States shall submit to the appropriate congressional 
        committees a report that examines--
                    (A) the status of the Fund's investments;
                    (B) the Fund's progress in establishing key 
                management structures to support its mission and 
                operations; and
                    (C) the extent to which the Fund has complied with 
                requirements in the grant agreements.
            (2) Updates.--The Comptroller General shall, for the 
        duration of the Fund and at the request of the appropriate 
        congressional committees, provide an updated report on the Fund 
        and any successor organization.
    (c) Independent Reports.--Not later than July 1, 2022, and July 1, 
2030, the Administrator of the United States Agency for International 
Development shall commission a report, to be completed by an 
independent, third-party organization, evaluating the performance of 
the Bosnia and Herzegovina-American Enterprise Fund with respect to the 
purposes set forth in section 3. The report shall be made available to 
the appropriate congressional committees.
    (d) Appropriate Congressional Committees Defined.--In this section, 
the term ``appropriate congressional committees'' means--
            (1) the Committee on Foreign Relations and the Committee on 
        Appropriations of the Senate; and
            (2) the Committee on Foreign Affairs and the Committee on 
        Appropriations of the House of Representatives.

SEC. 6. OPERATION PROVISIONS.

    (a) Applicable Provisions.--Subsections (d)(5), (g), (h), (i), (k), 
(l), (m), (n), (o), and (p) of section 201 of the Support for East 
European Democracy (SEED) Act of 1989 (22 U.S.C. 5421) shall apply with 
respect to the Bosnia and Herzegovina-American Enterprise Fund in the 
same manner as such provisions apply to Enterprise Funds designated 
pursuant to subsection (d) of such section.
    (b) Reinvestment.--Returns on investments of the Bosnia and 
Herzegovina-American Enterprise Fund and other payments to the Fund may 
be reinvested by the Fund and used to fund noninvestment projects 
without further appropriation by Congress.

SEC. 7. BEST PRACTICES AND PROCEDURES.

    To the maximum extent practicable, the Board of Directors of the 
Bosnia and Herzegovina-American Enterprise Fund should adopt the best 
practices and procedures used by Enterprise Funds, including those for 
which funding has been made available pursuant to section 201 of the 
Support for East European Democracy (SEED) Act of 1989 (22 U.S.C. 
5421).
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