International Development and Finance Act of 1989
PL 101-240 (H.R.2494), enacted 12/19/1989

103 STAT. 2492 
PUBLIC LAW 101-240—DEC. 19, 1989 
Public Law 101-240 
101st Congress 
An Act 
Dec. 19, 1989 
[H.R. 2494] 
International 
Development 
and Finance Act 
of 1989. 
22 u s e 2151 
note. 
To reauthorize the Export-Import Bank tied aid credit fund and pilot interest subsidy 
program, to provide for the participation of the United States in a replenishment of 
the Inter-American Development Bank and in the Enhanced Structural Adjust-
ment Facility of the International Monetary Fund, to improve the safety and 
soundness of the United States banking system and encourage the reduction of the 
debt burdens of the highly indebted countries, to encourage the multilateral 
development bsmks to engage in environmentally sustainable lending practices and 
give greater priority to poverty alleviation, tind for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
Development and Finance Act of 1989". 
(b) TABLE OF CONTENTS.— 
Sec. 1. Short title; table of contents. 
'International 
TITLE I—EXPORT-IMPORT BANK ACT AMENDMENTS 
Sec. 
Sec 
101. 
102. 
Export-Import Bank Act amendments. 
Extension of credit by Export-Import Bank with respect to Angola pro-
hibited unless certain conditions are met. 
Sec. 103. Export-import programs to the People's Republic of China prohibited 
unless certain conditions are met. 
TITLE n—INTER-AMERICAN DEVELOPMENT BANK 
Sec. 201. Participation by the United States in a capital increase of the Inter-
American Development Bank; increase in resources of fund for special 
operations. 
Investment in human capital. 
Limitations on Inter-American Development Bank policy based lending. 
Increase in Inter-American Development Bank lending to the Caribbean. 
Sense of the Congress that Inter-American Development Bank loans 
should reduce dependence on illicit narcotics. 
Sec. 206. Directives regarding government-owned enterprises in countries receiving 
lADB loans. 
Sec 
Sec 
Sec 
Sec 
202. 
203. 
204. 
205. 
TITLE III—INTERNATIONAL MONETARY FUND ENHANCED STRUCTURAL 
ADJUSTMENT FACILITY 
Sec. 301. Contribution to the interest subsidy account of the Enhanced Structural 
Adjustment Facility of the International Monetary Fund. 
Sec. 302. Discussions to enhance the capacity of the International Monetary Fund 
to alleviate the potentially adverse impacts of Fund programs on the 
poor and the environment. 
TITLE IV—INTERNATIONAL DEBT PROVISIONS 
Sec. 401. Short title. 
Sec. 402. Additional reserve requirements. 
Sec. 403. Report on mark to market accounting. 
Sec. 404. Study on elimination of capital flight. 
Sec. 405. Factors to be taken into account in developing United States policy 
toward debt reduction for certain highly indebted countries; report to 
the Congress. 
Sec. 406. Sense of the Congress that agreements to reduce debt burden should be 
accompanied by trade liberalization. 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2493 
Sec 407. Linkage of debt reduction loans to reduction in drug trafficking; report to 
Congress. 
TITLE V—ALLEVIATION OF POVERTY; ENVIRONMENTAL PROVISIONS; 
DEBT-FOR-DEVELOPMENT SWAPS; CONSOLIDATION OF REPORTING 
REQUIREMENTS 
Subtitle A—Alleviation of Poverty 
Sec. 501. Increasing the productive economic participation of the poor. 
Subtitles—International Debt Exchanges and the Environment 
Sec. 511. Sense of the Congress resolution regarding environmental policy and inter-
national debt exchanges. 
Sec. 512. Multilateral development banks and debt-for-nature exchanges. 
Subtitle C—Environmental Impact Assessments 
Sec. 521. Assessment of environmental impact of proposed multilateral develop-
ment bank actions. 
Subtitle D—Debt-for-Development Swaps 
Sec. 531. Encouragement of debt-foMevelopment swaps through local currency 
repayment. 
Subtitle E—Consolidation of Certain Reporting Requirements 
Sec. 541. Consolidation of certain reporting requirements. 
TITLE VI—MISCELLANEOUS PROVISIONS 
Sec. 601. Sense of the Congress that the International Bank for Reconstruction and 
Development and the International Monetary Fund should expeditiously 
act upon loan requests from Poland. 
Sec. 602. Sense of the Congress supporting assistance by multilateral lending insti-
tutions to establish financial institutions in Poland. 
Sec. 603. Sense of the Congress relating to conditional financial assistance by multi-
lateral lending institutions to Poland. 
Sec. 604. Sense of the Congress opposing the making of certain loans or the exten-
sion of certain financial and technical assistance to the People's Repub-
lic of China. 
TITLE Vn-^MISCELLANEOUS 
Sec. 701. Short title. 
/ 
PART A—COMMERCIAL DEBT-FOR NATURE EXCHANGES 
^ Sec. 711. Amendment to the Foreign Assistance Act. 
PART B—MULTILATERAL FOREIGN ASSISTANCE CORPORATION 
Sec. 721. General policy. 
Sec. 722. Policy on negotiations. 
TITLE VIII—EFFECTIVE DATE 
Sec. 801. Effective date. 
TITLE I—EXPORT-IMPORT BANK ACT 
AMENDMENTS 
SECIOI. EXPORT-IMPORT BANK ACT AMENDMENTS. 
(a) INTEREST SUBSIDY PAYMENTS.—Section 2(f) of the Export-
Import Bank Act of 1945 (12 U.S.C. 635(f)) is amended— 
(1) by striking paragraph (2) and redesignating paragraphs (3), 
(4), and (5) as paragraphs (2), (3), and (4), respectively; 
(2) by amending paragraph (3) (as so redesignated by para-
graph (1) of this subsection) to read as follows: 
"(3) LIMITATION ON AUTHORIZATION OP APPROPRIATIONS.—To 
carry out this subsection, there are authorized to be appro-
priated to the Bank not to exceed— 
"(A) $20,000,000, for fiscal year 1990; and 
"(B) $35,000,000, for fiscal year 1991."; and 
(3) in paragraph (4) (as so redesignated by paragraph (1) of 
^ 
this subsection), by striking "1988" and inserting "1991'\ 
(b) TIED AID CREDIT PROGRAM AND FUND.— 
103 STAT. 2494 
PUBLIC LAW 101-240—DEC. 19, 1989 
(1) PURPOSE.—Section 15(aX5) of such Act (12 U.S.C. 635i-
3(aX5)) is amended by striking all that follows "commercial 
advantage" and inserting "for the purposes o
f
—
-
"(A) enforcing compliance with the existing arrangement 
restricting the use of tied aid and partially untied aid 
credits for commercial purposes; and 
"(B) facilitating efforts to negotiate, establish, and en-
force new or revised comprehensive intemationsd arrange-
ments effectively restricting the use of tied aid and 
partially untied aid credits for commercial purposes; 
and such program should be used aggressively for such 
purposes.". 
Grants 
(2) EsTABUSHMENT OF PROGRAM.—The first Sentence of section 
15(bXl) of such Act (12 U.S.C. 635i-3a)Xl)) is amended by strik-
ing the matter preceding subparagraph (A) and inserting "To 
carry out the purposes of subsection (aX5), the Bank shall 
establish a tied aid credit program under which grants shall be 
made from funds available in the Tied Aid Credit Fund estab-
lished under subsection (c)—". 
(3) ADMINISTRATION OF PROGRAM.—Section 15(bX2XA) of such 
Act (12 U.S.C. 635i-3(bX2XA)) is amended by striking all that 
follows "to" and inserting "carry out the purposes described in 
subsection (aX5);". 
(4) AvAiLABiLTFY OF FUNDS.—Section 15(cX2) of such Act (12 
U.S.C. 635i-3(cX2)) is amended— 
(A) by striking "cost" and inserting "amount equal to the 
^ 
concessionality level"; and 
(B) by striking all that follows "authorized by the Bank" 
and inserting "through fiscal year 1991.". 
(5) LIMITATION ON AUTHORIZATION OF APPROPRIATIONS FOR 
r*^ FISCAL YEARS 1990 AND 1991.—Section 15(eXl) of such Act (12 
U.S.C. 635i-3(eXl)) is amended by inserting ", and for fiscal 
years 1990 and 1991, $300,000,000" after "$300,000,000". 
(6) REPORTS.—Section 15(gX2XE) of such Act (12 U.S.C. 635i-
3(gX2XE)) is amended to read as follows: 
"(E) the progress achieved by negotiations conducted to 
carry out the purposes described in subsection (aX5).". 
(7) LIMITATION ON AUTHORIZATION OP APPROPRIATIONS FOR 
FISCAL YEARS 1990, 1991, AND 1992.—Section 15(eXl) of such Act 
(12 U.S.C. 635i-3(eXl)) is amended by inserting ", and for fiscal 
years 1990, 1991, and 1992, $200,000,000" after "$300,000,000". 
(c) 
AUTHORITY TO ACCEPT REIMBURSEMENT FOR CERTAIN 
EX-
PENSES.—Section 2(aXl) of such Act (12 U.S.C. 635(aXl)) is 
amended— 
(1) in the 6th sentence— 
(A) by striking "The Bank may" and inserting "Subject to 
regulations which the Bank shall issue pursuant to section 
553 of title 5, United States Code, the Bank may"; and 
(B) by inserting ", and may accept reimbursement for 
travel and subsistence expenses incurred by a director, 
officer, or employee of the Bank, in accordance with sub-
chapter I of chapter 57 of title 5, United States Code" before 
the period; and 
(2) in the 7th sentence, by inserting "and shall be offset 
: against the expenses of the Bank for such activities" before the 
period. 
Tf. -
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2495 
(d) CLARIFYING AMENDMENT.—Section 2(bX6XG) of such Act (12 
U.S.C. 635(bX6XG)) is amended by striking "this paragraph" and 
inserting "subparagraphs (B), (C), (D), and (F)". 
(e) REPORT WITH RESPECT TO LOAN LOSS RESERVES.—Before the end 
w 
of the 6-month period beginning on the date of the enactment of this 
section, the Export-Import Bank of the United States shall submit a 
report to the Congress explaining why the Bank has not established 
a loan loss reserve. In preparing such report, the Bank shall— 
(1) determine if the establishment of a loan loss reserve would 
result in the unproductive characterization of the creditworthi-
ness of certain types of borrowers; 
(2) consult with the appropriate Executive branch entities to 
determine the budgeting and financial management implica-
tions of establishing a loan loss reserve; 
(3) review whether, and the extent to which similar bilatereil 
and multilateral lending institutions make provision against 
loan losses; and 
(4) report on the steps needed to return the Bank to 
profitability. 
SEC. 102. EXTENSION OF CREDIT BY EXPORT-IMPORT BANK WITH RE-
SPECT TO ANGOLA PROHIBITED UNLESS CERTAIN CONDI-
TIONS ARE MET. 
Section 2(b) of the Export-Import Bank Act of, 1945 (12 U.S.C. 
635(b)) is amended by adding at the end the following: 
"(12) PROHIBITION RELATING TO ANGOLA.—Notwithstanding any 
determination by the President under paragraph (2) or (11), the 
Bank may not guarantee, insure, or extend (or participate in the 
extension of) credit in connection with any export of any good (other 
than food or an agricultured commodity) or service to the People's 
Republic of Angola until the President certifies to the CJongress that 
free smd fair elections have been held in Angola in which all 
particip£mts were afforded free and fair access, and that the govern-
ment of Angola— 
"(A) is willing, and is actively seeking, to achieve an equitable 
political settlement of the conflict in Angola, including free and 
fair elections, through a mutual cease-fire and a dialogue with 
the opposition armed forces; 
"(B) has demonstrated progress in protecting internationally 
recognized human rights, and particularly in— 
"(i) ending, through prosecution or other means, involve-
ment of members of the military and security forces in 
political violence and abuses of internationally recognized 
human rights; 
"(ii) vigorously prosecuting persons engaged in political 
violence who are connected with the government; and 
"(iii) bringing to justice those responsible for the abduc-
•i^,- 
tion, torture, and murder of citizens of Angola and citizens 
of the United States; and 
"(C) has demonstrated progress in its respect for, and protec-
tion of— 
"(i) the freedom of the press; 
"(ii) the freedom of speech; 
"(iii) the freedom of assembly; 
"(iv) the freedom of association (including the right to 
organize for political purposes); 
(v) internationally recognized worker rights; and >
A 
103 STAT. 2496 
PUBLIC LAW 101-240—DEC. 19, 1989 
"(vi) other attributes of political pluralism and de-
mocracy. 
President of U.S. 
The President shall include in each report made pursuant to this 
Reports. 
paragraph a detailed statement with respect to each of the condi-
tions set forth in this parcigraph. This pargigraph shall not be 
construed to impose any requirement with respect to Angola that is 
more restrictive than any requirement imposed by this section 
generally on £ill other countries. . 
12 use 635 note. 
SEC. 103. EXPORT-IMPORT PROGRAMS TO THE PEOPLE'S REPUBLIC OF 
CHINA PROHIBITED UNLESS CERTAIN CONDITIONS ARE MET. 
(a) Notwithstanding any other provision of law and subject to the 
provisions of subsections (b) and (c), the Export-Import Bank of the 
United States shall not finance any trade with, nor extend any loan, 
credit, credit guarantee, insurance or reinsurance to the People's 
Republic of China. 
Ot)) The prohibitions described in subsection (a) of this section shall 
not apply to food or agricultural commodities. 
(c) TTie President may waive the prohibitions in subsection (a) if he 
makes a report to Congress either— 
(1) that the Government of the People's Republic of China has 
made progress on a program of political reform throughout the 
country, as well as in Tibet, which includes— 
(A) lifting of martial law; 
(B) heilting of executions and other reprisals against 
individuals for the nonviolent expression of their political 
beliefs; 
(C) release of political prisoners; 
(D) increased respect for internationally 
recognized 
human rights, including freedom of expression, the press, 
assembly, and association; and 
(E) permitting a freer flow of information, including an 
end to the jamming of Voice of America and greater access 
for foreign journalists; or 
(2) it is in the national interest of the United States to 
terminate a suspension under subsection (a). 
Agriculture and 
agricultural 
commodities. 
TITLE II—INTER-AMERICAN 
DEVELOPMENT BANK 
SEC. 201. PARTICIPATION BY THE XWITED STATES IN A CAPITAL 
INCREASE OF THE INTER-AMERICAN DEVELOPMENT BANK; 
INCREASE IN RESOURCES OF FUND FOR SPECIAL OPER-
ATIONS. 
The Inter-American Development Bank Act (22 U.S.C. 283 et seq.) 
is amended by adding at the end the following: 
22 use 283Z-5. 
"SEC. 33. CAPITAL INCREASE; INCREASE IN RESOURCES OF FUND FOR 
SPECIAL OPERATIONS. 
"(a) AuTHOiUTY To VOTE FOR, AND TO SUBSCRIBE AND CONTRIBUTE 
TO, INCREASE IN AUTHORIZED CAFFFAL STOCK OF BANK AND INCREASE 
IN RESOURCES OF FUND FOR SPECIAL OPERATIONS.— 
"(1) VOTE AUTHORIZED.—The United States Governor of the 
Bank is authorized to vote for resolutions which— 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2497 
"(A) were transmitted by the Board of Executive Direc-
tors to the Governors of the Bank by resolution of April 19, 
1989; 
"(B) are pending before the Board of Governors of the 
Bank; and 
"(C) provide for— 
"(i) an increase in the authorized capital stock of the 
Bank and sulracriptions to the Bank; and 
"(ii) an increase in the resources of the Fund for 
Special Operations and contributions to the Fund. 
"(2) 
SUBSCRIPTION AND CONTRIBUTION AUTHORTTY.—To 
the 
extent and in the amounts provided in advance in appropria-
tions Acts, on adoption of the resolutions described in para-
graph (1), the United States Governor of the Bank may, on 
behalf of the United States— 
"(A) subscribe to 760,112 shares of the increase in the 
authorized capital stock of the Bank; and 
"(B) contribute $82,304,000 to the Fund for Special 
Operations. 
"(b) LIMITATION ON AUTHORIZATION OP APPROPRIATIONS.—To pay 
for the subscription and contribution authorized under subsection 
(a), there are authorized to be appropriated, without fiscal year 
limitation, for payment by the Secretary of the Treasury— 
"(1) $9,169,559,712, for the United States subscription to the 
capital stock of the Bank; and 
"(2) $82,304,000, for the United States contribution to the 
Fund for Special Operations. 
"(c) ORGANIZATIONAL CHANGES REQUIRED TO BE MADE BEFORE 
PAYMENT FOR SUBSCRIPTION TO CAPITAL STOCK AND CONTRIBUTION TO 
THE FUND FOR SPECIAL OPERATIONS.—The Secretary of the Treasury 
may not make any payment for the subscription and contribution 
authorized under subsection (a) unless the Bank— 
"(1) has established an environmental unit with responsibility 
for the development, evaluation, and integration of Bank poli-
cies, projects, and programs designed to promote environ-
mentally sustainable development in borrower countries; 
"(2) has increased the number of the staff of the Bank with 
environmentally oriented responsibilities and training; 
"(3) provides for an increase in the number of environ-
mentally beneficial projects cmd programs financed by the 
Bank; and 
"(4) has designed a process for ensuring the access of indige-
nous non-governmental organizations to the process for design-
ing projects and programs. 
"(d) CERTIFICATION OF ACCESS TO BANK RECORDS REQUIRED BEFORE 
PAYMENT FOR SUBSCRIPTION TO CAPITAL STOCK AND CONTRIBUTION TO 
FUND FOR SPECIAL OPERATIONS.—The Secretary of the Treasury 
shall not make any pajrment for the subscription and contribution 
authorized under subsection (a) until the Secretary, after consulta-
tion with the United States Executive Director of the Bank, certifies 
to the Congress that— 
"(1) the Bank has given the CJomptroUer General of the Nicaragua. 
United States access to the audit memorandum issued by the 
Auditor General of the Bank with respect to the November 1987 
disbursement of funds to the Government of Nicaragua; 
103 STAT. 2498 
PUBLIC LAW 101-240—DEC. 19, 1989 
"(2) the Bank has implemented and is continuing to imple-
ment revised procedures issued in 1988 for collecting loan serv-
ices payments in arrears; 
"(3) the revised procedures referred to in paragraph (2) satisfy 
the recommendations of the Auditor Greneral of the Bank; and 
"(4) the Comptroller General of the United States has access 
to all documents of the Bank on the same terms and under the 
same conditions as such documents are made available to the 
United States Executive Director of the Bank.". 
SEC. 202. INVESTMENT IN HUMAN CAPITAL. 
(a) PROMOTION OP LENDING IN SUPPORT OF HUMAN CAPITAL.—The 
Inter-American Development Bank Act (22 U.S.C. 283 et seq.) is 
amended by adding after the section added by section 201 of this Act 
the following: 
22 u s e 283Z-6. 
"SEC. 34. INVESTMENT IN HUMAN CAPITAL. 
"(a) IN GENERAL.—The Secretary of the Tresisury shall instruct 
the United States Executive Director of the Inter-American Devel-
opment Bank to propose and use the voice and vote of such director, 
during the 4-year period beginning on Januanr 1,1990, to vigorously 
promote an increase in the proportion of Bank lending in support of 
projects and programs which support investments in human capital 
and to seek the rapid implementation by the Bank of systematic 
mechanisms of consultation with locally affected populations in 
borrower countries either directly or through appropriate represent-
ative non-governmental organizations. 
"
O
t
)
) INVESTMENTS IN HUMAN CAPITAL DEFINED.—As used in 
subsection (a), the term 'investments in human capital' means 
investments in projects, policies, and programs designed to improve 
urban and rural health care and sanitation, basic nutrition, edu-
cation, the small-producer private sector, the economic activities of 
women, and the development of indigenous non-governmental 
organizations.". 
22USC283Z-6 
(b) R
E
P
O
R
T T
O T
H
E CONGRESS.—The Chairman of the National 
note. 
Advisory CouncU on International Monetary and Financial Policies 
shall include in the report required by section 1701 of the Inter-
national Financial Institutions Act for fiscal year 1991 a report on 
the efforts undertaken by the United States Executive Director of 
the Inter-American Development Bank, and the progress to date, in 
achieving the objectives of section 34 of the Inter-American Develop-
ment Bank Act. 
SEC. 203. LIMITATIONS ON 
INTER-AMERICAN DEVELOPMENT BANK 
POLICY BASED LENDING. 
The Inter-American Development Bank Act (22 U.S.C. 283 et seq.) 
is amended by adding after the section added by section 202 of thus 
Act the following: 
22 u s e 283Z-7. 
"SEC. 35. UMITATIONS ON POLICY BASED LENDING. 
"The Secretary of the Treasury shall— 
"(1) take all necessary steps to encourage the Bank to limit 
the aggregate value of tne policy based loans made by the Bank 
(other than policy based loans made to any country which the 
Bank has determined is economically less developed or has a 
limited market economy, which are used to purchase sovereign 
debt of such country or to reduce the debt or debt service 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2499 
burden of such country) during the 4-year period beginning on 
January 1,1990, to 25 percent of the aggregate value of all loans 
made by the Bank during such 4-year period; 
"(2) take all necessair steps to encourage the Bank to limit 
the aggregate value of tne policy based loans made by the Bank 
to the government of a particular country during such 4-year 
period, to 50 percent of the aggregate value of all loans made by 
the Bank to such government during such 4^ear period; 
"(3) instruct the United States Executive Director of the Bank 
to explore with the other Executive Directors of the Bank ways 
to use a portion of the resources made available to the Bank by 
reason of the subscription and contribution described in section 
33(aX2) for debt reduction and debt service reduction for coun-
tries described in paragraph (1); and 
"(4) before the end of the 12-month period beginning on the Reports. 
date of the enactment of this section, report to the Congress on 
the matters described in paragraph (3).". 
SEC. 204. INCREASE IN INTER-AMERICAN DEVELOPMENT BANK LENDING 
TO THE CARIBBEAN. 
The Inter-American Development Bank Act (22 U.S.C. 283 et seq.) 
is amended by adding after the section added by section 203 of this 
Act the following: 
-SEC. 36. INCREASE IN LENDING TO THE CARIBBEAN. 
22 USC 283z-8. 
"The Secretary of the Treasury shall instruct the .United States 
Executive Director of the Bank to enter into discussions with the 
management of the Bank and with other member country govern-
ments to seek to increase Bank lending to the Caribbean region, 
directly or through appropriate financial intermediaries, for viable 
projects which will— 
"(1) result in expanded regional economic integration, diver-
sification, and industrial and agricultural production, and im-
proved infrastructure; and 
"(2) seek to ensure equitable and environmentally sustainable 
economic growth.". 
SEC. 205. SENSE OF THE CONGRESS THAT INTER-AMERICAN DEVELOP-
MENT BANK LOANS SHOULD REDUCE DEPENDENCE ON 
ILLICIT NARCOTICS. 
It is the sense of the Congress that, whenever possible and appro-
priate, loans made by the Inter-American Development Bank during 
the 4-year period beginning on January 1, 1990, should promote 
economic development which will reduce the growing economic 
dependence on the production and transit of illicit narcotics in 
certain borrower countries. 
SEC. 206. DIRECTIVES REGARDING GOVERNMENT-OWNED ENTERPRISES 
IN COUNTRIES RECEIVING lADB LOANS. 
The International Financial Institutions Act (22 U.S.C. 262c et 
seq.) is amended by redesignating section 1612 as section 1613 and 
22 USC 262p-5. 
by inserting after section 1611 the following: 
"SEC. 1612. DIRECTIVES 
REGARDING 
GOVERNMENT-OWNED 
ENTER- 
22 USC 262p-4g. 
PRISES IN COUNTRIES RECEIVING lADB LOANS. 
"(a) FINDING.—The Congress finds that a principal focus of United 
States Government policy in the multilateral development banks 
103 STAT. 2500 
PUBLIC LAW 101-240—DEC. 19, 1989 
has been and should be to foster greater development of the private 
sector in member borrowing countries of such banks. 
"(b) TECHNICAL ASSISTANCE TO TRANSFORM GOVERNMENT-OWNED 
ENTERPRISES INTO PRIVATELY OWNED ENTERPRISES.—In order to 
assist and strengthen the advancement of ongoing efforts to have 
the Inter-American Development Bank play a key role in building a 
viable private sector in member borrowing countries of such bank, 
and to further assist such bank in its determination to facilitate the 
transfer of government-owned enterprises in such countries to pri-
vate ownership, the Secretary of the Treasury shall instruct the 
United States Executive Director of such bank to vigorously encour-
age the provision of technical assistance to such countries to trans-
form enterprises owned, in whole or in part, by the governments of 
such countries into privately owned, self-suf^cient enterprises. Such 
technical assistance may involve the valuation of the assets of such 
government-owned enterprises, the assessment of tender offers, and 
the creation or strengthening of market-based mechanisms to facili-
tate such a transfer of ownership.". 
TITLE III—INTERNATIONAL MONETARY 
FUND ENHANCED 
STRUCTURAL AD-
JUSTMENT FACILITY 
SEC. 301. CONTRIBUTION TO THE INTEREST SUBSIDY ACCOUNT OF THE 
ENHANCED STRUCTURAL ADJUSTMENT FACILITY OF THE 
INTERNATIONAL MONETARY FUND. 
The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is 
amended by adding at the end the following: 
22 u s e 286e-12. 
"SEC. 54. CONTRIBUTION TO THE INTEREST SUBSIDY ACCOUNT OF THE 
ENHANCED STRUCTURAL ADJUSTMENT FACILITY OF THE 
INTERNATIONAL MONETARY FUND. 
"(a) CONTRIBUTION AUTHORIZED.— 
"(1) IN GENERAL.—Subject to paragraph (2), the United States 
Governor of the Fund may contribute $150,000,000 to the In-
terest Subsidy Account of the Enhanced Structural Adjustment 
Facility of the Fund on behalf of the United States. 
"(2) CONDITION.—The United States Governor of the Fund 
may not m£ike a commitment to contribute any amount au-
thorized to be contributed under paragraph (1) before an 
amount equal to such amount has been appropriated for such 
purpose. 
"(b) LIMITATION ON AUTHORIZATION OF APPROPRIATIONS.—To pay 
for the contribution authorized by subsection (a), there are au-
thorized to be appropriated not to exceed $150,000,000, without fiscal 
year limitation, for payment by the Secretary of the Treasury.". 
SEC. 302. DISCUSSIONS TO ENHANCE THE CAPACITY OF THE INTER-
NATIONAL MONETARY FUND TO ALLEVIATE THE POTEN-
TIALLY ADVERSE IMPACTS OF FUND PROGRAMS ON THE 
- « 
POOR AND THE ENVIRONMENT. 
The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is 
amended by adding after the section added by section 301 of this Act 
the following: 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2501 
"SEC. 66. DISCUSSIONS TO ENHANCE THE CAPACITY OF THE FUND TO 
ALLEVIATE THE POTENTIALLY ADVERSE IMPACTS OF FUND 
PROGRAMS ON THE POOR AND THE ENVIRONMENT. 
"The Secretary of the Treasury shall instruct the United States 
Executive Director of the Fund to seek policy changes by the Fund, 
through formal initiatives and through bilateral discussions, which 
will result in— 
"(1) the initiation of a systematic review of policy prescrip-
tions implemented by the Fund, for the purpose of determining 
whether the Fimd's objectives were met and the social and 
environmental impacts of such policy prescriptions; and 
"(2) the establishment of procedures which ensure the inclu-
sion, in future economic reform programs approved by the 
Fund, of policy options which eliminate or reduce the potential 
adverse impact on the well-being of the poor or the environment 
resulting from such programs.". 
TITLE IV—INTERNATIONAL DEBT 
PROVISIONS 
22 use 286kk. 
SEC. 401. SHORT TITLE. 
This title may be cited as the 
1989". 
'Foreign Debt Reserving Act of 
SEC. 402. ADDITIONAL RESERVE REQUIREMENTS. 
(a) FINDINGS.—The Congress finds that— 
(1) since the adoption of the International Lending Super-
vision Act of 1983, the credit quality of loans by United States 
banking institutions to highly indebted countries has deterio-
rated and the prospects for full repayment of such loans have 
diminished; 
(2) in general during this period, the level of country exposure 
and transfer risk associated with loans by United States bank-
ing institutions to highly indebted countries has not been ade-
quately reflected in the reserve levels established by many 
individual United States banking institutions or the reserve 
requirements imposed by Federal banking agencies pursuant to 
such Act; 
(3) during the last 3 years and particularly in recent months, 
United States banking institutions have increased their re-
serves for possible losses from loans to highly indebted countries 
but such reserves remain, in some cases, significantly lower 
than reserves established by banking institutions in a number 
of foreign countries and may not be adequate to deal with 
potential risks; £uid 
(4) in order to fulfill the purposes of such Act, the Federal 
banking agencies should take a more active role in reviewing 
reserve levels established by United States banking institutions 
for potential losses from loans to highly indebted countries and 
in requiring appropriate levels of both special and general 
reserves to reflect the increased risk of such loans. 
(b) IN GENERAL.—The International Lending Supervision Act of 
1983 (12 U.S.C. 3901 et seq.) is amended by inserting after section 
905 the following new section: 
Foreign Debt 
Reserving Act of 
1989. 
Loans. 
12 use 3901 
note. 
12 use 3904a 
note. 
103 STAT. 2502 
PUBLIC LAW 101-240—DEC. 19, 1989 
12 u s e 3904a. 
"SEC. 905A. ADDITIONAL RESERVE REQUIREMENTS. 
"(a) IN GENERAL,—Each appropriate Federal banking agency shall 
review the exposure to risk of United States banking institutions 
arising from the medium- and long-term loans made by such institu-
tions that are outstanding to any highly indebted country. Each 
agency shall provide direction to such institutions regarding addi-
tions to general reserves maintained by each banking institution for 
potential loan losses and special reserves required by such agency 
arising from such review. 
^ 
"(b) DETERMINATION OP INSTITUTIONAL EXPOSURE TO RISK.—In 
determining the exposure of an institution to risk for purposes of 
subsection (a), the appropriate Federal banking agency— 
"(1) shall determme whether any country exposure that is, 
and has been for at le£ist 2 years, rated in the category 'Other 
Transfer Risk Problems' or the category 'Substandard' bv the 
Intereigency Country Exposure Review Committee should be 
reevaluated; 
"(2) may exempt, in full or in part, from reserve requirements 
established pursuant to subsection (a), any loan— 
"(A) to a country that enters into a debt reduction, debt 
service reduction, or financing program with its bank credi-
tors that is supported by the International Bank for 
Reconstruction and Development or the International 
Monetary Fund; or 
"(B) secured, in whole or in part, by appropriate collat-
eral for payment of interest or principal; 
"(3) take into account any other factors which bear on such 
exposure and the particular circumstsmces of the institution; 
and 
"(4) shall consider as indicators of risk, where appropriate, 
the average reserve levels maintained by or required of banking 
institutions in foreign countries and secondary market prices 
for such loans. 
"(c) TIMING AND REPORT.— 
"(1) DETERMINED BY AGENCY.—Except as provided in para-
graph (3), each appropriate Federal banking agency shall 
determine the timing of any addition to reserves required by 
, 
subsection (a). 
"(2) REPORT.—Each appropriate Federal banking agency shall 
include in each report required to be made under section 913(d) 
after 1989 a report on the actions taken pursuant to this section. 
"(3) DEADUNE.—Each Federal agency required to undertake a 
review described in subsection (a) shall complete the review not 
later than December 31,1990. 
"(d) HIGHLY INDEBTED COUNTRY DEFINED.—As used in this section, 
the term 'highly indebted country' means any country designated as 
V 
a 'Highly Indebted Country' in the annual World Debt Tables most 
recently published by the International Bank for Reconstruction 
and Development before the date of the enactment of this section.". 
SEC. 403. REPORT ON MARK TO MARKET ACCOUNTING. 
(a) REPORT REQUIRED.—Before the end of the 90-day period begin-
ning on the date of the enactment of this section, the Board of 
Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, and the Comptroller of the Currency shall 
jointly report to the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives and the Committee on 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2503 
Banking, Housing, and Urban Affairs of the Senate on the merits of 
mark to market accounting treatment as an appropriate accounting 
treatment for the sovereign debt of highly indebted countries which 
is held by United States commercial banl^. 
(b) CONTENTS OF REPORT.—The report required under subsection 
(a) shall include— 
(1) a discussion of the merits of mark to market accounting 
treatment as the appropriate accounting treatment for the 
sovereign debt of highly indebted countries which is held by 
United States commercial banks; and 
(2) a description of the factors which the Board of Governors 
of the Federal Reserve Sjrstem, the Federal Deposit Insurance 
Corporation, and the Comptroller of the Currency will consider 
in future assessments of the applicability of mark to market 
accounting to such debt. 
SEC. 404. STUDY ON ELIMINATION OF CAPITAL PLIGHT. 
(a) IN GENERAL.—The Secretary of the Treasury shall instruct the 
United States Executive Director of the International Monetary 
Fund to propose that the Fund conduct a study on multilateral 
means by which the banking industry might help reverse capital 
flight from countries which are engaged in debt restructuring, 
including— 
(1) the feasibility of disclosing the names of account holders 
whose accounts may consist of flight capital, and the balances of 
such accoimts; 
(2) the usefulness of such disclosures in deterring the creation 
and maintenance of such accounts, and how such deterrence 
would operate or be defeated; 
(3) the extent to which any such information is gathered and 
to whom such information is made avsdlable; 
(4) the receptiveness of such countries to the disclosure of 
such mformation; 
(5) the difn.culties in, and the cost of, collecting such informa-
tion and overcoming legal obstacles used to disguise the true 
ownership of such deposits, including the feasibility of using the 
threat of confiscatory penalties to prevent the disguising of the 
ownership of deposits; 
(6) the usefiilness of using taxes as a means to encourage the 
repatriation of flight capital; and 
(7) the applicability (if any) of efforts to facilitate the identi-
fication, tracing, seizure, and forfeiture of drug crime proceeds, 
and to prevent the use of the banking system and of financial 
institutions for the purpose of money laundering. 
(b) FLIGHT CAPITAL DEFINED.—As used in subsection (a), the term 
"flight capital" means any asset— 
(IXA) which is deposited in a banking institution for safekeep-
ing or investment purposes; or 
(B) for which a financial institution serves as a conduit, an 
agent, or a fiduciary in a transaction; and 
(2) the owner of which may be a legal resident of a country 
other than the country in which the institution is located. 
(c) REPORT TO THE CONGRESS.—Not later than the end of the 180-
day period beginning on the date of the enactment of this Act, the 
Secretary of the Treasury shall submit to the Chairman of the 
Committee on Banking, Finance and Urban Affairs of the House of 
Representatives, and the Committee on Banking, Housing, and 
103 STAT. 2504 
PUBLIC LAW 101-240—DEC. 19, 1989 
Urban Affairs of the Senate a report on the actions taken and 
studies completed as required by subsection (a). 
SEC 405. FACTORS TO BE TAKEN INTO ACCOUNT IN DEVELOPING UNITED 
. 
STATES POUCY TOWARD DEBT REDUCTION FOR CERTAIN 
HIGHLY INDEBTED COUNTRIES; REPORT TO THE CONGRESS. 
Agriculture and 
(a) FACTOBS TO BE TAKEN INTO ACCOUNT.—In developing the 
agricultural 
policy of the United States Government with respect to debt reduc-
commodities. 
^^^ f^j. ^^^^i highly indebted country which has a substantial share 
of the export market for 1 or more agricultural commodities the 
export market for which the United States also has a substantial 
share, the Secretary of the Treasury shall consider £unong other 
factors the effects of such policy on: 
(1) United States exports of such commodities. 
(2) The world price of such commodities. 
(3) Domestic agricultural production and land distribution 
patterns in such country. 
(4) The volume of exports from such country of agricultural 
commodities the export market for which such country has a 
f
, 
substantial share of. 
(5) Basic nutrition levels in such coimtry. 
(b) REPORT TO THE CONGRESS.—Before the end of the 12-month 
period beginning on the date of the enactment of this section, the 
Secretary of the Treasury shall submit a report to the Congress on 
the potential impact of such policy on such factors in the highly 
indebted countries. 
(c) HIGHLY INDEBTED COUNTRY DEFINED.—As used in this section, 
the term "highly indebted country" means any country designated 
as a "Highly Indebted Country" in the annued World Debt Tables 
most recently published by the International Bank for Reconstruc-
tion and Development before the date of the enactment of this 
section. 
SEC 406. SENSE OF THE CONGRESS THAT AGREEMENTS TO REDUCE 
DEBT 
BURDEN 
SHOULD 
BE ACCOMPANIED 
BY 
TRADE 
LIBERAUZATION. 
(a) FINDINGS.—The Congress finds that— 
» 
(1) Third World debtor nations have often been forced to raise 
trade barriers in order to accumulate foreign exchange sur-
pluses to repay debt obligations; 
/ 
(2) trade flows between such nations and the United States 
have lessened due to the debt crisis; 
(3) the reduction of trade barriers would benefit the world 
^ 
economy and promote economic growth; and 
(4) the Brady plan encourages debt reduction agreements on 
"
' 
behalf of domestic financial institutions. 
(b) SENSE OF THE CONGRESS.—It is the sense of Congress that the 
Secretary of the Treasury should continue to encourage trade 
Uberalization as an element of economic reform programs. 
22 u s e 2291 
SEC. 407. LINKAGE OF DEBT REDUCTION LOANS TO REDUCTION IN DRUG 
note. 
TRAFFICKING; REPORT TO CONGRESS. 
(a) FINDINGS.—The Congress finds that— 
(1) the Brady Initiative is a positive step, recognizing as it 
does the need for reducing the debt and debt service burdens of 
"
" 
the indebted developing countries; 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2505 
(2) the multilateral development banks should, as part of this 
debt reduction process, encourage such countries to further 
reform their economies by reducing their dependence on 
i 
production and traf&cking of illicit narcotics; and 
(3) reduction of debt should relieve some of the financial 
burden on these countries, and thereby enable them to rely on 
legal income-generating activities. 
(b) INSTRUCTION OP UNFTED STATES EXECUTIVE DIRECTORS.—The 
Secretary of the Treasury shall instruct the United States Executive 
Director of each multilateral development bank that, in voting with 
respect to loans from the multilateral development bank to reduce 
the debt and debt burden of borrowing countries which are major 
producers, processors, traffickers, or exporters of illegal drugs to the 
United States, the Executive Director shall give preference to those 
countries which show marked improvement in reducing the volume 
of cultivation, processing, trafficking, and export to the United 
States of illegal drugs. In making a determination under the preced-
ing sentence with respect to a country's improvement, the Secre-
tary of the Treasury shall consult with the heads of the relevant 
agencies. 
(c) REPORT TO CONGRESS.—The Secretary of the Treasury shall 
include, in the detailed accounting requirea by section 2018(c) of the 
International Narcotics Control Act of 1986 (22 U.S.C. 2191 note), 
relating to multilateral development bank assistance for drug eradi-
cation and crop substitution programs, an additional discussion of 
the steps taken and the progress made in implementing the goals set 
forth in subsection (b) of this section, and further steps needed to 
secure the achievement of these goals. 
(d) DEFiNmoNS.—As used in this section— 
(1) the term "multilateral development bank" includes the 
International Bank for Reconstruction and Development, the 
International Development Association, the International Fi-
nance Corporation, the Inter-American Development Bank, the 
Inter-American Investment Corporation, the Asian Develop-
ment Bank, the African Development Bank, and the African 
Development Fund; and 
(2) the term "illegal drugs" means "narcotic and psychotropic 
drugs and other controlled substances", as defined in section 
481(iX3) of the Foreign Assistance Act of 1961 (22 U.S.C. 
2291(iX3)). 
TITLE V—ALLEVIATION OF POVERTY; 
ENVIRONMENTAL PROVISIONS; DEBT-
FOR-DEVELOPMENT SWAPS; CONSOLI-
DATION 
OF 
REPORTING 
REQUIRE-
MENTS 
Subtitle A—Alleviation of Poverty 
SEC. 501. INCREASING THE PRODUCTIVE ECONOMIC PARTICIPATION OF 22 USC 262p-5. 
THE POOR 
The International Financial Institutions Act (22 U.S.C. 262c et 
seq.) is amended by redesignating section 1613 (as so redesignated by 
103 STAT. 2506 
PUBLIC LAW 101-240—DEC. 19, 1989 
section 206 of this Act) as section 1614 and by inserting after section 
1612 (as added by such section 206) the following: 
22 use 262p-4h. 
'^EC 1613. DISCUSSIONS TO INCREASE THE PRODUCTTVE ECONOMIC 
PASnCIPATION OF THE POOR; REPORTS. 
"(a) IN GENERAL.—The Secretaiy of the Treasury shall instruct 
tiie United States Executive Director for each multilateral develop-
ment bank to vigorously and continually advocate, in all replenisn-
ment n^otiations and in discussion with other directors of such 
bank and with such bank, the following: 
"(1) A majoT objective of such bank's operations and financing 
in each borrowing country, as a long term priority, should be to 
increase the productive role of the poor in the economy of such 
coimtry. 
"(2) Such bank should encourage and assist each borrowing 
country to develop sustainable national plans and strat^es to 
eliminate the causes and alleviate the manifestations of poverty 
which keep the poor from leading economically and sociidly 
productive lives. Such plans and strat^es should give attention 
to— 
"(A) the enhancement of human resources, including pro-
grams for basic nutrition, primary health services, basic 
education, and safe water and basic sanitation; 
"(B) access to income-generating activities, employment, 
and moductive assets sudi as land and credit; and 
*\C) consultation with public sector social agencies and 
local non-governmental organizations. 
"(3) As an integral element of ongoing policy dialogue with 
each borrowing country to design structural adjustment plans 
and project l^iding programs, such bank should provide assist-
ance consistent with auiieving the objectives of the country's 
national plan for increasing the productive economic participa-
tion of 
the poor. Such dialogue should be conducted wim govern-
ment agencies working in social and economic sectors and with 
non-governmental groups in the borrowing country, especially 
those that have grassroots involvement with poor people. 
"(4) In an annual review document, such bank snould describe 
the extent to which the goal of increasing the productive eco-
nomic participation of the poor is being advanced or retarded 
and the steps that are being taken to overcome obstacles to its 
fiilfillment. Such review should be based on information con-
tained in the bank's country implementation review documents 
and in the country strategy documents for each borrowing 
country. Such country strategy documents should describe the 
national strat^y for productive economic participation of the 
poor and the steps the bank plans to take to assist the borrow-
mg country during the period covered by the country strategy 
document. 
*\5) Sach bank should assist countries in assessing and mon-
itoring progress in achieving poverty alleviation goals and tar-
gets throuc^ measurement by appropriate social indicators. 
"(6) Such bank should adopt procedures and budgetary alloca-
tions for administrative purposes, and establish appropriate 
sts^ffing levels, to oisure that adequate resoiirces are available 
to imj^ement the bank's program for enhancing the productive 
economic participation of the poor, in consultetion with non-
governmental groups. 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2507 
"(7) Such bank should adopt, as a separate and major cri-
terion in the allocation of concessional fin£incing resources, a 
preferential allocation to each country which undertakes 
significant efforts to enhance the productive economic participa-
tion of the poor. 
"(8) Such bank should require each country which receives 
structural adjustment assistance to have in place, after a 
reasonable phase-in period, a strategy to enhance the produc-
tive economic participation of the poor. 
"(b) PROGRESS REPORT.—Before the end of the 1-year period begin-
ning on the date of the enactment of this section, the Secretary of 
the Treasury shall submit to the Committee on Banking, Finance 
and Urban Affairs and the Committee on Appropriations of the v 
House of Representatives, and the Committee on Foreign Relations 
and the Committee on Appropriations of the Senate, a report on the 
following: 
"(1) The status of advocacy and progress being made to imple-
ment the objectives of subsection (a), describing the success to 
date, the obstacles encountered, and future expectations of 
progress. 
"(2) A description of the progress to date in achieving the 
purposes of section 1611, including the institutional capacity 
and effort devoted to assisting in the development of statisticsd 
measures to assess the well-being of the poor. 
"(3) A description and evaluation of the progress to date in 
developing effective mechanisms for involving non-govern-
mental organizations, directly or indirectly, in the design, 
implementation, and monitoring of development projects, pro-
grams, and policies of the multilateral development banks.". 
Subtitle B—International Debt Exchanges and 
the Environment 
SEC 511. SENSE OF THE CONGRESS RESOLUTION REGARDING ENVIRON-
MENTAL POUCY AND INTERNATIONAL DEBT EXCHANGES. 
It is the sense of the Congress that— 
(1) the Secretary of the Treasury should include support for 
sustainable development and conservation projects when 
providii^ a framework for n^otiating or facilitating exchanges 
or reductions of commercial debt of foreign countries; and 
(2) that in assisting or facilitating the reduction of debt of 
heavily indebted foreign countries, through multilateral institu-
tions such as the International Monetary Fund or the Inter-
national Bank for Reconstruction and Development, the 
Secretary of State and the Secretary of the Treasury should— 
(A) support efforts to provide adequate resources for 
sustainable development and conservation projects as a 
component of the restructured commercial bank debt of 
that coimtry; and 
(B) in providing such support, seek to assure that— 
(i) the host government, or a local nongovernmental 
organization acting with the support of the host govem-
> • 
ment, has identified conservation or sustainable devel-
opment projects it will target for assistance; 
103 STAT. 2508 
PUBLIC LAW 101-240—DEC. 19, 1989 
(ii) there will be in place an organization, either 
governmental or nongovernmental, that will have the 
commitment to assure the long-term viability of the 
project; and 
(iii) the allocation of the resources provided for con-
< 
servation 
and 
sustainable 
development 
projects 
through the debt restructuring agreement is done in a 
manner that will not overwhelm or distort economic 
conditions in the host country. 
SEC. 612. MULTILATERAL DEVELOPMENT BANKS AND DEBT-FOR-NATURE 
EXCHANGES. 
The International Financial Institutions Act (22 U.S.C. 262c et 
seq.) is amended by redesignating section 1614 (as so redesignated by 
22 use 262p-5. 
section 501 of this Act) as section 1617, and by inserting after section 
1613 (as added by such section 501) the following: 
Conservation. 
"SEC. 1614. MULTILATERAL 
DEVELOPMENT 
BANKS 
AND DEBT-FOR-
22 use 262p-4i. 
NATURE EXCHANGES. 
"(a) DIRECTIONS TO THE UNITED STATES EXECUTIVE DIRECTORS.— 
The Secretary of the Treasury shall direct the United States Execu-
tive Directors of the multilateral development banks to— 
"(1) negotiate for the creation in each respective multilateral 
development bank, except where the Secretary of the Treasury 
determines that the provisions of this subsection have pre-
viously been met, of a department that will— 
"(A) be responsible for environmental protection and re-
source conservation, including support for restoration, 
protection, and sustainable use policies; 
"(B) develop and monitor strict environmental guidelines 
and policies to govern lending activities; and 
'. *
'
- 
"(C) actively promote, coordinate and facilitate debt-for-
nature exchaiiges and the restoration, protection, and 
sustainable use of tropical forests, renewable natural 
resources, endangered ecosystems and species in debtor 
,«. K 
countries; 
"(2) support and encourage the approval of multilateral devel-
opment bank loans which include provisions that foster and 
facilitate the implementation of a sound and effective environ-
mental policy in the borrowing country; 
"' 
"(3) encourage the banks to assist such countries in reducing 
•' 
and restructuring private debt through the use of a portion of a 
project or policy based environmental loan in ways which will 
' 
enable such countries to buy back private debt at a rate of 
discoimt available for such debt, at auction in the secondary 
market or through negotiations with creditors holding such 
debt; 
"(4) seek to ensure that staff of each bank facilitate debtor 
countries' collaboration with local and international non-
governmental or private organizations in implementing debt-
for-nature exchanges; and 
"(5) seek to ensure that each bank adopts polico'^ guidelines 
which to the maximum extent possible provide for— 
"(A) the inclusion of sustainable use policies in loan 
agreements negotiated with borrower members; 
"(B) the adoption of economic programs to foster sound 
environmental policies; and 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2509 
"(C) the provision of debtor countries* policy changes or 
significant increases in financial resources for use in at 
least 1 of the following— 
"(i) restoration, protection, or sustainable use of the 
, 
world's oceans and atmosphere; 
"(ii) restoration, protection, or sustainable use of di-
verse animal and plant species; 
"(iii) establishment, restoration, protection, and 
maintenance of parks and reserves; 
"(iv) development and implementation of sound sys-
tems of natural resource management; 
"(v) development and support of local conservation 
progi^ams; 
"(vi) training programs to strengthen conservation 
institutions and increase scientific, technical, and 
managerial capabilities of individusJs and organiza-
tions involved in conservation efforts; 
"(vii) efforts to generate knowledge, increase under-
standing, 
and 
enhance 
public 
commitment 
to 
conservation; 
"(viii) design and implementation of sound programs 
of land and ecosystem management; and 
"(ix) promotion of r^enerative approaches in farm-
ing, forestry, and watershed management. 
"(b) NEGOTIATION OF GUIDELINES FOR RESTORATION, PROTECTION, 
O
R SUSTAINABLE USE POUCIES.—^The United States Ebcecutive Direc-
tors of the multilateral development banks shall seek to negotiate 
with the other executive directors to provide guidelines for restora-
tion, protection, or sustainable use policies. Pending the outcome of 
such n^otiations, the United States Executive Directors shall con-
sider restoration, protection, or sustainable use policies to be those 
which— 
"(1) support development that maintains and restores the 
renewable natural resource base so that present and future 
needs of debtor countries' populations can be met, while not 
impairing critical ecosystems and not exacerbating global 
environmental problems; 
"(2) are environmentally sustainable in that resources are 
conserved and managed in an effort to remove pressure on the 
natural resource base and to make judicious use of the land so 
as to sustain growth and the availability of all natural 
resources; 
"(3) support development that does not exceed the limits 
imposed by local hydrological cycles, soil, climate, vegetation, 
and human cultural practices; 
"(4) promote the maintenance and restoration of soils, vegeta-
tion, hydrological cycles, wildlife, critical ecosystems (tropical 
forests, wetlands, and coastal marine resources), biological 
diversity and other natural resources essential to economic 
growth and human well-being and shall, when using natural 
resources, be implemented to minimize the depletion of such 
natural resources; and 
"(5) take steps, wherever feasible, to prevent pollution that 
threatens human health and important biotic s^tems and to 
achieve patterns of energy consumption that meet human needs 
and rely on renewable r^ources. 
103 STAT. 2510 
PUBLIC LAW 101-240—DEC. 19, 1989 
"(c) INCLUSION OP CERTAIN ITEMS IN GUIDELINES.—The United 
States Executive Directors shall endeavor to include the provisions 
of paragraphs (1) through (5) of subsection (b) in the guidelines 
developed through the n^otiations specified in this section. 
22 use 262p-4j. 
"SEC. 1615. PROMOTION OF LENDING FOR THE ENVIRONMENT. 
"The Secretary of the Treasury shall instruct the United States 
Executive Director of the International Bank for Reconstruction and 
Development to initiate discussions with the other executive direc-
tors of such hank and the management of such bank and propose 
that, in order to reduce the future need for bank lending for 
reforestation and restoration of environmentally d^raded areas, 
the bank establish a project and poller^ based environmental len(Ung 
program (including a loan a portion of which could be used to reduce 
and restructure private debt), to be made available to interested 
countries with a demonstrated commitment to natural resource 
conservation, which would be based on— 
"(1) the estimated long-term economic return which could be 
expected from the sustainable use and protection of tropical 
forests, including the value of tropical forests for indigenous 
people and for science; 
"(2) the value derived 
from 
such services as— 
"(A) watershed management; 
"(B) soil erosion control; 
"(O the maintenance and improvement of— 
"(i) fisheries; 
"(ii) water 
supply 
regulation 
for 
industrial 
development; 
"(iii)food; 
"(iv)fuel; 
: 
"(v) fodder^ and 
"(vi) building materials for local communities; 
"(D) the extraction of naturally occurring products from 
locally controlled protected areas; and 
"(E) indigenous Knowledge of the management and use of 
natural resources; and 
"(3) the long-term benefits expected to be derived from 
maintaining biological diversity and climate stabilization. 
22 use 262p-4k. 
"SEC 1616. PROMOTION OF INSTITUTION-BUILDING FOR NONGOVERN-
MENTAL 
ORGANIZATIONS 
CONCERNED 
WITH 
THE 
ENVIRONMENT. 
"The Secretary of the Treasury shall instruct the United States 
Executive IMrectors of the multilateral development banks to vigor-
ously promote the adoption of policies and procedures which seek 
to— 
"(1) increase collaboration with, and, where necessaxy, 
strengthen, nongovernmental organizations in such countries 
which are concerned with environmental protection by provid-
ing appropriate assistance and support for programs and activi-
ties on environmental protection; and 
"(2) encourage international collaboration for information 
exchange and project enhancement with nongovernmental 
organizations in developing countries which are concerned with 
environmental protection and government agencies and private 
voluntary organizations in developed countries which are con-
cerned with environmental protection.". 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2511 
Subtitle C—Enyironmental Impact 
Assessments 
SEC 521. ASSESSMENT OF ENVIRONMENTAL IMPACT OF PROPOSED 
MULTILATERAL DEVELOPMENT BANK ACTIONS. 
Title X m of the International Financial Institutions Act (22 
U.S.C. 262m et seq.) is amended by adding at the end the following: 
"SEC 1308. ASSESSMENT OF ENVIRONMENTAL IMPACT OF PROPOSED 
22 USC 262m-7. 
BfULTILATERAL DEVELOPMENT BANK ACTIONS. 
"(a) ASSESSMENT REQUIBED BEFORE FAVORABLE VOTE O
N ACTION.— 
"(1) IN GENERAL.—^B^inning 2 years after the date of the 
enactment of this section, the Secretary of the Treasury shall 
instruct the United States Elxecutive Director of each multilat-
eral development bank not to vote in favor of any action 
\ . 
proposed to be taken by the respective bank which would have a 
si^ificant effect on the human environment, unless for at least 
120 days before the date of the vote— 
"(A) an assessment analyzing the environmental impacts 
of tlie proposed action and of alternatives to the proposed 
action has been completed by the borrowing country or the 
institution, and been made available to the board of direc-
tors of the institution; and 
"(B) except as provided in paragraph (2), such assessment 
or a comprehensive summary of such assessment has been 
made available to the multilateral development bank, 
affected groups, and local nongovernmental organizations. 
"(2) ExCEFnONS AND REPORTS.— 
"(A) ElxcEPTiONS.—^The requirement of paragraph (IXB) Classified 
shall not apply where the Secretary finds compelling rea- 
information. 
sons to beUeve that disclosure in any case descril^ in 
paragraph (1) would jeopardize the confidential relationship 
between the borrower country and the respective bank. 
"(B) REPORTS BY SECRETARY.—^The Secretary shall submit 
a quarterly report in writing to the Committees specified in 
subsection (0(1) of the findings described in subpara-
graph (A). 
"(b) ACCESS TO ASSESSMENTS IN ALL MEMBER COUNTRIES.—^The 
Secretary of the Treasury shall seek the adoption of policies and 
procedures, through discussions and n^otiations with the other 
m e n ^ r countries of the multilateral development banks and with 
the management of such banks, which result in access by govern-
mental agencies and interested members of the public of such 
member countries, to environmental assessments or documentary 
information containing comprehensive summaries of such assess-
ments which discuss the environmental impact of prospective 
projects and programs being considered by such banks. Such assess- Public 
ments or summaries should be made available to such governmental 
information. 
agencies and interested members of the public at least 120 days 
before scheduled board action, and public participation in review of 
the r^evant environmental information should be encouraged. 
"(c) CoNsmsRATiON OF ASSESSMENT.—The Secretary of &e Treas-
ury shall— 
"(1) ensure that an environmental impact assessment or com-
prehensive summary of such assessment described in subsection 
103 STAT. 2512 
PUBLIC LAW 101-240—DEC. 19, 1989 
(a) accompanies loan proposals through the agency review proc-
ess; and 
"(2) take into consideration recommendations from all other 
interested Federal agencies and interested members of the 
public. 
"(d) DEVELOPMENT OF PROCEDUKES FOK SYSTEMATIC ENVIRON-
MENTAL ASSESSMENT.—^The Secretary of the Treasury, in consulta-
tion with other Federal agencies, including the Environmental 
Protection Agency, the Department of State, and the Council on 
Environmental Quality, shall— 
^ 
"(1) instruct the United States Ebcecutive Director of each 
multilateial development bank to initiate discussions with the 
other executive directors of the respective bank and to propose 
that the respective bank develop and make available to member 
governments of, and borrowers from, the respective bank, 
within 18 months after the date of the enactment of this section, 
a procedure for the systematic environmental assessment of 
development projects for which the respective bank provides 
financial assistance, taking into consideration the Guidelines 
and Principles for Environmental Impact Assessment promid-
gated by the United Nations Environmental Programme and 
other bilateral or multilateral assessment procedures; and 
"(2) in determining the position of the United States on any 
action proposed to be taken by a multilateral development 
bank, develop and prescribe procedures for the consideration of, 
among other things— 
"(A) the environmental impact assessment of the action 
described in subsection (a); 
"(B) interagency and public review of such assessment; 
•.'';• 
a n d 
"(C) other environmental review and consultation of such 
action that is required by other law. 
"(e) USE OP UNITED STATES PERSONNEL.—The Secretary of the 
Tr^isury, in consultation with the Secretary of State, the Secretary 
of the Interior, the Administrator of the Environmental Protection 
Agency, the Chairman of the Council on Environmental Quality, the 
Admimstrator of the Agency for International Development, and 
^ 
the Administrator of the National Oceanic and Atmospheric 
Administration, shall— 
"(1) make available to the multilateral development banks, 
without charge, appropriate United States Government person-
' 
nel to assist in— 
"(A) training bank staff in environmental impact assess-
ment procedures; 
r 
"(B) providing advice on environmental issues; 
"(Q preparing environmental studies for projects with 
potentially significant environmental impacts; and 
"(D) preparing documents for public release, and develop-
ing procedures to provide for the inclusion of interested 
nongovernmental organizations in the environmental 
review process; and 
"(2) encourage other member countries of such banks to 
prmnHft mmilnr a5i«ifitance. 
"(0 REPORTS.— 
"(1) IN GENERAL.—^The Secretary of the Treasury shall submit 
to tlie Committees on Foreign Relations and Environment and 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2513 
Public Works of the Senate and the Committee on Banking, 
Finance and Urban Affairs of the House of Representatives— 
"(A) not later than the end of the 1-year period beginning 
on the date of the enactment of this section, a pn^ress 
report on the efficacy of efforts by the United States to 
1 
en(x>urage consistent and timely environmental impact 
assessment of actions proposed to be taken by the multilat-
eral development bai^ and on the progress made by the 
multilateral development banks in developing and institut-
ing environmental assessment policies ana procedures; and 
(B) not later than January 1, 1993, a detailed report on 
the matters described in subpars^graph (A). 
"(2) AVAILABILITY OF REPORTS.—^The reports required by para-
graph (1) shall be made available to the member governments 
of, and the borrowers from, the multilateral development banks, 
and to the public". 
Subtitle D—^Debt-for-Development Swaps 
Public 
information. 
SEC. 
5
3
1
. 
ENCOURAGEHENT OF DEBT-FOR-DEVELOPMENT 
THROUGH 
LOCAL 
CURRENCY 
REPAYMENT. 
SWAPS 
12 use 3901 
note. 
% (a) STATEMENT OP POUCY.—^It is the sense of the Congress that— 
(1) debt-for-development swaps, where pajrment is made in 
local currency at tiie free market rate, serve a useful purpose by 
providing banking institutions with constructive opportunities 
for the reduction of the external debt of highly indebted devel-
oping countries in a process that involves the participation of 
private, nonprofit groups in providing a stimidus to the eco-
nomic and sodal development of such developing countries; 
(2) debt-for-development swaps provide highly indebted devel-
oping countries wim a creative method of reducing external 
debt burdens, while promoting their economic growth and 
restructuring objectives; 
(3) banking institutions should give carefiil consideration to 
engaging in such swaps as one means of strengthening overall 
loan portfolios through the reduction of high external debt 
burdens while eq>anding economic opportunities through pri-
vate sector initiatives; and 
(4) in order to avoid any bias against such swaps in the 
regulatory framework applicable to the financial reporting of 
banking institutions, where payment is made in local currency 
at the free market rate, appropriate recognition of the fair 
market exchange value of tiie currency so received should be 
made. 
(b) NOTIFICATION RELATING TO LOCAL CURRENCY REPAYMENT 
THROUGH DEBT-FOR-DEVELOPMENT SWAPS.—^Before the end of the 6
^ 
month period b^;iimiiig on the date of the enactment of this section, 
each appropriate Federal banking agency shall adopt uniform g^de-
Imes that will effectuate tiie policy set forth in subsection (a) 
concerning the r^ulatory framework and accounting treatment of 
debtrfor-development swaps involving repayment in local currency 
at the free market rate. For the purpose of such guidelines, the 
impact of such swaps on reported loan loss reserves shall be deter-
mined by valuing currency received in such swai)s at fair market 
exchange value. 
(c) DEFINITIONS.—^As used in this section: 
Loans. 
103 STAT. 2514 
PUBLIC LAW 101-240—DEC. 19, 1989 
(1) 
APPROPRIATE 
FEDERAL 
BANKING 
AGENCY.—The term 
"appropriate Federal banking agency" has the meaning given 
such term in section 903(1) of the International Lending Super-
vision Act of 1983. 
(2) BANEING INSTITUTION.—The term "banking institution" 
has the meaning given such term in section 903(2) of the 
International Lending Supervision Act of 1983. 
(3) DEBT-POR-DEVELOPMENT SWAP.—The term "debt-for-devel-
opment swap" has the meaning given such term in section 
1608(bX2) of the International Financial Institutions Act. 
(4) HIGHLY INDEBTED COUNTRY.—The term "h^hly indebted 
country" means any country designated as a "Highly Indebted 
Country*' in the annual World Debt Tables most recently pub-
lished by the International Bank for Reconstruction and Devel-
opment before the date of the enactment of this section. 
Subtitle E—Consolidation of Certain 
Reporting Requirements 
SEC. 541. CONSOUDATION OF CERTAIN REPORTING REQUIREMENTS. 
(a) IN GENERAL.—^The International Financial Institutions Act (22 
U.S.C. 262c et seq.) is amended by adding at the end the following: 
"TITLE XVII—CONSOLIDATED 
REPORTING REQUIREMENTS 
22 use 262r. 
"SEC. 1701. ANNUAL REPORT BY CHAIRMAN OP THE NATIONAL ADVISORY 
COUNCIL ON INTERNATIONAL MONETARY AND FINANCIAL 
POUCIES. 
"(a) IN GENERAL.—The Chairman shall report annually to the 
"
^ 
Speaker of the House of Representatives, the President of the 
Senate, and to the President of the United States on the participa-
tion of the United States in the international financial institutions. 
The Chainnan shall present such report to the Speaker of the House 
of Representatives and the President of the Senate not later than 
Apnl 1 of each year following the close of the fiscal year covered by 
such report, except that the report for fiscal year 1989 shall be 
submitted not later than June 1,1990. 
"(b) Ck)NTENTS O
F REPORTS.—Each annual report required by 
subsection (a) shall contain— 
"(1) such data and explanations concerning the effectiveness, 
operations, and policies of the international financial institu-
tions, such recommendations concerning the international 
financial institutions, and such other data and material as the 
Chairman may deem appropriate; 
"(2) the reports on each specific issue and topic which is 
required by any other provision of law to be included in the 
report of the National Advisory Council on International Mone-
tary and Financial Policies required by section 4(bX5) of the 
Bretton Woods Agreements Act, as in effect immediately before 
the date of the enactment of this section; 
"(3) a description of each loan or other form of financial 
assistance approved by any international financial institution 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2515 
during the fiscal year covered by such report, and a discussion 
of how such loan or financial assistance will benefit the people, 
particularly the poor people, of the recipient country; 
"(4) a review of the success achieved through the multilateral 
development banks in reducing or eliminating import restric-
tions and unfair export subsidies which— 
"(A) have been determined to be consistent with inter-
national agreements; and 
"(B) have a serious adverse impact on the United States; 
"(5) a description of the actions taken and the progress made 
in carrying out subsections (a) and (b) of section 45 of the 
Bretton Woods Agreements Act; 
"(6) the report required by section 2018(c) of the International 
Narcotics Act of 1986 (title II of Public Law 99-570), discussing 
the actions taken and pn^ess made in encouraging the multi-
lateral development banks to finance drug eradication and crop 
substitution programs; 
"(7) a description of the progress made by the United States 
Executive Director of the International Monetaiy Fund with 
respect to the goals of section 55 of the Bretton Woods Agree-
ments Act; 
"(8) a description of the status of procedures in the multilat-
eral development banks specifically designed to incresise the 
productive role of the poor in the economies of the nations 
which are borrowers from such banks; 
"(9) in consultation with the Secretary of State, a report on 
the prepress toward achieving the goals of title VII (other than 
section 704), including the information required to be reported 
pursuant to section 701(c), and, for the fiscal year 1990, the 
report described in section 1613; 
(10) in consultation with the Secretary of State and the 
Administrator of the Agency for International Development, an 
assessment of the prepress being made to implement the objec-
tives of title Xni; and 
"(11) a report on— 
"(A) the prepress made in transforming government-
owned enterprises into privately owned enterprises as de-
scribed in section 1612(b); 
"(B) the performance of the privately owned enterprises 
resulting from such transformation; and 
"(Q the contributions of development finsmce companies 
toward strengthening the private sector in member borrow-
ing countries. 
*(c) DEFEMITIONS.—^As used in this title, title XVIQ, and title XDC: 
"(1) CHAIRMAN.—The term 'CJhairman' means the dHiairmsm 
of tibe National Advisory Council on International Monetary 
and Financial Policies. 
"(2) 
INTERNATIONAL FINANCIAL INSTITUTIONS.—The term 
'international financial institutions' means the International 
Monetary Fund, International Bank for Reconstruction and 
Development, International Development Association, Inter-
national Finance Corporation, Multilateral Investment Guaran-
tee Agency, Afiican Development Bank, African Development 
Fund, Asian Development Bank, Inter-American Development 
Bank, and Inter-American Investment (Corporation. 
"(3) MULTILATERAL DEVELOPMENT iNSTrrunoNS.—^The term 
'multilateral development institutions' means the international 
103 STAT. 2516 
PUBLIC LAW 101-240—DEC. 19, 1989 
. > financial institutions other than the International Monetary 
Fund 
"(4) MULTILATERAL DEVELOPMENT BANKS.—The term 'multilat-
eral development banks' means the multilateral development 
institutions other than the Multilateral Investment Guarantee 
Agenqjr. 
"(d) TBSTIMONT REQUIRED.—Upon reauest of the Committee on 
Banking, Finance and Urban Affairs of tiie House of Representa-
tives, the Chairman shall testify before the Committee to support 
and e3q>lain each annual report required by subsection (a), n the 
President has del^ated to a person or persons other than the 
Chairman the authority to manage United States participation in 
the international financial institutions which was vested in the 
President by section 1(b) of the Reorganization Plan No. 4 of 1965, 
such person or persons shall, upon request of the Committee, accom-
pany the Chairman and testify before the Committee with regard to 
such reiport The Chairman and such other person or persons shsJl 
assess, in their testimony, the effectiveness of the mtemational 
finandal 
institutions, the miyor issues affecting United States 
participation, the msyor developments in the past year, the pros-
pects for the coming year, Unit^ States policy goals with resp^ect to 
the international finandal institutions, and any specific issues 
addressed to them by any member of the Committee. 
Loans. 
'^SEC. 1702. TRANSMISSION TO THE CONGRESS OF OPERATING SUM-
22 use 262r-l. 
MARIES OF THE MULTILATERAL DEVELOPMENT BANKS. 
"The Secretary of the Treasury shall transmit to the Congress, on 
a monthly basis, current copies of the Monthly Operating Summary 
of the International Bank for Reconstruction and Development, 
showing the loan proposals or appraisal reports under consideration 
and the status of those loan prraosals or appraisal reports within 
Records. 
the Bank. The Secretary of the "nreasuiy shall also transmit to tlie 
Congress, at siu^ times as may be appropriate, comparable docu-
ments prepared by the other multilatexal development banks which 
show the loans or credits under consideration in the other multilat-
eral development banks. 
22 use 262r-2. 
'^EC 1703. COMBINED REPORT ON EFFECT OF PENDING MULTILATERAL 
DEVELOPMENT BANK LOANS ON ENVIRONMENT, NATURAL 
RESOURCES, PUBUC HEALTH, AND INDIGENOUS PEOPLES. 
"Not later than April 1 and October 1 of each year, the Adminis-
trator of the Agency for International Development, in consultation 
with the Secretary of the Treasury and the Secreta^ of State, shall 
8id>mit to the Committee on Appropriations and the Committee on 
Banking, Finance and Urban Affairs of the House of Representa-
tives, and the Committee on Appropriations and the Committee on 
Foreign Relations of the Senate, as a combined report, the reports 
required by section 1303(c) of this Act and by section 537(hX2) of the 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Act, 1988 (sec. 1(e) of Public Law 100-202). 
•TITLE XVin—EXPORT ENHANCEMENT 
22 use 262s-l. 
"SEC 1802. PROCUREMENT OPPORTUNITIES FOR UNITED STATES FIRMS. 
"The Secretary of the Treasury shall instruct the United States 
Executive Directors of the multilateral development institutions to 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2517 
22 use 262t. 
take all poarible steps to ensure that information relating to poten-
tial procurement oppcntunities for United States firms is expedi-
tiously oommumd^ed to the Secretaiy of the Treasurv, the 
Secretary of State, and the Secretary of Commerce, and is dissem-
inated as widely as possible to large and small businesses. 
•TITLE XIX—PERSONNEL PRACTICES 
*«EC 1901. PEBSONNEL FRACnCES. 
"(a) STATEMENT OF POUCT.—It shall be the poli(^ of the United 
States that no initiatives, discussions, or recommendations concern-
ing the placement or removal <^ any personnel emploved by the 
international financial institutions shall be based on the poutical 
philosopliQr or activity of 
the individual under consideration. 
"(b) CONSULTATION.—The Secretary of the Treasury shall consult 
with the Chairman and the ranlong minority member of the 
Committee on Banking, Finance and XJrban Affairs of the House of 
Representatives and the Committee on Foreign Relations of the 
Senate before any discussion or recommendations by any official of 
tiie United States Government concerning the placement or removal 
of any principal officer of any international financial institutions.". 
(b) TBANSFER OF PROVISIONS RELATING TO MULTILATERAL DEVELOP-
MENT BANK PROCUREMENT.—<1) Section 3202 of the Omnibus Trade 
and Competitiveness Act of 1988 (22 U.S.C. 262a) is hereby trans-
ferred to the International Financial Institutions Act, inserted after 
22 use 262q. 
the heading of titie XVm (as added by the amendment made by 
subsection (a) of this section), and redesignated as section 1801. 22 use 262s. 
(2) Section 2302 of the Omnibus Trade and Competitiveness Act of 
1988 (15 UJS.C. 4722) is hereby transferred to the International 
Financial Institutions Act, inserted after section 1802 (as added by 
the amendment made by subsection (^0 of this section), redesignated 22 use 262s-2. 
as section 1803, and amended 
fay 
striking subsection (c). 
(c) CONFORMING AMENDMENT.—Section 701(c) of the International 
Financial Institutions Act (22 UJS.C. 262d(c)) is amended to read as 
follows: 
"(cXD Not later than 30 days after the end of each calendar 
quarter, the Secretanr of the Treasury shall report quarterly on all 
loans considered by the Boards of Executive Directors of the institu-
tions listed in subsection (a) to the Chairman and ranking minority 
member of the Committee on Banking, Finance and UrlMm Affairs 
of the House of Representetives, or the designees of such Chairman 
and ranking minority member, and the Chairman and ranking 
minority member of the Committee on Foreign Relations of the 
Senate. 
"(2) Each report required by paragraph (1) shall— 
H
u
m
a
n rights. 
"(A) include a list of all loana considered by the Board of 
Executive Directors of the institutions listed in subsection (a) 
and shall specify witli respect to each such loan— 
"(i) uie institution involyec^ 
"(ii) the date of 
final 
action; 
"(iii) the borrowei^ 
"(iv) the amount; 
"(v) the project or program; 
"(^ the vote of the United Stetes Government; 
"(vii) the reason for United Stotes Government opposi-
tion, if anj^ 
Reports. 
Loans. 
103 STAT. 2518 
PUBLIC LAW 101-240—DEC. 19, 1989 
"(viii) the final disposition of the loan; and 
"(ix) if the United States Government opposed the loan, 
whether the loan meets basic human needs; 
V 
"(B) indicate whether the United States has opposed any loan, 
financial assistance, or technical assistance to a country on 
human rights grounds; 
"(Q indicate whether the United States has voted in favor of 
a loan, financial assistance, or technical assistance to a country 
with respect to which the United States had, in the preceding 2 
years, opposed a loan, financial assistance, or technical assist-
ance on human rights grounds; and 
"(D) in cases where the United States changed its voting 
position from opposition to support or from support to opposi-
tion, on human rights grounds— 
"(i) indicate the policy considerations that were taken 
into account in the development of the United States voting 
position; 
"(ii) describe human rights conditions in the country 
involved; 
"(iii) indicate how the United States voted on all other 
loans, financial assistance, and technical assistance to such 
country during the preceding 2 years; and 
"(iv) contain information as to how the United States 
voting position relates to the overall United States Grovem-
ment policy on human rights in such country.". 
(d)REPEAi£.—^The following provisions of law are hereby repealed: 
(1) Paragraphs (5) and (6) of section 4(b), and sections 15(b), 
30(b), 33(c), and 50, of the Bretton Woods Agreements Act (22 
22 use 286k-i. 
U.S.C. 2S6hCb) (5) and (6), 286e-9(b), 286s(c), and 286b-2). 
(2) Section 4(b) of the Asian Development Bank Act (22 U.S.C. 
285b(b)). 
(3) Section 12 of the Inter-American Development Bank Act 
(22UJS.C.283i). 
(4) Sections 701(gXl), 1103, 1307, and 1602(d) of the Inter-
national Financial Institutions Act (22 U.S.C. 262d(gXl), 262g-2 
note, 262m-6, and 262p-l(d)). 
22 use 286b-l. 
(6) Chapter 3 of Public Law 91-599 (84 Stat. 1658). 
(6) Sections 102 and 401 of PubUc Law 96-259 (22 U.S.C. 283 
note and 262i). 
(7) Sections 1005 and 1006 of the Supplemental Appropria-
tions Act, 1984 (Public Law 98-181; 22 U.S.C. 276c-3). 
(8) Section 537(c) of the Foreign Gyrations, Ebcport Financing, 
and Related Programs Appropriations Act, 1988 (sec. 101(e) of 
22 use 262/ 
PubUc Law 100-202; 22 U.S.C. 2621(c)). 
"°*f* 
(e) OTHER CONFORMING AMENDMENTS.—The following provisions 
of law are each amended by striking the last sentence: 
(1) Section 4 of the bitemational Finance Corporation Act (22 
U 
JS.C. 282b). 
(2) Section 4 of the Inter-American Development Bank Act (22 
U.S.C.283b). 
(3) Section 204 of the Inter-American Investment Corporation 
Act(22U.S.C.283cc). 
(4) Section 4 of the International Development Association 
Act(22U.S.C.284b). 
(5) Section 408 of the Multilateral Investment Guarantee 
Agency Act (22 U.S.C. 290k-5). 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2519 
(6) Section 204 of the African Development Fund Act (22 
U.S.C. 290g-2). 
(7) Section 1335 of the African Development Bank Act (22 
U.S.C. 290i-3). 
(8) Section 701(d) of the International Financial Institutions 
Act(22U.S.C.262d(d)). 
(f) CLERICAL AMENDMENTS.— 
(1) Section 4(b) of the Bretton Woods Agreements Act (22 
U.S.C. 286b(b)) is amended by redesignating paragraphs (7) and 
(8) as paragraphs (5) and (6), respectively. 
(2) Section 30 of the Bretton Woods Agreements Act (22 U.S.C. 
286e-9) is amended by striking "(a)". 
22 use 285b. 
(3) Section 4 of the Asian Development Bank Act (22 U.S.C. 
285b-9) is amended by striking "(a)". 
(4) Title X m of the International Financial Institutions Act 
(22 U.S.C. 262m et seq.) is amended by redesignating section 
1308 (as added by section 521 of this Act) as section 1307. 
TITLE VI—MISCELLANEOUS PROVISIONS 
SEC 601. SENSE OF THE CONGRESS THAT THE INTERNATIONAL BANK 
FOR RECONSTRUCTION AND DEVELOPMENT AND THE INTER-
NATIONAL MONETARY FUND SHOULD EXPEDITIOUSLY ACT 
UPON LOAN REQUESTS FROM POLAND. 
It is the sense of the Congress that, based on the liberalization of 
Poland's economic system and the opening of its economic system to 
market forces, the Secretary of the Treasury should instruct the 
United States Executive Directors of the International Bank for 
Reconstruction and Development and of the International Monetary 
Fimd to urge upon their colleagues that their respective institutions 
move as expeditiously as possible in considering and acting upon 
loan requests from, and in disbursing approved loans to, Poland. 
SEC 602. SENSE OF THE CONGRESS SUPPORTING ASSISTANCE BY MULTI-
LATERAL LENDING INSTITUTIONS TO ESTABLISH FINANCIAL 
INSTITUTIONS IN POLAND. 
It is the sense of the (Dongress that the Secretsuy of the Treasury 
should instruct the United States Executive Directors of the multi-
lateral development banks (as defined in section 1617 of the Inter-
national Financial Institutions Act), of the International Finance 
Corporation, and of the Multilateral Investment Guarantee Agency 
to enter into discussions with the other executive directors of such 
institutions and, in such discussions, urge such institutions to con-
sider and act promptly upon (and, in the case of the Multilateral 
Investment Guarantee Agency, after Poland becomes a member 
country of such institution) requests by individuals and private 
businesses in, and the Government of, Poland for financial and 
technical assistance in the establishment of financial institutions 
(including institutions such as credit unions, thrift institutions, and 
commerdiEd banks) and businesses involved in the provision of credit 
and financial services. 
103 STAT. 2520 
PUBLIC LAW 101-240—DEC. 19, 1989 
SEC 603. SENSE OF THE CONGRESS RELATING TO CONDITIONAL FINAN-
CIAL ASSISTANCE BY MULTILATERAL LENDING INSTITUTIONS 
TO POLAND. 
It is the sense of the Congress that the Secretary of the Treasury 
should instruct the United States Executive Directors of the multi-
lateral development banks (as defined in section 1617 of the Inter-
national Financial Institutions Act), of the International Monetary 
Fund, of the International Finance Corporation, and of the Multilat-
eral Investment Guarantee Agency to enter into discussions with 
the other executive directors of such institutions and propose that 
such institutions not provide financial assistance or debt forgiveness 
to Poland until the government of Poland allows and facilitates 
privately owned entities established in foreign countries to invest in 
private commercial ventures in Poland. 
SEC 604. SENSE OF THE CONGRESS OPPOSING THE BIAKING OF CERTAIN 
, 
LOANS OR THE EXTENSION OF CERTAIN FINANCIAL AND 
TECHNICAL ASSISTANCE TO THE PEOPLE'S REPUBUC OF 
CHINA. 
(a) FINDINGS.—^The Congress finds that— 
(1) the Government of the People's Republic of China ordered 
the People's Liberation Army to brutally attack peaceful dem-
onstrators who had assembled in Tiananmen Square; 
(2) this attack violated the human rights of the demon-
strators; 
(3) several thousand innocent and defenseless protesters were 
f killed in the initial assault; 
FangLizhi. 
* 
(4) these violations of human rights have evolved into a 
Li Shuxian. 
' pattern of continuing repression and reprisals against citizens 
throughout China as evidenced by the beating of alleged dis-
sidents, the order to the army to shoot "rioters"—^the Chinese 
Government's term for the peaceful demonstrators—on sight, 
the mass arrest of students and workers, the public declarations 
' * by govemmentcontrolled media that physicists Fang Lizhi and 
Li Shuxian (who are being given refuge in the United States 
Embassy in Benin^ are ''guilty" before being afforded due 
process, and the banning of all independent, 
unofficial 
prodemocracy organizations; 
(5) the (xovemment of the People's Republic of C!hina is trying 
to suppress truthful accounts of the actions taken in Be^'ing and 
throughout the country, by, among other things, expelling for-
eign journalists, including the local bureau chief of tlie Voice of 
America, from tiie country; 
(6) the People's RepiiJI>lic of China has received almost 
$8,000,000,000 in development loans from the International 
Bank for Reconstruction and Development, and increasing 
amounts of assistance from the Asian Development Bank; 
(7) it is morally repugnant that, through such multilateral 
development banks, United States taxpayer dollars are used to 
support the present policies of the People's Republic of China; 
(8) such development loans cannot be justified on economic 
grounds because economic development and market reforms 
cannot be achieved in the environment of repression that now 
clearly exists there; and 
(9) tiie People's Republic of China is engaging in "a pattern of 
gross violations of internationally recognized human rights . . . 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2521 
such as flagrant denial to life, liberty, and the security of 
person", 
(b) STATEMENT OF POLICY.—It is the sense of the Congress that the 
President should— 
(1) instruct the United States Executive Directors of the 
International Bank for Reconstruction and Development and 
l 
the Asian Development Bank to use their voices and votes to 
oppose the making of any loan or the extension of any financial 
or techniciQ assistance to the People's Republic of China, in 
accordbance with section 701(f) of the International Financial 
Institutions Act; and 
(2) consider the People's Republic of China to be a country 
descrtt>ed in section 701(aXl) of such Act until the President 
determines that the repression and reprisals against persons in 
connection with the prodemocracy demonstrations have ended. 
TITLE VII—MISCELLANEOUS 
SEC 701. SHORT TITLE. 
This title may be cited as the "Global Environmental Protection 
Assistance Act of 1989". 
PART A—COMMERCIAL DEBT-FOR-NATURE 
EXCHANGES 
Global 
Environmental 
Protection 
Assistance Act 
of 1989. 
Conservation. 
International 
agreements. 
^ u s e 2151 
note. 
SEC 711. AMENDMENT TO THE FOREIGN ASSISTANCE ACT. 
The Foreign Assistance Act of 1961 is amended by inserting after 
chapter 6 of part I the following new chapter: 
' 
"CHAPTER 7—DEBT-FOR-NATURE EXCHANGES 
"SBC. 461. DKFiNrnoN.—^For purpose of this chapter, the term 22 use 2281 
'debtrfor-nature exchange' means the cancellation or redemption of 
the foreign debt of the government of a country in exchange for— 
"(1) that government's making available local currencies 
(including through the issuance of bonds) which are used only 
for eligible projects involving the conservation or protection of 
the environment in that country (as described in section 463); or 
"(2) that government's financial resource or policy commit-
ment to take certain specified actions to ensure the restoration, 
protection, or sustainable use of natural resources within that 
country; or 
"(3) a combination of assets and actions under both para-
graphs (1) and (2). 
"SK;. 462. ASSISTANCE FOR (DOMMERCIAL DEBT EXCHANGES.—(a) 
The Administrator of the Agency for International Development is 
authorized to furnish assistance, in the form of grants on such terms 
and conditions as may be necessary, to nongovernmental organiza-
tions for the purchase on the open market of discounted commercial 
debt of a foreign government of an eligible country which will be 
canceled or redeemed under the terms of an agreement with that 
government as part of a debt-for-nature exchange. 
"(b) Notwithstanding any other provision of law, a grantee (or any 
sul^antee) of the grants referred to in subsection (a) may retain, 
without deposit in the Treasury of the United States and without 
Grants. 
22 u s e 2282. 
103 STAT. 2522 
PUBLIC LAW 101-240—DEC. 19, 1989 
further appropriation bv Congress, interest earned on the proceeds 
of any resulting debt-for-nature exchange pending the disburse-
ments of such proceeds and interest for approved program purposes, 
which may include the establishment of an endowment, the income 
of which is used for such purposes. 
22 use 2283. 
"SEC. 463. EuGiBLE PROJECTS.—(a) The Administrator of the 
Agency for International Development shall seek to ensure that 
debt-for-nature exchanges under this chapter support one or more of 
the following activities by either the host government, a local 
private conservation group, or a combination thereof: 
"(1) restoration, protection, or sustainable use of the world's 
oceans and atmosphere; 
"(2) restoration, protection, or sustainable use of diverse 
animal and plant species; 
"(3) establishment, restoration, protection, and maintenance 
of parks and reserves; 
(4) development and implementation of sound systems of 
natural resource management; 
"(5) development and support of local conservation programs; 
"(6) training programs to strengthen conservation institutions 
and increase scientific, technical, and managerial capabilities of 
individuals and organizations involved in conservation efforts; 
"(7) efforts to generate knowledge, increase understanding, 
and enhance public commitment to conservation; 
"(8) design and implementation of sound programs of land 
and ecosystem management; and 
"(9) promotion of regenerative approaches in farming, for-
estry, fishing, and watershed management. 
"(bXD In cooperation with nongovernmental organizations, the 
Administrator of the Agency for International Development shall 
seek to identify those areas, which because of an imminent threat, 
are in particular need of immediate attention to prevent the loss of 
unique biological life or valuable ecosystem. 
..^ 
"(2) The Administrator of the Agency for International Develop-
ment shall encourage as many eligible countries as possible to 
propose such exchanges with the purpose of demonstrating to a 
large number of governments the feasibility and benefits of sustain-
able development. 
22 use 2284. 
"SEC. 464. ELIGIBLE COUNTRIES.—In order for a foreign country to 
be eligible to participate in a debt-for-nature exchange under this 
chapter, the Administrator of the Agency for International Develop-
ment shall determine that— 
"(1) the host country is fully committed to the long-term 
viability of the program or project that is to be undertaken 
through the debt-for-nature exchange; 
"(2) a long-term plan has been prepared by the host country, 
or private conservation group, which adequately provides for 
the long-term viability of the program or project that is to be 
undertaken through the debt-for-nature exchange or that such a 
plan will be prepared in a timely manner; and 
"(3) there is a government agency or a local nongovernmental 
organization, or combination thereof, in the host country with 
the capability, commitment, and record of environmental con-
cern to oversee the long-term viability of the program or project 
that is to be undertaken through the debt-for-nature exchange.. 
Grants. 
"SEC. 465. TERMS AND CONDITIONS.—(a) The terms and conditions 
22 use 2285. 
fQj. making grants under this chapter shall be deemed to be fulfilled 
PUBLIC LAW 101-240—DEC. 19, 1989 
103 STAT. 2523 
upon final approval by the Administrator of the Agency for Inter-
national 
Development 
of 
the 
debt-for-nature 
exchange, 
a 
certification by tiie noi^ovemmental organization that the host 
government has accepted the terms of the exchange, and that an 
agreement has been reached to cancel the commercial debt in an 
agreed upon fashion. 
"(b) Grants made under this section are intended to complement, 
and not substitute for, assistance otherwise available to a foreign 
countiyunder this Act or any other provision of law. 
"(c) The United States Government is prohibited from accepting Real property. 
title or interest in any land in a foreign country as a condition on 
the debt exchange. 
"SEC. 466. PILOT PROGRAM FOR SUB-SAHARAN AFRICA.—(a) The 22 use 2286. 
Administrator of the Agency for International Development, in 
cooperation with nongovernmental conservation organizations, shall 
invite the government of each country in sub-Saharan Africa to 
submit a list of those areas of severely degraded national resources 
which threaten human survival and well-being and the opportunity 
for fiiture economic growth or those areas of biological or ecological 
importance within the territory of that country. 
(b) The Administrator of the Agency for mtemational Develop-
ment shall assess the list submitted by each country under subsec-
tion (a) and shall seek to reach agreement with the host country for 
the restoration and future sustainable use of those areas. 
"(cXD The Administrator of the Agency for International Develop- Grants. 
ment is authorized to make grants, on such terms and conditions as 
may be necessary, to nongovernmental orgeuiizations for the pur-
chase on the open market of discounted commercial debt of a foreign 
government of an eligible sub-Saharan country in exchange for 
commitments by that government to restore natural resources 
identified by the host country under subsection (a) or for commit-
ments to develop plans for sustainable use of such resources. 
"(2) Notwithstanding any other provision of law, a grantee (or any 
subgrantee) of the grants referred to in section (a) may retain, 
without deposit in the Treasury of the United States and without 
further appropriation by Congress, interest earned on the proceeds 
of any resulting debt-for-nature exchange pending the disburse-
ments of such proceeds and interest for approved program purposes, 
which may include the establishment of an endowment, the income 
of which is used for such purposes.". 
PART B—MULTILATERAL FOREIGN ASSISTANCE 
COORDINATION 
SEC 721. GENERAL POUCY. 
It is the sense of the Congress that the Secretary of State should 
seek to develop an increased consideration of global warming, tropi-
cal deforestation, sustainable development, and biological diversity 
among the highest goals of bilateral foreign assistance programs of 
all countries. 
SEC 722. POLICY ON NEGOTIATIONS. 
(a) IN GENERAL.—^The Secretary of State, acting through the 
United States representative to the Development Assistance 
Committee of the Organization for Economic Ckx>rdination and 
Development (PECD), should initiate, at the earliest practicable 
103 STAT. 2524 
PUBLIC LAW 101-240—DEC. 19, 1989 
date, negotiations among member countries on a coordinated 
approach to global warming, tropical deforestation, sustainable 
development, and biological ^versity through bilateral assistance 
programs tiiat would include— 
(1) increased consideration of the impact of developmental 
projects on global warming, tropical deforestation, and bio-
logical diversity; 
(2) reduction or elimination of funding for those projects that 
exacerbate those problems; 
(3) coordinated research and development of projects that 
I ' emphasize sustainable use or protection of tropical forests and 
support for local conservation efforts; 
(4) expanded use of forgiveness of foreign assistance debt in 
exchange for policy changes or pn^rams that address problems 
associated with global warming, tropical deforestation, sustain-
able development, and biological diversity; 
(5) increased use of foreign assistance funds and technical 
assistance in support of local conservation, restoration, or 
sustainable development efforts and debt-for-nature exchanges; 
Energy. 
(6) improved exchange of information on energy efficiency 
and solar and renewable energy sources, and a greater emphasis 
on the use of those sources of energy in developmental projects; 
V 
a n d 
(7) increased use of enviroimiental experts in the field to 
assess development projects for their impact on global warming, 
tropical deforestation, and biol<^cal diversity. 
(b) IMPLEMENTATION OF AGREEMENT.—N^otiations described in 
subsection (a) shall seek to ensure that the recommended changes 
are implemented as quickly as possible by member countries of the 
Development Assistance Committee. 
TITLE VIII—EFFECTIVE DATE 
22USC262d 
SEC 801. EFFECTIVE DATE. 
Ebccept as otherwise provided in this Act, this Act and the amend-
ments made by this Act shall take effect on the date of the enact-
ment of this Act 
Approved December 19, 1989. 
LEGISLATIVE HISTORY—H.R. 2494: 
HOUSE REPORTS: No. 101-271 (Ck)mm. on Banking, Finance and Urban Affairs). 
CONGRESSIONAL RECORD, Vol. 135 (1989): 
Oct. 18, considered and passed House. 
Nov. 21, considered and passed Senate, amended. House concurred in Senate 
amendments. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 25 (1989): 
Dec. 19, Presidential statement.