HR 4524

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IN THE HOUSE OF REPRESENTATIVES

April 18, 2002

Mr. Smith of New Jersey (for himself, Mr. LaFalce, Mr. Bachus, Mr. Frank, Mr. Leach, Ms. Waters, and Mr. Kucinich) introduced the following bill; which was referred to the Committee on International Relations, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To ensure that the Enhanced Highly Indebted Poor Countries Initiative achieves the objective of substantially increasing resources available for human development and poverty reduction in heavily indebted poor countries, and 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.

This Act may be cited as the “Debt Relief Enhancement Act of 2002”.

SEC. 2. MODIFICATION OF ENHANCED HIPC INITIATIVE.

(a) In General.—The Secretary of the Treasury shall immediately commence efforts within the Paris Club of Official Creditors, the International Bank for Reconstruction and Development, the International Monetary Fund, and other appropriate multilateral development institutions to modify the Enhanced HIPC Initiative so that the amount of debt stock reduction approved for a country eligible for debt relief under the Enhanced HIPC Initiative shall be sufficient to reduce, for at least each year through 2005, or each of the first 3 years after the Decision Point—

(1) the net present value of the outstanding public and publicly guaranteed debt of the country to not more than 150 percent of the annual value of exports of the country for the year preceding the Decision Point; and

(2) the annual payments due on such public and publicly guaranteed debt—

(A) to not more than 10 percent of the amount of the annual current revenues received by the country from internal sources; or

(B) in the case of a country suffering a severe public health crisis, to not more than 5 percent of the amount of the annual current revenues received by the country from internal sources.

(b) Definitions.—In this section:

(1) Enhanced hipc initiative.—The term “Enhanced HIPC Initiative” means the multilateral debt initiative for heavily indebted poor countries presented in the Report of G-7 Finance Ministers on the Cologne Debt Initiative to the Cologne Economic Summit, Cologne, 18-20 June, 1999.

(2) Decision point.—The term “Decision Point” means, with respect to a country, the point in time at which the Executive Boards of the International Bank for Reconstruction and Development and the International Monetary Fund review the debt sustainability analysis for the country and decide that the country is eligible for debt relief under the Enhanced HIPC Initiative.

(3) Public health crisis.—A country is deemed to be suffering a “public health crisis” if—

(A) the nationwide HIV/AIDS infection rate for the country, as reported in the most recent epidemiological data as compiled by the Joint United Nations Program on HIV/AIDS, is at least 5 percent among women attending prenatal clinics, or 20 percent or more among individuals in groups with high-risk behavior; or

(B) the country is suffering a health crisis or epidemic, as defined by the World Health Organization.

SEC. 3. REPORT ON EXPANSION OF DEBT RELIEF TO NON-HIPC COUNTRIES.

(a) In General.—Within 90 days after the date of the enactment of this Act, the Secretary of the Treasury shall submit to the Congress a report on—

(1) the options and costs associated with expanding debt relief to include poor countries who were not eligible for inclusion in the Enhanced HIPC Initiative (as defined in section 2(b)(1));

(2) options for burden-sharing among donor countries and multilateral institutions of costs associated with expanding debt relief; and

(3) options, in addition to the Enhanced HIPC Initiative (as so defined), to ensure debt sustainability in poor countries, particularly in cases when the poor country has suffered an external economic shock or a natural disaster.

(b) Specific Options To Be Considered.—Among the options for expansion of debt relief, consideration should be given to making eligible for the relief poor countries for which outstanding public and publicly guaranteed debt requires annual payments in excess of 10 percent of the amount of the annual current revenues received by the countries from internal sources.

SEC. 4. DEBT RELIEF FOR THE POOREST COUNTRIES.

(a) Authority To Reduce Debt.—The President may reduce amounts owed to the United States (or any agency of the United States) by an eligible country as a result of—

(1) guarantees issued under sections 221 and 222 of the Foreign Assistance Act of 1961;

(2) credits extended or guarantees issued under the Arms Export Control Act; or

(3) any obligation or portion of such obligation, to pay for purchases of United States agricultural commodities guaranteed by the Commodity Credit Corporation under export credit guarantee programs authorized pursuant to section 5(f) of the Commodity Credit Corporation Charter Act of June 29, 1948, section 4(b) of the Food for Peace Act of 1966, or section 202 of the Agricultural Trade Act of 1978.

(b) Limitations.—(1) The authority provided by subsection (a) may be exercised only to implement multilateral official debt relief and referendum agreements, commonly referred to as “Paris Club Agreed Minutes”.

(2) The authority provided by subsection (a) may be exercised only in such amounts or to such extent as is provided in advance by appropriations Acts.

(3) The authority provided by subsection (a) may be exercised only with respect to countries with heavy debt burdens that are eligible to borrow from the International Development Association, but not from the International Bank for Reconstruction and Development, commonly referred to as “IDA-only” countries.

(c) Conditions.—The authority provided by subsection (a) may be exercised only with respect to a country whose government—

(1) does not have an excessive level of military expenditures;

(2) has not repeatedly provided support for acts of international terrorism and is not failing to cooperate with the United States on efforts to combat international terrorism;

(3) is not failing to cooperate on international narcotics control matters;

(4) (including its military or other security forces) does not engage in a consistent pattern of gross violations of internationally recognized human rights;

(5) is not ineligible for assistance because of the application of section 527 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995; and

(6) has not been designated, in the most recent Department of State ‘Trafficking in Persons Report’, as a ‘Tier 3’ nation pursuant to the Victims of Trafficking and Violence Protection Act of 2000 (Public Law 106-386) for its failure to cooperate on international trafficking in persons prevention efforts.

(d) Additional Requirements Relating to Actions To Prevent HIV/AIDS and Poverty.—In addition to the requirements of subsection (c), the authority provided by subsection (a) may be exercised only with respect to an eligible country if the country has agreed that—

(1) the financial benefits of debt reduction will be applied to programs to combat HIV/AIDS and poverty, in particular through concrete measures to improve basic services in health, education, nutrition, and other development priorities, and to redress environmental degradation;

(2) the financial benefits of debt reduction are in addition to the total spending of the country’s government on poverty reduction for the previous year, or the average total of such expenditures for the previous 3 years, whichever is greater;

(3) the eligible country will implement transparent and participatory policy making and budget procedures, good governance, and effective anti-corruption measures; and

(4) the eligible country will broaden public participation and popular understanding of the principles and goals of poverty reduction.

(e) Availability of Funds.—The authority provided by subsection

(a) may be used only with regard to funds appropriated by an Act making appropriations for foreign operations, export financing, and related programs under the heading “Debt Restructuring”.

(f) Certain Prohibitions Inapplicable.—A reduction of debt pursuant to subsection (a) shall not be considered assistance for purposes of any provision of law limiting assistance to a country. The authority provided by subsection (a) may be exercised notwithstanding section 620(r) of the Foreign Assistance Act of 1961 or section 321 of the International Development and Food Assistance Act of 1975.

SEC. 5. MODIFICATION OF DETERMINATION OF COUNTRIES SUPPORTING TERRORISM UNDER CERTAIN INTERNATIONAL AFFAIRS LAWS.

(a) Foreign Assistance Act of 1961.—

(1) General prohibition on assistance.—Section 620A(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a)) is amended by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”.

(2) Enterprise for the americas initiative.—Section 703(a)(2) of such Act (22 U.S.C. 2430b(a)(2)) is amended by inserting after “international terrorism” the following: “and has cooperated with the United States on efforts to combat international terrorism”.

(b) Arms Export Control Act.—

(1) General prohibition on transactions.—Section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) is amended in the first sentence by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”.

(2) Transfer of missile equipment or technology by united states person.—Section 72(c) of such Act (22 U.S.C. 2797a(c)) is amended by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”.

(3) Transfer of missile equipment or technology by foreign person.—Section 73(f) of such Act (22 U.S.C. 2797b(f)) is amended by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”.

(4) Transfer of chemical or biological weapons by foreign person.—Section 81(a)(2)(B) of such Act (22 U.S.C. 2798(a)(2)(B)) is amended by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”.

(c) Export Administration Act of 1979.—

(1) General requirements.—Section 6(j)(1)(A) of the Export Administration Act of 1979 (50 U.S.C. app. 2405(j)(1)(A)) is amended—

(A) in subsection (j)(1)(A), by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”; and

(B) in subsection (l)(3)(B), by inserting after “international terrorism” the following: “or to have failed to cooperate with the United States on efforts to combat international terrorism”.

(2) Transfer of chemical or biological weapons by foreign person.—Section 11C(a)(2)(B) of such Act (50 U.S.C. app. 2410c(a)(2)(B)) is amended by inserting after “international terrorism” the following: “or has failed to cooperate with the United States on efforts to combat international terrorism”. <all>