Jubilee Act for Responsible Lending H.R. 2634

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 `Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2008′.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Many low-income countries have been struggling under the burden of international debts for many years.
(2)
Since 1996, when the Heavily Indebted Poor Countries Initiative (HIPC)
was created, more than 30 nations have seen some form of debt relief
totaling approximately $80,000,000,000.
(3)
Congress has demonstrated its support for bilateral and multilateral
debt relief through the enactment of comprehensive debt relief
initiatives for heavily indebted low-income countries in–

(A)
title V of H.R. 3425 of the 106th Congress, as enacted into law by
section 1000(a)(5) of the Act entitled `An Act making consolidated
appropriations for the fiscal year ending September 30, 2000, and for
other purposes’, approved November 29, 1999 (Public Law 106-113; 113 Stat. 1501-311) and the amendments made by such title;
(B)
title II of H.R. 5526 of the 106th Congress, as enacted into law by
section 101(a) of the Act entitled `An Act making appropriations for
foreign operations, export financing, and related programs for the
fiscal year ending September 30, 2001, and for other purposes’, approved
November 6, 2000 (Public Law 106-429; 114 Stat. 1900A-5); and
(C) title V of the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (Public Law 108-25; 117 Stat. 747) and the amendment made by such title.

SEC. 3. CANCELLATION OF DEBT OWED BY ELIGIBLE LOW-INCOME COUNTRIES.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-8) is amended by adding at the end the following:

`SEC. 1626. CANCELLATION OF DEBT OWED BY ELIGIBLE LOW-INCOME COUNTRIES.

`(a)
In General- The Secretary of the Treasury shall commence immediate
efforts, within the Paris Club of Official Creditors, the International
Monetary Fund (IMF), the International Bank for Reconstruction and
Development (World Bank), and the other international financial
institutions (as defined in section 1701(c)(2)), to negotiate an
agreement to accomplish the following:

`(1)
Cancellation by each international financial institution of all debts
owed to the institution by eligible low-income countries, and, to the
extent possible, financing the debt cancellation from the ongoing
operations, procedures, and accounts of the institution, without
undermining the financial integrity of the institution.

`(2) Cancellation by the United States of all debts owed to it by eligible low-income countries.

`(3) Ensuring that any waiting period for the enhanced debt cancellation is not excessive.

`(4)
Ensuring that the provision of debt cancellation to eligible low-income
countries is not followed by a reduction in the provision of any other
development assistance to the countries by international financial
institutions and bilateral creditors, or to other countries eligible for
assistance from the International Development Association.

`(5)
Encouraging the government of each eligible low-income country to
allocate at least 20 percent of its national budget towards
poverty-alleviation programs such as the provision of basic health care
services, education services, and clean water services to all
individuals in the country.

This
subsection shall not be interpreted to authorize the Secretary of the
Treasury to enter into an agreement to accomplish any of the foregoing
without express congressional authorization to do so.

`(b)
Establishment of Framework for Creditor Transparency- The Secretary of
the Treasury shall commence immediate efforts, within the Paris Club of
Official Creditors, the International Monetary Fund, the World Bank, and
the other international financial institutions (as so defined), to
ensure that each of the institutions–

`(1)
continues to make efforts to promote greater transparency regarding the
activities of the institution, including credit, grant, guarantee, and
technical assistance operations, following a policy of maximum
disclosure; and

`(2)
supports continued efforts to allow informed participation and input by
affected communities, including translation of information on proposed
projects, provision of information (including draft documents) through
information technology application, oral briefings, and outreach to and
dialogue with community organizations and institutions in affected
areas.

`(c) Establishment of Framework for Responsible Lending- The Secretary of the Treasury shall commence immediate efforts to–

`(1)
develop and promote policies to ensure all creditors, with no
distinction, will contribute to preserving the gains of debt relief for
low-income debtor countries;

`(2)
provide that the external financing needs of low-income countries are
met primarily through grant financing rather than new lending;

`(3) seek the international adoption of a binding legal framework on new lending that–

`(A)
guarantees that no creditor can take or expect to take financial
advantage of acquired or newly awarded debt relief through the terms and
rates of such lending to beneficiary countries;

`(B) is binding on all creditors, whether multilateral, bilateral or private;

`(C)
foresees, as a sanction for creditors who violate it, an equitable
share in the burden of the losses from any future debt relief needed by
the sovereign debtor to whom lending was irresponsibly provided;

`(D) provides for decisions on irresponsible lending to be made by an entity independent from the creditors; and

`(E) enables fair opportunities for the people of the affected country to be heard; and

`(4)
support the development of responsible financing standards where
creditors and aid/loan recipients alike adhere to standards to assure
transparency and accountability to citizens, human rights, and the
avoidance of new odious debt, while encouraging the development of
renewable energy and helping countries to transition away from
dependence on oil.

                                   `(d) GAO Audit of Debt Portfolios of Countries With Questionable Loans-

`(1)
IN GENERAL- The Comptroller General of the United States shall
undertake an audit of the debt portfolios of previous governments in
countries such as the Democratic Republic of Congo and South Africa,
where there is significant evidence that odious, onerous, or illegal
loans were made to the government. Each such audit shall–

`(A)
consider debt owed to the World Bank, the IMF, and the other
international financial institutions (as so defined), export credit
debts owed to governments, and debts owed to commercial creditors, and
assess whether or not past investments produced the intended results;

`(B)
investigate the process by which the loans were contracted, how the
funds were used, and determine whether United States or international
laws were violated in the contraction of these loans, and whether any of
the loans were odious or onerous; and

`(C)
be planned and executed in a transparent and consultative manner,
engaging congressional bodies and civil society groups in the countries.

`(2)
REPORT- Within 2 years after the date of the enactment of this section,
the Comptroller General of the United States shall prepare and submit
to the Committees on Financial Services and on Foreign Affairs of the
House of Representatives and the Committees on Banking, Housing, and
Urban Affairs and on Foreign Relations of the Senate a report that
contains the results of the audits undertaken under paragraph (1).

`(e)
Availability on Treasury Department Website of Remarks of United States
Executive Directors at Meetings of International Financial
Institutions’ Boards of Directors- The Secretary of the Treasury shall
make available on the website of the Department of the Treasury the full
record of the remarks of the United States Executive Director at
meetings of the boards of directors of the International Monetary Fund,
the World Bank, and the other international financial institutions (as
so defined), about cancellation or reduction of debts owed to the
institution involved, with redaction by the Secretary of the Treasury of
material deemed too sensitive for public distribution, but showing the
topic, amount of material redacted, and reason for the redaction.

`(f)
Report From the Comptroller General- Within 1 year after the date of
the enactment of this section, the Comptroller General of the United
States shall prepare and submit to the Committees on Financial Services
and on Foreign Affairs of the House of Representatives and the
Committees on Banking, Housing, and Urban Affairs and on Foreign
Relations of the Senate a report on the availability of the ongoing
operations, procedures, and accounts of the IMF, the World Bank, and the
other international financial institutions (as so defined) for
canceling the debt of eligible low-income countries.

`(g)
Annual Reports From the President- Not later than December 31 of each
year, the President shall submit to the Committees on Financial Services
and on Foreign Affairs of the House of Representatives and the
Committees on Foreign Relations and on Banking, Housing, and Urban
Affairs of the Senate a report, which shall be made available to the
public, on the activities undertaken under this section, and other
progress made in accomplishing the purposes of this section, for the
prior fiscal year. The report shall include a list of the countries that
have received debt cancellation, a list of the countries whose request
for debt cancellation has been denied and the reasons therefor, and a
list of the countries whose requests for debt cancellation are under
consideration.

`(h) Eligible Low-Income Country Defined- In this section, the term `eligible low-income country’ means a country–

`(1)
that is eligible for financing from the International Development
Association but not from the World Bank, and does not qualify for debt
relief under the Enhanced HIPC Initiative (as defined in section
1625(e)(3)) and under the Multilateral Debt Relief Initiative;
`(2)
that has transparent and effective budget execution and public
financial management systems which ensure that the savings from debt
relief are spent on reducing poverty;
`(3) the government of which does not have an excessive level of military expenditures;
`(4)
the government of which has not provided support for acts of
international terrorism, as determined by the Secretary of State under
section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App.
2405(j)(1)), or section 620A(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2371(a));
`(5) the government of which is cooperating with the United States on international narcotics control matters;
`(6)
the government of which (including its military or other security
forces) does not engage in a pattern of gross violations of
internationally recognized human rights (as defined in section 116 of
the Foreign Assistance Act of 1961 (Public Law 87-195));
`(7)
the government of which has not been identified in the most recent
Trafficking in Persons Report issued by the Department of State as not
fully complying with minimum standards for eliminating human trafficking
and not making significant efforts to do so;
`(8)
the government of which has been determined by the President to be
cooperating with United States efforts to stop illegal immigration to
the United States;
`(9) the government of which has been determined by the President to be committed to free and fair elections;
`(10) the government of which was chosen by and permits free and fair elections; and
`(11) the government of which does not have business interests with Iran.’.

SEC. 4. LIMITATION ON CONDITIONALITY OF DEBT RELIEF FOR ELIGIBLE LOW-INCOME COUNTRIES.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-8) is further amended by adding at the end the following:

`SEC. 1627. LIMITATION ON CONDITIONALITY OF DEBT RELIEF FOR ELIGIBLE LOW-INCOME COUNTRIES.

`(a)
In General- The Secretary of the Treasury shall commence immediate
efforts within the Paris Club of Official Creditors, the International
Monetary Fund (IMF), the International Bank for Reconstruction and
Development (World Bank), and the other international financial
institutions (as defined in section 1701(c)(2)), to ensure that debt
cancellation is provided to eligible low-income countries (as defined in
section 1626(h)) subject to all and only the following conditions: That
the government of such a country–

`(1)
take steps so that the financial benefits of debt relief are applied to
programs to combat poverty (in particular through concrete measures to
improve economic infrastructure, basic services in education, nutrition,
and health, particularly treatment and prevention of the leading causes
of mortality) and to redress environmental degradation;
`(2) make policy decisions through transparent and participatory processes;
`(3)
adopt an integrated development strategy to support poverty reduction
through economic growth, that includes monitorable poverty reduction
goals;
`(4) implement transparent policy making and budget procedures, good governance, and effective anticorruption measures;
`(5)
broaden public participation and popular understanding of the
principles and goals of poverty reduction, particularly through economic
growth, and good governance;
`(6)
promote the participation of citizens and nongovernmental organizations
in the economic policy choices of the government; and
`(7)
produce an annual report disclosing how the savings from debt
cancellation were used, and make the report publicly available and
easily accessible to all interested parties, including civil society
groups and the media.

`(b)
Annual Reports to the Congress- Not later than December 31 of each
year, the President shall submit to the Committees on Financial Services
and on International Relations of the House of Representatives and the
Committees on Foreign Relations and on Banking, Housing, and Urban
Affairs of the Senate a report, which shall be made available to the
public, on the activities undertaken under this section, and other
progress made in accomplishing the purposes of this section, for the
prior fiscal year.’.

SEC. 5. SENSE OF THE CONGRESS.

It
is the sense of the Congress that to further the goals of debt
reduction for low-income countries, in addition to the efforts described
in this Act, the United States should pay off outstanding arrearages of
$595,800,000 to the International Development Association and regional
development banks, and become current on all debt reduction efforts,
including those carried out by the International Development Association
and under the Enhanced Heavily Indebted Poor Countries Initiative and
the Multilateral Debt Relief Initiative.

SEC. 6. SENSE OF THE CONGRESS.

(a)
Finding- The Congress finds that Haiti is scheduled to send $48,700,000
in debt payments to multilateral financial institutions in 2008.
(b)
Sense of the Congress- It is the sense of the Congress that, due to the
current humanitarian and political instability in Haiti, including food
shortages and political turmoil, the Secretary of the Treasury should
use his influence to expedite the complete and immediate cancellation of
Haiti’s debts to all international financial institutions, or if such
debt cancellation cannot be provided, to urge the institutions to
immediately suspend the requirement that Haiti make further debt service
payments on debts owed to the institutions.

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