§286oo — Title 22 Foreign Relations and Intercourse | U.S. Code

Summary

Directs the U.S. to push the IMF to change its lending so loans from the Fund’s main resources are used mostly for short-term help with balance-of-payments problems. Medium-term loans should be rare and only when a country’s problems are long-lasting, when the country has a strong plan of reforms, and when it cannot get private money. Requires the IMF to charge higher prices for loans above 200 percent of a country’s quota to discourage overuse. Also requires stronger checks against false reporting: stop payments and new loans until fixes and possible sanctions are applied; require early repayment if money was given because of false information; make serious cases public; require yearly independent audits of central bank books for members getting new disbursements and publish them; and require loan applicants to give details on their internal controls and allow on-site reviews when needed.

Title 22, §286oo

Foreign Relations and Intercourse — Source: USLM XML via OLRC

It is the policy of the United States to work to implement reforms in the International Monetary Fund (IMF) to achieve the following goals:

(1)Lending from the general resources of the Fund should concentrate chiefly on short-term balance of payments financing.

(2)Use of medium-term lending from the general resources of the Fund should be limited to a set of well-defined circumstances, such as—

(A)when a member’s balance of payments problems will be protracted;

(B)such member has a strong structural reform program in place; and

(C)the member has little or no access to private sources of capital.

(3)Premium pricing should be introduced for lending from the general resources of the Fund, for greater than 200 percent of a member’s quota in the Fund, to discourage excessive use of Fund lending and to encourage members to rely on private financing to the maximum extent possible.

(4)The Fund should have in place and apply systematically a strong framework of safeguards and measures to respond to, correct, and discourage cases of misreporting of information in the context of a Fund program, including—

(A)suspending Fund disbursements and ensuring that Fund lending is not resumed to members that engage in serious misreporting of material information until such time as remedial actions and sanctions, as appropriate, have been applied;

(B)ensuring that members make early repayments, where appropriate, of Fund resources disbursed on the basis of misreported information;

(C)making public cases of serious misreporting of material information;

(D)requiring all members receiving new disbursements from the Fund to undertake annually independent audits of central bank financial statements and publish the resulting audits; and

(E)requiring all members seeking new loans from the Fund to provide to the Fund detailed information regarding their internal control procedures, financial reporting and audit mechanisms and, in cases where there are questions about the adequacy of these systems, undertaking an on-site review and identifying needed remedies.

Editorial Notes

Codification section 101(a) [title VIII, § 805] of Pub. L. 106–429, which directed amendment of the Bretton Woods Agreement Act by adding this section, was executed by amending the Bretton Woods Agreements Act by adding this section, to reflect the probable intent of Congress.

§286oo Principles for International Monetary Fund lending

Summary

Title 22, §286oo

Notes & Related Subsidiaries

Editorial Notes

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