12 U.S.C. § 635i–8: Special debt relief for…

Summary

The President can lower the principal and interest a very poor, heavily indebted country owes the Bank for loans under this part, but only to carry out multilateral debt-relief deals agreed through the Paris Club. An "eligible country" must have very heavy external debt, be allowed to borrow from the International Development Association, and not be allowed to borrow from the International Bank for Reconstruction and Development. The President decides who qualifies. Debt relief can be given only if the country’s government does not spend too much on the military, has not repeatedly supported international terrorism, cooperates on international drug control, and does not have a pattern of gross human rights abuses (including by its military). Funds for any relief must be provided in advance by Congress in appropriations Acts.

Title 12, §635i–8

Banks and Banking, Source: USLM XML via OLRC

(a)Debt reduction authority

The President may reduce amounts of principal and interest owed by any eligible country to the Bank as a result of loans or guarantees made under this subchapter.

(b)Limitations

(1)Types of debt reduction

The authority provided by subsection (a) may be exercised only to implement multilateral agreements to reduce the burden of official bilateral debt as set forth in the minutes of the so-called “Paris Club” (also known as “Paris Club Agreed Minutes”).

(2)Eligible countries

(A)“Eligible country” defined

As used in subsection (a), the term “eligible country” means any country that—

(i)has excessively burdensome external debt;

(ii)is eligible to borrow from the International Development Association; and

(iii)is not eligible to borrow from the International Bank for Reconstruction and Development.

(B)Determinations

Subject to subparagraph (A), the President may determine whether a country is an eligible country for purposes of subsection (a).

(c)Conditions

The authority provided by this section 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;

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

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

(d)Appropriations

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

Notes & Related Subsidiaries

Editorial Notes

Amendments

2002—Subsec. (a). Pub. L. 107–189 substituted “principal” for “principle”.

Executive Documents

Delegation of Authority With Respect to Debt Reduction for Poorest Countries Memorandum of President of the United States, June 20, 1994, 59 F.R. 33413, provided: Memorandum for the Secretary of the Treasury By the authority vested in me as President by the Constitution and the laws of the United States of America, including section 570 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1994 (Public Law 103–87) (the “Act”) [enacting 12 U.S.C. 635i–8], section 14 of the Export-Import Bank Act of 1945 (12 U.S.C. 635—635i–8) [probably means 12 U.S.C. 635i–8], and section 301 of title 3 of the United States Code, it is hereby ordered as follows: 1. There are delegated to the Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Defense, the functions, authorities, and duties conferred upon the President by section 570(a) of the Act [107 Stat. 970]. 2. There are delegated to the Secretary of the Treasury, in consultation with the Secretary of State and the President of the Export-Import Bank, the functions, authorities, and duties conferred upon the President by section 570(b) of the Act and section 14(a) of the Export-Import Bank Act of 1945 (12 U.S.C. 635—635i–8). The Secretary of the Treasury is authorized and directed to publish this memorandum in the Federal Register. William J. Clinton.

§635i–8 Special Debt Relief for Poorest, Most Heavily Indebted Countries