22 U.S.C. § 286nn: Approval of contributions…

Summary

Allow the Treasury Secretary to tell the United States director at the Fund to vote for two moves to help the poorest countries. First, the Fund would sell some of its gold in private deals at market prices to create exactly 2.226 billion Special Drawing Rights (SDRs) in profit. Right after each sale, the buying members would make payments tied to their repurchase obligations so the Fund ends up keeping the gold. The profits would be invested in a separate subaccount, and the earnings from that subaccount would be used only for debt relief under the modified Heavily Indebted Poor Countries (HIPC) Initiative. Second, support closing the Fund’s Special Contingency Account 2 (SCA–2) and making its money available to the poorest countries. Any funds tied to the United States’ part of SCA–2 must be used only for debt relief under the modified HIPC Initiative.

Title 22, §286nn

Foreign Relations and Intercourse, Source: USLM XML via OLRC

For the purpose of mobilizing the resources of the Fund in order to help reduce poverty and improve the lives of residents of poor countries and, in particular, to allow those poor countries with unsustainable debt burdens to receive deeper, broader, and faster debt relief, without allowing gold to reach the open market or otherwise adversely affecting the market price of gold, the Secretary of the Treasury is authorized to instruct the United States Executive Director of the Fund to vote—

(1)to approve an arrangement whereby the Fund—

(A)sells a quantity of its gold at prevailing market prices to a member or members in nonpublic transactions sufficient to generate 2.226 billion Special Drawing Rights in profits on such sales;

(B)immediately after, and in conjunction with each such sale, accepts payment by such member or members of such gold to satisfy existing repurchase obligations of such member or members so that the Fund retains ownership of the gold at the conclusion of such payment; and

(C)uses the earnings on the investment of the profits of such sales through a separate subaccount, only for the purpose of providing debt relief from the Fund under the modified Heavily Indebted Poor Countries (HIPC) Initiative (as defined in section 262p–6 of this title); and

(2)to support a decision that shall terminate the Special Contingency Account 2 (SCA–2) of the Fund so that the funds in the SCA–2 shall be made available to the poorest countries. Any funds attributable to the United States participation in SCA–2 shall be used only for debt relief from the Fund under the modified HIPC Initiative.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2000—Par. (1)(B), (D). Pub. L. 106–429 inserted “and” at end of subpar. (B) and struck out subpar. (D) which read as follows: “shall not use more than 9⁄14 of the earnings on the investment of the profits of such sales; and”.

Statutory Notes and Related Subsidiaries

Certification to Congress Relating To Use of Profits To Augment International Monetary Fund Pub. L. 106–113, div. B, § 1000(a)(5) [title V, § 503(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–316, provided that: “Within 15 days after the United States Executive Director casts the votes necessary to carry out the instruction described in section 62 of the Bretton Woods Agreements Act [22 U.S.C. 286nn], the Secretary of the Treasury shall certify to the Congress that neither the profits nor the earnings on the investment of profits from the gold sales made pursuant to the instruction or of the funds attributable to United States participation in SCA–2 will be used to augment the resources of any reserve account of the International Monetary Fund for the purpose of making loans.”

§286nn Approval of Contributions for Debt Reductions for the Poorest Countries