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

Summary

The United States will push the IMF to change how it lends money. IMF lending from its main funds should mostly be for short-term balance-of-payments help. Medium-term loans should be used only in clear cases: when a country’s problems will last a long time, when the country has a strong plan for reforms, and when it has little or no access to private capital. The IMF should charge higher fees on loans that exceed 200 percent of a country’s quota to discourage heavy use and push countries to seek private financing. The IMF must also use strong safeguards against false or misleading reporting. It should stop payments and not resume lending to countries that seriously misstate important information until fixes and any sanctions are applied. The IMF should seek early repayment when funds were given because of bad information and make serious cases public. Countries getting new payments must have yearly independent audits of central bank finances and publish them. Countries asking for new loans must give details about their internal controls, financial reporting, and audits, and accept on-site reviews when those systems are in doubt.

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

Citations & Metadata