22 U.S.C. § 286oo: Principles for International…

Summary

The United States wants the IMF to change how it lends money. IMF loans from its main funds should be used mostly for short-term balance of payments help. Medium-term loans should be rare and only when a country’s problems will last a long time, when the country has a strong plan for big reforms, and when it cannot get private financing. The IMF should charge higher fees on loans over 200 percent of a country’s quota to discourage heavy use. The IMF must act firmly when a country misreports important information: stop payments until fixes and penalties are in place, require early repayment when money was given because of wrong data, make serious cases public, require yearly independent audits of central bank financial statements and publish them, and demand detailed control and audit information and 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)Short-term balance of payments financing

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

(2)Limitations on medium-term financing

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

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)Redressing misreporting of information

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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