United States Economic Assistance Conditionality Act of 2004 - Amends the Foreign Assistance Act of 1961 to require governments of low income oil-producing countries (as defined by this Act) to meet specified requirements relating to their oil revenues in order to be eligible for U.S. economic assistance.
Amends the Bretton Woods Agreements Act to direct the Secretary of the Treasury to oppose the making of International Monetary Fund or International Bank for Reconstruction and Development loans to a government that fails to meet such oil revenue-related requirements.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4364 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 4364
To amend the Foreign Assistance Act of 1961 to require the governments
of low income oil-producing countries to meet certain requirements
relating to their oil revenues in order to be eligible to receive
United States economic assistance.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 13, 2004
Mr. Hyde introduced the following bill; which was referred to the
Committee on International Relations, and in addition to the Committee
on Financial Services, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Foreign Assistance Act of 1961 to require the governments
of low income oil-producing countries to meet certain requirements
relating to their oil revenues in order to be eligible to receive
United States economic assistance.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``United States Economic Assistance
Conditionality Act of 2004''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The governments of low income oil-producing countries
often do not provide information to the people of such
countries regarding their oil revenues. Such opacity can hide
billions of dollars worth of financial impropriety.
(2) The governments of such countries have generally
refused to disclose information regarding their oil revenues
when pressed by international organizations and others,
proclaiming that such disclosure is an infringement on national
sovereignty.
(3) As a result, the people of such countries are left
without the necessary information to ensure proper management
and accountability regarding such oil revenues. Dispossessed,
the people of such countries are often left marginalized and at
the mercy of donor assistance. In Angola, for example, one in
every four oil dollars earned is unaccounted for. At the same
time, one in four Angolan children dies before the age of five
from preventable diseases.
(4) In some low income oil-producing countries, government-
imposed royalties and fees on the revenues of business
enterprises engaged in oil production are often misappropriated
and squandered. These businesses are then left vulnerable to
accusations of complicity with corruption.
(5) The governments of low income oil-producing countries
that mismanage oil revenues are often unstable and do not
survive, creating further instability that threatens the supply
of vital industrial commodities and forcing the international
community to respond with costly emergency assistance to those
countries.
(6) A key to promoting political, economic, and social
reform in low income oil-producing is transparency in public
finances.
(7) If the governments of such countries tell their people
how much oil revenue the government receives and how that
revenue is allocated and expended, the resulting transparency
will engender more realistic public expectations, more
plausible national development programs, and better means to
combat corruption and promote democracy, respect for human
rights, and the rule of law.
(8) Transparency by such foreign governments will benefit
United States business enterprises as well. Respect for the
rule of law, codified regulatory practices, and transparent
bidding and award practices deter corruption and encourage a
level playing field in such countries for United States
business enterprises.
(9) Export credit activities and other bilateral
concessional loan programs of the United States Government for
low income oil-producing countries should require that any
assistance under such activities and programs be conditional on
appropriate transparency by the governments of such countries
relating to oil revenues.
(10) International financial institutions such as the World
Bank should incorporate revenue transparency across their
lending and technical assistance portfolios by making full
transparency a condition of all their financial support and by
including it in their national poverty reduction strategy
consultations.
(11) One bold and promising model is the Chad/Cameroon
Pipeline Project, under which the Government of Chad, private
investors, and the World Bank Group have established an
accountability and oversight mechanism for the country's
revenues derived from oil production.
(12) Donald Norland, former United States Ambassador to
Chad, in testimony on April 18, 2002, before the Committee on
International Relations of the House of Representatives stated
that the Chad/Cameroon Pipeline Project ``has addressed these
extraordinarily challenging issues in ways that may well serve
as a model for developing natural resources in other
countries''.
(13) Ambassador Norland further testified that: ``Success
will require keeping the project in the spotlight of public
attention as well as under constant scrutiny and monitoring by
outside groups . . . Scrutiny is the key to transparency.
Transparency is, in turn, indispensable in guaranteeing that
oil resources go . . . to projects that reduce poverty while
preserving the environment and advancing human rights . . . to
make sure that revenues go to benefit the people of Chad and
not to private bank accounts.''.
SEC. 3. LIMITATION ON UNITED STATES ECONOMIC ASSISTANCE FOR LOW INCOME
OIL-PRODUCING COUNTRIES.
Chapter 1 of part III of the Foreign Assistance Act of 1961 (22
U.S.C. 2351 et seq.) is amended--
(1) by redesignating the second section 620G (as added by
section 149 of Public Law 104-164 (110 Stat. 1436)) as section
620J; and
(2) by adding at the end the following new section:
``SEC. 620K. LIMITATION ON UNITED STATES ECONOMIC ASSISTANCE FOR LOW
INCOME OIL-PRODUCING COUNTRIES.
``(a) Definitions.--In this section:
``(1) Low income country.--The term `low income country'
means a country that has a per capita income equal to or less
than the historical ceiling of the International Development
Association, as defined by the International Bank for
Reconstruction and Development.
``(2) Low income oil producing country.--The term `low
income oil-producing country' means a low-income country that
produces an average of not less than 100,000 barrels of oil or
equivalent per day based on the most recent information
available by the Energy Information Administration of the
Department of Energy.
``(3) Oil.--The term `oil' includes crude oil, natural gas
plant liquids, other petroleum-based liquids, and petroleum-
based refinery byproducts.
``(4) United states economic assistance.--The term `United
States economic assistance' means any of the following:
``(A) Bilateral economic, development, or technical
assistance (other than military assistance,
humanitarian assistance, or assistance to prevent,
treat, and monitor HIV/AIDS) provided by any department
or agency of the United States Government to a foreign
country under any program, project, or activity that is
contained within the major budget functional category
150 (relating to International Affairs), including
assistance under--
``(i) chapter 1 of part I of the Foreign
Assistance Act of 1961 (relating to development
assistance);
``(ii) chapter 10 of part I of that Act
(relating to the Development Fund for Africa);
``(iii) chapter 11 of part I of that Act
(relating to assistance for the independent
states of the former Soviet Union);
``(iv) chapter 12 of part I of that Act
(relating to assistance for the countries of
the South Caucasus and Central Asia region);
``(v) chapter 4 of part II of that Act
(relating to the Economic Support Fund); or
``(vi) the Support for East European
Democracy (SEED) Act of 1989.
``(B) Bilateral economic, development, or technical
assistance (other than military assistance,
humanitarian assistance, or assistance to prevent,
treat, and monitor HIV/AIDS) provided by any department
or agency of the United States Government to a foreign
country under any program, project, or activity that is
contained within any of the following major budget
functional categories:
``(i) 270 (relating to Energy).
``(ii) 300 (relating to Natural Resources
and the Environment), including programs,
projects, and activities of the Environmental
Protection Agency, the Department of the
Interior, and the United States Army Corps of
Engineers).
``(iii) 350 (relating to Agriculture),
including assistance provided under title I of
the Agricultural Trade Development and
Assistance Act of 1954, the Food for Progress
program, and other programs administered by the
Department of Agriculture, such as programs
administered by the Commodity Credit
Corporation.
``(iv) 370 (relating to Commerce and
Housing Credit).
``(v) 400 (relating to Transportation).
``(vi) 500 (relating to Education,
Training, Employment, and Social Services).
``(vii) 550 (relating to Health).
``(viii) 750 (relating to the
Administration of Justice).
``(ix) 800 (relating to the General
Government).
``(b) Identification; Determinations.--Not later than October 1,
2005, and not later than each October 1 thereafter, the President,
acting through the Board of Directors of the Millennium Challenge
Corporation--
``(1) shall identify all countries in the world that are
low income oil-producing countries (as defined in subsection
(a)(1)); and
``(2) for each country identified under paragraph (1)--
``(A) shall determine whether or not the country
scores in the top quartile of all low income countries
in each of the three indicators described in subsection
(d), as required under subsection (c)(1)(A); and
``(B) shall determine whether or not the government
of the country meets the requirements of subsection
(e), as required under subsection (c)(1)(B).
``(c) Limitation on Economic Assistance.--
``(1) Limitation.--Notwithstanding any other provision of
law (other than a provision of this section), United States
economic assistance may be provided for fiscal year 2007 and
each subsequent fiscal year for a low income oil-producing
country only if the President, acting through the Board of
Directors of the Millennium Challenge Corporation, determines
that--
``(A) the country scores in the top quartile of all
low income countries in each of the three indicators
described in subsection (d); and
``(B) the government of the country meets the
requirements of subsection (e).
``(2) Rule of construction.--The limitation on assistance
under paragraph (1) shall not apply to a low income oil-
producing country that is determined by the Board of Directors
of the Millennium Challenge Corporation to be an eligible
country under section 607 of the Millennium Challenge Act of
2003 (22 U.S.C. 7706) and is identified as such by the Chief
Executive Officer of the Corporation under section 608(d) of
such Act (22 U.S.C. 7707(d)).
``(d) Indicators.--The indicators referred to in subsection
(c)(1)(A) are the following:
``(1) Total expenditures on health.--The amount expended by
the government of the country at all levels on health divided
by the gross domestic product of the country.
``(2) Total expenditures on primary education.--The amount
expended by the government of the country at all levels on
primary education divided by the gross domestic product of the
country.
``(3) Primary education completion rate.--The number of
students who complete primary education divided by the total
population of individuals of the same age in the country.
``(e) Requirements.--The requirements referred to in subsection
(c)(1)(B) are the following:
``(1) Transparency relating to oil revenues.--The
government of the country makes publicly available information
on--
``(A) the amount of revenues received by the
government through the production of oil in the country
for the preceding calendar year, whether through
royalties, rents, taxes, customs, duties, or otherwise;
and
``(B) the allocation of such revenues among the
various departments and agencies of the government.
``(2) Allocation and expenditure of oil revenues.--The
government of the country allocates and expends an appropriate
amount of the revenues referred to in paragraph (1) on
education, food and nutrition assistance, and public health
programs for the people of the country.
``(3) UN convention against corruption.--The country is a
signatory to the United Nations Convention Against Corruption
(Document A/58/422), as adopted by the United Nations General
Assembly on October 31, 2003.
``(f) Report.--
``(1) In general.--Not later than October 1, 2006, and not
later than October 1 of each year thereafter, the President,
acting through the Board of Directors of the Millennium
Challenge Corporation, shall prepare and transmit to Congress a
report that contains--
``(A) for the fiscal year beginning on the
applicable October 1--
``(i) the identification each low income
oil-producing country, as required under
subsection (b)(1); and
``(ii) the determinations with respect to
each such low income oil-producing country, as
required under subparagraphs (A) and (B) of
subsection (b)(2); and
``(B) for the prior fiscal year, an identification
of each low income oil-producing country that received
United States economic assistance by reason of the
application of subsection (c)(1) and the amounts and
purposes of such assistance.
``(2) Special rule for initial report.--The requirement to
include information described in subparagraph (B) of paragraph
(1) shall not apply to the initial report required to be
submitted under such paragraph.''.
SEC. 4. LIMITATION ON UNITED STATES SUPPORT FOR MULTILATERAL ASSISTANCE
FOR CERTAIN COUNTRIES.
The Bretton Woods Agreements Act (22 U.S.C. 286-286oo) is amended
by adding at the end the following:
``SEC. 64. LIMITATION ON UNITED STATES SUPPORT FOR MULTILATERAL
ASSISTANCE FOR CERTAIN COUNTRIES.
``The Secretary of the Treasury shall instruct the United States
Executive Directors at the Fund and at the Bank to use the voice, vote,
and influence of the United States to oppose the making of a loan by
the Fund or the Bank, respectively, to the government of any country
not eligible to receive United States economic assistance by reason of
section 620K of the Foreign Assistance Act of 1961.''.
<all>
Introduced in House
Introduced in House
Referred to the Committee on International Relations, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on International Relations, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on International Relations, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology, for a period to be subsequently determined by the Chairman.
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