Withholding of funds until certain conditions are met

(a)

Institutional reforms

(1)

In general

With respect to each of fiscal years 2018 through 2023, in addition to any amounts withheld from disbursement under subsection (b), 15 percent of the amounts provided in appropriations Acts for the International Development Association for the fiscal year— (A)shall be withheld from disbursement until the conditions of paragraph (2) or (3) are satisfied; and (B) (i)shall be disbursed after, the conditions of paragraph (2) are satisfied; and (ii)may be disbursed after, the conditions of paragraph (3) are satisfied. (2)

Initial conditions

The conditions of this paragraph are satisfied with respect to the amounts provided in appropriations Acts for a fiscal year if, in the fiscal year, the Secretary of the Treasury reports to the appropriate congressional committees that the International Bank for Reconstruction and Development— (A)is implementing institutional incentives, including through formal staff evaluation criteria, that prioritize poverty reduction, development outcomes, and capable project management over the volume of the Bank’s lending and grantmaking; (B)is taking, or has completed, steps to address the management failures described in Inspection Panel Investigation Report 106710–UG, and to prevent their recurrence in countries that are eligible for World Bank support; and (C)is taking measures to strengthen its management of trust funds, with the goal of increasing the accountability of the trust funds for poverty reduction and development outcomes. (3)

Subsequent conditions

The conditions of this paragraph are satisfied if the Secretary of the Treasury reports to the appropriate congressional committees, in each of the 3 fiscal years most recently preceding the fiscal year in which the report is made, that the International Bank for Reconstruction and Development has instituted the measures described in paragraph (2) of this subsection and the measures described in subsection (b)(2). (b)

Governance and anticorruption reforms

(1)

In general

With respect to each of fiscal years 2018 through 2023, in addition to any amounts withheld from disbursement under subsection (a), 15 percent of the amounts provided in appropriations Acts for the International Development Association for the fiscal year— (A)shall be withheld from disbursement until the conditions of paragraph (2) or (3) are satisfied; and (B) (i)shall be disbursed after, the conditions of paragraph (2) are satisfied; and (ii)may be disbursed after, the conditions of paragraph (3) are satisfied. (2)

Initial conditions

The conditions of this paragraph are satisfied with respect to the amounts provided in appropriations Acts for a fiscal year if, in the fiscal year, the Secretary of the Treasury reports to the appropriate congressional committees that the International Bank for Reconstruction and Development— (A)is emphasizing in appropriate operational policies, directives, and country strategies its support for secure property rights, due process of law, and economic freedom as essential conditions for sustained poverty reduction in World Bank borrowing countries; (B) (i)has not approved any loans or grants assistance by the Bank to a country designated by the United States as a state sponsor of terrorism in the preceding fiscal year; and (ii)is strengthening the ability of Bank-funded projects to undermine violent extremism; (C)is taking steps to conduct randomized forensic audits of projects receiving assistance from the Bank, increase the number of the audits, and strengthen the capacity of the Bank’s Integrity Vice Presidency; and (D)is taking measures to detect and minimize corruption in all World Bank projects involving development policy lending. (3)

Subsequent conditions

The conditions of this paragraph are satisfied if the Secretary of the Treasury reports to the appropriate congressional committees, in each of the 3 fiscal years most recently preceding the fiscal year in which the report is made that the International Bank for Reconstruction and Development has instituted the measures described in paragraph (2) of this subsection and the measures described in subsection (a)(2). (c)

Appropriate congressional committees defined

In this section, the term appropriate congressional committees means the Committees on Financial Services and Appropriations of the House of Representatives and the Committees on Foreign Relations and Appropriations of the Senate.