Text: H.R.3114 — 105th Congress (1997-1998)All Information (Except Text)

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Reported in House (03/18/1998)

 
[Congressional Bills 105th Congress]
[From the U.S. Government Printing Office]
[H.R. 3114 Reported in House (RH)]





                                                 Union Calendar No. 260

105th CONGRESS

  2d Session

                               H. R. 3114

                          [Report No. 105-454]

_______________________________________________________________________

                                 A BILL

 To authorize United States participation in a quota increase and the 
New Arrangements to Borrow of the International Monetary Fund, and for 
                            other purposes.

_______________________________________________________________________

                             March 18, 1998

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                 Union Calendar No. 260
105th CONGRESS
  2d Session
                                H. R. 3114

                          [Report No. 105-454]

 To authorize United States participation in a quota increase and the 
New Arrangements to Borrow of the International Monetary Fund, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 27, 1998

   Mr. Leach (for himself, Mr. LaFalce, Mrs. Roukema, Mr. Vento, Mr. 
 Hinchey, and Mr. Jackson of Illinois) introduced the following bill; 
 which was referred to the Committee on Banking and Financial Services

                             March 18, 1998

Additional sponsors: Mr. Hamilton, Mr. Bentsen, and Mrs. Maloney of New 
                                  York

                             March 18, 1998

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on January 
                               27, 1998]

_______________________________________________________________________

                                 A BILL


 
 To authorize United States participation in a quota increase and the 
New Arrangements to Borrow of the International Monetary Fund, and for 
                            other purposes.

    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 ``International Monetary Fund Reform 
and Authorization Act of 1998''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) the International Monetary Fund (IMF) was conceived at 
        Bretton Woods, New Hampshire, to promote a sound and open world 
        economy and a stable international financial system;
            (2) while the international financial system has evolved 
        significantly since the IMF was founded fifty years ago, its 
        core mission remains focused on providing advice on 
        macroeconomic and exchange rate policy and highly conditional 
        financial assistance, including appropriate economic and 
        governance reforms, to countries facing balance of payments or 
        liquidity problems;
            (3) the IMF includes elements in structural adjustment 
        programs that affect industrial and labor policies, which have 
        profound social and political ramifications;
            (4) the IMF has intervened in financial markets in 
        situations of extreme uncertainty and crisis to restore 
        investor and lender confidence, which may result in partially 
        relieving such lenders and investors of the negative 
        consequences of imprudent lending and investment decisions;
            (5) the expanded conditionality which accompanies IMF 
        funding has profound domestic consequences in the United 
        States;
            (6) the United States, as the leading power of the post-
        cold-war world, has a greater interest than any other country 
        in a strengthened IMF that multilateralizes the financial 
        support for ongoing economic reforms in countries important to 
        United States interests and that can respond to threats to the 
        international financial system so that the United States does 
        not end up serving as the world's lender of last resort;
            (7) the United States is the only country with veto power 
        over major IMF decisions;
            (8) to sustain its capabilities, the IMF needs to sustain 
        its strength relative to a rapidly expanding global economy 
        characterized by exponential growth of global capital markets;
            (9) the United States financial commitment to the IMF 
        leverages several times as much from other countries, and its 
        general resource financing is not scored as a budgetary outlay;
            (10) the ongoing currency and banking crisis in the Far 
        East has affected United States financial markets and may 
        result in a decline in United States economic growth by as much 
        as one and one-half percent, and the United States has a vested 
        economic and national security interest in utilizing the IMF 
        and other multilateral mechanisms to help stabilize certain 
        Asian economies;
            (11) neither the IMF nor the international financial system 
        predicted or was adequately prepared for the domestic financial 
        instability that has developed in East Asia, particularly the 
        excessive short-term borrowing the private sector institutions, 
        and therefore significant reforms of the IMF and the 
        international financial system are needed to ensure that the 
        world is better prepared to prevent and cope with similar 
        crises;
            (12) the United States also has an interest in not 
        contributing to ``moral hazard'', the belief by private 
        investors and lenders that public credit will be used to bail 
        them out of the consequences of imprudent credit decisions;
            (13) in establishing the terms for its financial support, 
        the IMF must strike a balance between contributing to the 
        stability of the Asian economies and ensuring that the private 
        creditors who contributed to the crisis by their imprudent 
        lending also make a significant contribution to the resolution 
        of such crisis; and
            (14) with respect to some East Asian countries, some 
        observers believe that--
                    (A) the IMF has often imposed tight monetary and 
                fiscal policies designed for countries in other parts 
                of the world that follow excessively expansionary 
                fiscal and monetary policies, despite the fact that, by 
                the IMF's own account, the monetary and fiscal policies 
                of the East Asian countries have not contributed to the 
                financial difficulties faced by such countries;
                    (B) the rationale for such strategy has been the 
                need to attract foreign capital and provide the means 
                to earn foreign exchange;
                    (C) in the absence of solutions to the short term 
                debt overhang problem which requires a rollover of such 
                short term maturities by private creditors, and to the 
                unfettered flow of capital into and out of markets 
                without regard to maturities or purpose, as an integral 
                part of the IMF program, no interest rate is high 
                enough to attract such capital;
                    (D) a tight monetary and fiscal austerity program, 
                combined with industrial restructuring and labor market 
                flexibility measures where they are also a part of an 
                IMF program, may excessively depress the local economy, 
                creating potentially explosive social and political 
                problems;
                    (E) such a strategy could also create excessive 
                pressure to export and reduce imports, eroding support 
                in the United States for a more open international 
                trading and investment regime, as export markets 
                collapse and a flood of imports puts downward pressure 
                on U.S. wages and employment; and
                    (F) there is a consequent need for the IMF, other 
                international financial institutions, the United 
                States, and other countries, as appropriate, to fashion 
                programs and policies that are adapted to local 
                conditions and integrate private creditor 
                contributions.

                  TITLE I--INTERNATIONAL MONETARY FUND

SEC. 101. PARTICIPATION IN QUOTA INCREASE.

    (a) In General.--The Bretton Woods Agreements Act (22 U.S.C. 286-
286mm) is amended by adding at the end the following:

``SEC. 61. QUOTA INCREASE.

    ``(a) In General.--The United States Governor of the Fund may 
consent to an increase in the quota of the United States in the Fund 
equivalent to 10,622,500,000 Special Drawing Rights.
    ``(b) Subject to Appropriations.--The authority provided by 
subsection (a) shall be effective only to such extent or in such 
amounts as are provided in advance in appropriations Acts.''.
    (b) Effectiveness Subject to Certification.--The amendment made by 
subsection (a) shall not take effect until the Secretary of the 
Treasury certifies to the Committee on Banking and Financial Services 
of the House of Representatives and the Committee on Foreign Relations 
of the Senate that the investors and banks make a significant 
contribution in conjunction with a financing package that, in the 
context of an international financial crisis, might include taxpayer 
supported official financing.

                  TITLE II--NEW ARRANGEMENTS TO BORROW

SEC. 201. NEW ARRANGEMENTS TO BORROW.

    (a) In General.--Section 17 of the Bretton Woods Agreements Act (22 
U.S.C. 286e-2 et seq.) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and February 24, 1983'' and 
                inserting ``February 24, 1983, and January 27, 1997''; 
                and
                    (B) by striking ``4,250,000,000'' and inserting 
                ``6,712,000,000'';
            (2) in subsection (b), by striking ``4,250,000,000'' and 
        inserting ``6,712,000,000''; and
            (3) in subsection (d)--
                    (A) by inserting ``or the Decision of January 27, 
                1997,'' after ``February 24, 1983,''; and
                    (B) by inserting ``or the New Arrangements to 
                Borrow, as applicable'' before the period at the end.
    (b) Effectiveness Subject to Certification.--The amendments made by 
subsection (a) shall not take effect until the Secretary of the 
Treasury certifies to the Committee on Banking and Financial Services 
of the House of Representatives and the Committee on Foreign Relations 
of the Senate that the investors and banks make a significant 
contribution in conjunction with a financing package that, in the 
context of an international financial crisis, might include taxpayer 
supported official financing.

                      TITLE III--POLICY PROVISIONS

SEC. 301. ADVOCACY OF POLICIES TO ENHANCE THE GENERAL EFFECTIVENESS OF 
              THE INTERNATIONAL MONETARY FUND.

    (a) In General.--Title XV of the International Financial 
Institutions Act (22 U.S.C. 262o-262o-1) is amended by adding at the 
end the following:

``SEC. 1503. ADVOCACY OF POLICIES TO ENHANCE THE GENERAL EFFECTIVENESS 
              OF THE INTERNATIONAL MONETARY FUND.

    ``(a) In General.--The Secretary of the Treasury shall instruct the 
United States Executive Director of the International Monetary Fund to 
use aggressively the voice and vote of the Executive Director to do the 
following:
            ``(1) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund in structuring 
        programs and assistance so as to promote policies and actions 
        that will contribute to exchange rate stability and avoid 
        competitive devaluations that will further destabilize the 
        international financial and trading systems.
            ``(2) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund in promoting 
        market-oriented reform, trade liberalization, economic growth, 
        democratic governance, and social stability through--
                    ``(A) appropriate liberalization of pricing, trade, 
                investment, and exchange rate regimes of countries to 
                open countries to the competitive forces of the global 
                economy;
                    ``(B) opening domestic markets to fair and open 
                internal competition among domestic enterprises by 
                eliminating inappropriate favoritism for small or large 
                businesses, eliminating elite monopolies, creating and 
                effectively implementing anti-trust and anti-monopoly 
                laws to protect free competition, and establishing fair 
                and accessible legal procedures for dispute settlement 
                among domestic enterprises;
                    ``(C) privatizing industry in a fair and equitable 
                manner that provides economic opportunities to a broad 
                spectrum of the population, eliminating government and 
                elite monopolies, closing loss-making enterprises, and 
                reducing government control over the factors of 
                production;
                    ``(D) economic deregulation by eliminating 
                inefficient and overly burdensome regulations and 
                strengthening the legal framework supporting private 
                contract and intellectual property rights;
                    ``(E) establishing or strengthening key elements of 
                a social safety net to cushion the effects on workers 
                of unemployment and dislocation; and
                    ``(F) encouraging the opening of markets for 
                agricultural commodities and products by requiring 
                recipient countries to make efforts to reduce trade 
                barriers.
            ``(3) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund, in concert 
        with appropriate international authorities and other 
        international financial institutions (as defined in section 
        1701(c)(2)), in strengthening financial systems in developing 
        countries, and encouraging the adoption of sound banking 
        principles and practices, including the development of laws and 
        regulations that will help to ensure that domestic financial 
        institutions meet strong standards regarding capital reserves, 
        regulatory oversight, and transparency.
            ``(4) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund, in concert 
        with appropriate international authorities and other 
        international financial institutions (as defined in section 
        1701(c)(2)), in facilitating the development and implementation 
        of internationally acceptable domestic bankruptcy laws and 
        regulations in developing countries, including the provision of 
        technical assistance as appropriate.
            ``(5) Vigorously promote policies that aim at appropriate 
        burden-sharing by the private sector so that investors and 
        creditors bear more fully the consequences of their decisions, 
        and accordingly advocate policies which include--
                    ``(A) strengthening crisis prevention and early 
                warning signals through improved and more effective 
                surveillance of the national economic policies and 
                financial market development of countries (including 
                monitoring of the structure and volume of capital flows 
                to identify problematic imbalances in the inflow of 
                short and medium term investment capital, potentially 
                destabilizing inflows of offshore lending and foreign 
                investment, or problems with the maturity profiles of 
                capital to provide warnings of imminent economic 
                instability), and fuller disclosure of such information 
                to market participants;
                    ``(B) accelerating work on strengthening financial 
                systems in emerging market economies so as to reduce 
                the risk of financial crises;
                    ``(C) consideration of provisions in debt contracts 
                that would foster dialogue and consultation between a 
                sovereign debtor and its private creditors, and among 
                those creditors;
                    ``(D) consideration of extending the scope of the 
                International Monetary Fund's policy on lending to 
                members in arrears and of other policies so as to 
                foster the dialogue and consultation referred to in 
                subparagraph (C);
                    ``(E) intensified consideration of mechanisms to 
                facilitate orderly workout mechanisms for countries 
                experiencing debt or liquidity crises;
                    ``(F) consideration of establishing ad hoc or 
                formal linkages between the provision of official 
                financing to countries experiencing a financial crisis 
                and the willingness of market participants to 
                meaningfully participate in any stabilization effort 
                led by the International Monetary Fund;
                    ``(G) using the International Monetary Fund to 
                facilitate discussions between debtors and private 
                creditors to help ensure that financial difficulties 
                are resolved without inappropriate resort to public 
                resources;
                    ``(H) the International Monetary Fund accompanying 
                the provision of funding to countries experiencing a 
                financial crisis resulting from imprudent borrowing 
                with efforts to achieve a significant contribution by 
                the private creditors, investors, and banks which had 
                extended such credits; and
                    ``(I) in the context of International Monetary Fund 
                responses to international financial crises, vigorously 
                promote consideration of appropriate ways in which 
                debtors and private creditors, in consultation with 
                central banks, can be encouraged voluntarily to take 
                steps to achieve resolution of outstanding debts, and 
                to do so in a manner that provides for an appropriate 
                degree of burden-sharing.
            ``(6) Vigorously promote policies that would make the 
        International Monetary Fund a more effective mechanism, in 
        concert with appropriate international authorities and other 
        international financial institutions (as defined in section 
        1701(c)(2)), for promoting good governance principles within 
        recipient countries by fostering structural reforms, including 
        procurement reform, that reduce opportunities for corruption 
        and bribery, and drug-related money laundering.
            ``(7) Vigorously promote the design of International 
        Monetary Fund programs and assistance so that governments that 
        draw on the International Monetary Fund channel public funds 
        away from unproductive purposes, including large `show case' 
        projects and excessive military spending, and toward investment 
        in human and physical capital as well as social programs to 
        protect the neediest and promote social equity.
            ``(8) Work with the International Monetary Fund to foster 
        economic prescriptions that are appropriate to the individual 
        economic circumstances of each recipient country, recognizing 
        that inappropriate stabilization programs may only serve to 
        further destabilize the economy and create unnecessary 
        economic, social, and political dislocation.
            ``(9) Structure International Monetary Fund programs and 
        assistance so that the maintenance and improvement of core 
        labor standards are routinely incorporated as an integral goal 
        in the policy dialogue with recipient countries, so that--
                    ``(A) recipient governments commit to affording 
                workers the right to exercise internationally 
                recognized core worker rights, including the right of 
                free association and collective bargaining through 
                unions of their own choosing;
                    ``(B) measures designed to facilitate labor market 
                flexibility are consistent with such core worker 
                rights;
                    ``(C) the staff of the International Monetary Fund 
                adequately takes into account the views of the 
                International Labor Organization, particularly with 
                respect to the effect of labor market flexibility 
                measures on core worker rights in such countries; and
                    ``(D) the staff of the International Monetary Fund 
                surveys the labor market policies and practices of 
                recipient countries and recommends policy initiatives 
                that will help to ensure the maintenance or improvement 
                of core labor standards.
            ``(10) Vigorously promote the adoption and enforcement of 
        laws promoting respect for internationally recognized worker 
        rights (as defined in section 507(4) of the Trade Act of 1974 
        (19 U.S.C. 2467(4))).
            ``(11) Vigorously promote International Monetary Fund 
        programs and assistance that are structured to the maximum 
        extent feasible to discourage practices which may promote 
        ethnic or social strife in a recipient country.
            ``(12) Vigorously promote recognition by the International 
        Monetary Fund that macroeconomic developments and policies can 
        affect and be affected by environmental conditions and 
        policies, including by working independently and with the 
        multilateral development banks to encourage countries to 
        correct market failures and pursue macroeconomic stability 
        while promoting policies for sustainable development and 
        environmental protection.
            ``(13) Facilitate greater International Monetary Fund 
        transparency, including by enhancing accessibility of the 
        International Monetary Fund and its staff, fostering a more 
        open release policy toward working papers, past evaluations, 
        and other International Monetary Fund documents, seeking to 
        publish all Letters of Intent to the International Monetary 
        Fund and Policy Framework Papers, and establishing a more open 
        release policy regarding Article IV consultations.
            ``(14) Facilitate greater International Monetary Fund 
        accountability and enhance International Monetary Fund self-
        evaluation by vigorously promoting review of the effectiveness 
        of the Office of Internal Audit and Inspection and the 
        Executive Board's external evaluation pilot program and, if 
        necessary, the establishment of an operations evaluation 
        department modeled on the experience of the International Bank 
        for Reconstruction and Development, guided by such key 
        principles as usefulness, credibility, transparency, and 
        independence.
            ``(15) Vigorously promote coordination with the 
        International Bank for Reconstruction and Development and other 
        international financial institutions (as defined in section 
        1701(c)(2)) in promoting structural reforms which facilitate 
        the provision of credit to small businesses, including 
        microenterprise lending, especially in the world's poorest, 
        heavily indebted countries.
            ``(16) Vigorously promote, in the context of the 
        International Monetary Fund's policy dialogue with its member 
        countries, measures to protect the rights and land of 
        indigenous peoples, including the Penan of Borneo, Malaysia, 
        the Dayaks of East Kalimantan, Indonesia, and the indigenous 
        communities of Irian Jaya, Indonesia.
            ``(17) Vigorously promote policies such that the 
        International Monetary Fund, in considering loan programs and 
        assistance, takes into account the extent to which the 
        recipient government has demonstrated a commitment to--
                    ``(A) providing accurate and complete data on the 
                annual expenditures and receipts of the armed forces;
                    ``(B) establishing good and publicly accountable 
                governance, including an end to excessive military 
                involvement in the economy; and
                    ``(C) making substantial reductions in excessive 
                military spending and forces, including domestic 
                security forces.
            ``(18) Structure International Monetary Fund debt relief 
        programs so that the programs do not impose unfair conditions 
        on heavily indebted poor countries, increase the amount of debt 
        relief available to poor countries, and decrease the time 
        required to qualify for debt relief.
    ``(b) Coordination With Other Executive Departments.--To the extent 
that it would assist in achieving the goals described in subsection 
(a), the Secretary of the Treasury shall pursue the goals in 
coordination with the Secretary of State, the Secretary of Labor, the 
Secretary of Commerce, the Administrator of the Environmental 
Protection Agency, the Administrator of the Agency for International 
Development, and the United States Trade Representative.''.
    (b) Advisory Committee on IMF Policy.--Section 1701 of such Act (22 
U.S.C. 262p-5) is amended by adding at the end the following:
    ``(e) Advisory Committee on IMF Policy.--
            ``(1) In general.--The Secretary of the Treasury shall 
        establish an International Monetary Fund Advisory Committee (in 
        this subsection referred to as the `Advisory Committee').
            ``(2) Membership.--The Advisory Committee shall consist of 
        8 members appointed by the Secretary of the Treasury, after 
        appropriate consultations with the relevant organizations, as 
        follows:
                    ``(A) 2 members shall be representatives from 
                organized labor.
                    ``(B) 2 members shall be representatives from 
                banking and financial services.
                    ``(C) 2 members shall be representatives from 
                industry and agriculture.
                    ``(D) 2 members shall be representatives from 
                nongovernmental environmental and human rights 
                organizations.
            ``(3) Duties.--Not less frequently than every 6 months, the 
        Advisory Committee shall meet with the Secretary of the 
        Treasury or the Deputy Secretary of the Treasury to review, and 
        provide advice on, the extent to which individual country 
        International Monetary Fund programs meet the policy goals set 
        forth in this Act regarding the International Monetary Fund.
            ``(4) Inapplicability of termination provision of the 
        federal advisory committee act.--Section 14(a)(2) of the 
        Federal Advisory Committee Act shall not apply to the Advisory 
        Committee.''.

SEC. 302. AVAILABILITY OF INTERNATIONAL MONETARY FUND LETTERS OF INTENT 
              REGARDING AGREEMENTS REQUIRED IN ORDER TO RECEIVE 
              ASSISTANCE.

    Title XV of the International Financial Institutions Act (22 U.S.C. 
262o-262o-1) is further amended by adding at the end the following:

``SEC. 1504. AVAILABILITY OF INTERNATIONAL MONETARY FUND LETTERS OF 
              INTENT REGARDING AGREEMENTS REQUIRED IN ORDER TO RECEIVE 
              ASSISTANCE.

    ``Within 3 business days after the United States Executive Director 
at the International Monetary Fund receives a letter of intent from a 
country regarding structural adjustment or an economic, social, or 
other agreement required by the Fund in order to receive assistance 
from the Fund, the Executive Director shall provide to the Secretary of 
the Treasury a copy of the letter and any related memorandum of 
understanding. Within 7 days after receiving the copy, the Secretary of 
the Treasury shall make the copy available to the public (by electronic 
or other readily and publicly accessible means) except to the extent 
that the Secretary determines that doing so would--
            ``(1) endanger the national security of the country or of 
        the United States;
            ``(2) disrupt markets; or
            ``(3) be contrary to the obligations of the United States 
        as a member of the International Monetary Fund.''.

SEC. 303. ENFORCEMENT OF INDONESIAN COMPLIANCE WITH REFORMS REQUIRED BY 
              THE INTERNATIONAL MONETARY FUND.

    The Secretary of the Treasury shall certify to the Committee on 
Banking and Financial Services of the House of Representatives and the 
Committee on Foreign Relations of the Senate that the United States 
Executive Director at the International Monetary Fund will oppose 
further disbursements of funds to Indonesia unless the Indonesian 
government complies with the terms of its International Monetary Fund 
reform package.

SEC. 304. SENSE OF THE CONGRESS ON THE TREATMENT OF MUCHTAR PAKPAHAN.

    It is the sense of the Congress that the Government of Indonesia 
should immediately release Muchtar Pakpahan from prison and have all 
criminal charges against him dismissed.

SEC. 305. SENSE OF THE CONGRESS ON THE ROLE OF JAPAN IN RESTORING 
              REGIONAL AND GLOBAL ECONOMIC GROWTH.

    (a) Finding.--The Congress finds that deteriorating economic 
conditions and ongoing financial market turbulence in Asia makes it 
more important than ever that Japan play a leadership role in helping 
to restore confidence and serve as a crucial engine of regional and 
world economic growth.
    (b) Sense of the Congress.--It is the sense of the Congress that 
Japan should assume a greater regional leadership role, which would 
coincide with Japan's goal of promoting strong domestic demand-led 
growth and avoiding a significant increase in its external surplus with 
the United States and the countries of the Asia-Pacific region.

                           TITLE IV--REPORTS

SEC. 401. SEMIANNUAL REPORTS ON FINANCIAL STABILIZATION PROGRAMS LED BY 
              THE INTERNATIONAL MONETARY FUND IN CONNECTION WITH 
              FINANCING FROM THE EXCHANGE STABILIZATION FUND.

    Title XVII of the International Financial Institutions Act (22 
U.S.C. 262r-262r-2) is amended by adding at the end the following:

``SEC. 1704. REPORTS ON FINANCIAL STABILIZATION PROGRAMS LED BY THE 
              INTERNATIONAL MONETARY FUND IN CONNECTION WITH FINANCING 
              FROM THE EXCHANGE STABILIZATION FUND.

    ``(a) In General.--The Secretary of the Treasury, in consultation 
with the Secretary of Commerce and other appropriate Federal agencies, 
shall prepare reports on the implementation of financial stabilization 
programs (and any material terms and conditions thereof) led by the 
International Monetary Fund in countries in connection with which the 
United States has made a commitment to provide, or has provided 
financing from the stabilization fund established under section 5302 of 
title 31, United States Code. The reports shall include the following:
            ``(1) A description of the condition of the economies of 
        countries requiring the financial stabilization programs, 
        including the monetary, fiscal, and exchange rate policies of 
        the countries.
            ``(2) A description of the degree to which the countries 
        requiring the financial stabilization programs have fully 
        implemented financial sector restructuring and reform measures 
        required by the International Monetary Fund, including--
                    ``(A) ensuring full respect for the commercial 
                orientation of commercial bank lending;
                    ``(B) ensuring that governments will not intervene 
                in bank management and lending decisions (except in 
                regard to prudential supervision);
                    ``(C) the passage of appropriate financial reform 
                legislation;
                    ``(D) strengthening the domestic financial system, 
                through financial sector restructuring, as well as 
                improved transparency and supervision; and
                    ``(E) the opening of domestic capital markets.
            ``(3) A description of the degree to which the countries 
        requiring the financial stabilization programs have fully 
        implemented reforms required by the International Monetary Fund 
        that are directed at corporate governance and corporate 
        structure, including--
                    ``(A) making nontransparent conglomerate practices 
                more transparent through the application of 
                internationally accepted accounting practices, 
                independent external audits, full disclosure, and 
                provision of consolidated statements; and
                    ``(B) ensuring that no government subsidized 
                support or tax privileges will be provided to bail out 
                individual corporations, particularly in the 
                semiconductor, steel, and paper industries.
            ``(4) A description of the implementation of reform 
        measures required by the International Monetary Fund to 
        deregulate and privatize economic activity by ending domestic 
        monopolies, undertaking trade liberalization, and opening up 
        restricted areas of the economy to foreign investment and 
        competition.
            ``(5) A detailed description of the trade policies of the 
        countries, including any unfair trade practices or adverse 
        effects of the trade policies on the United States.
            ``(6) A description of the extent to which the financial 
        stabilization programs have resulted in appropriate burden-
        sharing among private sector creditors, including rescheduling 
        of outstanding loans by lengthening maturities, agreements on 
        debt reduction, and the extension of new credit.
            ``(7) A description of the extent to which the economic 
        adjustment policies of the International Monetary Fund and the 
        policies of the government of the country adequately balance 
        the need for financial stabilization, economic growth, 
        environmental protection, social stability, and equity for all 
        elements of the society.
            ``(8) Whether International Monetary Fund involvement in 
        labor market flexibility measures has had a negative effect on 
        core worker rights, particularly the rights of free association 
        and collective bargaining.
            ``(9) A description of any pattern of abuses of core worker 
        rights in recipient countries.
            ``(10) The amount, rate of interest, and disbursement and 
        repayment schedules of any funds disbursed from the 
        stabilization fund established under section 5302 of title 31, 
        United States Code, in the form of loans, credits, guarantees, 
        or swaps, in support of the financial stabilization programs.
            ``(11) The amount, rate of interest, and disbursement and 
        repayment schedules of any funds disbursed by the International 
        Monetary Fund to the countries in support of the financial 
        stabilization programs.
    ``(b) Timing.--Not later than October 1, 1998, and semiannually 
thereafter, the Secretary of the Treasury shall submit to the 
Committees on Banking and Financial Services and International 
Relations of the House of Representatives and the Committees on Foreign 
Relations, and Banking, Housing, and Urban Affairs of the Senate a 
report on the matters described in subsection (a).''.

SEC. 402. REPORTS ON REFORMING THE ARCHITECTURE OF THE INTERNATIONAL 
              FINANCIAL SYSTEM.

    (a) Findings.--The Congress finds that, in order to ensure that the 
International Monetary Fund does not become the global lender of last 
resort to private sector corporations and financial institutions, and 
in order to help prevent future threats to the international financial 
system, the Secretary of the Treasury and the Chairman of the Board of 
Governors of the Federal Reserve System, working with their 
counterparts in other countries and with international organizations as 
appropriate, should--
            (1) seek to establish a broad set of international 
        transparency principles on accounting and disclosure policies 
        and practices covering, in particular, private sector financial 
        organizations;
            (2) promote improvements in the provision by both borrowers 
        and lenders of timely and comprehensive aggregate information 
        on cross-border financial stocks and flows;
            (3) seek an international accord establishing uniform 
        minimum standards with respect to robust banking and 
        supervisory systems, which individual countries should be 
        required to meet as a condition for the establishment of 
        subsidiaries, branches, or other offices of banking 
        institutions from their countries in the jurisdictions of the 
        countries participating in the accord;
            (4) immediately initiate with appropriate representatives 
        of the countries that are members of the International Monetary 
        Fund discussions aimed at securing national treatment for 
        United States investors in such countries; and
            (5) seek to establish internationally acceptable bankruptcy 
        standards and should work particularly to have International 
        Monetary Fund recipient countries adopt such standards.
    (b) Reports.--
            (1) In general.--The Secretary of the Treasury shall 
        prepare 3 reports on progress made toward achieving the 
        objectives outlined in subsection (a), which shall describe the 
        steps taken by the United States, other members of the world 
        community, and the international financial institutions to 
        strengthen safeguards in the global financial system, including 
        measures to promote more efficient functioning of global 
        markets, by--
                    (A) helping to develop effective legal and 
                regulatory frameworks, including appropriate bankruptcy 
                and foreclosure mechanisms;
                    (B) increasing transparency and disclosure by both 
                the private and public sectors;
                    (C) strengthening prudential standards, both 
                globally and in individual economies;
                    (D) improving domestic policy management;
                    (E) strengthening the role of the international 
                financial institutions in financial crisis prevention 
                and management; and
                    (F) ensuring appropriate burden sharing by the 
                private sector, particularly commercial banks and 
                financial institutions, in the resolution of crises.
            (2) Timing.--The Secretary of the Treasury shall submit to 
        the Committees on Banking and Financial Services and 
        International Relations of the House of Representatives and the 
        Committees on Foreign Relations and Banking, Housing, and Urban 
        Affairs of the Senate 2 interim reports on the matters 
        described in paragraph (1), the first of which is due by 
        October 1, 1998, and the second of which is due on April 1, 
        1999, and a final report on such matters, which is due on 
        October 1, 1999.

SEC. 403. ANNUAL REPORT AND TESTIMONY ON THE STATE OF THE INTERNATIONAL 
              FINANCIAL SYSTEM, IMF REFORM, AND COMPLIANCE WITH IMF 
              AGREEMENTS.

    Title XVII of the International Financial Institutions Act (22 
U.S.C. 262r-262r-2) is further amended by adding at the end the 
following:

``SEC. 1705. ANNUAL REPORT AND TESTIMONY ON THE STATE OF THE 
              INTERNATIONAL FINANCIAL SYSTEM, IMF REFORM, AND 
              COMPLIANCE WITH IMF AGREEMENTS.

    ``(a) Reports.--Not later than October 1 of each year, the 
Secretary of the Treasury shall submit to the Committee on Banking and 
Financial Services of the House of Representatives and the Committee on 
Foreign Relations of the Senate a written report on the progress (if 
any) made by the United States Executive Director at the International 
Monetary Fund in influencing the International Monetary Fund to adopt 
the policies and reform its internal procedures in the manner described 
in section 1503.
    ``(b) Testimony.--After submitting the report required by 
subsection (a) but not later than October 31 of each year, the 
Secretary of the Treasury shall appear before the Committee on Banking 
and Financial Services of the House of Representatives and the 
Committee on Foreign Relations of the Senate and present testimony on--
            ``(1) any progress made in reforming the International 
        Monetary Fund;
            ``(2) the status of efforts to reform the international 
        financial system; and
            ``(3) the compliance of countries which have received 
        assistance from the International Monetary Fund with agreements 
        made as a condition of receiving the assistance.''.

SEC. 404. AUDITS OF THE INTERNATIONAL MONETARY FUND.

    Title XVII of the International Financial Institutions Act (22 
U.S.C. 262r-262r-2) is further amended by adding at the end the 
following:

``SEC. 1706. AUDITS OF THE INTERNATIONAL MONETARY FUND.

    ``(a) Access to Materials.--Not later than 30 days after the date 
of the enactment of this section, the Secretary of the Treasury shall 
certify to the Committee on Banking and Financial Services of the House 
of Representatives and the Committee on Foreign Relations of the Senate 
that the Secretary has instructed the United States Executive Director 
at the International Monetary Fund to facilitate timely access by the 
General Accounting Office to information and documents of the 
International Monetary Fund needed by the Office to perform financial 
reviews of the International Monetary Fund that will facilitate the 
conduct of United States policy with respect to the Fund.
    ``(b) Reports.--Not later than June 30, 1999, and annually 
thereafter, the Comptroller General of the United States shall prepare 
and submit to the committees specified in subsection (a) a report on 
the financial operations of the Fund during the preceding year, which 
shall include--
            ``(1) the current financial condition of the International 
        Monetary Fund;
            ``(2) the amount, rate of interest, disbursement schedule, 
        and repayment schedule for any loans that were initiated or 
        outstanding during the preceding calendar year, and with 
        respect to disbursement schedules, the report shall identify 
        and discuss in detail any conditions required to be fulfilled 
        by a borrower country before a disbursement is made;
            ``(3) a detailed description of whether the trade policies 
        of borrower countries permit free and open trade by the United 
        States and other foreign countries in the borrower countries;
            ``(4) a detailed description of the export policies of 
        borrower countries and whether the policies may result in 
        increased export of their products, goods, or services to the 
        United States which may have significant adverse effects on, or 
        result in unfair trade practices against or affecting United 
        States companies, farmers, or communities;
            ``(5) a detailed description of any conditions of 
        International Monetary Fund loans which have not been met by 
        borrower countries, including a discussion of the reasons why 
        such conditions were not met, and the actions taken by the 
        International Monetary Fund due to the borrower country's 
        noncompliance;
            ``(6) an identification of any borrower country and loan on 
        which any loan terms or conditions were renegotiated in the 
        preceding calendar year, including a discussion of the reasons 
        for the renegotiation and any new loan terms and conditions; 
        and
            ``(7) a specification of the total number of loans made by 
        the International Monetary Fund from its inception through the 
        end of the period covered by the report, the number and 
        percentage (by number) of such loans that are in default or 
        arrears, and the identity of the countries in default or 
        arrears, and the number of such loans that are outstanding as 
        of the end of period covered by the report and the aggregate 
        amount of the outstanding loans and the average yield (weighted 
        by loan principal) of the historical and outstanding loan 
        portfolios of the International Monetary Fund.''.