§635i–3. Tied Aid Credit Fund and program

(a) Findings

The Congress finds that-

(1) tied aid and partially untied aid credits offered by other countries are a predatory method of financing exports because of their market-distorting effects;

(2) these distortions have caused the United States to lose export sales, with resulting losses in economic growth and employment;

(3) these practices undermine market mechanisms that would otherwise result in export purchase decisions made on the basis of price, quality, delivery, and other factors directly related to the export, where official financing is not subsidized and would be a neutral factor in the transaction;

(4) support of commercial exports by donor countries with tied aid and partially untied aid credits impedes the growth of developing countries because it diverts development assistance funds from essential developmental purposes; and

(5) there should be established in the Bank a tied aid program to target the export markets of those countries which make extensive use of tied aid or partially untied aid credits for commercial advantage for the purposes of-

(A) enforcing compliance with the existing Arrangement restricting the use of tied aid and partially untied aid credits for commercial purposes; and

(B) facilitating efforts to negotiate, establish, and enforce new or revised comprehensive international arrangements effectively restricting the use of tied aid and partially untied aid credits for commercial purposes;

and such program should be used aggressively for such purposes.

(b) Establishment of tied aid credit program

(1) In general

The Bank shall establish a tied aid credit program under which grants shall be made from funds available in the Tied Aid Credit Fund established under subsection (c) of this section-

(A) to supplement the financing of a United States export when there is a reasonable expectation that predatory financing will be provided by another country for a sale by a competitor of the United States exporter with respect to such export and with special attention to matching tied aid and partially untied aid credits extended by other governments-

(i) in violation of the Arrangement; or

(ii) in cases in which the Bank determines that United States trade or economic interests justify the matching of tied aid credits extended in compliance with the Arrangement, including grandfathered cases;

(B) to supplement the financing of United States exports to foreign markets which are actual or potential export markets for any country which the Bank determines-

(i) engages in predatory official export financing through the use of tied aid or partially untied aid credits, and impedes negotiations or violates agreements on tied aid to eliminate the use of such credits for commercial purposes; or

(ii) engages in predatory financing practices that seek to circumvent international agreements on tied aid; or

(C) to supplement the financing of United States exports under such other circumstances as the Bank may determine to be appropriate for carrying out the purposes of this section.

(2) Administration of program

The tied aid credit program shall be administered by the Bank-

(A) in consultation with the Secretary and in accordance with the Secretary's recommendations on how such credits could be used most effectively and efficiently to carry out the purposes described in subsection (a)(5) of this section;

(B) in cooperation with United States exporters and private financial institutions or entities, and in consultation with other Federal agencies, as appropriate; and

(C) in consultation with the National Advisory Council on International Monetary and Financial Policies.

(3) Coordination with other export financing

Under the tied aid credit program, the Bank may combine grants from the Tied Aid Credit Fund with-

(A) any guarantee, insurance, or other extension of credit provided by the Bank under this subchapter;

(B) any export financing provided by any private financial institution or other entity; and

(C) any other type of export financing,

in such manner and under such terms as the Bank determines to be appropriate, including combinations of export financing in the form of blended financing and parallel financing.

(4) Information on countries which engage in official predatory export financing and impede negotiations

In order to assist the Bank to make the most efficient use of funds available for supplemental financing under paragraph (1)(B), the United States Trade Representative and the Secretary of Commerce may provide information on principal sectors and key markets of countries described in paragraph (1)(B) to the Bank, the Secretary, and the National Advisory Council on International Monetary and Financial Policies. The Bank shall also request and take into consideration the views of the private sector on principal sectors and key markets of countries described in paragraph (1)(B).

(c) Tied Aid Credit Fund

(1) In general

There is hereby established within the Bank a fund to be known as the "Tied Aid Credit Fund" (hereinafter in this section referred to as the "Fund"), consisting of such amounts as may be appropriated to the Fund pursuant to the authorization contained in subsection (e) of this section.

(2) Expenditures from Fund

Amounts in the Fund shall be available for grants made by the Bank under the tied aid credit program established pursuant to subsection (b) of this section and to reimburse the Bank for the amount equal to the concessionality level of any tied aid credits authorized by the Bank.

(d) Consistency with Arrangement

Any export financing involving the use of a grant under the tied aid credit program shall be consistent with the procedures established by the Arrangement, as in effect at the time such financing is approved.

(e) Authorization

There are authorized to be appropriated to the Fund such sums as may be necessary to carry out the purposes of this section. Such sums are authorized to remain available until expended.

(f) Nonreviewability

No action taken under this section shall be reviewable by any court, except for abuse of discretion.

(g) Report to Congress

(1) In general

On or before October 15, 1992, and every 6 months thereafter, the Bank, in consultation with the Secretary, shall submit a report on tied aid credits to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives.

(2) Contents of reports

Each report required under paragraph (1) shall contain a description of-

(A) the implementation of the Arrangement restricting tied aid and partially untied aid credits for commercial purposes, including the operation of notification and consultation procedures;

(B) all principal offers of tied aid credit financing by foreign countries during the previous 6-month period, including all offers notified by countries participating in the Arrangement, and in particular-

(i) offers grandfathered under the Arrangement; and

(ii) notifications of exceptions under the Arrangement;

(C) any use by the Bank of the Tied Aid Credit Fund to match specific offers, including those that are grandfathered or exceptions under the Arrangement; and

(D) other actions by the United States Government to combat predatory financing practices by foreign governments, including additional negotiations among participating governments in the Arrangement.

(3) Confidential information

To the extent the Bank determines any information required to be included in the report under this subsection should not be made public, such information may be submitted separately on a confidential basis or provided orally, rather than in written form, to the Chairmen and ranking minority Members of the Committees of the Senate and the House of Representatives with jurisdiction over the subject matter of the report.

(h) Definitions

For purposes of this section, the following definitions shall apply:

(1) Tied aid and partially untied aid credit

The terms "tied aid credit" and "partially untied aid credit" mean any credit which-

(A) has a grant element greater than zero percent, as determined by the Development Assistance Committee of the Organization for Economic Cooperation and Development;

(B) is, in fact or in effect, tied to-

(i) the procurement of goods or services from the donor country, in the case of tied aid credit; or

(ii) the procurement of goods or services from a restricted number of countries, in the case of partially untied aid credit; and

(C) is financed either exclusively from public funds or partly from public and partly from private funds.

(2) Secretary

The term "Secretary" means the Secretary of the Treasury.

(3) Arrangement

The term "Arrangement" means the Arrangement on Guidelines for Officially Supported Export Credits established through the Organization for Economic Cooperation and Development.

(4) Blended financing

The term "blended financing" means financing provided through any combination of official development assistance, official export credits, and private commercial credit which is integrated into a single agreement with a single set of financial terms.

(5) Parallel financing

The term "parallel financing" means financing provided by any combination of official development assistance, official export credits, and private commercial credit which is not integrated into a single agreement and does not have a single set of financial terms.

(6) Offers grandfathered under the Arrangement

The term "offers grandfathered under the Arrangement" means-

(A) financing offers made or lines of credit extended on or before February 15, 1992; or

(B) financing offers extended for subloans under lines of credit referred to in subparagraph (A) made on or before August 15, 1992, or, in the case of Mexico, on or before December 31, 1992.

(July 31, 1945, ch. 341, §10, formerly §15, as added Pub. L. 99–472, §19, Oct. 15, 1986, 100 Stat. 1205 ; amended Pub. L. 100–217, Dec. 29, 1987, 101 Stat. 1454 ; Pub. L. 100–418, title III, §3302(b), Aug. 23, 1988, 102 Stat. 1383 ; Pub. L. 101–240, title I, §101(b), Dec. 19, 1989, 103 Stat. 2493 ; Pub. L. 101–513, title V, §562(d), Nov. 5, 1990, 104 Stat. 2036 ; renumbered §10 and amended Pub. L. 102–429, title I, §§103, 121(c)(4), Oct. 21, 1992, 106 Stat. 2187 , 2199; Pub. L. 104–97, §1, Jan. 11, 1996, 109 Stat. 984 ; Pub. L. 104–107, title V, §579, Feb. 12, 1996, 110 Stat. 751 ; Pub. L. 105–121, §3, Nov. 26, 1997, 111 Stat. 2528 .)

Prior Provisions

A prior section 10 of act July 31, 1945, ch. 341, repealed section 713b of Title 15, Commerce and Trade.

Amendments

1997-Subsec. (c)(2). Pub. L. 105–121, §3(a), struck out "through September 30, 1997" after "authorized by the Bank".

Subsec. (e). Pub. L. 105–121, §3(b), amended first sentence generally. Prior to amendment first sentence read as follows: "There are authorized to be appropriated to the Fund such sums as may be necessary for each of fiscal years 1996 and 1997."

1996-Subsec. (c)(2). Pub. L. 104–107, §579(a), which directed substitution of "1997" for "1995", could not be executed because "1995" does not appear in text after amendment by Pub. L. 104–97. See below.

Pub. L. 104–97, §1(a), substituted "1997" for "1995".

Subsec. (e). Pub. L. 104–107, §579(b), which directed substitution of "1996 and 1997" for "1993, 1994, and 1995", could not be executed because that language does not appear in text after general amendment by Pub. L. 104–97. See below.

Pub. L. 104–97, §1(b), substituted "There are authorized to be appropriated to the Fund such sums as may be necessary for each of fiscal years 1996 and 1997." for "There are authorized to be appropriated to the Fund $500,000,000 for each of fiscal years 1993, 1994, and 1995."

1992-Subsec. (a). Pub. L. 102–429, §103(c)(1), (2), substituted "predatory" for "predacious" in par. (1), struck out "temporary" before "tied aid program" in introductory provisions of par. (5), and substituted "existing Arrangement" for "existing arrangement" in par. (5)(A).

Subsec. (b)(1). Pub. L. 102–429, §103(c)(3)(A), substituted "The" for "To carry out the purposes of subsection (a)(5) of this section, the".

Subsec. (b)(1)(A). Pub. L. 102–429, §103(c)(1), (3)(B), substituted "predatory" for "predacious" and inserted before semicolon "and with special attention to matching tied aid and partially untied aid credits extended by other governments-" followed by cls. (i) and (ii).

Subsec. (b)(1)(B). Pub. L. 102–429, §103(c)(1), (3)(C), in cl. (i) substituted "predatory" for "predacious" and "partially untied aid credits, and impedes negotiations or violates agreements on tied aid to eliminate the use of such credits for commercial purposes; or" for "partially untied aid credits; and", added cl. (ii), and struck out former cl. (ii) which read as follows: "impedes negotiations to eliminate the use of such credits for commercial purposes; or".

Subsec. (b)(2). Pub. L. 102–429, §103(c)(4), (5), struck out "of the Treasury" after "Secretary" in subpar. (A) and substituted "United States exporters and private financial institutions or entities, and in consultation with other Federal agencies" for "private financial institutions or entities" in subpar. (B).

Subsec. (b)(4). Pub. L. 102–429, §103(c)(6), inserted at end "The Bank shall also request and take into consideration the views of the private sector on principal sectors and key markets of countries described in paragraph (1)(B)."

Subsec. (c)(2). Pub. L. 102–429, §103(a), substituted "September 30, 1995" for "fiscal year 1992".

Subsec. (e). Pub. L. 102–429, §103(b), amended subsec. (e) generally, substituting present provisions for provisions which authorized appropriations for fiscal years 1987 through 1992 and provided authority for Presidential rescission.

Subsec. (g)(1). Pub. L. 102–429, §103(c)(7), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "Report required.-Before the end of the 6-month period beginning on October 15, 1986, and every six months thereafter, the Bank, in consultation with the Secretary, shall prepare and transmit a report on tied aid credits to the President of the Senate and the Speaker of the House of Representatives."

Subsec. (g)(2). Pub. L. 102–429, §103(c)(7), amended par. (2) generally. Prior to amendment, par. (2) read as follows: "Contents of report.-Each report required by paragraph (1) shall contain a description of-

"(A) the principal offers of predacious financing by foreign countries during the course of the previous 6 months;

"(B) steps taken by the United States to combat specific predacious financing practices of foreign countries;

"(C) any use by the Bank of the Tied Aid Credit Fund to match specific predacious financing practices of foreign countries and to initiate tied aid credit offers;

"(D) any additional steps the United States may take in the future to discourage use of predacious financing practices; and

"(E) the progress achieved by negotiations conducted to carry out the purposes described in subsection (a)(5) of this section."

Subsec. (h). Pub. L. 102–429, §103(c)(8), substituted "For purposes of this section, the following definitions shall apply:" for "For the purpose of this section-" in introductory provisions and added par. (6).

1990-Subsec. (c)(2). Pub. L. 101–513, §562(d)(2), substituted "1992" for "1991".

Subsec. (e)(1). Pub. L. 101–513, §562(d)(1), substituted "for fiscal year 1990, $300,000,000, and for each of fiscal years 1991 and 1992, $500,000,000" for "and for fiscal years 1990 and 1991, $300,000,000".

1989-Subsec. (a)(5). Pub. L. 101–240, §101(b)(1), substituted "for the purposes of-", pars. (A) and (B), and concluding provisions for "for the purpose of facilitating the negotiation of a comprehensive international arrangement restricting the use of tied aid and partially untied aid credits for commercial purposes, and such program should be aggressively used until such an arrangement is established."

Subsec. (b)(1). Pub. L. 101–240, §101(b)(2), inserted introductory provisions and struck out former introductory provisions which read as follows: "For the purpose of facilitating the negotiation of a comprehensive international arrangement restricting the use of tied aid and partially untied aid credits for commercial purposes, the Bank shall establish a tied aid credit program under which grants shall be made from funds available in the Tied Aid Credit Fund established under subsection (c) of this section-".

Subsec. (b)(2)(A). Pub. L. 101–240, §101(b)(3), substituted "carry out the purposes described in subsection (a)(5) of this section" for "promote the negotiation of a comprehensive international arrangement restricting the use of tied aid and partially untied aid credits for commercial purposes".

Subsec. (c)(2). Pub. L. 101–240, §101(b)(4), substituted "amount equal to the concessionality level" for "cost" and "through fiscal year 1991" for "during fiscal years 1986, 1987, 1988, and 1989".

Subsec. (e)(1). Pub. L. 101–240, §101(b)(7), which directed the insertion of ", and for fiscal years 1990, 1991, and 1992, $200,000,000" after "$300,000,000" was not executed in view of earlier amendment by section 101(b)(5) of Pub. L. 101–240, which inserted ", and for fiscal years 1990 and 1991, $300,000,000" after "$300,000,000", and in view of Senate floor amendment of the bill which added the authorization contained in section 101(b)(5) and was intended to replace the authorization now appearing in section 101(b)(7). See Cong. Rec., Vol. 135, pt. 22, pp. 31199, 31203.

Pub. L. 101–240, §101(b)(5), inserted ", and for fiscal years 1990 and 1991, $300,000,000" after "$300,000,000".

Subsec. (g)(2)(E). Pub. L. 101–240, §101(b)(6), amended subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: "any progress achieved in negotiations to establish a comprehensive international arrangement restricting the use of tied aid and partially untied credits for commercial purposes."

1988-Subsecs. (c)(2), (e)(1). Pub. L. 100–418 substituted "1988, and 1989" for "and 1988".

1987-Subsec. (c)(2). Pub. L. 100–217 substituted "during fiscal years 1986, 1987, and 1988" for "during fiscal year 1986".

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress.

Use of Fund To Discourage Predatory Financing Practices

Section 3302(a) of Pub. L. 100–418 provided that: "The Congress finds that-

"(1) negotiations have led to an international agreement to increase the grant element required in tied aid credit offers;

"(2) concern continues to exist that countries party to the agreement may continue to offer tied aid credits that deviate from the agreement;

"(3) in such cases, the United States could continue to lose export sales in connection with the aggressive, and in some cases, unfair, tied aid practices of such countries; and

"(4) in such cases, the Export-Import Bank of the United States should continue to use the Tied Aid Credit Fund established by section 15(c) [now 10(c)] of the Export-Import Bank Act of 1945 [12 U.S.C. 635i–3(c)] to discourage the use of such predatory financing practices."