§ 635i–3.
(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;
(5)
the Bank has, at a minimum, the following two tasks—
(A)
(i)
first, the Bank should match foreign export credit agencies and aid agencies when they engage in tied aid outside the confines of the Arrangement and when they exploit loopholes, such as untied aid;
(ii)
such matching is needed to provide the United States with leverage in efforts at the OECD to reduce the overall level of export subsidies;
(iii)
only through matching foreign export credit offers can the Bank buttress United States negotiators in their efforts to bring these loopholes within the disciplines of the Arrangement; and
(iv)
in order to bring untied aid within the discipline of the Arrangement, the Bank should consider initiating highly competitive financial support when the Bank learns that foreign untied aid offers will be made; and
(B)
second, the Bank should support United States exporters when the exporters face foreign competition that is consistent with the Arrangement and the Subsidies Code of the World Trade Organization, but which places United States exporters at a competitive disadvantage; and
(6)
there should be established in the Bank a tied aid program to target the export markets of those countries, including those that are not a party to the Arrangement, which make extensive use of tied aid or partially untied aid credits, or untied aid used to promote exports as if it were tied aid, 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, or untied aid used to promote exports as if it were tied aid, for commercial purposes; and
(C)
promoting compliance with Arrangement rules among foreign export credit agencies that are not a party to the Arrangement;
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)—
(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 principles, process, and standards developed pursuant to paragraph (5) of this subsection and the purposes described in subsection (a)(5);
(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
(5)
Principles, process, and standards governing use of the Fund
(B)
Content of principles, process, and standards
(i)
Consideration of certain principles and standards
In developing the principles and standards referred to in subparagraph (A), the Secretary and the Bank shall consider administering the Tied Aid Credit Fund in accordance with the following principles and standards:
(I)
The Tied Aid Credit Fund should be used to leverage multilateral negotiations to restrict the scope for aid-financed trade distortions through new multilateral rules, to police existing rules, and to seek compliance by those countries that are not a party to the Arrangement.
(II)
The Tied Aid Credit Fund will be used to counter a foreign tied aid credit confronted by a United States exporter when bidding for a capital project.
(III)
Credible information about an offer of foreign tied aid will be required before the Tied Aid Credit Fund is used to offer specific terms to match such an offer. In cases where information about a specific offer of foreign tied aid (or untied aid used to promote exports as if it were tied aid) is not available in a timely manner, or is unavailable because the foreign export credit agency involved is not subject to the reporting requirements under the Arrangement, then the Bank may decide to use the Tied Aid Credit Fund based on credible evidence of a history of such offers under similar circumstances or other forms of credible evidence.
(IV)
The Tied Aid Credit Fund will be used to enable a competitive United States exporter to pursue further market opportunities on commercial terms made possible by the use of the Fund.
(V)
Each use of the Tied Aid Credit Fund will be in accordance with the Arrangement unless a breach of the Arrangement has been committed by a foreign export credit agency.
(VI)
The Tied Aid Credit Fund may only be used to defend potential sales by United States companies to a project that is environmentally sound.
(VII)
The Tied Aid Credit Fund may be used to preemptively counter potential foreign tied aid offers without triggering foreign tied aid use.
(ii)
Process
In handling individual applications involving the use or potential use of the Tied Aid Credit Fund the following process shall exclusively apply pursuant to subparagraph (A):
(I)
The Bank shall process an application for tied aid in accordance with the principles and standards developed pursuant to subparagraph (A) and clause (i) of this subparagraph.
(II)
Twenty days prior to the scheduled meeting of the Board of Directors at which an application will be considered (unless the Bank determines that an earlier discussion is appropriate based on the facts of a particular financing), the Bank shall brief the Secretary on the application and deliver to the Secretary such documents, information, or data as may reasonably be necessary to permit the Secretary to review the application to determine if the application complies with the principles and standards developed pursuant to subparagraph (A) and clause (i) of this subparagraph.
(III)
The Secretary may request a single postponement of the consideration by the Board of Directors of the application for up to 14 days to allow the Secretary to submit to the Board of Directors a memorandum objecting to the application.
(IV)
Case-by-case decisions on whether to approve the use of the Tied Aid Credit Fund shall be made by the Board of Directors, except that the approval of the Board of Directors (or a commitment letter based on that approval) shall not become final (except as provided in subclause (V)), if the Secretary indicates to the President of the Bank in writing the Secretary’s intention to appeal the decision of the Board of Directors to the President of the United States and makes the appeal in writing not later than 20 days after the meeting at which the Board of Directors considered the application.
(V)
The Bank shall not grant final approval of an application for any tied aid credit (or a commitment letter based on that approval) if the President of the United States, after consulting with the President of the Bank and the Secretary, determines within 30 days of an appeal by the Secretary under subclause (IV) that the extension of the tied aid credit would materially impede achieving the purposes described in subsection (a)(6). If no such Presidential determination is made during the 30-day period, the approval by the Bank of the application (or related commitment letter) that was the subject of such appeal shall become final.
(C)
Initial principles, process, and standards
(D)
Transitional principles and standards
(6)
Reconsideration of decisions
([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]; [Pub. L. 106–569, title XI, § 1103(d)(2)], Dec. 27, 2000, [114 Stat. 3031]; [Pub. L. 107–189], §§ 9, 10(c), (d), 24(a)(2)(E), June 14, 2002, [116 Stat. 701], 703, 704, 708; [Pub. L. 109–438, § 10], Dec. 20, 2006, [120 Stat. 3275].)