12 U.S.C. § 635i–6 — Debt reduction; Enterprise for the Americas Initiative

(a) Definitions. For this section: (1) “Eligible country” means a country the President designates under subsection (b). (2) “Facility” means the Treasury Department entity established by section 1738 of title 7. (3) “IMF” means the International Monetary Fund.

(b) Eligibility for Facility benefits. (1) A country qualifies only if it—(A) is in Latin America or the Caribbean; (B) has an IMF standby or extended arrangement, or an arrangement under the structural adjustment facility or enhanced structural adjustment facility, or, in exceptional circumstances, is making significant progress toward one of those or an IMF-monitored program or equivalent, and, when appropriate, has or is making progress toward structural or sectoral adjustment loans from the IBRD or IDA; (C) has made major investment reforms with an Inter-American Development Bank loan or is otherwise implementing, or making significant progress toward, an open investment regime; and (D) when appropriate, has agreed with commercial-bank lenders on a satisfactory financing program, including debt or debt-service reduction when appropriate.

(2) The President decides whether a country qualifies.

(c) Loans eligible for sale, reduction, or cancellation. (1) Despite other law, the President may under this section sell to an eligible purchaser a loan, or part of one, made before January 1, 1992, under this subchapter to an eligible country or its agency. On receiving payment from an eligible purchaser, the President may instead reduce or cancel the loan or part. This may be done only to facilitate (A) debt-for-equity, debt-for-development, or debt-for-nature swaps; or (B) an eligible country’s buy-back of its own qualified debt, but only if the country uses additional local currency equal to at least 40 percent of the price it paid for the debt, or equal to the difference between that price and the debt’s face value, for activities linking conservation and sustainable natural-resource use with local community development and child survival or other child-development activities, consistently with sections 1738f through 1738k of title 7. The sale, reduction, or cancellation also may not violate a term or condition of an earlier agreement about the loan.

(2) The President must establish the terms and conditions for these sales, reductions, and cancellations.

(3) A Securities Act of 1933 registration statement is not required for the Bank’s sale or offer of a loan or interest in one under this section. For that Act, the Bank is not an issuer or underwriter for a later sale or other disposition of the loan or interest, or of a security an eligible purchaser receives through a debt-for-equity, debt-for-development, or debt-for-nature swap.

(4) The Facility must tell the Bank which purchasers the President has found eligible and direct the Bank to carry out the transaction. The Bank must adjust its accounts to show the sale, reduction, or cancellation.

(5) This subsection’s authority may be used only to the extent advance appropriations Acts provide, as needed to implement the Federal Credit^* Reform Act of 1990.

(d) Deposit of proceeds. Money from a sale, reduction, or cancellation under this section must be deposited in the United States Government account or accounts established to repay the loan.

(e) Eligible purchasers. A loan may be sold under subsection (c)(1)(A) only to a purchaser who gives the President plans satisfactory for using it in a debt-for-equity, debt-for-development, or debt-for-nature swap.

(f) Consultation with debtor. Before selling, reducing, or canceling a loan to an eligible country, the President must consult that country about the amount and the uses for those swaps.

(g) Appropriations. Congress authorizes whatever sums are necessary for these sales, reductions, and cancellations. The sums remain available until spent.