22 U.S.C. § 262p–4c — Initiation of discussions to facilitate debt-for-development swaps for human welfare and environmental conservation

(a) Findings
Congress finds that: (1) voluntary debt-for-development swaps in heavily indebted developing countries can both reduce the burden of foreign debt and free up money inside the country for charitable, educational, and scientific purposes — including environmental conservation, education, human welfare, health, farm research, microenterprise credit, and building up local nonprofits; and (2) heavily indebted countries may want to encourage such swaps as much as possible, as long as it's consistent with sound economic management and doesn't fuel inflation.

(b) Initiation of discussions
(1) In general — The Treasury Secretary must instruct the U.S. representative at the World Bank to start discussions with the Bank's directors, the International Development Association, and the International Finance Corporation, and propose that these institutions give advice and help — as appropriate — to borrowing-country governments that want to set up debt-for-development swaps. This includes advice on mechanisms like trust funds, especially in the context of debt rescheduling, that manage the swaps' effect on the country's economy soundly and preserve the value of the capital raised.
(2) Definitions — (A) "Debt-for-development swap" means buying qualified debt, or having it donated, by a tax-exempt charitable organization (under section 501(c)(3) of title 26), and then transferring that debt to an organization in the foreign country in exchange for that organization, government, or foreign group agreeing to carry out a charitable, educational, or scientific activity. (B) "Qualified debt" means: (i) sovereign debt issued by a foreign government; (ii) debt owed by private institutions in that country; and (iii) debt owed by institutions in that country partly owned by private persons and partly by public institutions.