22 U.S.C. § 262p–8 — Modification of the Enhanced HIPC Initiative

(a) Authority
(1) In general — The Treasury Secretary should immediately begin working with the Paris Club, the World Bank, the IMF, and other multilateral institutions to modify the Enhanced HIPC Initiative. The goal: for each of the first 3 years after May 27, 2003, or the country's Decision Point (whichever is later), reduce debt enough that (A) the present value of the country's public and publicly guaranteed debt — measured as of the decision point, or as of May 27, 2003 if the country hasn't reached its decision point yet — falls to no more than 150 percent of the country's yearly export value for the year before the Decision Point; and (B) the country's yearly debt payments fall to no more than (i) 10 percent of its yearly government revenue (or 5 percent for a country suffering a public health crisis, as defined in subsection (e)), or (ii) an equivalent percentage of gross national product or another comparable benchmark.
(2) Limitation — When financing these Initiative goals, an international financial institution must prioritize using its own resources first.

(b) Relation to poverty and the environment
Debt cancellation under these modifications should not be conditioned on a poor country agreeing to policies that deepen poverty or harm the environment, including any policy that: (1) adds or extends user fees on primary education or primary health care — including HIV/AIDS, tuberculosis, and malaria prevention and treatment, and infant, child, and maternal care; (2) shifts more cost onto poor people to pay for basic public services like education, health care, clean water, or sanitation; (3) cuts the country's minimum wage below $2 a day, or weakens workers' ability to exercise their internationally recognized worker rights as defined in section 262p–4p; or (4) pushes unsustainable resource extraction or cuts budget support for environmental programs.

(c) Conditions
A country is not eligible for debt cancellation under these modifications if its government: (1) spends excessively on its military; (2) has repeatedly supported international terrorism, as the Secretary of State has determined under section 4605(j)(1) of title 50 or section 2371(a) of this title; (3) fails to cooperate on international narcotics control; or (4) shows a consistent pattern of serious human rights violations, including by its military or security forces.

(d) Programs to combat HIV/AIDS and poverty
A country otherwise eligible for debt cancellation under these modifications can get it only if it has agreed to: (1) make sure debt cancellation's financial benefits go to programs fighting HIV/AIDS and poverty — especially better health, education, nutrition, and other development priorities, and fixing environmental damage; (2) make sure these benefits are added on top of — not instead of — its total poverty-reduction spending from the previous year, or its average spending over the previous 3 years, whichever is bigger; (3) put in place transparent, participatory policymaking and budget procedures, good governance, and real anti-corruption measures; and (4) broaden public participation in and understanding of poverty-reduction goals.

(e) Definitions
(1) "Country suffering a public health crisis" means a country where, according to the most recent UNAIDS epidemiological data, at least 5 percent of women at prenatal clinics have HIV/AIDS, or more than 20 percent of people in high-risk groups do.
(2) "Decision Point" means the date the World Bank's and IMF's executive boards review a country's debt sustainability analysis and decide it's eligible for debt relief under the Enhanced HIPC Initiative.
(3) "Enhanced HIPC Initiative" means the multilateral debt initiative in the Report of G-7 Finance Ministers on the Cologne Debt Initiative to the Cologne Economic Summit, held June 18–20, 1999.