[Senate Report 111-107]
[From the U.S. Government Publishing Office]
Calendar No. 227
111th Congress Report
SENATE
1st Session 111-107
======================================================================
OVERSEAS PRIVATE INVESTMENT CORPORATION REAUTHORIZATION ACT OF 2009
_______
December 15, 2009.--Ordered to be printed
_______
Mr. Kerry, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 705]
The Committee on Foreign Relations, having had under
consideration the bill S. 705, to reauthorize the programs of
the Overseas Private Investment Corporation, and for other
purposes, reports favorably thereon and recommends that the
bill do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Discussion.......................................................1
IV. Cost Estimate....................................................9
V. Evaluation of Regulatory Impact.................................13
VI. Changes in Existing Law.........................................13
I. PURPOSE
The purpose of S. 705 is to reauthorize the programs of the
Overseas Private Investment Corporation.
II. COMMITTEE ACTION
S. 705 was introduced by Senators Kerry and Lugar on March
25, 2009. On March 31, 2009, the committee ordered S. 705
reported favorably by voice vote.
III. DISCUSSION
S. 705, the ``Overseas Private Investment Corporation
Reauthorization Act of 2009'' reauthorizes the agency through
September 30, 2013. It strengthens the agency's development
mandate and ensures that its activities are consistent with
United States foreign policy objectives. The Overseas Private
Investment Corporation (OPIC) is an independent agency of the
United States established in 1971. OPIC's mandate is to
mobilize and facilitate the participation of the U.S. private
sector in the economic and social development of less developed
countries, thereby complementing the development assistance
objectives of the United States. OPIC provides political risk
insurance, project financing, and other financial assistance to
U.S. companies in support of these objectives.
Over the agency's 38-year history, OPIC projects have
generated more than $72 billion in U.S. exports and more than
273,000 American jobs while supporting over $188 billion worth
of investments that have helped developing countries generate
almost $15 billion in host-government revenues leading to over
821,000 host-country jobs.
The legislation includes several important changes: (1)
strengthening transparency requirements to ensure NGOs and
other interested groups have sufficient notice and information
about potential OPIC-supported projects; (2) ensuring
extractive industry projects supported by OPIC conform to
standards and principles established by the Extractive
Industries Transparency Initiative; and (3) strengthening the
rights of workers overseas.
Preferential Consideration of Certain Investment Projects.
This section amends section 231(f) of the FAA and requires
OPIC, to the greatest degree practicable and consistent with
the Corporation's goals, to provide preferential consideration
to investment projects in less developed countries, the
governments of which are receptive to private enterprise and
are willing and able to maintain conditions that enable private
enterprise to make its full contribution to the development
process. This does not affect the committee's longstanding
belief that protecting human rights, strengthening the rule of
law, and promoting democratic governance by the host government
are essential elements towards sustainable long-term
development.
Transparency for Extraction Investments. The bill creates
a new subsection under the climate change mitigation section
addressing extraction investments. The committee recognizes the
problematic history of extractive industry projects in
developing countries. The committee intends for this
legislation to provide important transparency safeguards so
that OPIC-sponsored projects can best fulfill the agency's
development mandate. The legislation directs the Corporation to
provide notice to Congress not later than 60 days before
approval of extractive industry projects, defined as those
which are Category A and valued at $10,000,000 or more.
In general, the Corporation may approve a contract of
insurance, reinsurance, a guaranty, or provide financing to an
eligible investor for a project that significantly involves an
extractive industry only if: (1) the eligible investor has
agreed to implement Extractive Industries Transparency
Initiative (EITI) principles and criteria, or substantially
similar principles and criteria related to the specific project
to be carried out; and (2) the host country where the project
is to be carried out has committed to EITI principles and
criteria or substantially similar principles and criteria, or
the host country is taking the necessary steps to establish
functioning systems. Functioning systems include: accurately
accounting for revenues and expenditures in connection with
extraction; the independent audit of such revenues and
expenditures and the widespread public dissemination of the
finding of the audit; and verifying government receipts against
company payments, including widespread dissemination of such
payment information and disclosure of such documents as host
government agreements. The legislation includes an exception to
the above provision and allows for the Corporation to approve
an extractive industry project, even if the host country has
not committed to EITI or substantially similar principles and
criteria and is not taking the necessary steps to establish
functioning accounting, auditing and government receipt
verification systems, provided that the host government does
not prevent the eligible investor from implementing EITI or
substantially similar principles and criteria related to the
specific project to be carried out.
``Extractive industry'' refers to an enterprise engaged in
the exploration, development, or extraction of oil and gas
reserves, metal ores, gemstones, industrial minerals, or coal.
By ``substantially similar principles and criteria,'' the
committee means the general agreement of EITI principles, as
well as the adoption of specific criteria, including:
1. Regular publication of all material oil, gas and mining
payments by companies to governments and all
material revenues received by governments from oil,
gas and mining companies to a wide audience in a
publicly accessible, comprehensive and
comprehensible manner;
2. Payments and revenues are reconciled by a credible,
independent administrator, applying international
auditing standards and with publication of the
administrator's opinion regarding that
reconciliation including discrepancies, should any
be identified;
3. This approach should be extended to all companies
including state-owned enterprises; and
4. Civil society is actively engaged as a participant in the
design, monitoring and evaluation of this process
and contributes towards public debate.
Finally, this section requires the Corporation, to the
extent practicable and consistent with its development
objectives, to give preference to projects where both the
eligible investor and host country have agreed to implement
EITI principles and criteria, or substantially similar
principles and criteria.
Increased Transparency and Public Participation
The committee commends OPIC for its transparency initiative
implemented in response to the 2003 reauthorization committee
report. This section furthers transparency by amending section
231A(c)(2) of the FAA to require OPIC to provide advance notice
and information regarding all projects considered by the Board
of Directors. The committee wants to ensure there is a robust
exchange of information and viewpoints prior to Board
discussion of potential projects. In the past, public hearings
scheduled by OPIC to receive views regarding the activities of
the Corporation have been sparsely attended or cancelled due to
lack of attendance. The committee believes public input would
be enhanced by requiring OPIC to make information available in
advance about potential projects to be voted on by the Board of
Directors. The legislation is intended to address this
information gap and ensure that interested parties are aware in
advance about the public hearing date and have sufficient
information in order to prepare for such a hearing.
The legislation directs the Corporation to hold a public
hearing in order to afford an opportunity for any person to
present view regarding the activities of the Corporation. It
shall notice such a hearing at least 20 days in advance. To
ensure participants are adequately prepared for such a hearing,
at least 15 days in advance, the Corporation shall make
available a public summary of each project, not including any
confidential business information, including information
related to workers rights, as well as information related to
the project's social and environmental impacts.
The legislation also directs the Corporation to make
available to the public the detailed methodology used to assess
and monitor the impact of projects supported by the Corporation
related to host-country environmental and development impact,
project impact toward employment in the United States and the
protection of internationally recognized worker rights, as well
as the elimination of discrimination with respect to employment
and occupation, in host countries.
The legislation furthers additional transparency toward
``Category A'' projects, which are projects that have a
significant adverse environmental impact. ``Category A
project'' means a project or other activity for which the
Corporation proposes to provide insurance, reinsurance, a
guaranty, financing, or other assistance and which is likely to
have a significant adverse environmental impact. OPIC's Board
of Directors may not vote in favor of any action proposed to be
taken by the Corporation on any Category A project until at
least 60 days after the Corporation makes available for public
comment a summary of the project and relevant information about
the project. Such summaries, which shall not include
confidential business information, shall be made available to
groups in the area that may be impacted by the proposed project
and to NGOs in the host country. To the extent practicable, the
Corporation shall publish responses to comments received with
respect to a Category A project and submit the responses to the
Board not later than 7 days before a vote is to be taken for
action on the project.
The committee commends the Corporation for establishing an
Office of Accountability. The Corporation shall continue to
maintain an Office of Accountability to provide, to the maximum
extent practicable, upon request, problem-solving services for
projects supported by the Corporation and to review the
Corporation's compliance with its environmental, social,
internationally recognized worker rights, human rights, and
transparency policies and procedures. The committee expects the
Office of Accountability to continue to operate in a manner
that is fair, objective, and transparent.
The committee expects that:
The transparency commitments made by OPIC Acting President
in his April 7, 2009 letter to the Committee on Foreign
Relations for the Senate and the Committee on Foreign
Affairs for the House of Representatives, will be
faithfully implemented by the Corporation, and will
apply consistently to all projects and subprojects.
OPIC's commitment to improved coordination with locally
affected communities found in the September 21, 2006
OPIC Anti-Corruption and Transparency Initiative Fact
Sheet will also be faithfully implemented. In addition,
the brief project summaries will identify environmental
and social policies that will be applied to the project
and subprojects will include developmental, labor, and
worker rights policies.
OPIC's definition of ``business confidential'' should be
consistent with FOIA definition as per 5 U.S.C.
Sec. 552(b)(4) and pursuant to the guidance of the U.S.
Department of Justice.
Mandatory Board approval (and 60 day public notice and
comment period) should be required for all Category A
projects.
Within one year of the date of enactment of this act, the
OPIC Board of Directors should consider a proposal to
include discussion and/or votes on projects as part of
the open session of board meetings.
The statutorily required review of proposed OPIC assessment
and monitoring methodology should include the
subsequent revision of this methodology. This review
and revision will recur on every 3 years, and a minimum
of 60 days of public comment will be provided. A
summary of the project monitoring reports should also
be disclosed.
Regarding 60 day public notice and comment period for
Category A projects, detailed information, including
documentation that project related information has been
made available to potentially affected peoples in the
host country in a language and manner of distribution
that is accessible to them, will be required to be made
available at least 60 days in advance of the Board
meeting
All new Host Country Notifications, Third Party Independent
Audits Certification and Summaries of Category A
Projects and Subprojects for which OPIC received an
application after the effective date of OPIC's
Transparency Initiative commitments, will be made
publicly available on OPIC's website as soon as they
are issued.
Statutory requirements for the Office of Accountability
will result in independence of budget and power to
approve expenditures associated with that budget, and
its ability to carry out investigations and analysis
should not be dictated by OPIC management. This
includes, but is not limited to, the freedom of the
Office of Accountability staff and its designates to
travel in fulfillment of the Office of Accountability's
duties.
Investment Funds and Other Financial Intermediaries
The committee expects that:
All requirements for OPIC projects should be applied to
``sub-projects,'' investment funds, and other financial
intermediaries.
All Category A subprojects should be approved by OPIC and
include the public comment period and publication of
environmental and social assessments.
Contract language: Language pertaining to environmental,
social and labor requirements must be written into all
contracts between OPIC-supported investment funds,
financial intermediaries and the companies and
``subprojects'' in which they invest.
The committee expects that analysis of fund performance in
the Annual Report shall identify and describe each subproject
supported by OPIC Investment Funds, including an analysis of
the performance of each fund. Such analysis shall identify the
domicile of each fund, all subprojects of each fund, the
categorization of each subproject (i.e. category A, B), and
provide descriptions of environmental and social impacts of
each subproject.
Given the current financial climate and the opaque nature
of offshore funds, the committee expects that OPIC will
continue to take every precaution to ensure that any funds
domiciled offshore meet the requirements of all relevant U.S.
statutes.
Ineligibility of Persons Doing Certain Business with State
Sponsors of Terrorism. The bill adds a new subsection (m) to
Section 239 of the FAA to make ineligible for OPIC assistance
persons with certain business activity in or with state
sponsors of terrorism. This will ensure that OPIC assistance
will not go towards entities, parent companies or affiliates
that are engaged in a discouraged transaction with a ``state
sponsor of terrorism.''
The legislation is meant to strike a balance between
concern that the Corporation refrain from directing any support
towards entities engaged in a discouraged transaction with a
state sponsor of terrorism, while ensuring the Corporation is
able to function in an effective and efficient manner and that
certification requirements will not have a chilling effect on
potential applicants.
The Corporation has provided the committee with assurances
that the certification required by this section will require
the certifying officer to affirm that they have taken measures
necessary to determine whether their firm and any applicable
affiliated entities are engaged in discouraged transactions,
and if necessary, has received any information and cooperation
from affiliated entities needed to make the certification.
``State sponsor of terrorism'' means any country the
government of which the Secretary of State has determined has
repeatedly provided support for acts of international terrorism
pursuant to the Export Administration Act of 1979 and the Arms
Export Control Act. This does not include Southern Sudan,
Southern Kordofan/Nuba Mountains State, Blue Nile State, and
Abyei, Darfur, if the Corporation, with concurrence of the
Secretary of State, Determines that providing assistance for
projects in such regions will provide emergency relief, promote
economic self-sufficiency, or implement a nonmilitary program
in support of a viable peace agreement in Sudan.
OPIC officials have committed to consult closely with the
Secretary of State to ensure that any support provided to
projects within Gaza is consistent with U.S. policy objectives.
In addition, the committee expects the Corporation to consult
with Senate Committee on Foreign Relations and the House
Committee on Foreign Affairs before approval of assistance to
such projects.
Increasing Project Requirements Regarding Employment. This
section amends section 231A of the Foreign Assistance Act (FAA)
to require OPIC to take certain measures to strengthen the
rights of workers overseas. The committee believes that
promoting internationally recognized worker rights is an
integral component of U.S. foreign policy, and OPIC plays an
important role in this effort. The bill directly links workers
rights standards in OPIC-supported projects to standards
established under the Generalized System of Preferences (GSP)
in the Trade Act of 1974 and directs that the Corporation can
only provide assistance to prospective applicants if: 1) the
country in which the project is to be undertaken is eligible
under GSP; or 2) the country in which the project is to be
undertaken is not eligible under GSP but has taken or is taking
steps to afford workers in the country internationally
recognized worker rights. The committee expects OPIC to
implement a thorough review of its approval process for
determining the eligibility of non-GSP cleared countries to
ensure that OPIC assistance is not directed towards those
countries that fail to respect internationally recognized
worker rights. The committee also expects OPIC to carefully
review all project applications to ensure that project sponsors
have not previously committed, or are currently committing,
significant violations of internationally recognized worker
rights. OPIC should monitor project compliance, and review any
complaints related to a project.
``Internationally recognized worker rights'' follows the
definition provided in section 507(4) of the Trade act of 1974.
The worker rights limitation does not apply to the provision of
humanitarian services. If Congress raises GSP workers rights
standards, then workers rights standards for OPIC projects in
GSP eligible countries will also increase. The legislation
directs OPIC to refer to information contained in reports
required by this Act and the Trade Act of 1974 as well as other
relevant information--including observations, reports and
recommendations of the International Labor Organization--when
making worker rights determinations for purposes of project
eligibility. In addition, the legislation removes a waiver
previously granted to the president of OPIC allowing the
Corporation to support projects ``in the national interest''
that may fall below established worker rights standards.
Finally, the legislation adds an ``elimination of
discrimination with respect to employment and occupation''
clause to the worker rights standard.
Climate Change Mitigation. The committee directs OPIC to
institute a climate change mitigation action plan. Climate
change is one of the critical issues facing the international
community and has especially serious implications for
developing countries. The committee believes that agencies such
as OPIC, whose mandate is to promote economic and social
development in less developed countries, has an important role
to play toward mitigating climate change and energy security.
The committee commends OPIC for the strong leadership role it
has assumed through its greenhouse gas and clean energy
initiative, and urges the Corporation to continue to sustain
such efforts. To ensure this momentum is not lost, the
legislation directs the Corporation to establish benchmark
clean energy technology, climate mitigation and greenhouse gas
goals. Within 180 days of enactment, the Corporation must
institute a plan that will include the following:
First, OPIC shall establish a goal for substantially
increasing support of projects that use, develop, or otherwise
promote the use of clean energy technology during the 10-year
period beginning on the date of enactment of this Act. This
should include preferential treatment to evaluating and
awarding assistance for projects that use, develop, or
otherwise promote the use of clean energy technologies.
Second, when the agency undertakes environmental impact
assessments of potential projects, it shall take into account
the degree to which the project contributes to the emission of
greenhouse gases. This subsection applies to all projects, not
just those classified as ``Category A,'' and shall not be
construed to eliminate any other requirement found elsewhere in
law.
Third, OPIC shall continue to maintain a goal for reducing
direct greenhouse gas emissions associated with projects in the
Corporation's portfolio by 20 percent during the 10-year period
beginning on the date of enactment, as well as a goal for
limiting annual investment in projects that have significant
greenhouse gas emissions in a manner that will help achieve a
20-percent reduction in greenhouse gas emissions over 10 years.
The Corporation is directed to maintain a goal based on total
aggregate greenhouse gas emissions of all projects in a manner
compatible with the findings and actions taken under the United
Nations Framework Convention on Climate Change.
The committee includes the following reporting requirements
to be included in the Corporation's annual report: Annual
greenhouse gas emissions attributable to each project that has
significant greenhouse gas emissions in the Corporation's
active portfolio; estimated greenhouse gas emissions for each
new project that has significant greenhouse gas emissions;
extent to which the Corporation is meeting its greenhouse gas
reduction goals; and a listing of each new project supported by
the Corporation that involves renewable energy and
environmentally beneficial products and services, including
clean energy technology. In submitting its annual report, the
``reporting requirements'' in this subsection apply to all
projects, including those implemented through financial
intermediaries.
``Clean technology'' refers to a renewable energy supply or
end-use technology that, compared over its life cycle to a
similar technology already in widespread commercial use within
a given country, will reduce emissions of greenhouse gases or
decrease energy intensity of operation, substantially lower
emissions of air pollutants, or generate substantially smaller
and less hazardous quantities of solid and liquid waste.
``Clean'' end-use technologies include end-use energy
efficiency measures that achieve substantial reductions in
greenhouse gas emissions. ``Clean'' end-use technologies do not
include HFC-23 abatement projects.
The committee expects the President of OPIC to provide the
following information within one year of the date of enactment
of this Act:
An update of OPIC's methodology for accounting for GHG
emissions in consultation with the public. Such
methodology shall account for all OPIC supported
projects and sub-projects that have GHG emissions of
more than 25,000 tonnes of CO2-equivalent
per year.
Measures to be taken to reduce GHG emissions of all OPIC
supported projects and subprojects, as rapidly as
practicable, all projects and subprojects in which OPIC
invests, by at least 50 percent by 2023 with a goal of
limiting new carbon additions in proportional annual
increments.
Inclusion in each annual report under section 240A: (i)
annual GHG emissions of the Corporation, (ii) annual
GHG emissions of each project that OPIC supports that
are estimated to emit more than 25,000 tonnes of
CO2 eq.
Environmental and Social Guidelines
The committee has strongly directed the Corporation to
issue regulations of the highest standards in terms of
environmental and social guidelines that can be feasibly
implemented. Not only should these guidelines be no less
rigorous than those the Corporation has made publicly available
as of June 3, 2009 and of the environmental and social policies
of the World Bank Group, these guidelines should also
incorporate the highest of standards, whether from the World
Bank Group or other relevant institutions. For example, the
Asian Development Bank, having conducted a multi-year process
of rewriting its environmental and social policies, proposes
that draft full environmental impact assessments for all
category A private sector and public sector projects be
publicly disclosed 120 days prior to Board consideration,
proposes that draft full EAIs for Category A subprojects are
required to be disclosed 120 days before approval by the
appropriate body (e.g., the ADB Board), and proposes that
environmental assessments be required for all Bank financed or
administered projects and their components, regardless of the
source of financing (i.e. whether financed by the ADB, co-
financed, or financed by borrower).
Scoring. In early 2009, the Congressional Budget Office
issued a document it described as a ``Notification,'' which
proposed ``to stop crediting the Overseas Private Investment
Corporation (OPIC) with savings of discretionary budget
authority from the interest earned on its reserves of U.S.
Treasury securities.''
While this proposal was not adopted, the committee
reexamined the relevant statutory requirements, and the
committee fully expects that any assessment of OPIC's capacity
to self-fund will include interest income from its holdings of
U.S. securities. The committee strongly opposes redefining the
interest earned on OPIC's reserves of U.S. Treasury securities
as an intra-governmental transfer. Such an action would be
inconsistent with OPIC's statutory mandates.
V. COST ESTIMATE
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of
the costs of this legislation prepared by the Congressional
Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, May 7, 2009.
Hon. John F. Kerry,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 705, the Overseas
Private Investment Corporation Reauthorization Act of 2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John Chin.
Sincerely,
Douglas W. Elmendorf.
------
Congressional Budget Office Cost Estimate
May 7, 2009.
S. 705
Overseas Private Investment Corporation
Reauthorization Act of 2009
AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON
MARCH 31, 2009
SUMMARY
S. 705 would authorize the Overseas Private Investment
Corporation (OPIC) to continue to issue political risk
insurance and to finance investments in developing countries
and emerging market economies with direct loans and loan
guarantees. This authority, which is set to expire at the end
of fiscal year 2009 under current law, would extend through
September 30, 2013.
CBO estimates that implementing S. 705 would cost $137
million over the 2010-2014 period, assuming appropriation of
the estimated amounts. Enacting the bill would not affect
direct spending or revenues.
S. 705 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of S. 705 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
Changes in Spending Subject to Appropriation Due to S. 705
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2010-2014
----------------------------------------------------------------------------------------------------------------
Administrative Expenses
Estimated Authorization Level.................... 10 22 32 44 39 148
Estimated Outlays................................ 9 20 30 42 39 140
Insurance Program
Estimated Authorization Level.................... 5 8 10 10 7 40
Estimated Outlays................................ 2 5 8 9 9 33
Loan Program
Estimated Authorization Level.................... 27 19 8 1 -33 23
Estimated Outlays................................ -1 -4 -9 -11 -11 -36
Total Changes
Estimated Authorization Level................ 42 49 50 55 13 209
Estimated Outlays............................ 10 21 29 40 37 137
----------------------------------------------------------------------------------------------------------------
BASIS OF ESTIMATE
For this estimate, CBO assumes that S. 705 will be enacted
before the end of fiscal year 2009, that the necessary funds
and authority will be provided in annual appropriation acts
each fiscal year, and that outlays will follow historical
spending patterns for OPIC activities.
OPIC operates a program to insure investors in developing
countries and emerging markets against financial losses due to
expropriation, currency inconvertibility, and damage resulting
from political violence. In addition, OPIC operates a loan
program to finance such investment through direct loans and
loan guarantees. The bill would authorize OPIC to issue new
insurance policies, loans, and loan guarantees through
September 30, 2013.
The Omnibus Appropriations Act, 2009 (Public Law 111-8)
authorized OPIC to continue issuing insurance policies and
financing investments through the end of fiscal year 2009.
Estimated spending under current law therefore assumes that
OPIC continues to service its outstanding portfolio of
insurance and loans and continues to receive interest on its
current investments in U.S securities, but that it issues no
new policies and finances no new investments after September
30, 2009.
Administrative Expenses
In 2009, OPIC received appropriations of $51 million for
administrative expenses. CBO expects that under current law
(that is, without reauthorization) total appropriations for
administrative expenses would decline gradually from the 2009
level to the minimum amount necessary to service its
outstanding insurance and loans. CBO estimates that if the
programs are reauthorized total appropriations for
administrative expenses would remain at 2009 levels, adjusted
for inflation, through 2013. Administrative expenses thereafter
would only be needed to service outstanding insurance and
loans. CBO estimates that under the bill additional
administrative costs would total $140 million over the 2010-
2014 period, assuming appropriation of the necessary amounts.
Insurance Program
CBO expects that under current law insurance premiums and
claim payments would decline each year, based on historical
data showing that about 20 percent of insurance policies are
cancelled or reduced each year. CBO also anticipates that there
would be no further obligations for project-specific expenses
or various activities to encourage investment. Under the bill,
CBO assumes that OPIC's insurance portfolio, premiums, and
claims would remain at the estimated 2009 level through 2013.
Given that claim payments have exceeded premiums in recent
years, we estimate that, excluding relevant administrative
expenses, extending the authority for OPIC's insurance program
would result in a net cost of $33 million (claims paid out
minus premiums paid in) over the 2010-2014 period.
Loan Program
In 2009, OPIC received an appropriation of $29 million for
the cost of loan subsidies as defined in the Federal Credit
Reform Act. CBO expects that under current law subsidy costs
would decline gradually from the 2009 level as disbursement of
approved loans also decline. CBO estimates that under the bill
subsidy costs would remain at 2009 levels, adjusted for
inflation, through 2013. CBO estimates that additional subsidy
costs under the bill would total $60 million over the 2010-2014
period.
For the past several years, the subsidy rate for many loan
guarantees made by OPIC has been negative, thus generating
discretionary offsetting collections. CBO expects that under
current law such receipts would decline gradually from an
estimated $40 million in 2009 to $5 million in 2014. We
estimate that under the bill those collections would increase
by $96 million over the 2010-2014 period.
Thus, CBO estimates that, excluding relevant administrative
expenses, reauthorizing OPIC's loan program would result in a
net savings of $36 million over the 2010-2014 period--$60
million in additional costs minus $96 million in additional
receipts.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
S. 705 contains no intergovernmental or private-sector
mandates as defined in UMRA and would not affect the budgets of
state, local, or tribal governments.
ESTIMATE PREPARED BY:
Federal Costs: John Chin
Impact on State, Local, and Tribal Governments: Jacob
Kuipers
Impact on the Private Sector: Burke Doherty
ESTIMATE APPROVED BY:
Theresa Gullo, Deputy Assistant Director for Budget
Analysis.
V. EVALUATION OF REGULATORY IMPACT
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. CHANGES IN EXISTING LAW
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, existing law in which no change is proposed is shown in
roman).
The Foreign Assistance Act of 1961
* * * * * * *
Title IV--Overseas Private Investment Corporation
Sec. 231. Creation, Purpose and Policy.-- * * *
* * * * * * *
In carrying out its purpose, the Corporation, utilizing
broad criteria, shall undertake--
(a) to conduct financing, insurance, and reinsurance
operations on a self-sustaining basis, taking into account in
its financing operations the economic and financial soundness
of projects;
* * * * * * *
[(f) to consider in the conduct of its operations the
extent to which less developed country governments are
receptive to private enterprise, domestic and foreign, and
their willingness and ability to maintain conditions which
enable private enterprise to make its full contribution to the
development process;]
(f) to the greatest degree practicable and consistent with
the goals of the Corporation, to give preferential
consideration to investment projects in any less developed
country the government of which is receptive to both domestic
and foreign private enterprise and to projects in any country
the government of which is willing and able to maintain
conditions that enable private enterprise to make a full
contribution to the development process;
* * * * * * *
(m) to refuse to insure, reinsure, or finance any
investment subject to performance requirements which would
reduce substantially the positive trade benefits likely to
accrue to the United States from the investment; [and]
(n) to refuse to insure, reinsure, guarantee, or finance
any investment in connection with a project which the
Corporation determines will pose an unreasonable or major
environmental, health, or safety hazard, or will result in the
significant degradation of national parks or similar protected
areas[.]; and
(o) to decline to issue any contract of insurance or
reinsurance, or any guaranty, or to enter into any agreement to
provide financing or any other assistance for a prospective
eligible investor who enters, directly or through an affiliate,
into certain discouraged transactions with a state sponsor of
terrorism.
Sec. 231A. Additional Requirements.--[(a) Worker Rights.--
[(1) Limitation on opic activities.--The Corporation
may insure, reinsure, guarantee, or finance a project
only if the country in which the project is to be
undertaken is taking steps to adopt and implement laws
that extend internationally recognized worker rights,
as defined in section 507(4) of the Trade Act of 1974,
to workers in that country (including any designated
zone in that country). The Corporation shall also
include the following language, in substantially the
following form, in all contracts which the Corporation
enters into with eligible investors to provide
financial support under this title:
[``The investor agrees not to take actions to prevent
employees of the foreign enterprise from lawfully
exercising their right of association and their right
to organize and bargain collectively. The investor
further agrees to observe applicable laws relating to a
minimum age for employment of children, acceptable
conditions of work with respect to minimum wages, hours
of work, and occupational health and safety, and not to
use forced labor. The investor is not responsible under
this paragraph for the actions of a foreign
government.''
[(2) Use of annual reports on workers rights.--The
Corporation shall, in making its determinations under
paragraph (1), use the reports submitted to the
Congress pursuant to section 504 of the Trade Act of
1974. The restriction set forth in paragraph (1) shall
not apply until the first such report is submitted to
the Congress.
[(3) Waiver.--Paragraph (1) shall not prohibit the
Corporation from providing any insurance, reinsurance,
guaranty, or financing with respect to a country if the
President determines that such activities by the
Corporation would be in the national economic interests
of the United States. Any such determination shall be
reported in writing to the Congress, together with the
reasons for the determination.
[(4) In making a determination under this section for
the People's Republic of China, the Corporation shall
discuss fully and completely the justification for
making such determination with respect to each item set
forth in subparagraphs (A) through (E) of section
507(4) \227\ of the Trade Act of 1974.]
(a) Increasing Project Requirements Regarding Employment.--
(1) In general.--The Corporation may insure,
reinsure, guaranty, or finance a project only if--
(A) the country in which the project is to be
undertaken is eligible for designation as a
beneficiary developing country under the
Generalized System of Preferences (19 U.S.C.
2461 et seq.) and has not been determined to be
ineligible for such designation on the basis of
section 502(b)(2)(G) of the Trade Act of 1974
(19 U.S.C. 2462(b)(2)(G)) (relating to
internationally recognized worker rights), or
section 502(b)(2)(H) of such Act (19 U.S.C.
2462(b)(2)(H) (relating to the worst forms of
child labor); or
(B) the country in which the project is to be
undertaken is not eligible for designation as a
beneficiary country under the Generalized
System of Preferences, the government of that
country has taken or is taking steps to afford
workers in the country (including any
designated zone or special administrative
region or area in that country) internationally
recognized worker rights (as defined in section
507(4) of the Trade Act of 1974) (19 U.S.C.
2467(4)).
(2) Limitation inapplicable.--The limitation
contained in paragraph (1) shall not apply to providing
assistance for humanitarian services.
(3) Use of reports.--The Corporation shall, in
implementing paragraph (1), consider--
(A) information contained in the reports
required by sections 116(d) and 502B(b) of this
Act and the report required by section 504 of
the Trade Act of 1974 (19 U.S.C. 2464);
(B) other relevant sources of information
readily available to the Corporation, including
observations, reports, and recommendations of
the International Labour Organization; and
(C) information provided in the hearing
required under subsection (c).
(4) Contract language.--The Corporation shall include
the following language, in substantially the following
form, in all contracts which the Corporation enters
into with eligible investors to provide support under
this title:
``The investor agrees not to take any actions to
obstruct or prevent employees of the foreign enterprise
from exercising the employees' internationally
recognized worker rights (as defined in section 507(4)
of the Trade Act of 1974) (19 U.S.C. 2467(4)) and the
investor agrees to adhere to the obligations regarding
those rights. The investor agrees to prohibit
discrimination with respect to employment and
occupation.''
(5) Preference to certain countries.--Consistent with
its development objectives, the Corporation shall give
preferential consideration to projects in countries
that--
(A) have adopted and maintained, in the
country's laws and regulations, internationally
recognized worker rights, as well as the
elimination of discrimination with respect to
employment and occupation; and
(B) are effectively enforcing those laws.
* * * * * * *
(c) Public Hearings.--(1) The Board shall hold at least one
public hearing each year in order to afford an opportunity for
any person to present views as to whether the Corporation is
carrying out its activities in accordance with section 231 and
this section or whether any investment in a particular country
should have been or should be extended insurance, reinsurance,
guarantees, or financing under this title.
[(2) In conjunction with each meeting of its Board of
Directors, the Corporation shall hold a public hearing in order
to afford an opportunity for any person to present views
regarding the activities of the Corporation. Such views shall
be made part of the record.]
(2) In conjunction with each meeting of its Board of
Directors, the Corporation shall hold a public hearing in order
to afford an opportunity for any person to present views
regarding the activities of the Corporation. The Corporation
shall provide notice of the hearing at least 20 days in before
the hearing. At least 15 days in before the hearing the
Corporation shall make available a public summary of each
project, including information related to workers rights, to be
considered at the meeting. The Corporation shall not include
any confidential business information in the summary made
available under this subsection. Any views expressed at the
hearing or in written comments shall be made part of the
record.
* * * * * * *
[(g) Pilot Equity Finance Program.--
[(1) Authority for pilot program.--In order to study
the feasibility and desirability of a program of equity
financing, the Corporation is authorized to establish a
4-year pilot program under which it may, on the limited
basis prescribed in paragraphs (2) through (5),
purchase, invest in, or otherwise acquire equity or
quasi-equity securities of any firm or entity, upon
such terms and conditions as the Corporation may
determine, for the purpose of providing capital for any
project which is consistent with the provisions of this
title except that--
[(A) the aggregate amount of the
Corporation's equity investment with respect to
any project shall not exceed 30 percent of the
aggregate amount of all equity investment made
with respect to such project at the time that
the Corporation's equity investment is made,
except for securities acquired through the
enforcement of any lien, pledge, or contractual
arrangement as a result of a default by any
party under any agreement relating to the terms
of the Corporation's investment; and
[(B) the Corporation's equity investment
under this subsection with respect to any
project, when added to any other investments
made or guaranteed by the Corporation under
subsection (b) or (c) with respect to such
project, shall not cause the aggregate amount
of all such investment to exceed, at the time
any such investment is made or guaranteed by
the Corporation, 75 percent of the total
investment committed to such project as
determined by the Corporation.
[The determination of the Corporation under
subparagraph (B) shall be conclusive for
purposes of the Corporation's authority to make
or guarantee any such investment.
[(2) Equity authority limited to projects in sub-
saharan africa and caribbean basin and marine
transportation projects globally.--Equity investments
may be made under this subsection only in projects in
countries eligible for financing under this title that
are countries in sub-Saharan Africa or countries
designated as beneficiary countries under section 212
of the Caribbean Basin Economy Recovery Act and in
marine transportation projects in countries and areas
eligible for OPIC support worldwide using United States
commercial maritime expertise.
[(3) Additional criteria.--In making investment
decisions under this subsection, the Corporation shall
give preferential consideration to projects sponsored
by or significantly involving United States small
business or cooperatives. The Corporation shall also
consider the extent to which the Corporation's equity
investment will assist in obtaining the financing
required for the project.
[(4) Disposition of equity interest.--Taking into
consideration, among other things, the Corporations'
financial interests and the desirability of fostering
the development of local capital markets in less
developed countries, the Corporation shall endeavor to
dispose of any equity interest it may acquire under
this subsection within a period of 10 years from the
date of acquisition of such interest.
[(5) Implementation.--To the extent provided in
advance in appropriations Acts, the Corporation is
authorized to create such legal vehicles as may be
necessary for implementation of its authorities, which
legal vehicles may be deemed non-Federal borrowers for
purposes of the Federal Credit Reform Act of 1990.
Income and proceeds of investments made pursuant to
this section 234(g) may be used to purchase equity or
quasi-equity securities in accordance with the
provisions of this section: Provided, however, That
such purchases shall not be limited to the 4-year
period of the pilot program: Provided further, That the
limitations contained in section 234(g)(2) shall not
apply to such purchases.
[(6) Consultations with congress.--The Corporation
shall consult annually with the Committee on Foreign
Affairs of the House of Representatives and the
Committee on Foreign Relations of the Senate on the
implementation of the pilot equity finance program
established under this subsection.]
[(h)] (g) Local Currency Guaranties for Eligible
Investors.--To issue to--
(1) eligible investors, or
(2) local financial institutions, guaranties,
denominated in currencies other than United States
dollars, of loans and other investments made to
projects sponsored by or significantly involving
eligible investors, assuring against loss due to such
risks and upon such terms and conditions as the
Corporation may determine, for projects that the
Corporation determines to have significant
developmental effects or as the Corporation determines
to be necessary or appropriate to carry out the
purposes of this title.
* * * * * * *
Sec. 234. Investment Insurance and Other Programs.--The
Corporation is hereby authorized to do the following:
(a) Investment Insurance.--(1) To issue insurance, upon
such terms and conditions as the Corporation may determine, to
eligible investors assuring protection in whole or in part
against any or all of the following risks with respect to
projects which the Corporation has approved--
* * * * * * *
(b) Investment Guaranties.--To issue to eligible investors
guaranties of loans and other investments made by such
investors assuring against loss due to such risks and upon such
terms and conditions as the Corporation may determine:
Provided, however, That such guaranties on other than loan
investments shall not exceed 75 per centum of such investment:
Provided further, That except for loan investments for credit
unions made by eligible credit unions or credit union
associations, the aggregate amount of investment (exclusive of
interest and earnings) so guaranteed with respect to any
project shall not exceed, at the time of issuance of any such
guaranty, 75 per centum of the total investment committed to
any such project as determined by the Corporation, which
determination shall be conclusive for purposes of the
Corporation's authority to issue any such guaranty: Provided
further, That not more than 15 per centum of the maximum
contingent liability of investment guaranties which the
Corporation is permitted to have outstanding under section
[235(a)(2)] 235(a)(1) shall be issued to a single investor.
* * * * * * *
SEC. 234A. ENHANCING PRIVATE POLITICAL RISK INSURANCE INDUSTRY.
* * * * * * *
SEC. 234B. EXTRACTION INVESTMENT.
(a) Extraction Investments.--
(1) Prior notification to congressional committees.--
(A) In general.--The Corporation shall
provide notice of consideration of approval of
a project described in subparagraph (B) to the
Committees on Foreign Relations and
Appropriations of the Senate and the Committees
on Foreign Affairs and Appropriations of the
House of Representatives not later than 60 days
before approval of such project.
(B) Project described.--A project described
in this subparagraph is a Category A project
(as defined in section 237(q)(3)) relating to
an extractive industry project or any
extractive industry project for which the
assistance to be provided by the Corporation is
valued at $10,000,000 or more (including
contingent liability).
(2) Commitment to eiti principles.--
(A) In general.--Except as provided in
subparagraph (B), the Corporation may approve a
contract of insurance, reinsurance, a guaranty,
or enter into an agreement to provide financing
to an eligible investor for a project that
significantly involves an extractive industry
only if--
(i) the eligible investor has agreed
to implement the Extractive Industries
Transparency Initiative principles and
criteria, or substantially similar
principles and criteria related to the
specific project to be carried out; and
(ii)(I) the host country where the
project is to be carried out has
committed to the Extractive Industries
Transparency Initiative principles and
criteria, or substantially similar
principles and criteria; or
(II) the host country where the
project is to be carried out has in
place or is taking the necessary steps
to establish functioning systems for--
(aa) accurately accounting
for revenues and expenditures
in connection with the
extraction and export of the
type of natural resource to be
extracted or exported;
(bb) the independent audit of
such revenues and expenditures
and the widespread public
dissemination of the finding of
the audit; and
(cc) verifying government
receipts against company
payments, including widespread
dissemination of such payment
information, and disclosure of
such documents as host
government agreements,
concession agreements, and
bidding documents, and allowing
in any such dissemination or
disclosure for the redaction
of, or exceptions for,
information that is
commercially proprietary or
that would create a competitive
disadvantage.
(B) Exception.--If a host country does not
meet the requirements of subparagraph (A)(ii)
(I) or (II), the Corporation may approve a
contract of insurance, reinsurance, or a
guaranty, or enter into an agreement to provide
financing for a project in the host country if
the Corporation determines it is in the foreign
policy interest of the United States for the
Corporation to provide support for the project
in the host country and the host country does
not prevent an eligible investor from complying
with subparagraph (A)(i).
(3) Preference for certain projects.--With respect to
all projects that significantly involve an extractive
industry, the Corporation, to the extent practicable
and consistent with the Corporation's development
objectives, shall give preference to a project in which
the eligible investor has agreed to implement the
Extractive Industries Transparency Initiative
principles and criteria, or substantially similar
principles and criteria, and the host country where the
project is to be carried out has committed to the
Extractive Industries Transparency Initiative
principles and criteria, or substantially similar
principles and criteria.
(4) Effect on other requirements.--Nothing in this
subsection shall affect the limitations and
prohibitions with respect to direct investments
described in section 234(c).
(5) Reporting requirement.--The Corporation shall
include in each annual report required under section
240A a description of its activities to carry out this
subsection.
(b) Extractive Industry.--The term ``extractive industry''
refers to an enterprise engaged in the exploration,
development, or extraction of oil and gas reserves, metal ores,
gemstones, industrial minerals (except rock used for
construction purposes), or coal.
SEC. 235. ISSUING AUTHORITY, DIRECT INVESTMENT AUTHORITY AND
RESERVES.--
(a) Issuing Authority.--
(1) Insurance and financing.--(A) The maximum
contingent liability outstanding at any one time
pursuant to insurance issued under section 234(a), and
the amount of financing issued under sections 234(b)
and (c), shall not exceed in the aggregate
$29,000,000,000.
(B) Subject to spending authority provided in
appropriations Acts pursuant to section 504(b) of the
Federal Credit Reform Act of 1990, the Corporation is
authorized to transfer such sums as are necessary from
its noncredit activities to pay for the subsidy and
administrative costs of the investment guaranties and
direct loan programs under subsections (b) and (c) of
section 234.
(2) Termination of authority.--The authority of
subsections (a), (b), and (c) of section 234 shall
continue until [2007] September 30, 2013.
* * * * * * *
[(e) There is hereby authorized to be transferred to the
Corporation at its call, for the purposes specified in section
236, all fees and other revenues collected under predecessor
guaranty authority from December 31, 1968, available as of the
date of such transfer.]
[(f)] (e) There are authorized to be appropriated to the
Corporation, to remain available until expended, such amounts
as may be necessary from time to time to replenish or increase
the noncredit account revolving fund, to discharge the
liabilities under insurance, reinsurance, or guaranties issued
by the Corporation or issued under predecessor guaranty
authority, or to discharge obligations of the Corporation
purchased by the Secretary of the Treasury pursuant to this
subsection. However, no appropriations shall be made to augment
the noncredit account revolving fund until the amount of funds
in the noncredit account revolving fund is less than
$25,000,000. Any appropriations to augment the noncredit
account revolving fund shall then only be made either pursuant
to specific authorization enacted after the date of enactment
of the Overseas Private Investment Corporation Amendments Act
of 1974, or to satisfy the full faith and credit provision of
section 237(c). In order to discharge liabilities under
investment insurance or reinsurance, the Corporation is
authorized to issue from time to time for purchase by the
Secretary of the Treasury its notes, debentures, bonds, or
other obligations; but the aggregate amount of such obligations
outstanding at any one time shall not exceed $100,000,000. Any
such obligation shall be repaid to the Treasury within one year
after the date of issue of such obligation. Any such obligation
shall bear interest at a rate determined by the Secretary of
the Treasury, taking into consideration the current average
market yield on outstanding marketable obligations of the
United States of comparable maturities during the month
preceding the issuance of any obligation authorized by this
subsection. The Secretary of the Treasury shall purchase any
obligation of the Corporation issued under this subsection, and
for such purchase he may use as a public debt transaction the
proceeds of the sale of any securities issued under the Second
Liberty Bond Act after the date of enactment of the Overseas
Private Investment Corporation Amendments Act of 1974. The
purpose for which securities may be issued under such Bond Act
shall include any such purchase.
Sec. 237. General Provisions Relating to Insurance
Guaranty, and Financing Program.--(a) Insurance guaranties, and
reinsurance issued under this title shall cover investment made
in connection with projects in any less developed friendly
country or area with the government to which the President of
the United States has agreed to institute a program for
insurance, guaranties, or reinsurance.
* * * * * * *
(j) Each insurance, reinsurance, and guaranty contract
executed by such officer or officers as may be designated by
the Board shall be conclusively presumed to be issued in
compliance with the requirements of this Act.
* * * * * * *
(m)(1) Before finally providing insurance, reinsurance,
guarantees, or financing under this title for any
environmentally sensitive investment in connection with a
project in a country, the Corporation shall notify appropriate
government officials of that country of--
(A) all guidelines and other standards adopted by the
International Bank for Reconstruction and Development
and any other international organization relating to
the public health or safety or the environment which
are applicable to the project; and
(B) to the maximum extent practicable, any
restriction under any law of the United States relating
to public health or safety or the environment that
would apply to the project if the project were
undertaken in the United States.
The notification under the preceding sentence shall include
a summary of the guidelines, standards, and restrictions
referred to in subparagraphs (A) and (B), and may include any
environmental impact statement, assessment, review, or study
prepared with respect to the investment pursuant to section
[239(g)] 239(f).
* * * * * * *
(o) Use of Local Currencies.--Direct loans or investments
made in order to preserve the value of funds received in
inconvertible foreign currency by the Corporation as a result
of activities conducted pursuant to section 234(a) shall not be
considered in determining whether the Corporation has made or
has outstanding loans or investments to the extent of any
limitation on obligations and equity investment imposed by or
pursuant to this title. The provisions of section 504(b) of the
Federal Credit Reform Act of 1990 shall not apply to direct
loan obligations made with funds described in this subsection.
(p) Review of Methodology.--Not later than 180 days after
the date of the enactment of the Overseas Private Investment
Corporation Reauthorization Act of 2009, the Corporation shall
make available to the public the methodology, including
relevant regulations, used to assess and monitor the impact of
projects supported by the Corporation--
(1) on employment in the United States;
(2) on development and the environment in host
countries; and
(3) on the protection of internationally recognized
worker rights, as well as the elimination of
discrimination with respect to employment and
occupation, in host countries.
(q) Public Notice Prior to Project Approval.--
(1) Public notice.--
(A) In general.--The Board of Directors of
the Corporation may not vote in favor of any
action proposed to be taken by the Corporation
on a Category A project before the date that is
60 days after the Corporation--
(i) makes available for public
comment a summary of the project and
relevant information about the project;
and
(ii) such summary and information
described in clause (i) has been made
available to groups in the area that
may be impacted by the proposed project
and to nongovernmental organizations in
the host country.
(B) Exception.--The Corporation shall not
include any confidential business information
in the summary and information made available
under clauses (i) and (ii) of subparagraph (A).
(2) Published response.--To the extent practicable,
the Corporation shall publish responses to the comments
received under paragraph (1)(A)(i) with respect to a
Category A project and submit the responses to the
Board not later than 7 days before a vote is to be
taken on any action proposed by the Corporation on the
project.
(3) Category a project defined.--The term ``Category
A project'' means any project or other activity for
which the Corporation proposes to provide insurance,
reinsurance, a guaranty, financing, or other assistance
under this title and which is likely to have a
significant adverse environmental impact.
(r) Office of Accountability.--The Corporation shall
maintain an Office of Accountability to provide, to the maximum
extent practicable, upon request, problem-solving services for
projects supported by the Corporation and review of the
Corporation's compliance with its environmental, social,
internationally recognized worker rights, human rights, and
transparency policies and procedures. The Office of
Accountability shall operate in a manner that is fair,
objective, and transparent.
(s) Prohibition on Assistance for Certain Railway
Projects.--The Corporation may not provide insurance,
reinsurance, a guaranty, financing, or other assistance to
support the development or promotion of a railway connection or
railway-related connection that connects Azerbaijan and Turkey
without connecting or traversing with Armenia.
Sec. 239. General Provisions and Powers.--(a) The
Corporation shall have its principal office in the District of
Columbia and shall be deemed, for purposes of venue in civil
actions, to be resident thereof.
[(b) The President shall transfer to the Corporation, at
such time as he may determine, all obligations, assets and
related rights and responsibilities arising out of, or related
to, predecessor programs and authorities similar to those
provided for in section 234 (a), (b), and (d). Until such
transfer, the agency heretofore responsible for such
predecessor programs shall continue to administer such assets
and obligations, and such programs and activities authorized
under this title as may be determined by the President.]
[(c)] (b)(1) The Corporation shall be subject to the
applicable provisions of chapter 91 of title 31, United States
Code, except as otherwise provided in this title.
(2) An independent certified public accountant shall
perform a financial and compliance audit of the financial
statements of the Corporation at least once every three years,
in accordance with generally accepted Government auditing
standards for a financial and compliance audit, as issued by
the Comptroller General. The independent certified public
accountant shall report the results of such audit to the Board.
The financial statements of the Corporation shall be presented
in accordance with generally accepted accounting principles.
These financial statements and the report of the accountant
shall be included in a report which contains, to the extent
applicable, the information identified in section 9106 of title
31, United States Code, and which the Corporation shall submit
to the Congress not later than six and one-half months after
the end of the last fiscal year covered by the audit. The
General Accounting Office may review the audit conducted by the
accountant and the report to the Congress in the manner and at
such times as the General Accounting Office considers
necessary.
(3) In lieu of the financial and compliance audit required
by paragraph (2), the Government Accountability Office shall,
if the Office considers it necessary or upon the request of the
Congress, audit the financial statements of the Corporation in
the manner provided in paragraph (2). The Corporation shall
reimburse the Government Accountability Office for the full
cost of any audit conducted under this paragraph.
(4) All books, accounts, financial records, reports, files,
workpapers, and property belonging to or in use by the
Corporation and the accountant who conducts the audit under
paragraph (2), which are necessary for purposes of this
subsection, shall be made available to the representatives of
the Government Accountability Office.
[(d)] (c) To carry out the purposes of this title, the
Corporation is authorized to adopt and use a corporate seal,
which shall be judicially noticed; to sue and be sued in its
corporate name; to adopt, amend, and repeal bylaws governing
the conduct of its business and the performance of the powers
and duties granted to or imposed upon it by law; to acquire,
hold or dispose of, upon such terms and conditions as the
Corporation may determine, any property, real, personal, or
mixed, tangible or intangible, or any interest therein; to
invest funds derived from fees and other revenues in
obligations of the United States and to use the proceeds
therefrom, including earnings and profits, as it shall deem
appropriate; to indemnify directors, officers, employees and
agents of the Corporation for liabilities and expenses incurred
in connection with their Corporation activities; to require
bonds of officers, employees, and agents and pay the premiums
therefor; notwithstanding any other provision of law, to
represent itself or to contract for representation in all legal
and arbitral proceedings; to enter into limited-term contracts
with nationals of the United States for personal services to
carry out activities in the United States and abroad under
subsections (d) and (e) of section 234; to purchase, discount,
rediscount, sell, and negotiate, with or without its
endorsement or guaranty, and guarantee notes, participation
certificates, and other evidence of indebtedness (provided that
the Corporation shall not issue its own securities, except
participation certificates for the purpose of carrying out
section 231(c) or participation certificates as evidence of
indebtedness held by the Corporation in connection with
settlement of claims under section 237(i)); to make and carry
out such contracts and agreements as are necessary and
advisable in the conduct of its business; to exercise the
priority of the Government of the United States in collecting
debts from bankrupt, insolvent, or decedents' estates; to
determine the character of and the necessity for its
obligations and expenditures, and the manner in which they
shall be incurred, allowed, and paid, subject to provisions of
law specifically applicable to Government corporations; to
collect or compromise any obligations assigned to or held by
the Corporation, including any legal or equitable rights
accruing to the Corporation; and to take such actions as may be
necessary or appropriate to carry out the powers herein or
hereafter specifically conferred upon it.
[(e)] (d) The Inspector General of the Agency for
International Development (1) may conduct reviews,
investigations, and inspections of all phases of the
Corporation's operations and activities and (2) shall conduct
all security activities of the Corporation relating to
personnel and the control of classified material. With respect
to his responsibilities under this subsection, the Inspector
General shall report to the Board. The agency primarily
responsible for administering part I shall be reimbursed by the
Corporation for all expenses incurred by the Inspector General
in connection with his responsibilities under this subsection.
[(f)] (e) Except for the provisions of this title, no other
provision of this or any other law shall be construed to
prohibit the operation in Yugoslavia, Poland, Hungary, or any
other East European country,\334\ or the People's Republic of
China, or Pakistan of the programs authorized by this title, if
the President determines that the operation of such program in
such country is important to the national interest.
[(g)] (f) The requirements of section 117(c) of this Act
relating to environmental impact statements and environmental
assessments shall apply to any investment which the Corporation
insures, reinsures, guarantees, or finances under this title in
connection with a project in a country.
[(h)] (g) In order to carry out the policy set forth in
paragraph (1) of the second undesignated paragraph of section
231 of this Act, the Corporation shall prepare and maintain for
each investment project it insures, finances, or reinsures, a
development impact profile consisting of data appropriate to
measure the projected and actual effects of such project on
development. Criteria for evaluating projects shall be
developed in consultation with the Agency for International
Development.
[(i)] (h) The Corporation shall take into account in the
conduct of its programs in a country, in consultation with the
Secretary of State, all available information about observance
of and respect for human rights and fundamental freedoms in
such country and the effect the operation of such programs will
have on human rights and fundamental freedoms in such country.
The provisions of section 116 of this Act shall apply to any
insurance, reinsurance, guaranty, or loan issued by the
Corporation for projects in a country, except that in addition
to the exception (with respect to benefiting needy people) set
forth in subsection (a) of such section, the Corporation may
support a project if the national security interest so
requires.
[(j)] (i) The Corporation, including its franchise,
capital, reserves, surplus, advances, intangible property, and
income, shall be exempt from all taxation at any time imposed
by the United States, by any territory, dependency, or
possession of the United States, or by any State, the District
of Columbia, or any county, municipality, or local taxing
authority.
[(k)](j) The Corporation shall publish, and make available
to applicants for insurance, reinsurance, guarantees,
financing, or other assistance made available by the
Corporation under this title, the policy guidelines of the
Corporation relating to its programs.
(k) Congressional Notification of Increase in Maximum
Contingent Liability.--The Corporation shall notify the
Committee on Foreign Relations of the Senate and the Committee
on Foreign Affairs of the House of Representatives not later
than 15 days after the date on which the Corporation's maximum
contingent liability outstanding at any time pursuant to
insurance issued under section 234(a), and the amount of
finfncing issued under section 234(b) and (c), exceeds the
Corporation's maximum contingent liability for the preceding
fiscal year by 25 percent or more.
(l) Transparency and Accountability of Investment Funds.--
(1) Competitive selection of investment fund
management.--With respect to any investment fund that
the Corporation creates on or after the date of the
enactment of the Overseas Private Investment
Corporation Reauthorization Act of 2009, the
Corporation may select persons to manage the fund only
by contract using competitive precedures that are full
and open.
(2) Criteria for selection.--In assessing a proposal
for investment fund management, the Corporation shall
consider, in addition to other factors, the following:
(A) The prospective fund management's
experience, depth, and cohesiveness.
(B) The prospective fund management's track
record in investing risk capital in emerging
markets.
(C) The prospective fund management's
experience, management record, and monitoring
capabilities in the countries in which the
management operates, including details of local
presence (directly or through local alliances).
(D) The prospective fund management's
experience as a fiduciary in managing
institution capital, meeting reporting
requirements, and administration.
(E) The prospective fund management's record
in avoiding investments in companies that would
be disqualified under section 239(l).
(3) Annual report.--The Corporation shall include in
each annual report under section 240A an analysis of
the investment fund portfolio of the Corporation,
including the following:
(A) Fund performance.--An analysis of the
aggregate financial performance of the
investment fund portfolio grouped by region and
maturity.
(B) Status of loan guaranties.--The amount of
guaranties committed by the Corporation to
support investment funds, including the
percentage of such amount that has been
disbursed to the investment funds.
(C) Risk ratings.--The definition of risk
ratings, and the current aggregate risk ratings
for the investment fund portfolio, including
the number of investment funds in each of the
Corporation's rating categories.
(D) Competitive selection of investment fund
management.--The number of proposals received
and evaluated for each newly established
investment fund.
(m) Operations in Iraq.--Notwithstanding subsections (a)
and (b) of section 237, the Corporation is authorized to
undertake in Iraq any program authorized by this title.
(n) State Sponsor of Terrorism.--
(1) In general.--In order to carry out the policy set
forth in section 231(o) of this Act, the Corporation
shall require a certification from an officer of a
prospective OPIC-supported United States investor that
the investor and all affiliates of the investor are not
engaged in a discouraged transaction with a state
sponsor of terrorism.
(2) Discouraged transaction.--In this subsection, the
term ``discouraged transaction'' means any of the
following activities:
(A) An investment commitment of $20,000,000
or more by the investor in the energy sector in
a state sponsor of terrorism.
(B) Any loan, or an extension of credit, to
the government of a state sponsor of terrorism
by the investor that--
(i) is outstanding on the date the
Corporation enters into a contract with
the investor; and
(ii) that has a value of more than
$5,000,000, including the sale of goods
for which payment is not required by
the purchaser within 45 days.
(C) The transfer by the investor of goods
that are included on the United States
Munitions List, referred to in section 38(a)(1)
of the Arms Export Control Act (22 U.S.C.
2778(a)(1)) to a state sponsor of terrorism
within the 3-year period preceding the date the
Corporation enters into a contract with the
investor.
(3) Exception.--An officer of a prospective OPIC-
supported United States investor may provide a
certification under this subsection notwithstanding the
fact that an affiliate of the investor is engaged in a
discouraged transaction if the transaction is carried
out under a contract or other obligation of the
affiliate that was entered into or incurred before the
acquisition of such affiliate by the prospective OPIC-
supported United States investor or the parent company
of the OPIC-supported United States investor.
(4) Definitions.--In this subsection:
(A) Affiliate.--The term ``affiliate'' means
any person that is directly or indirectly
controlled by, under common control with, or
controls a prospective OPIC-supported United
States investor or the parent company of such
investor.
(B) Investment commitment in the energy
sector of a state sponsor of terrorism.--The
term ``investment commitment in the energy
sector of a state sponsor of terrorism'' means
any of the following activities if such
activity is undertaken pursuant to a
commitment, or pursuant to the exercise of
rights under a commitment, that was entered
into with the government of a state sponsor of
terrorism or a nongovernmental entity in a
country that is a state sponsor of terrorism:
(i) The entry into a contract that
includes responsibility for the
development or transportation of
petroleum or natural gas resources
located in a country that is a state
sponsor of terrorism, or the entry into
a contract providing for the general
supervision or guaranty of another
person's performance of such a
contract.
(ii) The purchase of a share of
ownership, including an equity
interest, in the development of
petroleum or natural resources
described in clause (i).
(iii) The entry into a contract
providing for the participation in
royalties, earnings, or profits in the
development of petroleum or natural
resources described in clause (i),
without regard to the form of the
participation.
(C) State sponsor of terrorism.--The term
``state sponsor of terrorism''--
(i) means any country the government
of which the Secretary of State has
determined has repeatedly provided
support for acts of international
terrorism pursuant to section 6(j) of
the Export Administration Act of 1979,
section 620A of this Act, or section 40
of the Arms Export Control Act; and
(ii) does not include Southern Sudan,
Southern Kordofan/Nuba Mountains State,
Blue Nile State, and Abyei, Darfur, if
the Corporation, with the concurrence
of the Secretary of State, determines
that providing assistance for projects
in such regions will provide emergency
relief, promote economic self-
sufficiency, or implement a nonmilitary
program in support of a viable peace
agreement in Sudan, such as the
Comprehensive Peace Agreement for Sudan
and the Darfur Peace Agreement.
Sec. 240. Small Business Development.--(a) In General.-- *
* *
* * * * * * *
(c) Resources Dedicated to Small Businesses, Cooperatives,
and Other Small United States Investors.--The Corporation shall
ensure that adequate personnel and resources, including senior
officers, are dedicated to assist United States small
businesses, cooperatives, and other small United States
investors in obtaining insurance, reinsurance, financing, and
other assistance under this title. The Corporation shall
include, in each annual report under section 240A, the
following information with respect to the period covered by the
report:
(1) A description of such personnel and resources.
(2) The number of United States small businesses,
cooperatives, and other small United States investors
that received insurance, reinsurance, financing, and
other assistance from the Corporation, and the dollar
value of such insurance, reinsurance, financing, and
other assistance.
(3) A description of the projects for which the
insurance, reinsurance, financing, and other assistance
was provided.
Sec. 240A. Reports to the Congress.--(a) After the end of
each fiscal year, the Corporation shall submit to the Congress
a complete and detailed report of its operations during such
fiscal year. Such report shall include--
(1) an assessment, based upon the development impact
profiles required by section [239(h)] 239(g), of the
economic and social development impact and benefits of
the projects with respect to which such profiles are
prepared, and of the extent to which the operations of
Corporation complement or are compatible with the
development assistance programs of the United States
and other donors; and
(2) a description of any project for which the
Corporation--
(A) refused to provide any insurance,
reinsurance, guaranty, financing, or other
financial support, on account of violations of
human rights referred to in section [239(i)]
239(h); or
(B) notwithstanding such violations, provided
such insurance, reinsurance, guaranty,
financing, or financial support, on the basis
of a determination (i) that the project will
directly benefit the needy people in the
country in which the project is located, or
(ii) that the national security interest so
requires.
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