[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 586 Introduced in House (IH)]

112th CONGRESS
  2d Session
H. RES. 586

 Expressing the concern of Congress regarding the Argentine Republic's 
   willful and repeated disregard for the rule of law in the United 
                                States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 16, 2012

Mr. Manzullo submitted the following resolution; which was referred to 
 the Committee on Financial Services, and in addition to the Committee 
 on Foreign Affairs, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                               RESOLUTION


 
 Expressing the concern of Congress regarding the Argentine Republic's 
   willful and repeated disregard for the rule of law in the United 
                                States.

Whereas Argentina ranks as one of the most important economies of South America 
        and bears the responsibilities of membership in the Group of Twenty 
        Finance Ministers and Central Bank Governors (G-20);
Whereas in 2001, Argentina declared its default on over $81,000,000,000 of its 
        sovereign debt, including approximately $9,900,000,000 of Argentine 
        sovereign bonds owned by United States citizens and corporations;
Whereas in 2005, after terminating negotiations with its creditors, Argentina 
        unilaterally sought to impose upon those creditors a 73 percent 
        reduction on the face value of its debts, a proportion drastically 
        greater than international norms that did not reflect Argentina's 
        capacity to pay;
Whereas Argentina then sought to repudiate all debts owed to the approximately 
        one-quarter of its eligible bondholders who rejected its unilateral 
        offer, notwithstanding the legally and traditionally voluntary nature of 
        such exchanges;
Whereas in 2005, the Argentine administration and legislature codified the 
        repudiation of the Republic's debts by passing the so-called ``Lock 
        Law'', which prohibited the Argentine government from reopening its debt 
        exchange or making any other future offer to bondholders;
Whereas in 2006, Argentina demonstrated its capacity to repay its debts in full 
        by repaying $9,800,000,000 owed by the country to the International 
        Monetary Fund (IMF);
Whereas in 2009, Argentina enacted Law 26,547, which temporarily suspended the 
        ``Lock Law'' for the government's convenience so as to conduct a second 
        debt exchange, with a coercive further prohibition against allowing 
        bondholders that had brought judicial proceedings from receiving more 
        favorable treatment than exchange participants;
Whereas in 2010, Argentina executed this second debt exchange by unilaterally 
        offering creditors not participating in the 2005 exchange the equivalent 
        of a 75 percent reduction in value, even worse terms than those offered 
        in 2005 despite considerable improvement in the country's economic and 
        financial conditions;
Whereas, notwithstanding that the country currently holds at least 
        $45,000,000,000 in foreign currency reserves, Argentina refuses to pay 
        more than 100 United States court judgments in total exceeding 
        $5,000,000,000, with further direct and indirect costs to U.S. 
        bondholders, investors, and taxpayers arising from Argentina's default 
        and non-negotiated debt restructuring;
Whereas, notwithstanding Argentina's express commitments in the Fiscal Agency 
        Agreement governing its bond indebtedness to waive claims of sovereign 
        immunity and submit to the jurisdiction of the State of New York in 
        order to gain access to capital markets in the United States, Argentina 
        now contests and refuses to honor these judgments;
Whereas Argentina has similarly dishonored claims brought by United States 
        companies and others before the International Center for Settlement of 
        Investment Disputes (ICSID) and other international arbitral forums, 
        which have collectively issued awards against Argentina totaling over 
        $900,000,000;
Whereas Argentina's failure to comply with arbitral awards in favor of United 
        States creditors violates Argentina's obligations under the Treaty 
        Between the United States of America and the Argentine Republic 
        Concerning the Reciprocal Encouragement and Protection of Investment, 
        also known as the U.S.-Argentina Bilateral Investment Treaty;
Whereas Argentina's disregard for established international norms is apparent in 
        its disproportionate share of cases brought before ICSID, where, among 
        G-20 countries, Argentina accounts for 78 percent of all pending cases;
Whereas Argentina actively evades the judgments rendered by United States courts 
        and other adjudicatory bodies and thus abusing the immunity of the Bank 
        for International Settlements (BIS), and by secreting its assets in ways 
        and places that frustrate the enforcement of United States judgments and 
        arbitral awards;
Whereas Argentina's dishonest and disreputable conduct encourages other nations 
        to pursue comparable tactics for dishonoring their international 
        financial commitments, for example Ecuador, which in 2008 selectively 
        defaulted on its sovereign bond obligations, citing Argentina's conduct 
        as precedent;
Whereas the international financial community, including the IMF, has criticized 
        Argentina for its lack of fiscal transparency and its manipulation of 
        key economic statistics, including in particular a gross understatement 
        of Argentina's inflation and exaggeration of economic growth;
Whereas Argentina has imposed fines and initiated criminal enforcement action 
        against independent economists who publish inflation statistics that 
        differ from the official reports;
Whereas the Financial Action Task Force (FATF) has identified Argentina's 
        failure to comply with 47 out of its 49 recommendations, the worst 
        evaluation of any G-20 nation, highlighting the country's regulatory 
        shortcomings and the vulnerability of Argentina's financial institutions 
        to terrorist financing and money laundering;
Whereas Argentina refuses to comply with IMF membership requirements, including 
        but not limited to Article IV reviews, which allow the IMF to accurately 
        assess a country's economic health, development, and policies;
Whereas the actions of Argentina since its 2001 declaration of default have 
        imposed billions of dollars of financial losses, not only within the 
        United States but throughout global financial markets, which could 
        deprive more deserving sovereign borrowers of access to capital by 
        undermining confidence in the markets for and legal enforceability of 
        sovereign debt; and
Whereas Argentina's failure to comply with its obligations under international 
        investment treaties threatens to undermine the confidence of investors 
        that such treaties afford them a meaningful remedy against unjust 
        expropriation or other unfair or inequitable treatment by the states in 
        which they invest, thus undermining justice and deterring the investment 
        that is necessary to stimulate worldwide economic growth: Now, 
        therefore, be it
    Resolved, That the House of Representatives--
            (1) declares that the Argentine Republic has repeatedly and 
        willfully disregarded the rule of law in the United States;
            (2) declares that the refusal of Argentina to honor and 
        satisfy the judgments of United States courts and arbitral 
        awards threatens the economic well-being of the United States 
        and undermines the integrity and efficacy of such courts;
            (3) declares that Argentina should immediately honor its 
        obligations to United States bondholders and investors;
            (4) declares that the United States should work with other 
        IMF member states to restrict Argentina's access to IMF 
        benefits and prerogatives until Argentina has complied with its 
        obligations as an IMF member;
            (5) declares that the United States should resolutely 
        maintain its policy of opposing further loans to Argentina by 
        the World Bank and the Inter-American Development Bank 
        (excepting those rare circumstances in which loans are targeted 
        at the very poor) and that it should vigorously encourage other 
        countries to do the same;
            (6) declares that officials of the United States Federal 
        Reserve System who sit on the Board of Directors of the BIS 
        should endeavor to ensure that Argentina is prohibited from 
        continuing to exploit the immunities of this organization for 
        the purpose of evading the judgments of United States courts; 
        and
            (7) declares that Argentina's behavior is not befitting a 
        member of the G-20 Group of Finance Ministers and Central Bank 
        Governors, and that the United States should work with other G-
        20 members to re-evaluate Argentina's membership in that body.
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