[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2307 Introduced in Senate (IS)]

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114th CONGRESS
  1st Session
                                S. 2307

   To promote the strengthening of the private sector in Bosnia and 
                              Herzegovina.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 19, 2015

  Mrs. Shaheen (for herself and Mr. Wicker) introduced the following 
  bill; which was read twice and referred to the Committee on Foreign 
                               Relations

_______________________________________________________________________

                                 A BILL


 
   To promote the strengthening of the private sector in Bosnia and 
                              Herzegovina.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Bosnia and Herzegovina-American 
Enterprise Fund Act''.

SEC. 2. PURPOSE AND FINDINGS.

    (a) Purpose.--The purpose of this Act is to support economic 
opportunity and political progress in Bosnia and Herzegovina through 
the creation of an enterprise fund that will provide financial 
investment and technical assistance to small and medium-sized 
enterprises.
    (b) Findings.--Congress makes the following findings:
            (1) The United States has a strong interest in ensuring the 
        gains in stability and reconciliation made since the end of the 
        Bosnian War in 1995 are not overtaken by difficult economic 
        conditions.
            (2) In 2014, protests broke out across Bosnia and 
        Herzegovina as a result of widespread frustration among the 
        populace regarding the economy, which is currently experiencing 
        an unemployment rate of more than 40 percent.
            (3)(A) A crucial element for economic progress in Bosnia 
        and Herzegovina is robust growth among small and medium-sized 
        enterprises (SMEs), which have struggled to access necessary 
        financing.
            (B) Although the private sector credit-to-GDP ratio in 
        Bosnia and Herzegovina grew from 25 percent in 2001 to over 65 
        percent in 2008, it has failed to grow in the 7 years since, 
        and is significantly less than the average for advanced 
        economies.
            (C) Bank lending, which grew similarly rapidly before 2008, 
        has grown barely more than 1 percent per year since then.
            (D) International financial institutions and foreign-owned 
        private investment funds active in Bosnia and Herzegovina have 
        provided growth finance for larger companies and infrastructure 
        project financing, but have not substantially invested in SMEs.
            (4)(A) Bosnia and Herzegovina's demographic, income and 
        geographic characteristics are promising for SME growth.
            (B) Bosnia and Herzegovina is a market of almost 4,000,000 
        people, whose per capita income has grown by almost 50 percent 
        in less than a decade, and substantial growth remains in order 
        to achieve income parity with its Balkan neighbor economies.
            (C) Bosnia and Herzegovina currently imports almost 
        $10,000,000,000 of goods per year, a substantial portion of 
        which could be substituted for by domestic SME production.
            (5) To help foster and support the fledgling private sector 
        in Central and Eastern Europe after the fall of the Berlin 
        Wall, Congress, through enactment of the Support for East 
        European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et seq.) 
        and the FREEDOM Support Act (22 U.S.C. 5801 et seq.), 
        authorized nearly $1,200,000,000 for the United States Agency 
        for International Development (USAID) to establish 10 new 
        investment funds (collectively known as the ``Enterprise 
        Funds'') to both support economic development objectives and 
        realize substantial financial returns.
            (6) The Enterprise Funds--
                    (A) channeled approximately $10,000,000,000 of 
                public and private funding into more than 500 
                enterprises in 19 countries;
                    (B) leveraged $6,900,000,000 in private investment 
                capital from outside the United States Government;
                    (C) provided substantial development capital where 
                supply was limited;
                    (D) created or sustained more than 300,000 jobs 
                through investment and development activities;
                    (E) funded $80,000,000 in technical assistance to 
                strengthen the private sector; and
                    (F) are expected to recoup 177 percent of the 
                original USAID funding.
            (7) Enterprise funds established in partnership with United 
        States partners, such as Poland, Hungary, Albania, Russia, and 
        other European countries, have proven beneficial to the 
        economies of such countries.
            (8) Creating a similar fund in close partnership with the 
        people of Bosnia and Herzegovina would help sustain and expand 
        economic reform efforts in Bosnia and Herzegovina and empower 
        entrepreneurs to create urgently needed employment 
        opportunities.
            (9) Establishing an enterprise fund for Bosnia and 
        Herzegovina would--
                    (A) help improve financial institutions within the 
                country;
                    (B) provide debt, equity, and other investment 
                vehicles for commercially viable SMEs; and
                    (C) make the investment environment more attractive 
                to domestic and international investors.

SEC. 3. PURPOSES OF BOSNIA AND HERZEGOVINA-AMERICAN ENTERPRISE FUND.

    The purposes of the Bosnia and Herzegovina-American Enterprise Fund 
are--
            (1) to promote the private sector in Bosnia and 
        Herzegovina, while considering the development impact of 
        investments and profitability of those investments, 
        particularly in small and medium-sized enterprises, and joint 
        ventures with participants from the United States and Bosnia 
        and Herzegovina;
            (2) to promote policies and practices conducive to 
        strengthening the private sector in Bosnia and Herzegovina 
        through measures including loans, microloans, equity 
        investments, insurance, guarantees, grants, feasibility 
        studies, technical assistance, training for businesses 
        receiving investment capital, and other measures;
            (3) to promote good corporate governance and transparency 
        in Bosnia and Herzegovina, foster competition, catalyze 
        productivity improvements in existing businesses, and 
        strengthen local capital markets; and
            (4) to promote security through job creation in the private 
        sector in Bosnia and Herzegovina and to further the creation of 
        a middle class in Bosnia and Herzegovina.

SEC. 4. BOSNIA AND HERZEGOVINA-AMERICAN ENTERPRISE FUND.

    (a) Designation.--The President is authorized to designate a 
private, nonprofit organization (to be known as the Bosnia and 
Herzegovina-American Enterprise Fund) to receive funds and support made 
available under this Act after determining that such organization has 
been designated for the purposes specified in section 3. The President 
should make such designation only after consultation with the 
leadership of each House of Congress.
    (b) Board of Directors.--
            (1) Appointment.--The Bosnia and Herzegovina-American 
        Enterprise Fund shall be governed by a Board of Directors, 
        which shall be comprised of 6 private citizens of the United 
        States appointed by the President of the United States in 
        consultation with the Administrator of the United States Agency 
        for International Development. The Board is authorized to 
        appoint up to 3 additional members who are citizens of Bosnia 
        and Herzegovina if agreed to unanimously by all members of the 
        Board.
            (2) Qualifications.--Members of the Board of Directors 
        shall be selected from among people who have had successful 
        business careers and demonstrated experience and expertise in 
        international and particularly emerging markets investment 
        activities, such as private equity or venture capital 
        investment, banking, finance, strategic business consulting, or 
        entrepreneurial business creation, and backgrounds in priority 
        business sectors of the Fund.
            (3) United states government liaison to the board.--The 
        President shall appoint the United States Ambassador to Bosnia 
        and Herzegovina, or the Ambassador's designee, as a liaison to 
        the Board.
            (4) Non-government liaisons to the board.--
                    (A) Authority to appoint.--Upon the recommendation 
                of the Board of Directors, the President may appoint up 
                to 2 additional liaisons to the Board of Directors in 
                addition to the members specified in paragraphs (1) and 
                (3), of which not more than 1 may be a non-citizen of 
                the United States.
                    (B) NGO community.--One of the additional liaisons 
                to the Board should be from the nongovernmental 
                organization community, with significant prior 
                experience in development and an understanding of 
                development policy priorities for Bosnia and 
                Herzegovina.
                    (C) Technical expertise.--One of the additional 
                liaisons to the Board should have extensive 
                demonstrated industry, sector, or technical experience 
                and expertise in a priority investment sector for the 
                Fund.
    (c) Grants.--
            (1) In general.--There is authorized to be appropriated for 
        the Department of State for fiscal year 2016 $30,000,000--
                    (A) to carry out the purposes set forth in section 
                3 through the Bosnia and Herzegovina-American 
                Enterprise Fund; and
                    (B) to pay for the administrative expenses of the 
                Bosnia and Herzegovina-American Enterprise Fund.
            (2) Eligible programs and projects.--Grants awarded under 
        this section may only be used for programs and projects that 
        support the purposes set forth in section 3.
            (3) Compliance requirements.--
                    (A) In general.--Grants may not be awarded to the 
                Bosnia and Herzegovina-American Enterprise Fund under 
                this section unless the Fund agrees to comply with the 
                requirements under this section.
                    (B) Grant agreement.--The grant agreement between 
                the United States Agency for International Development 
                and the Bosnia and Herzegovina-American Enterprise Fund 
                shall state that the Fund shall end its reinvestment 
                cycle not later than December 31, 2030, unless the 
                Secretary of State, in consultation with the 
                Administrator of the United States Agency for 
                International Development, and after consultation with 
                the appropriate congressional committees, determines 
                that the Fund should be extended.
                    (C) Prevention of money laundering and terrorist 
                financing.--The grant agreement between the United 
                States Agency for International Development and the 
                Bosnia and Herzegovina-American Enterprise Fund shall 
                state that the Fund shall comply with procedures 
                specified by the Secretary of State to ensure that 
                grant funds are not provided by the Fund to or through 
                any individual, private or government entity, or 
                educational institution that advocates, plans, 
                sponsors, engages in, or has engaged in, money 
                laundering or terrorist activity or, with respect to a 
                private entity or educational institution, that has as 
                a principal officer of the entity's governing board or 
                governing board of trustees any individual that has 
                been determined to be involved in or advocating money 
                laundering or terrorist activity or determined to be a 
                member of a designated foreign terrorist organization.
                    (D) Disposition of assets.--The assets of the 
                Bosnia and Herzegovina-American Enterprise Fund at the 
                time the Fund is dissolved shall be returned to the 
                General Fund of the United States Treasury and used to 
                reduce the debt of the United States in a manner agreed 
                upon by USAID and the Board of Directors for the Fund, 
                except for those assets used to designate a legacy 
                foundation which is appropriately resourced to the 
                needs of Bosnia and Herzegovina.
    (d) Notification.--
            (1) In general.--Not later than 15 days before designating 
        an organization to operate as the Bosnia and Herzegovina-
        American Enterprise Fund pursuant to subsection (a), the 
        President shall provide the information described in paragraph 
        (2) to the Chairman and Ranking Member of the appropriate 
        congressional committees.
            (2) Information.--The information described in this 
        paragraph is--
                    (A) the identity of the organization to be 
                designated to operate as the Bosnia and Herzegovina-
                American Enterprise Fund pursuant to subsection (a);
                    (B) the name and qualifications of the individual 
                who will serve as Chairman of the Board of Directors; 
                and
                    (C) the amount of the grant intended to fund the 
                Bosnia and Herzegovina-American Enterprise Fund over 
                the lifetime of the fund.
    (e) Public Disclosure.--Not later than 1 year after the entry into 
force of the initial grant agreement under this section, and annually 
thereafter, the Fund shall prepare and make available to the public on 
an Internet Web site administered by the Fund a report on the Fund's 
activities during the previous year, including--
            (1) a description of each investment or project supported 
        by the Fund, including each type of assistance provided in 
        accordance with section 3(2);
            (2) the amounts invested by the Fund in each company or 
        project;
            (3) the amounts of additional private investments made in 
        each company or project; and
            (4) the amounts of any profits or losses realized by the 
        Fund in connection with each such company or project.

SEC. 5. REPORTS.

    (a) Administrative Expenses.--Not later than 1 year after the date 
of the enactment of this Act, and annually thereafter until the Fund is 
dissolved, the Fund shall submit to the appropriate congressional 
committees a report detailing the administrative expenses of the Fund, 
including any employee incentive compensation arrangements implemented 
by the Fund which are not considered to be industry standard.
    (b) GAO Report.--Not later than 3 years after the date of the 
enactment of this Act, and every 3 years thereafter until the Fund is 
dissolved, the Comptroller General of the United States shall submit to 
the appropriate congressional committees a report assessing the 
activities of the Fund in achieving the stated goals of promoting 
private sector investment and employment in Bosnia and Herzegovina and 
identifying those institutional or regulatory constraints that inhibit 
a more effective application of Fund resources.
    (c) USAID Reports.--Not later than July 1, 2022, and July 1, 2030, 
the Administrator of the United States Agency for International 
Development shall submit a report to the appropriate congressional 
committees assessing the performance of the Bosnia and Herzegovina-
American Enterprise Fund with respect to the purposes set forth in 
section 3.
    (d) Appropriate Congressional Committees Defined.--In this section, 
the term ``appropriate congressional committees'' means--
            (1) the Committee on Foreign Relations and the Committee on 
        Appropriations of the Senate; and
            (2) the Committee on Foreign Affairs and the Committee on 
        Appropriations of the House of Representatives.

SEC. 6. OPERATION PROVISIONS.

    (a) Applicable Provisions.--Subsections (d)(5), (g), (h), (i), (k), 
(l), (m), (n), (o), and (p) of section 201 of the Support for East 
European Democracy (SEED) Act of 1989 (22 U.S.C. 5421) shall apply with 
respect to the Bosnia and Herzegovina-American Enterprise Fund in the 
same manner as such provisions apply to Enterprise Funds designated 
pursuant to subsection (d) of such section.
    (b) Reinvestment.--Returns on investments of the Bosnia and 
Herzegovina-American Enterprise Fund and other payments to the Fund may 
be reinvested in projects carried out by the Fund without further 
appropriation by Congress.

SEC. 7. BEST PRACTICES AND PROCEDURES.

    To the maximum extent practicable, the Board of Directors of the 
Bosnia and Herzegovina-American Enterprise Fund should adopt the best 
practices and procedures used by Enterprise Funds, including those for 
which funding has been made available pursuant to section 201 of the 
Support for East European Democracy (SEED) Act of 1989 (22 U.S.C. 
5421).

SEC. 8. EXPERIENCE OF OTHER ENTERPRISE FUNDS.

    In implementing this Act, the President shall ensure that the 
Articles of Incorporation of the Bosnia and Herzegovina-American 
Enterprise Fund (including provisions specifying the responsibilities 
of the Board of Directors of the Fund), the terms of United States 
Government grant agreements with the Fund, and United States Government 
oversight of the Fund are, to the maximum extent practicable, 
consistent with the Articles of Incorporation of, the terms of grant 
agreements with, and the oversight of the Enterprise Funds designated 
pursuant to section 201 of the Support for East European Democracy 
(SEED) Act of 1989 (22 U.S.C. 5421) and comparable provisions of law.
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