[Federal Register Volume 81, Number 170 (Thursday, September 1, 2016)]
[Notices]
[Pages 60390-60392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21057]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 16-04]


Report on Countries That Are Candidates for Millennium Challenge 
Account Eligibility in Fiscal Year 2017 and Countries That Would Be 
Candidates but for Legal Prohibitions

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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    Section 608(a) of the Millennium Challenge Act of 2003 requires the 
Millennium Challenge Corporation to publish a report that identifies 
countries that are ``candidate countries'' for Millennium Challenge 
Account assistance during FY 2017. The report is set forth in full 
below.

    Dated: August 25, 2016.
Thomas G. Hohenthaner,
Acting VP/General Counsel and Corporate Secretary, Millennium Challenge 
Corporation.

Report on Countries That Are Candidates for Millennium Challenge 
Compact Eligibility for Fiscal Year 2017 and Countries That Would Be 
Candidates but for Legal Prohibitions

Summary

    This report to Congress is provided in accordance with section 
608(a) of the Millennium Challenge Act of 2003, as amended, 22 U.S.C. 
Sec. Sec.  7701, 7707(a) (the Act).
    The Act authorizes the provision of assistance for global 
development through the Millennium Challenge Corporation (MCC) for 
countries that enter into a Millennium Challenge Compact with the 
United States to support policies and programs that advance the 
progress of such countries to achieve lasting economic growth and 
poverty reduction. The Act requires MCC to take a number of steps in 
selecting countries with which MCC will seek to enter into a compact, 
including determining the countries that will be eligible countries for 
fiscal year (FY) 2017 based on (a) a country's demonstrated commitment 
to (i) just and democratic governance, (ii) economic freedom, and (iii) 
investments in its people; (b) the opportunity to reduce poverty and 
generate economic growth in the country; and (c) the availability of 
funds to MCC. These steps include the submission of reports to the 
congressional committees specified in the Act and the publication of 
notices in the Federal Register that identify:
    The countries that are ``candidate countries'' for FY 2017 based on 
their per capita income levels and their eligibility to receive 
assistance under U.S. law and countries that would be candidate 
countries but for specified legal prohibitions on assistance (section 
608(a) of the Act);
    The criteria and methodology that the MCC Board of Directors 
(Board) will use to measure and evaluate the relative policy 
performance of the ``candidate countries'' consistent with the 
requirements of subsections (a) and (b) of section 607 of the Act in 
order to determine ``eligible countries'' from among the ``candidate 
countries'' (section 608(b) of the Act); and
    The list of countries determined by the Board to be ``eligible 
countries'' for FY 2017, identification of such countries with which 
the Board will seek to enter into compacts, and a justification for 
such eligibility determination and selection for compact negotiation 
(section 608(d) of the Act).
    This report is the first of three required reports listed above.

Candidate Countries for FY 2017

    The Act requires the identification of all countries that are 
candidate countries for FY 2017 and the identification of all countries 
that would be candidate countries but for specified legal prohibitions 
on assistance. Under the terms of the Act, sections 606(a) and (b) set 
forth the two income tests countries must satisfy to be candidate 
countries.\1\ However, for FY 2016, those categories were defined by 
MCC's FY 2016 appropriations act, the Department of State, Foreign 
Operations, and Related Programs Appropriations Act, 2016 (the FY 2016 
SFOAA), which is found at Division K of the Consolidated Appropriations 
Act, 2016 (Pub. L. 114-113). Specifically, the FY 2016 SFOAA used the 
same definitions that have been used since the FY 2012 appropriations 
act and defines low income candidate countries as the 75 poorest 
countries as identified by the World Bank and provided that a country 
that changes during the fiscal year from low income to lower middle 
income (or vice versa) will retain its candidacy status in its former 
income category for the fiscal year of transition and the two 
subsequent fiscal years. Assuming these definitions will be used again 
for FY 2017, MCC is using them for purposes of this report.\2\
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    \1\ Sections 606(a) and (b) of the Act provide that a country 
will be a candidate country for purposes of eligibility if it (1) 
has a per capita income equal to or less than the historical ceiling 
of the International Development Association eligibility for the 
fiscal year involved (the ``low income category'') or (2) is 
classified as a lower middle income country in the then most recent 
edition of the World Development Report for Reconstruction and 
Development published by the International Bank for Reconstruction 
and Development and has an income greater than the historical 
ceiling for International Development Association eligibility for 
the fiscal year involved (the ``lower middle income category''); and 
is not ineligible to receive U.S. economic assistance under part I 
of the Foreign Assistance Act of 1961, as amended (the Foreign 
Assistance Act), by reason of the application of the Foreign 
Assistance Act or any other provision of law.
    \2\ If the language relating to the definition of low income 
candidate countries is not enacted or is changed for MCC's FY 2017 
appropriations act, MCC will revisit the selection process once the 
FY 2017 appropriations act is enacted and will conduct the selection 
process in accordance with the Act and applicable provisions for FY 
2017.
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    Under the redefined categories, a country will be a candidate 
country for FY 2017 if it:
    Meets one of the following tests:
    Has a per capita income that is not greater than the World Bank's 
lower middle income country threshold for

[[Page 60391]]

such fiscal year ($4,035 gross national income per capita for FY 2017); 
and is among the 75 lowest per capita income countries, as identified 
by the World Bank; or
    Has a per capita income that is not greater than the World Bank's 
lower middle income country threshold for such fiscal year ($4,035 
gross national income per capita for FY 2017); but is not among the 75 
lowest per capita income countries as identified by the World Bank;
    And
    Is not ineligible to receive U.S. economic assistance under part I 
of the Foreign Assistance Act of 1961, as amended (the Foreign 
Assistance Act), by reason of the application of the Foreign Assistance 
Act or any other provision of law.
    Due to the provisions requiring countries to retain their former 
income classification for three fiscal years, changes from the low 
income to lower middle income categories or vice versa for FY 2017 will 
go into effect for FY 2020. Countries transitioning to the upper middle 
income category do not remain in the candidate pool.\3\
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    \3\ In FY 2017, the World Bank updated its estimates of gross 
national incomes per capita resulting in Georgia graduating to upper 
middle income status after having been a low income candidate 
country as recently as FY 2015. Previously, Paraguay graduated to 
upper middle income status after having been a low income country 
for FY 2014. Both have transitioned to upper middle income status 
without the benefit of gradual reclassification. Further, in FY 
2016, Mongolia experienced a similar reclassification to upper 
middle income status, removing its gradual reclassification benefit. 
Although Mongolia has re-entered the candidate pool for FY 2017, it 
does so as a lower middle income country and does not retain the 
gradual graduation benefit it would have had if it had not exited 
from the candidate pool for FY 2016. As a result, the removal of 
Georgia, Mongolia, and Paraguay from the low income category due to 
their classification as upper middle income countries means that 
there are only 72 low income countries for FY 2017 (eight of which 
are legally prohibited).
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    Pursuant to section 606(c) of the Act, the Board identified the 
following countries as candidate countries under the Act for FY 2017. 
In so doing, the Board referred to the prohibitions on assistance to 
countries for FY 2016 under the FY 2016 SFOAA.

Candidate Countries: Low Income Category

Afghanistan
Bangladesh
Benin
Bhutan
Burkina Faso
Burundi
Cambodia
Cameroon
Central African Republic
Chad
Comoros
Cote d'Ivoire
Democratic Republic of Congo
Djibouti
Egypt
Ethiopia
Gambia
Ghana
Guatemala
Guinea
Guinea-Bissau
Haiti
Honduras
India
Kenya
Kiribati
Kyrgyz Republic
Lao PDR
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Micronesia
Moldova
Morocco
Mozambique
Nepal
Nicaragua
Niger
Nigeria
Pakistan
Papua New Guinea
Philippines
Republic of Congo
Rwanda
Samoa
Sao Tome and Principe
Senegal
Sierra Leone
Solomon Islands
Somalia
Sri Lanka
Swaziland
Tajikistan
Tanzania
Togo
Uganda
Uzbekistan
Vanuatu
Vietnam
Yemen
Zambia

Candidate Countries: Lower Middle Income Category

Armenia
Cabo Verde
El Salvador
Indonesia
Kosovo
Mongolia
Timor Leste
Tongo
Tunisia
Ukraine

Countries That Would Be Candidates but for Legal Provisions That 
Prohibit Assistance

    Countries that would be considered candidate countries for FY 2017, 
but are ineligible to receive United States economic assistance under 
part I of the Foreign Assistance Act by reason of the application of 
any provision of the Foreign Assistance Act or any other provision of 
law, are listed below. This list is based on legal prohibitions against 
economic assistance that apply as of July 22, 2016.

Prohibited Countries: Low Income Category

    Bolivia is subject to foreign assistance restrictions pursuant to 
section 706(3) of the Foreign Relations Authorization Act, FY 2003 
(P.L. 107-228), regarding adherence to obligations under international 
counternarcotics agreements and other counternarcotics measures.
    Burma is subject to foreign assistance restrictions, including 
restrictions pursuant to section 570 of the FY 1997 Foreign Operations, 
Export Financing, and Related Programs Appropriations Act (P.L. 104-
208), which prohibits assistance to the government of Burma until it 
makes measurable and substantial progress in improving human rights 
practices and implementing democratic governance.
    Eritrea is subject to foreign assistance restrictions, including 
restrictions due to its status as a Tier 3 country under the Victims of 
Trafficking and Violence Protection Act of 2000 (22 U.S.C. Sec. Sec.  
7101 et seq.).
    North Korea is subject to foreign assistance restrictions, 
including restrictions pursuant to section 7007 of the FY 2016 SFOAA, 
which prohibits direct assistance to the government of North Korea.
    South Sudan is subject to foreign assistance restrictions pursuant 
to section 7042(i)(2) of the FY 2016 SFOAA, which prohibits, with 
limited exceptions, assistance to the central government of South Sudan 
until the Secretary of State certifies and reports to Congress that 
such government is taking effective steps to end hostilities and pursue 
good faith negotiations for a political settlement of the internal 
conflict; provide access for humanitarian organizations; end the 
recruitment and use of child soldiers; protect freedoms of expression, 
association, and assembly; reduce corruption related to the extraction 
and sale of oil and gas; and establish democratic institutions, 
including accountable military and police forces under civilian 
authority.

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    Sudan is subject to foreign assistance restrictions, including 
restrictions pursuant to section 7042(j) of the FY 2016 SFOAA, which 
prohibits (with limited exceptions) assistance to the government of 
Sudan.
    Syria is subject to foreign assistance restrictions, including 
restrictions pursuant to section 7007 of the FY 2016 SFOAA, which 
prohibits direct assistance to the government of Syria.
    Zimbabwe is subject to foreign assistance restrictions, including 
restrictions pursuant to section 7042(k)(2) of the FY 2016 SFOAA, which 
prohibits (with limited exceptions) assistance for the central 
government of Zimbabwe unless the Secretary of State certifies and 
reports to Congress that the rule of law has been restored, including 
respect for ownership and title to property, and freedoms of 
expression, association, and assembly.
    Countries identified above as candidate countries, as well as 
countries that would be considered candidate countries but for the 
applicability of legal provisions that prohibit U.S. economic 
assistance, may be the subject of future statutory restrictions or 
determinations, or changed country circumstances, that affect their 
legal eligibility for assistance under part I of the Foreign Assistance 
Act by reason of application of the Foreign Assistance Act or any other 
provision of law for FY 2017.

[FR Doc. 2016-21057 Filed 8-29-16; 11:15 am]
BILLING CODE 9211-03-P