H.R. 2493 would prevent wealthy and middle-income foreign states that do business, issue securities, or borrow money in the United States, and then fail to satisfy United States court judgments totaling $100,000,000 or more based on such activities, from inflicting further economic injuries in the United States, from undermining the integrity of United States courts, and from discouraging responsible lending to poor and developing nations by undermining the secondary and primary markets for sovereign debt.
Detailed Summary
Judgment Evading Foreign States Accountability Act of 2009 - States the policy of the United States regarding: (1) advocacy within the governing bodies of international organizations and other foreign policy settings for the full compensation and fair treatment of persons in whose favor judgments have been awarded by U.S. courts; (2) protection of economic interests of persons and nations that benefit from a reliable flow of foreign capital by restricting the access to U.S. capital markets of judgment evading foreign states (foreign states that fail to fully satisfy a final judgment exceeding a certain amount for more than two years) and their state-owned corporations, warning of the dangers of dealing financially with such states and state-owned corporations, and congressional scrutiny of requests for aid made by such states; and (3) protection of the authority of the U.S. courts by preventing such states from willfully flouting the judgments of those courts.
Directs the Securities and Exchange Commission (SEC) to: (1) deny a judgment evading foreign state access to U.S. capital markets unless the proceeds of borrowing or securities issuance are to be used in the first instance to satisfy in full all final judgments that form the basis for such designation as such a state; and (2) require all periodic filings made by such a state with the SEC to prominently bear a warning describing its failure to satisfy outstanding judgments. Imposes similar restrictions on state-owned corporations of such states.
Requires: (1) a proposal to extend bilateral or multilateral assistance to a judgment evading state to bear notice that such state is a judgment evading state; and (2) the Secretary of the Treasury to report annually to Congress identifying each such state.
Status of the Legislation
Latest Major Action: 5/19/2009: Referred to House committee. Status: 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.
Points in Favor
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Points Against
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Visitor Comments
M Stulman
June 26, 2009, 9:31am (report abuse)In reality, the majority of companies that are now aggressively pursuing Argentina are predatory Vultures which bought the debt after Argentina defaulted. If enacted, this law would be abused by Vulture Funds as another weapon in their arsenal to squeeze massive profits out of the most impoverished countries.
This damaging and counterproductive bill is chiefly supported by notorious Vulture Funds, and is being aggressively promoted by several high powered Washington DC lobbyists. The bill would make it easier for the Vultures to line their own pockets and profiteer off impoverished country debt.
This misguided legislation would strengthen the Vulture Funds’ ability to collect massive profits from the world’s most impoverished countries. It penalizes countries in economic turmoil by cutting off access to U.S. credit markets – a key tool for economic recovery
M Stulman
June 26, 2009, 9:31am (report abuse). Current foreign bondholders’ investments in these countries would be undermined, aiding Vulture Funds while mainstream American investors are injured.
This legislation exempts Heavily Indebted Poor Countries (HIPC), but many impoverished countries that do not currently qualify for HIPC status would be left vulnerable, including Kenya, Lesotho and Cape Verde.