-The President will direct the U.S. Department of Commerce to respond positively to requests from your governments for assistance in the development of export promotion programs. The Department of Commerce will make available technical advice on promotion techniques and personnel training to help develop new markets for Latin American exports worldwide.

Dept. of State Bulletin, Vol. LXXV, No. 1932, July 5, 1976, pp. 7-8. On June 17, 1976. the OAS General Assembly adopted Res. 231 (VI-0/76), in which the General Assembly resolved:

1. To reiterate its deep concern that the clause excluding Ecuador and Venezuela from the Generalized System of Preferences remains in the Trade Act of 1974 of the United States of America.

2. To express its disappointment that, despite the many earnest appeals made and the pledges received, discrimination against Ecuador and Venezuela persists, and this continues to disturb inter-American relations.

3. To put on record its emphatic request that the legal provision giving rise to this discrimination be amended as promptly as possible, to avoid greater damage to the affected countries.

4. To reaffirm the importance, in observance of the commitments undertaken within the inter-American system and in a spirit of mutual cooperation and regional solidarity, of applying the Trade Act of the United States of America in a manner consistent with the interests and development needs of the Latin American countries.

5. In this respect, to note with interest the statement made by the Secretary of State of the United States of America on the policy that his government will follow in applying the Trade Act and on its willingness to make improvements in it.

6. To renew the mandate conferred upon the Permanent Council through resolution AG/RES. 199 (V-0/75).

OAS Doc. OEA/Ser.P/VI-0.2, July 7, 1976, Vol. 1, pp. 38-39.

The 94th Congress failed to act on legislation (the Bentsen amendment) that was designed to remove the nonembargoing members of the Organization of Petroleum Exporting Countries (OPEC) Ecuador and Venezuela-from the restrictions of the Trade Act of 1974.

§ 3

International Economic Assistance
and Development

International Lending Institutions
Inter-American Development Bank

Increased participation by the United States in the InterAmerican Development Bank, and provision for the United States to vote for entry into the Bank by nonregional members and the Bahamas and Guyana, was authorized by Public Law 94-302 (90 Stat. 591) approved May 31, 1976. Title I of the Act amended the Inter-American Development Bank Act (22 U.S.C. 283 et seq.) by adding the following new sections:

SEC. 26. (a) The United States Governor of the Bank is hereby authorized to vote in favor to two resolutions proposed by the

Governors at a special meeting in July 1975, and now pending before the Board of Governors of the Bank, which provide for (1) an increase in the authorized capital stock of the Bank and additional subscriptions of members thereto and (2) an increase in the resources of the Fund for Special Operations and contributions thereto. Upon adoption of such resolutions, the United States Governor is authorized to agree on behalf of the United States (1) to subscribe to ninety-nine thousand four hundred and seventy-four shares of $10,000 par value of the increase in the authorized capital stock of the Bank of which eighty-nine thousand five hundred and twenty-six shall be callable shares and nine thousand nine hundred and forty-eight shall be paid in and (2) to contribute to the Fund for Special Operations $600,000,000, in accordance with and subject to the terms and conditions of such resolutions.

(b) There are hereby authorized to be appropriated, without fiscal year limitation, the amounts necessary for payment by the Secretary of the Treasury of (1) $1,199,997,873 for the United States subscription to the capital stock of the Bank and (2) $600,000,000 for the United States share of the increase in the resources of the Fund for Special Operations.

SEC. 27. (a) The United States Governor of the Bank is hereby authorized to vote for an additional increase of one hundred and eight thousand shares of $10,000 par value in the authorized callable capital stock of the Bank as recommended in the resolution of the Board of Governors entitled "Increase of U.S. $4 Billion in the Authorized Capital Stock and Subscriptions Thereto". Upon adoption of a Board of Governors resolution increasing the authorized capital stock of the Bank by such amount, the United States Governor is authorized to agree on behalf of the United States to subscribe to thirty-seven thousand three hundred and three shares of $10,000 par value of such additional increase in callable capital in accordance with and subject to the terms and conditions of such resolution.

(b) In order to pay for the increase in the United States subscription to the Bank provided for in this section, there is hereby authorized to be appropriated, without fiscal year limitation, $450,002,218 for payment by the Secretary of the Treasury.

In addition, Title I authorized the U.S. Governor of the Bank to vote for three proposed resolutions of the Board of Governors with respect to (1) creation of a new class of stock designated as Inter-Regional Capital stock; (2) admission of nonregional countries-ten European plus Japan and Israel-to membership in the Bank, and (3) an increase in the authorized callable ordinary capital stock and subscriptions thereto in connection with the admission of nonregional members. The U.S. Governor was also authorized to vote for amendments to the Inter-American Development Bank Agreement (TIAS 4397; 10 UST 3029; entered into force for the United States December 30, 1959) as amended, providing for membership of the Bahamas and Guyana and for lending to the Caribbean Development Bank.

Title I added a new section (22 U.S.C. 283y) (the Harkin amendment) to the Inter-American Development Bank Act instructing the U.S. Executive Director of the Bank to oppose loans to countries engaging in a consistent pattern of gross violations of human rights unless such loans directly benefit needy people. The new section reads as follows:

SEC. 28. (a) The United States Executive Director of the Bank is authorized and directed to vote against any loan, any extension of financial assistance, or any technical assistance to any country which engages in a consistent pattern of gross violations of internationally recognized human rights, including torture or cruel, inhumane, or degrading treatment or punishment, prolonged detention without charges, or other flagrant denial of the right to life, liberty, and the security of person, unless such assistance will directly benefit the needy people in such country.

(b) In determining whether this standard is being met with regard to activities of the Inter-American Development Bank, the Committee on Foreign Relations of the Senate or the House Committee on International Relations, or the House Committee on Banking, Currency and Housing, may require the United States Governor of the Bank to submit in writing information demonstrating that such loan or assistance will directly benefit those persons in such country to which such loan or assistance is supposed to be directed, together with a detailed explanation of the assistance to be provided (including the dollar amounts of such assistance) and an explanation of how such assistance will directly benefit such persons in such country.

(c) In determining whether or not a country falls within the provisions of subsection (a) the Senate Committee on Foreign Relations and the House Committee on International Relations and the House Committee on Banking, Currency and Housing shall give consideration to the extent of cooperation of such country in permitting an unimpeded investigation of alleged violations of internationally recognized human rights by appropriate international organizations, including the International Committee of the Red Cross, or groups or persons acting under the authority of the United Nations or of the Organization of American States.

Finally, Title I instructed the U.S. Executive Director of the Bank to propose a resolution providing for the development and utilization of intermediate technologies as major facets of the Bank's development strategy as soon as possible and directed the U.S. Governor to report to the Congress on the progress of the resolution.

See also H. Repts. 94-541 and 94-1121, and S. Repts. 94-673 and 94-815. On July 9, 1976, nine nonregional nations were admitted to membership in the Inter-American Development Bank: Belgium, Denmark, the Federal Republic of Germany, Israel, Japan, Spain, Switzerland, the United Kingdom, and Yugoslavia. As a result of sec. 28 of the Inter-American Development Bank Act, quoted supra, the United States cast a negative vote on a $21 million industrial credit loan to Chile. The vote did not defeat the loan.

Amendments to the Agreement Establishing the Inter-American Development Bank (TIAS 4397; 10 UST 3029), as amended, with Respect to the Creation of the Inter-Regional Capital Stock of the Bank and to Related Matters, with General Rules Governing Admission of Nonregional Countries to Membership in the Bank came into force on June 1, 1976 (TIAS 8383; 27 UST), on approval by the Bank's Board of Governors. Since adoption of the resolutions of approval required a favorable vote by countries having at least 75 percent of the total voting power in the Bank, U.S. approval was essential. The United States voted for the resolutions, pursuant to Public Law 94-302, supra.

The amendments to the Bank's charter provide for important changes in the Bank's legal structure and operations. The purpose of creating inter-regional capital stock was to permit the greatest possible use of the Bank's callable capital for raising additional resources in support of the Bank's activities. The "General Rules" implement the basic principles and procedures established by the amended Articles in connection with the admission of the nonregional countries and will govern the operations of the Bank with its expanded membership.

While the inter-regional and ordinary capital will be kept entirely separate for legal and accounting purposes, the Bank continues to have a unified capital structure for purposes of computing voting power and preemptive rights. Thus, any member, regional or nonregional, has the option of exercising its preemptive rights by subscribing to either ordinary or inter-regional capital.

The amendments provide that the voting power of the regional developing countries may not drop below 53.5 percent, that of the United States below 34.5 percent, and that of Canada below 4 percent. The veto of the United States in the Fund for Special Operations is thus preserved since decisions concerning the operations of the Fund must be adopted by a two-thirds majority. Voting ratios among the various groups (Latin America, nonregionals, Canada, and the United States) are preserved through the mechanism of preemptive rights. The amended Articles include a provision which will allow the Bank to raise additional capital without upsetting the prescribed voting ratios, even if all members do not participate in a subscription. Article VIII, section 4(a), provides that the Board of Governors may authorize the creation of nonvoting stock in connection with future capital stock increases of either ordinary or inter-regional capital.

African Development Fund

Authorization for the United States to participate in the African Development Fund, the concessional lending arm of the African

Development Bank, was provided in Title II of Public Law 94-302 (90 Stat. 591), approved May 31, 1976. Title II, cited as the African Development Fund Act (22 U.S.C. 290g-290g-9), also provides for appointment by the President of a Governor and Alternate Governor, places certain limitations on U.S. financing of the Fund and on voting for any amendments of the Agreement establishing the Fund, authorizes an appropriation of $25 million to be paid in three annual installments of $9 million (1976), $8 million (1977), and $8 million (1978) as the U.S. subscription to the Fund, provides for original jurisdiction of district courts of the United States for any civil action brought by or against the Fund in the United States, its territories or possessions, or the Commonwealth of Puerto Rico, and authorizes U.S. territorial application of the agreement. Provision is also made to deposit a U.S. declaration to the agreement retaining the right to tax salaries and emoluments paid by the Fund to U.S. citizens or nationals, and to deposit a declaration providing for reservations on certain other matters.

In accordance with U.S. policy in reference to other multilateral lending organizations, the Act contains the following restriction on voting for any loan to a country taking expropriation action:

SEC. 210. The President shall instruct the United States Governor of the Fund to cause the Executive Director representing the United States in the Fund to cast the votes of the United States against any loan or other utilization of the funds of the Fund for the benefit of any country which has

(1) nationalized or expropriated or seized ownership or control of property owned by any United States citizen or by any corporation, partnership, or association not less than 50 per centum of which is beneficially owned by United States citizens;

(2) taken steps to repudiate or nullify existing contracts or agreements with any United States citizen or any corporation, partnership, or association not less than 50 per centum of which is beneficially owned by United States citizens; or

(3) imposed or enforced discriminatory taxes or other exactions, or restrictive maintenance or operational conditions, or has taken other actions, which have the effect of nationalizing, expropriating, or otherwise seizing ownership or control of property so owned;

unless the President determines that (A) an arrangement for prompt, adequate, and effective compensation has been made, (B) the parties have submitted the dispute to arbitration under the rules of the Convention for the Settlement of Investment Disputes, or (C) good faith negotiations are in progress aimed at providing prompt, adequate, and effective compensation under the applicable principles of international law.

A human rights provision, section 211 (22 U.S.C. 290g-9) (the Harkin amendment), like that for the Inter-American Development Bank contained in Title I, ante, p. 490, instructs the Executive