I
118th CONGRESS
1st Session
H. R. 605
IN THE HOUSE OF REPRESENTATIVES
January 27, 2023
Mr. Hill (for himself, Mr. Barr, and Mr. Huizenga) introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To amend the Special Drawing Rights Act in order to strengthen congressional oversight with respect to allocations of Special Drawing Rights by the International Monetary Fund, and to prohibit such allocations for perpetrators of genocide and state sponsors of terrorism without congressional authorization, and for other purposes.
Short title
This Act may be cited as the Special Drawing Rights Oversight Act of 2023
.
Findings
The Congress finds as follows:
The allocation of Special Drawing Rights (SDRs) through the International Monetary Fund (IMF) creates unconditional liquidity for IMF member countries.
According to article XVIII of the Articles of Agreement of the IMF, allocations of SDRs shall seek to meet the long-term global need
in reserve assets.
SDRs are allocated in proportion to the quotas of IMF members, such that the G20 alone is entitled to approximately two-thirds of a general allocation. At the same time, the Board of Governors of the Federal Reserve System has swap line arrangements with the central banks of eight G20 members, including the European Central Bank, the Bank of Japan, and the Bank of England, for the purpose of providing sufficient liquidity.
The size of SDR allocations has expanded dramatically, rising from 9,300,000,000 SDRs in 1970–1972, to 12,100,000,000 SDRs in 1979–1981, to 204,000,000,000 SDRs in 2009, with proposals for a new, unilateral allocation that bypasses congressional authorization in an amount of approximately 450,000,000,000 SDRs.
Under current law, the Secretary of the Treasury is able to bypass Congress and approve an allocation of SDRs in a manner that provides unconditional liquidity in the following approximate amounts: $41,700,000,000 to the People’s Republic of China; $17,600,000,000 to the Russian Federation; $4,900,000,000 to the Islamic Republic of Iran, and $5,000,000,000 to Venezuela. In addition, current law permits allocations in these amounts to be made in successive years that span two basic periods.
In the 98th Congress, the House of Representatives passed the bipartisan International Recovery and Financial Stability Act, which would have prohibited new allocations of SDRs without congressional authorization.
Strengthening congressional oversight
Section 6 of the Special Drawing Rights Act (22 U.S.C. 286q) is amended—
in subsection (a)—
by striking each basic period
and inserting any 10-year period
; and
by inserting 25 percent of
before the United States quota
; and
in subsection (b)—
by inserting , or consent to or acquiesce in such an allocation,
before without consultations
;
by striking 90
and inserting 180
; and
by inserting Chairman and ranking minority members of
before the appropriate subcommittees
.
Prohibition on allocations for perpetrators of genocide and state sponsors of terrorism without congressional authorization
Section 6(b) of the Special Drawing Rights Act (22 U.S.C. 286q(b)) is amended by adding at the end the following:
Unless Congress by law authorizes such action, neither the President nor any person or agency shall on behalf of the United States vote to allocate Special Drawing Rights under article XVIII, sections 2 and 3, of the Articles of Agreement of the Fund to a member country of the Fund, if the President of the United States has found that the government of the member country—
has committed genocide at any time during the 10-year period ending with the date of the vote; or
has repeatedly provided support for acts of international terrorism.
.
