[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
JUDGMENT EVADING FOREIGN STATES ACCOUNTABILITY ACT OF 2011
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MARKUP
BEFORE THE
SUBCOMMITTEE ON
THE WESTERN HEMISPHERE
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON
H.R. 1798
__________
NOVEMBER 29, 2012
__________
Serial No. 112-188
__________
Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
or
http://www.gpo.gov/fdsys/
______
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COMMITTEE ON FOREIGN AFFAIRS
ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey HOWARD L. BERMAN, California
DAN BURTON, Indiana GARY L. ACKERMAN, New York
ELTON GALLEGLY, California ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
DONALD A. MANZULLO, Illinois BRAD SHERMAN, California
EDWARD R. ROYCE, California ELIOT L. ENGEL, New York
STEVE CHABOT, Ohio GREGORY W. MEEKS, New York
RON PAUL, Texas RUSS CARNAHAN, Missouri
MIKE PENCE, Indiana ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
CONNIE MACK, Florida THEODORE E. DEUTCH, Florida
JEFF FORTENBERRY, Nebraska BEN CHANDLER, Kentucky
MICHAEL T. McCAUL, Texas BRIAN HIGGINS, New York
TED POE, Texas ALLYSON SCHWARTZ, Pennsylvania
GUS M. BILIRAKIS, Florida CHRISTOPHER S. MURPHY, Connecticut
JEAN SCHMIDT, Ohio FREDERICA WILSON, Florida
BILL JOHNSON, Ohio KAREN BASS, California
DAVID RIVERA, Florida WILLIAM KEATING, Massachusetts
MIKE KELLY, Pennsylvania DAVID CICILLINE, Rhode Island
TIM GRIFFIN, Arkansas
TOM MARINO, Pennsylvania
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New York
Yleem D.S. Poblete, Staff Director
Richard J. Kessler, Democratic Staff Director
------
Subcommittee on the Western Hemisphere
CONNIE MACK, Florida, Chairman
MICHAEL T. McCAUL, Texas ELIOT L. ENGEL, New York
JEAN SCHMIDT, Ohio ALBIO SIRES, New Jersey
DAVID RIVERA, Florida ENI F.H. FALEOMAVAEGA, American
CHRISTOPHER H. SMITH, New Jersey Samoa
ELTON GALLEGLY, California GREGORY W. MEEKS, New
YorkAs of 6/19/
12 deg.
C O N T E N T S
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Page
MARKUP OF
H.R. 1798, To prevent 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........................................................... 2
Amendment in the nature of a substitute to H.R. 1798 offered by
the Honorable Connie Mack, a Representative in Congress from
the State of Florida, and chairman, Subcommittee on the
Western Hemisphere........................................... 21
APPENDIX
Markup notice.................................................... 42
Markup minutes................................................... 43
The Honorable Connie Mack: Prepared statement.................... 45
JUDGMENT EVADING FOREIGN STATES ACCOUNTABILITY ACT OF 2011
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THURSDAY, NOVEMBER 29, 2012
House of Representatives,
Subcommittee on the Western Hemisphere,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:06 p.m., in
room 2172, Rayburn House Office Building, Hon. Connie Mack
(chairman of the subcommittee) presiding.
Mr. Mack. The subcommittee will come to order.
Pursuant to notice, for purposes of a markup I call up H.R.
1798, the Judgment Evading Foreign States Accountability Act.
Without objection, the measure is considered read and open for
amendment at any point.
[H.R. 1798 follows:]
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Mr. Mack. Before recognizing myself and other members for
statements, I have an amendment in the nature of a substitute
that was shared with your offices yesterday, which includes
updates and a few minor edits.
The clerk will report the amendment.
Mr. Gately. Amendment in the nature of a substitute to H.R.
1798, offered by Mr. Mack of Florida.
Strike all after the enacting clause----
Mr. Mack. Without objection, the amendment in the nature of
a substitute is considered read.
[The amendment in the nature of a substitute follows:]
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Mr. Mack. All members are given leave to insert remarks on
this measure into the record should they choose to do so.
I now recognize myself to speak on the bill and the
amendment.
The Judgment Evading Foreign States Accountability Act
draws our attention to a serious problem that requires our
immediate attention. The Republic of Argentina has incurred
substantial debt in the United States and has subsequently
defaulted on those debts. Going back more than a decade, in
2001, Argentina defaulted on more than $81 billion in sovereign
debt. In 2005, Argentina refused to negotiate with creditors
and unilaterally offered creditors 27 cents on the dollar.
Despite having agreed to submit to the jurisdictions of
U.S. courts, specifically the State of New York, and waive
claims of sovereign immunity, Argentina has contested at least
151 lawsuits and has refused to honor 116 court judgments
against it, totaling more than $6 billion.
Additionally, Argentina has demonstrated a similar
disregard for arbitral awards granted to the United States
investors by the International Centre for Settlement of
Investment Disputes, a tribunal of the World Bank. Currently,
Argentina is the respondent in more of these cases than any
other G-20 nation, accounting for more than 66 percent of such
cases.
Argentina's arguments for nonpayment have been outright
rejected by both the World Bank and the U.S. State Department.
Argentina's behavior undermines the viability of the World
Bank's arbitration process, thereby harming the worldwide
investments of U.S. businesses that rely upon this forum for
adjudication purposes.
The Obama administration has taken some action against
Argentina, such as suspending Generalized System of Preferences
benefits, as well as voting against new loans to Argentina
through the World Bank and the Inter-American Development Bank.
However, the Obama administration has not gone far enough to
protect United States businesses and investors.
Many people in the United States are unaware of Argentina's
irresponsible behavior and blatant disregard for the rule of
law. U.S. citizens continue to invest in, lend to, and do
business with Argentina and are unfamiliar with the associated
risks. Those who are injured as a result of this conduct often
have little or no recourse.
H.R. 1798, the Judgment Evading Foreign States
Accountability Act, takes bold steps to protect U.S. businesses
and investors. This bill denies Argentina and other foreign
states that have been in default of U.S. court judgments
exceeding $100 million for more than 2 years access to U.S.
capital markets, as well as requires the U.S. Government to
consider the default status of countries prior to granting them
aid.
I urge all of my colleagues to work with me to ensure the
passage of the Judgment Evading Foreign States Accountability
Act.
I now recognize the ranking member for his remarks.
Mr. Engel. Thank you very much, Mr. Chairman.
Before I turn to today's markup, I want to tell you what a
pleasure it has been to work with you on this subcommittee. We
have had an excellent working relationship and, I would dare
say, an excellent friendship.
Regardless of whether it was when I chaired the
subcommittee and you were the ranking member or when you
chaired and I have been the ranking member, we worked very well
together. I have appreciated your friendship, your good humor,
your cooperation, and that of your wife, our colleague, as
well. And I wish you and your wife the best of luck in the days
ahead.
Mr. Mack. Thank you. Thank you very much.
Mr. Engel. Turning to today's markup, I think we must first
note that Argentina is a very important country with which the
United States has and will continue to have a multifaceted
relationship. It is a member of the G-20 and a key nation in
South America. It has vast resources and a large and educated
population. I have enjoyed my visits to Argentina and continue
to believe that it is a natural friend of the United States.
However, today's markup deals with holders of several
billion dollars worth of Argentine debt who have remained
unpaid since Argentina defaulted on roughly $100 billion of
sovereign debt. While the vast majority of these bondholders
accepted a restructuring of the debt, substantially reducing
what they were owed, a small minority have held out, rejecting
those deals.
Mr. Chairman, I understand your concern about this matter,
as it is very serious. However, I think that today's markup is
not the appropriate course of action at this sensitive time,
and let me say why.
First, we haven't had hearings about Argentina on the debt
issue. We are not first in line in terms of jurisdiction; that
falls to the Committee on Financial Services. I don't make
light of this. As you have pointed out, this is a serious
matter, but also a very complicated matter. And I don't believe
that rushing into a markup of legislation which may have
unforeseen implications, especially ahead of Financial Services
Committee consideration, is the step we should be taking now.
I understand that even if we report this bill favorably
today, the full committee will not take it up, and even if,
hypothetically, the full committee did approve the bill,
neither the House nor the Senate would have time to consider
it. Therefore, I don't think today's markup will achieve the
intended goal.
And, finally, this matter is in the Federal court system
right now. Late last month, the U.S. Court of Appeals for the
Second Circuit upheld a lower court ruling that Argentina had
to pay $1.33 billion to the holdout investors. However, only
yesterday, the U.S. Court of Appeals for the Second Circuit
granted an emergency stay on its order, giving Argentina more
time to respond to the ruling. Given the action in our courts,
this is precisely, I think, the wrong time to be marking up
H.R. 1798. It will be seen as interfering in the judicial
process, something I think we should avoid at this moment.
Therefore, I will respectfully vote no on H.R. 1798 today
but will continue to monitor this issue closely in the days and
weeks ahead. I certainly agree with you, Mr. Chairman, that
this is an important issue and one that we need not take
lightly and must not take lightly. I just don't think that
today is the right time to do it.
So let me just conclude again the way I started, Mr.
Chairman. It has been a pleasure serving with you on this
subcommittee. You are not only my colleague but you are my
friend. And I hope that we will continue to work together in
the future on many, many different things. And I wish you only
the best in the future.
I yield back the balance of my time.
Mr. Mack. Thank you very much.
I would like to thank the ranking member for your comments,
and I feel the same way. We have had a wonderful relationship.
We have worked together very well. We have not always agreed,
but we have always worked together to do what was best, as we
saw it, for the hemisphere. And I value your friendship, and I
appreciate your kind words today. So thank you very much.
Are there any other members who wish to strike the last
word and speak briefly on the measure?
Mr. McCaul. Mr. Chairman, I would like to strike the last
word.
Mr. Mack. The gentleman is recognized.
Mr. McCaul. First, I think this bill is an important step
toward holding countries accountable for their financial
obligations under U.S. law.
I recently went down to Argentina, among other countries,
and we met with several officials down there. And I was struck
by what I see as a growing anti-American trend down there. I
certainly hope Argentina will go back to being a friendly
country and not being the antagonist that it looks like it is
appearing to go down that road.
Having said that, I just, on a personal point of personal
privilege, Mr. Chairman, it has been not only a great honor
serving on this committee with you, we came into Congress
together at the same time, and I considered you to be one of my
dearest friends up here in the Congress, along with your lovely
wife. And we are going to miss you a lot.
And, with that, I yield back.
Mr. Mack. I thank the gentleman.
And, again, thank you for your kind words. And our days
aren't over. We are going to continue to do a lot of great
things together. And I appreciate those kind words.
Do any other members wish to be recognized?
Mr. Sires. Yes.
Mr. Mack. The gentleman is recognized.
Mr. Sires. Well, thank you for having this hearing today.
And I also want to express my thanks to you for working
together the last few years. It certainly has been my pleasure,
and I certainly enjoyed our trip to Panama, although the timing
wasn't--all the things that happened, but it was certainly an
enjoyable trip.
And I thank you for all your support on an issue that is
very important to me and my community. You have been a strong
supporter, and I thank you for that.
And I will be supporting this bill today.
Mr. Mack. Thank you.
And thank you for always being willing to work with us and
with me. You are a friend, and I look forward to continue to
see your work done here on this committee. So thank you.
Anyone else?
The gentleman is recognized.
Mr. Rivera. Thank you, Chairman. Thank you for having this
important hearing and for always showing leadership on issues
that sometimes are difficult to tackle, as I have noticed
during my tenure on this committee.
And I will be supporting the bill, as well. But as someone
who has worked with you and with your family for many years--as
you know, I started working with your father in Congress in
1988 and 1989 and served with you in the Florida legislature.
And it was an honor and privilege and a pleasure to always
serve with you in the Florida House of Representatives and my
time here in Congress with you, showing that leadership on so
many issues that are important, particularly to promoting
freedom, freedom around the world, to those that are not as
fortunate, as many are here in the United States, to live in
the greatest and freest country the world has ever known.
So thank you for always being a standard bearer for
freedom, whether it be in Cuba, Latin America, all over the
world. You have been a staunch advocate, and you are to be
commended for that. Thank you for your service.
Mr. Mack. Thank you very much, David. Thank you.
Hearing no further amendments, the question is on agreeing
to the amendment in the nature of a substitute.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it, and the
amendment in the nature of a substitute is agreed to.
The question now occurs on adopting the bill as amended.
All in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it, and the
amended bill is agreed to.
Without objection, H.R. 1798, as amended, is reported
favorably to the full Committee on Foreign Affairs. And staff
are directed to make any technical and conforming changes.
This concludes our business. And I would just like to say
before we adjourn that it has been a privilege, an honor to
serve with the members of this committee. And I think that we
have done great work on this committee, whether it is when you
were the chairman, and I think that we have done some great
work, as well, over the last couple years.
I see real opportunity for Latin America and the United
States in how we work together and for the future of all of the
people in all of our countries. And I will continue to watch
and pay attention and be involved in issues that are related to
Latin America and freedom. And I just want to thank my
colleagues for everything that you have done for the people of
the United States and people of Latin America.
And, without objection, the subcommittee stands adjourned.
[Whereupon, at 2:20 p.m., the subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing RecordNotice deg.
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