Legislation

For text of this legislation, please click here.

To view the Dear Colleague letter sent by Representative Eric Massa, please click here.

Judgment Evading Foreign States Accountability Act of 2009

• H.R.2493
• Title: To 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.
• Sponsor: Rep Massa, Eric J. J. [NY-29] (introduced 5/19/2009)
• Cosponsors: Rep Bishop, Timothy H. [NY-1]; Rep Maffei, Daniel B. [NY-25]; Rep Maloney, Carolyn B. [NY-14]; Rep McMahon, Michael E. [NY-13]; Rep McHenry, Patrick T. [NC-10]; Rep Carnahan, Russ [MO-3]: Rep Tonko, Paul D. [NY-21]; Rep Wexler, Robert [FL-19]; Rep Towns, Edolphus [NY-10]; Rep Higgins, Brian [NY-27]; Rep Hall, John J. [NY-19]; Rep Shadegg, John B. [AZ-3]; Rep Fallin, Mary [OK-5]; Rep Garrett, Scott [NJ-5]; Rep Marchant, Kenny [TX-24]; Rep Posey, Bill [FL-15]
• 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.

News coverage of JEFSA

• Clarin, “Pressure from seven Obama congressmen for the bondholders”
• Infobae, “Pressure from the holdouts gains support in the Capitol”
• Ambito Financiero, “U.S.: bondholders seek punishment for Argentina”
• El Cronista, “Obama's legislators ask for a law to block Argentina from emitting debt in the United States”
• Bolsafe Valores, “Proposed law in U.S. complicated Argentina's financing”
• Dow Jones Newswires, “House Bill Would Bar Argentina From US Capital Mkts”
• U.S. Members of Congress Introduce Legislation on Argentine Debt and Court Defaults - May 20, 2009

Why Jubilee USA and JEFSA are Compatible

Supporters of Jubilee USA should be assured that the Judgment Evading Foreign States Accountability Act (JEFSA) of 2009 will not disqualify poor nations from receiving debt relief or impose other penalties on them. The legislation introduced has been carefully crafted to avoid jeopardizing debt relief status for poor nations. The Jubilee USA Act and JEFSA are compatible for the following reasons:

• JEFSA applies only to “wealthy and middle-income foreign states.” These are states that are “not presently eligible or potentially eligible to receive debt receive debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative of the World Bank” and those “not presently eligible for financing from the International Development Association (IDA).”
  
  
• The Jubilee USA Act has been used as a guide to ensure that JEFSA does not affect poor nations. These sanctions effectively exclude from penalty any nation qualifying for debt relief under the Jubilee USA Act.
  
  
• JEFSA legislation only imposes sanctions against “judgment evading foreign states” – that is, nations that have defaulted on more than $100 million in obligations, and have remained in default for more than two years. The legislation would then only bar such nations from incurring additional indebtedness in US capital markets. These nations are allowed two years to honor court judgments before penalties apply. JEFSA’s goal of prohibiting further accrual of debt is not incompatible with the goals of Jubilee and other advocates of debt cancellation and responsible lending.
  
  
• JEFSA would currently only affect Argentina, which has repeatedly defaulted on court judgments, has remained in default for years, and is not eligible for aid through HIPC or the IDA. This legislation will serve to discourage future bad acts by other middle-income and wealthy nations, rather than punishing impoverished nations for the inability to repay their debts.

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Open Letter to the U.S. House of Representatives: Protect Taxpayers from Judgment-Evading Nations

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