(4) 184 The Congress, in considering the budget programs transmitted by the President for the Corporation, pursuant to section 104 of the Government Corporation Control Act, as amended, may limit the obligations and contingent liabilities to be undertaken under section 234 (a) and (b) as well as the use of funds for operating and administrative expenses.185 (5) 184 The authority of section 234 (a) and (b) shall continue until September 30, 1985.186 (b) There shall be established a revolving fund, known as the Direct Investment Fund, to be held by the Corporation. Such fund shall consist initially of amounts made available under section 232, shall be available for the purposes authorized under section 234(c), shall be charged with realized losses and credited with realized gains and shall be credited with such additional sums as may be transferred to it under the provisions of section 236. The Corporation shall transfer to the Fund in the fiscal year 1982, and in each fiscal year thereafter (1) at least 10 per centum of the net income of the Corporation for the preceding fiscal year, and (2) all amounts received by the Corporation during the preceding fiscal year as repayment of principal and interest on loans made under section 234(c), to the extent such amounts have not been expended or obligated before the effective date of the Overseas Private Investment Corporation Amendments Act of 1981, and the Corporation shall use the funds so transferred to make loans under section 234(c) to the extent that there are eligible projects which meet the Corporation's criteria for funding: Provided, however, That loans from the Direct Investment Fund are authorized for any fiscal year only to the extent or in such amounts as provided in advance in appropriation Acts. 187 (c) There shall be established in the Treasury of the United States an insurance and guaranty fund, which shall have separate accounts to be known as the Insurance Reserve and the Guaranty Reserve, which reserves shall be available for discharge of liabilities, as provided in section 235(d), until such time as all such liabilities have been discharged or have expired or until all such reserves have been expended in accordance with the provisions of this section. Such fund shall be funded by: (1) the funds heretofore 185 Foreign Assistance Appropriations Act, 1985 (sec. 101 of the Continuing Appropriations Act, 1985, Public Law 98-473; 98 Stat. 1892) provides: "The Overseas Private Investment Corporation is authorized to make such expenditures within the limits of funds available to it and in accordance with law (including not to exceed $35,000 for official reception and representation expenses), and to make such contracts and commitments without regard to fiscal year limitations as provided by section 9104 of title 31, United States Code, as may be necessary in carrying out the program set forth in the budget for the current fiscal year.' 16 Sec. 4(2) of Public Law 95-268 (92 Stat. 214) extended the authority from Dec. 31, 1977, to Sept. 30, 1981. This date was further extended to Sept. 30, 1985, by sec. 5(b)(1) of the OPIC Amendments Act of 1981 (Public Law 97-65; 95 Stat. 1023). 1 The text of subsec. (b) beginning with the words "The Corporation shall transfer to the Fund" was added by sec. 5(c) of the OPIC Amendments Act of 1981 (Public Law 97-65; 95 Stat. 1023). Foreign Assistance Appropriations Act, 1985 (sec. 101 of the Continuing Appropriations, 1985, Public Law 98-473) provides the following: "During the fiscal year 1985 and within the resources and authority available, gross obligations for the amount of direct loans shall not exceed $15,000,000," available to discharge liabilities under predecessor guaranty authority (including housing guaranty authorities), less both the amount made available for housing guaranty programs pursuant to section 223(b) and the amount made available to the Corporation pursuant to section 234(e) 188; and (2) such sums as shall be appropriated pursuant to section 235(f) for such purposes. The allocation of such funds to each such reserve shall be determined by the Board after consultation with the Secretary of the Treasury. Additional amounts may thereafter be transferred to such reserves pursuant to section 236. (d) Any payment made to discharge liabilities under investment insurance or reinsurance issued under section 234 189 or under similar predecessor guaranty authority shall be paid first out of the Insurance Reserve, as long as such reserve remains available, and thereafter out of funds made available pursuant to section 235(f). Any payments made to discharge liabilities under guaranties issued under section 234(b) or under similar predecessor guaranty authority shall be paid first out of the Guaranty Reserve as long as such reserve remains available, and thereafter out of funds made available pursuant to section 235(f). (e) There is hereby authorized to be transferred to the Corporation at its call, for the purposes specified in section 236, all fees and other revenues collected under predecessor guaranty authority from December 31, 1968, available as of the date of such transfer. (f) 190 There are authorized to be appropriated to the Corporation, to remain available until expended, such amounts as may be necessary from time to time to replenish or increase the insurance and guaranty fund, to discharge the liabilities under insurance, reinsurance, or guaranties issued by the Corporation or issued under predecessor guaranty authority, or to discharge obligations of the Corporation purchased by the Secretary of the Treasury pursuant to this subsection. However, no appropriations shall be made to augment the Insurance Reserve until the amount of funds in the Insurance Reserve is less than $25,000,000. Any appropriations to augment the Insurance Reserve shall then only be made either pursuant to specific authorization enacted after the date of enactment of the Overseas Private Investment Corporation Amendments Act of 1974, or to satisfy the full faith and credit provision of section 237(c). In order to discharge liabilities under investment insurance or reinsurance, the Corporation is authorized to issue from time to time for purchase by the Secretary of the Treasury its notes, debentures, bonds, or other obligations; but the aggregate amount of such obligations outstanding at any one time shall not exceed $100,000,000. Any such obligation shall be repaid to the Treasury within one year after the date of issue of such obligation. Any such obligation shall bear interest at a rate determined by the 188 The correct reference is "section 235(e)". 189 Sec. 2(3)(B) of the OPIC Amendments Act of 1974 (Public Law 93-390) substituted "insurance or reinsurance issued under section 234" in lieu of "insurance issued under section 234(a)". 199 Subsec. (f) was amended by sec. 2(3)C) of the OPIC Amendments Act of 1974 (Public Law 93-390). It formerly read as follows: "(f) There is hereby authorized to be appropriated to the Corporation, to remain available until expended, such amounts as may be necessary from time to time to replenish or increase the insurance and guaranty fund or to discharge the liabilities under insurance and guaranties issued by the Corporation or issued under predecessor guaranty authority." Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of any obligation authorized by this subsection. The Secretary of the Treasury shall purchase any obligation of the Corporation issued under this subsection, and for such purchase he may use as a public debt transaction the proceeds of the sale of any securities issued under the Second Liberty Bond Act after the date of enactment of the Overseas Private Investment Corporation Amendments Act of 1974. The purpose for which securities may be issued under such Bond Act shall include any such purchase. Sec. 236.191 Income and Revenues.-In order to carry out the purposes of the Corporation, all revenues and income transferred to or earned by the Corporation, from whatever source derived, shall be held by the Corporation and shall be available to carry out its purposes, including without limitation (a) payment of all expenses of the Corporation, including investment promotion expenses; (b) transfers and additions to the insurance or guaranty reserves, the Direct Investment Fund established pursuant to section 235, and such other funds or reserves as the Corporation may establish, at such time and in such amounts as the Board may determine; and (c) payment of dividends, on capital stock, which shall consist of and be paid from net earnings of the Corporation after payments, transfers, and additions under subsections (a) and (b) hereof. Sec. 237.192 General Provisions Relating to Insurance and Guaranty Program.-(a) Insurance guaranties, and reinsurance 193 issued under this title shall cover investment made in connection with projects in any less developed friendly country or area with the government to which the President of the United States has agreed to institute a program for insurance, guaranties, or reinsurance, 193 (b) The Corporation shall determine that suitable arrangements exist for protecting the interest of the Corporation in connection with any insurance, guaranty or reinsurance 190 issued under this title, including arrangements concerning ownership, use, and disposition of the currency, credits, assets, or investments on account of which payment under such insurance, guaranty, or reinsurance 193 is to be made, and right, title, claim, or cause of action existing in connection therewith. (c) All guaranties issued prior to July 1, 1956, all guaranties issued under sections 202(b) and 413(b) of the Mutual Security Act of 1954, as amended, all guaranties heretofore issued pursuant to prior guaranty authorities repealed by the Foreign Assistance Act of 1969, and all insurance, reinsurance, 193 and guaranties issued pursuant to this title shall constitute obligations, in accordance with the terms of such insurance, reinsurance, 193 or guaranties, of 191 22 U.S.C. 2196. Sec. 236 was added by Sec. 105 of the FA Act of 1969. 192 22 U.S.C. 2197. Sec. 237 was added by Sec. 105 of the FA Act of 1969. 193 Sec. 2(4) of the OPIC Amendments Act of 1974 (Public Law 93-390) added the reference to reinsurance. the United States of America and the full faith and credit of the United States of America is hereby pledged for the full payment and performance of such obligations. (d) 194 Fees shall be charged for insurance, guaranty, and reinsurance coverage in amounts to be determined by the Corporation. In the event fees charged for investment insurance, guaranties, or reinsurance are reduced, fees to be paid under existing contracts for the same type of insurance, guaranties, or reinsurance and for similar guaranties issued under predecessor guaranty authority may be reduced. (e) No insurance, guaranty, or reinsurance 193 of any equity investment shall extend beyond twenty years from the date of issu ance. (f) Compensation for insurance, reinsurance, or guaranties issued under this title shall not exceed the dollar value, as of the date of the investment, of the investment made in the project with the approval of the Corporation plus interest, earnings, or profits actually accrued on such investment to the extent provided by such insurance, reinsurance, or guaranty, except that the Corporation may provide that (1) appropriate adjustments in the insured dollar value be made to reflect the replacement cost of project assets, and (2) compensation for a claim of loss under insurance of an equity investment may be computed on the basis of the net book value attributable to such equity investment on the date of loss. 195 Notwithstanding the preceding sentence, the Corporation shall limit the amount of direct insurance and reinsurance issued by it under section 234 so that risk of loss as to at least 10 per centum of the total investment of the insured and its affiliates in the project is borne by the insured and such affiliates, except that limitation shall not apply to direct insurance or reinsurance of loans by banks or other financial institutions to unrelated parties.196 (g) No payment may be made under any guaranty, insurance or reinsurance 193 issued pursuant to this title for any loss arising out of fraud or misrepresentation for which the party seeking payment is responsible. (h) Insurance, guaranties, or reinsurance 197 of a loan or equity investment of an eligible investor in a foreign bank, finance compa 194 Subsec. (d) was amended by sec. 2(4)(D) of the OPIC Amendments Act of 1974 (Public Law 93-390). It formerly read as follows: "(d) Fees shall be charged for insurance and guaranty coverage in amounts to be determined by the Corporation. In the event fees to be charged for investment insurance or guaranties are reduced, fees to be paid under existing contracts for the same type of guaranties or insurance and for similar guaranties issued under predecessor guaranty authority may be reduced". 195 The first sentence of subsec. (f) was amended and restated by sec. 6(a) of the OPIC Amendments Act of 1981 (Public Law 97-65; 95 Stat. 1023). Previous amendments to this sentence in subsec. (f) which are retained in the new text include the following: The word "reinsurance" was added by sec. 2(4) (F) of Public Law 93-390; the basic language of clause (1) was added by sec. 5 of Public Law 95-268 (92 Stat. 215). 196 This sentence was added by sec. 2(4)G) of the OPIC Amendments Act of 1974 (Public Law 93-390). The phrase "except that limitation shall not apply to direct insurance or reinsurance of loans by banks or other financial institutions to unrelated parties" was added by sec. 5 of Public Law 95-268 (92 Stat. 215). A sentence, as added by sec. 2(4)G) of Public Law 93-390 and which previously appeared at this point, was struck out by sec. 6(b) of the OPIC Amendments Act of 1981 (Public Law 97-65; 95 Stat. 1023). It formerly read as follows: "The preceding sentence shall not apply to the extent not permitted by State law." 197 Sec. 204) of the OPIC Amendments Act of 1974 (Public Law 93-390) substituted the words ", guaranties, or reinsurance" in lieu of "or guaranties". ny, or other credit institution shall extend only to such loan or equity investment and not to any individual loan or equity investment made by such foreign bank, finance company, or other credit institution. (i) Claims arising as a result of insurance, reinsurance 198 or guaranty operations under this title or under predecessor guaranty authority may be settled, and disputes arising as a result thereof may be arbitrated with the consent of the parties, on such terms and conditions as the Corporation may determine. Payment made pursuant to any such settlement, or as a result of an arbitration award, shall be final and conclusive notwithstanding any other provision of law. (j) Each guaranty contract executed by such officer or officers as may be designated by the Board shall be conclusively presumed to be issued in compliance with the requirements of this Act. (k) 199 In making a determination to issue insurance, guaranties, or reinsurance under this title, the Corporation shall consider the possible adverse effect of the dollar investment under such insurance, guaranty, or reinsurance upon the balance of payments of the United States. (1) 200 (1) No payment may be made under any insurance or reinsurance which is issued under this title on or after the date of enactment of this subsection 201 for any loss occurring with respect to a project, if the preponderant cause of such loss was an act by the investor seeking payment under this title, by a person possessing majority ownership and control of the investor at the time of the act, or by any agent of such investor or controlling person, and a court of the United States has entered a final judgment that such act constituted a violation under the Foreign Corrupt Practices Act of 1977. (2) Not later than 120 days after the date of enactment of this subsection,201 the Corporation shall adopt regulations setting forth appropriate conditions under which any person convicted under the Foreign Corrupt Practices Act of 1977 for an offense related to a project insured or otherwise supported by the Corporation shall be suspended, for a period of not more than five years, from eligibility to receive any insurance, reinsurance, guaranty, loan, or other financial support authorized by this title. Sec. 238.202 Definitions.-As used in this title (a) the term "investment" includes any contribution or commitment 203 of funds, commodities, services, patents, processes, or techniques, in the form of (1) a loan or loans to an approved project, (2) the purchase of a share of ownership in any such project, (3) participation in royalties, earnings, or profits of any Sec. 24XJ) of the OPIC Amendments Act of 1974 (Public Law 93-390) added the word ", reinsurance". ***Subsec. (k) was amended by sec. 2(4)(K) of the OPIC Amendments Act of 1974 (Public Law 93-390). It formerly read as follows: "(k) In making a determination to issue insurance or a guaranty under this title, the Corporation shall consider the possible adverse effect of the dollar investment under such insurance or guaranty upon the balance of payments of the United States". 20 Subsec. (1) was added by sec. 6 of Public Law 95-268 (92 Stat. 215). 20: Subsec. (1) became effective Apr. 24, 1978. 2322 U.S.C. 2198. Sec. 238 was added by sec. 105 of the FA Act of 1969. The words "or commitment" were added by sec. 7 of the OPIC Amendments Act of 1981 Public Law 97-65; 95 Stat. 1024). 40-730 0-85-6 |