This is the accessible text file for GAO report number GAO-04-928R entitled 'Treasury Continues Its Formal Process to Promote U.S. Policies at the International Monetary Fund' which was released on July 12, 2004. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. July 12, 2004: Congressional Committees: Subject: Treasury Continues Its Formal Process to Promote U.S. Policies at the International Monetary Fund: Congress has shown considerable interest in legislating U.S. policies regarding the International Monetary Fund (IMF or the Fund). Currently, the administration is charged with responding to dozens of legislative mandates related to the Fund, including advocacy for certain Fund policies, instructions for U.S. voting positions on Fund assistance to borrower countries, and requirements to report to Congress on various aspects of U.S. participation in the Fund. In 2003, we reported that the United States had 67 legislative mandates prescribing U.S. policy goals at the Fund. These mandates covered a wide range of policies, including combating terrorism, human rights, international trade, and weapons proliferation. As an international organization, the Fund is generally exempt from U.S. law. However, Congress can seek to influence IMF policy by directing the Secretary of the Treasury to instruct the U.S. Executive Director to pursue certain policy considerations or vote in a particular way on IMF programs or assistance to specific countries as part of his duties within the Board of the Fund.[Footnote 1] In 2000, Congress directed us to assess the Department of the Treasury's efforts in advancing U.S. legislative mandates at the Fund. The Consolidated Appropriations Act for Fiscal Year 2000[Footnote 2] requires us to report annually on the extent to which IMF practices are consistent with U.S. policies as set forth in federal law. In January 2001, we reported that the Treasury Department instituted a formal process in 1999 to systematically promote congressionally mandated policies at the Fund. We also found that while Treasury had had some influence over Fund policies, it was difficult to attribute the adoption of a policy within the Fund solely to the efforts of any one member because the Fund generally makes decisions on the basis of consensus.[Footnote 3] In February 2003, we provided an update on (1) the status of the U.S. Treasury's process for advancing congressional mandates at the Fund and (2) the number of U.S. legislative mandates concerning the Fund. This report provides a similar update for 2004. Results in Brief: The U.S. Treasury continues to maintain a formal process for advancing U.S. policies at the Fund. A Treasury task force facilitates coordination between Treasury and the U.S. Executive Director and identifies early opportunities to influence decisions of Fund members. Since our February 2003 report, the task force has continued to meet biweekly to identify opportunities to advance legislative mandates at the Fund. The task force has made several efforts to enhance the monitoring and promotion of mandates--for example, by focusing attention on countries not yet on the IMF Board's calendar but that are likely to require Fund assistance. We have identified a total of 67 legislative mandates that prescribe U.S. policy goals at the IMF, the same number as in our February 2003 report. Although the total number remained the same, some mandates have expired since our February 2003 report and others have been added. New mandates address policy issues such as the lifting of economic sanctions on Iraq, human rights in Burma, and development assistance for Tibet. Treasury continues to notify the U.S. Executive Director about new mandates through instruction letters. Background: The Department of the Treasury has the lead role within the executive branch for formulating U.S. policy toward the Fund. The U.S. Executive Director is appointed by the President and pursues U.S. policy objectives through his/her membership in the Fund's Executive Board. Treasury's Office of International Affairs, with the Office of the U.S. Executive Director of the IMF, formulates, evaluates, and implements Treasury policy concerning U.S. participation in the IMF, including the policy positions and directives set forth in legislative mandates. The legislative mandates that set forth U.S. policy regarding the Fund cover a range of issues. Some of these, such as exchange rate policy and emerging issues, including combating terrorism, are core to the Fund's mission. This report classifies mandates into one of two broad categories: "policy" mandates and "directed vote" mandates.[Footnote 4] Policy mandates seek to foster or advocate a certain policy at the IMF by directing Treasury to instruct the U.S. Executive Director to use his/her "voice" and/or "vote" on behalf of the United States at the Executive Board to bring about a policy change at the Fund. For example, the U.S. Executive Director is directed to encourage the IMF to adopt internationally recognized worker rights by borrowing countries. Directed vote mandates are more prescriptive in that they instruct the United States to "oppose" or "vote against" loans or other IMF assistance to particular countries or categories of countries. For example, the U.S. Executive Director is directed to oppose financial assistance for a country that is not compliant with the military spending and audits mandate, as shown in enclosure I. Treasury Has a Systematic Process for Promoting U.S. Legislative Mandates: Treasury continues to have a systematic process in place to advance U.S. legislative mandates at the Fund. As we reported previously,[Footnote 5] Treasury created the Task Force on Implementation of U.S. Policy and Reforms in the IMF in March 1999 to strengthen the process by which the United States pursues its objectives at the IMF. In particular, the task force was to increase awareness among Treasury staff about the mandates and identify early opportunities to provide input to the U.S. Executive Director to influence decisions regarding IMF members' programs and economic reviews. Treasury also continues to make available to all relevant staff annual updates of its comprehensive legislative mandates manual, which contains all mandates applicable to U.S. participation in the Fund. The task force includes staff-level representatives from the regional and functional offices within Treasury's Office of International Affairs, Treasury's Office of the General Counsel, and the U.S. Executive Director's office. Task force members continue to meet biweekly to discuss how Treasury and the U.S. Executive Director can best apply legislative mandates, given a country's economic circumstances.[Footnote 6] According to Treasury officials, the task force serves an important role as a mechanism to systematically remind Treasury officials of the need to address legislative mandates. Prior to each biweekly meeting, task force members review a tentative schedule of IMF Executive Board meetings for upcoming weeks to stay abreast of what countries will be discussed by the Board. Also, Treasury officials may prepare for the meetings by obtaining information about other opportunities to attempt to influence the IMF. For example, Treasury officials may hold discussions with Fund officials when an IMF mission is planned to a particular country as part of negotiations for a new or existing program or an economic review. At the task force meetings, members discuss opportunities to implement mandates of potential relevance for specific countries. The aim of the discussion is to identify the best opportunities to make a credible and convincing case for pursuing a mandate at a given time. Once agreement is reached on how to pursue a mandate, Treasury country officers collaborate with U.S. Executive Director staff and functional specialists to draft a policy position for the U.S. Executive Director. The policy position can take the form of input for a written statement or talking points for an oral statement to the Executive Board. The U.S. Executive Director pursues U.S. objectives, including the legislative mandates, through various channels at the Fund. For example, the U.S. Executive Director regularly makes oral or written statements to the Board to apprise it of U.S. policy objectives regarding requests from countries for new programs, Fund reviews of existing programs, and regular Fund reviews of all members' economic policies. Since creating the task force, Treasury has made occasional modifications to reinforce its efforts to monitor and promote legislative mandates at the Fund. For example, in March 2001, the task force expanded its agenda to include not only countries scheduled for discussion by the IMF Board but also countries that may need a program over the next several months. This enabled task force participants to focus attention on countries not yet on the Board's calendar. Since April 2004, Treasury officials have initiated efforts to make the task force more useful for participants by, for example, reorganizing the meeting agenda into a table format that clearly indicates which mandates are relevant to which countries. They also categorized the countries under discussion by differentiating those that currently have an IMF program from those that may need one. Treasury officials also stated that they plan to modify the meeting format to cover mandates and policy issues in greater depth. They will, for example, focus a meeting on a certain set of topics and invite those staff representatives whose work relates to these topics to attend. No Change in Number of U.S. Legislative Mandates Concerning the IMF: The number of U.S. legislative mandates concerning the IMF has not changed since our February 2003 report. Through our legal analysis, supplemented by documentation obtained from the Department of the Treasury, we identified a total of 67 legislative mandates as of June 2004, the same number of mandates we identified in our February 2003 report. Our list includes one legislative mandate that Treasury does not include in its own compendium. This mandate, passed in 1980, was intended to help promote a policy of diversification of foreign exchange assets. According to a Treasury official, Treasury does not include this mandate in its own compendium because it has determined that the mandate has been overtaken by subsequent events and is outdated. Although the total number of mandates remains the same, each year some mandates expire and others are added. For example, one expired mandate relates to indirect financing for countries including China and North Korea that was contained in a 2002 annual appropriations act. This mandate expired when the appropriated funds to which it applied were no longer legally available. New mandates address policy issues such as lifting of economic sanctions on Iraq, human rights in Burma, and support for development assistance to Tibet. Treasury continues to provide annual notification letters concerning new mandates to the U.S. Executive Director's office. These notification letters instruct the U.S. Executive Director to take appropriate actions with respect to IMF mandates. Enclosure I identifies all directed vote and policy mandates that prescribe U.S. policy goals at the IMF under current federal law. The enclosure briefly describes the broad policy objectives the mandates address and some of the actions required by the U.S. Treasury and the U.S. Executive Director. The mandates date from 1945 to 2004, with the majority enacted in the last decade. Some mandates address multiple policy issues, sometimes overlapping one another. Enclosure II identifies some policies that are addressed in multiple mandates.[Footnote 7] For example, nine mandates pertain to trade and seven pertain to debt issues. Agency Comments and Our Evaluation: We received written comments on a draft of this report from the Department of the Treasury, which are reprinted in Enclosure III. Treasury concurred with the facts presented in this report. Treasury reiterated its position that the extensive legislative mandates could potentially undermine its effectiveness and influence at the Fund. Scope and Methodology: To describe the current process that Treasury has in place to advance congressional mandates at the IMF, we reviewed the list of topics discussed in the biweekly task force meetings from January 2003 to May 2004, which summarizes major issues relating to the mandates. To determine the current number of IMF mandates, we analyzed Treasury's compilation of legislative mandates pertaining to the international financial institutions and documents obtained through our own legal research. In addition, we reviewed a February 2004 memorandum for distribution from Treasury to the U.S. Executive Director concerning new mandates and Treasury's 2004 compilation of legislative mandates applying to international financial institutions. We used two criteria to identify the relevant laws for this review. These criteria were (1) any current law that explicitly directs the U.S. Executive Director to the IMF to use his vote at the IMF to achieve a policy goal and (2) any current law that seeks to have the U.S. Executive Director use his voice at the IMF to promote a U.S. policy or make a policy change. To address both objectives, we also interviewed officials in Treasury's Office of International Affairs and the Office of the General Counsel. We conducted this review from May to July 2004 in accordance with generally accepted government auditing standards. We are sending copies of this report to other congressional committees, the Secretary of the Treasury, the Managing Director of the International Monetary Fund, and other interested parties. Copies will be made available to additional requesters. This report will be available at no charge on the GAO Web site at http://www.gao.gov. If you have any questions about this report, please contact Joseph A. Christoff at 202-512-8979 and Stephanie J. May at 202-512-6293. We can also be reached by e-mail at christoffj@gao.gov and mays@gao.gov, respectively. Zina Merritt, Suzanne Dove, Mary Moutsos, Ashley Alley, Mark Speight, and Lynn Cothern made contributions to this report. Signed by: Joseph A. Christoff: Director, International Affairs and Trade: Signed by: Stephanie J. May: Managing Associate General Counsel: General Counsel: Enclosures - 2: List of Congressional Committees: The Honorable Richard Lugar: Chairman: The Honorable Joseph R. Biden, Jr. Ranking Minority Member: Committee on Foreign Relations: United States Senate: The Honorable Ted Stevens: Chairman: The Honorable Robert C. Byrd: Ranking Minority Member: Committee on Appropriations: United States Senate: The Honorable Mitch McConnell: Chairman: The Honorable Patrick J. Leahy: Ranking Minority Member: Subcommittee on Foreign Operations, Export Financing, and Related Programs: Committee on Appropriations: United States Senate: The Honorable Bill Young: Chairman: The Honorable David R. Obey: Ranking Minority Member: Committee on Appropriations: House of Representatives: The Honorable Michael G. Oxley: Chairman: The Honorable Barney Frank: Ranking Minority Member: Committee on Financial Services: House of Representatives: Enclosure I: U.S. Legislative Mandates[A] Concerning the IMF: 1; Law and date of enactment[B]: 22 U.S.C. 262d; Oct. 3, 1977; Subject matter: Human rights, international terrorism, religious freedom, and others, including nuclear material acquisition; Required actions: The Department of the Treasury shall instruct the U.S. Executive Director (USED) to oppose loans to countries whose governments engage in a pattern of gross violations of internationally recognized human rights or provide refuge to individuals committing acts of international terrorism by hijacking aircraft, unless such assistance is directed to serve basic human needs. Severe violations of religious freedom should be considered in determining if the country has engaged in gross violations of internationally recognized human rights. Further, Treasury is to instruct the USED to consider a list of concerns when carrying out his/her duties, including whether recipient countries are seeking to acquire unsafeguarded special nuclear material; Directed vote: Yes. 2; Law and date of enactment[B]: 22 U.S.C. 262e; Oct. 3, 1977; Subject matter: Salaries and benefits of IMF employees; Required actions: The President shall direct the USED to take all appropriate actions to keep the compensation for IMF employees at a level comparable to the compensation provided employees of both private business and the U.S. government in comparable positions; Directed vote: No. 3; Law and date of enactment[B]: 22 U.S.C. 262h; Oct. 15, 1986; Subject matter: Trade, mining, and surplus commodities; Required actions: Treasury shall instruct the USED to use his voice and vote on behalf of the United States to oppose any IMF assistance for the production or extraction of any commodity or mineral for export, if it is in surplus on world markets and if the export of such commodity or mineral would cause substantial injury to the U.S. producers of the same, similar, or competing commodity or mineral; Directed vote: Yes. 4; Law and date of enactment[B]: 22 U.S.C. 262k Aug. 15, 1985; Subject matter: Impact of country adjustment programs on industries and commodity markets; Required actions: Treasury shall instruct the USED to consider, when reviewing loans, credits, or other uses of IMF resources, the effect that country adjustment programs would have on individual industries' sectors and international commodity markets including specific criteria to be considered as a basis for a vote against certain mining and related project proposals; Directed vote: No. 5; Law and date of enactment[B]: 22 U.S.C. 262k-1 Sept. 30, 1996; Subject matter: Military spending and audits; Required actions: Treasury shall instruct the USED to use his voice and vote to oppose any loan, other than for basic humanitarian needs, to any country that the Secretary of the Treasury determines does not have in place a functioning system for reporting to civilian authorities audits of receipts and expenditures that fund activities of the armed and security forces and that has not provided to the IMF information about the audit process requested by the institution; Directed vote: Yes. 6; Law and date of enactment[B]: 22 U.S.C. 262k-2 Sept. 30, 1996; Subject matter: Female genital mutilation; Required actions: Treasury shall instruct the USED to use his voice and vote to oppose any loan, other than for basic humanitarian needs, for any government that the Secretary of the Treasury determines has a known history of practicing female genital mutilation and has not taken steps to implement educational programs designed to prevent this practice; Directed vote: Yes. 7; Law and date of enactment[B]: 22 U.S.C. 262n-3 Oct. 21, 1998; Subject matter: Trade barriers and agricultural commodities; Required actions: Treasury shall instruct the USED to use aggressively his voice and vote to vigorously promote policies to encourage the opening of markets for agricultural commodities and products by requiring recipient countries to make efforts to reduce trade barriers; Directed vote: No. 8; Law and date of enactment[B]: 22 U.S.C. 262o-1 Aug. 23, 1994; Subject matter: Military spending and good governance; Required actions: Treasury shall instruct the USED to consider, when deciding whether to support a country's loan program, the extent to which IMF borrowing countries have demonstrated a commitment to (1) providing accurate and complete data on military spending; (2) establishing good and publicly accountable governance, including to end excessive military involvement in the economy; and (3) to make substantial reductions in excessive military spending and forces. The USED shall promote a policy that seeks to channel funding toward growth and development priorities and away from unproductive expenditures, including military spending; Directed vote: No. 9; Law and date of enactment[B]: 22 U.S.C. 262o-2 Oct. 21, 1998; Subject matter: Transparency, debt, private sector, trade, crisis lending, exchange rates, labor, the environment, military spending, sound banking, social safety nets, good governance, corruption, the poor, and ethnic and social strife; Required actions: Treasury shall instruct the USED to use aggressively his voice and vote to enhance the general effectiveness of the IMF with respect to numerous issues, including exchange rate stability, trade liberalization, antitrust reform, core labor standards, social safety nets, sound banking principles, private sector burden-sharing, disclosure of market information, debt, crises lending, good governance, procurement reform, corruption and bribery, drug-related money laundering, excessive military spending, ethnic and social strife, environmental protection, transparency, and microenterprise lending, especially to the world's poorest heavily indebted countries; Directed vote: No. 10; Law and date of enactment[B]: 22 U.S.C. 262p-4n Nov. 5, 1990; Subject matter: Equal employment opportunities at the IMF; Required actions: Treasury shall instruct the USED to use his voice and vote to urge the IMF to adopt policies and procedures that ensure that the IMF does not discriminate against any person on the basis of race, ethnicity, gender, color, or religious affiliation in any determination related to employment; Directed vote: No. 11; Law and date of enactment[B]: 22 U.S.C. 262p-4o Aug. 23, 1994; Subject matter: Respect for indigenous peoples; Required actions: Treasury shall direct the USED to use his voice and vote to bring about the creation and full implementation of policies designed to promote respect for and full protection of the territorial rights, traditional economies, cultural integrity, traditional knowledge, and human rights of indigenous peoples; Directed vote: No. 12; Law and date of enactment[B]: 22 U.S.C. 262p-4p Aug. 23, 1994; Subject matter: Internationally recognized worker rights; Required actions: Treasury shall direct the USED to use his voice and vote to urge the IMF to adopt policies to encourage borrowing countries to guarantee certain internationally recognized worker rights and to include the status of such rights as an integral part of the policy dialogue with each country. In addition, the USED shall urge the IMF to establish formal procedures to screen projects and programs for any negative impact in a borrowing country with respect to those rights; Directed vote: No. 13; Law and date of enactment[B]: 22 U.S.C. 262p-4q Apr. 24, 1996; Subject matter: State support of international terrorism; Required actions: Treasury shall instruct the USED to use his voice and vote to oppose any loan for a country for which the Secretary of State has made a determination that it is a terrorist state; Directed vote: Yes. Figure 1: 14; Law and date of enactment[B]: Figure 2: 22 U.S.C. 262p-4r Oct. 26, 2001; Subject matter: Terrorism; Required actions: Treasury may instruct the USED to use aggressively the voice and vote of the U.S. to require an auditing of IMF disbursements to ensure that no funds are paid to persons who commit, threaten to commit, or support terrorism. In addition, if the President determines that a country has committed to take actions that contribute to efforts of the U.S. to respond to, deter, or prevent acts of international terrorism, Treasury may instruct the USED to use the voice and vote of the U.S. to support any loan or other use of IMF funds for such country; Directed vote: No. 15; Law and date of enactment[B]: 22 U.S.C. 262p-6 Nov. 29, 1999; Subject matter: Debt relief; Required actions: Treasury should urge the IMF to complete a debt sustainability analysis by December 31, 2000, and determine eligibility for debt relief for as many countries under the modified Heavily Indebted Poor Countries Initiative as possible. Treasury should also instruct the USED to ensure that an external assessment of the Heavily Indebted Poor Countries Initiative takes place by December 31, 2001; Directed vote: No. 16; Law and date of enactment[B]: 22 U.S.C. 262p-7 Nov. 29, 1999; Subject matter: Extended Structural Adjustment Facility reform; Required actions: Treasury shall instruct the USED to use his voice and vote to promote the IMF's establishment of poverty reduction policies and procedures to support countries' efforts under programs developed and jointly administered by the World Bank and the IMF containing those components listed in the mandate; Directed vote: No. 17; Law and date of enactment[B]: 22 U.S.C. 262t Dec. 19, 1989; Subject matter: Personnel practices at the IMF; Required actions: It shall be U.S. policy that no initiatives, discussions, or recommendations concerning the placement or removal of any personnel employed by the IMF shall be based on the political philosophy or activity of that individual; Directed vote: No. 18; Law and date of enactment[B]: 22 U.S.C. 286e-8 Oct. 10, 1978; Subject matter: Treatment of creditors in debt rescheduling; Required actions: Treasury shall instruct the USED to seek to assure that no decision by the IMF departs from U.S. policy regarding the comparability of treatment of public and private creditors in cases of debt rescheduling where official U.S. credits are involved; Directed vote: No. 19; Law and date of enactment[B]: 22 U.S.C. 286e-9 Oct. 10, 1978; Subject matter: Investment, employment, and basic human needs; Required actions: Treasury shall instruct the USED to encourage IMF staff to formulate economic stabilization programs that foster a broader base of productive investment and employment, especially in those productive activities that are designed to meet basic human needs; Directed vote: No. 20; Law and date of enactment[B]: 22 U.S.C. 286e-11 Oct. 10, 1978; Subject matter: Countries harboring international terrorists; Required actions: Treasury shall instruct the USED to work in opposition to financing for countries either harboring international terrorists or failing to take measures to prevent acts of international terrorism; Directed vote: No. 21; Law and date of enactment[B]: 22 U.S.C. 286k July 31, 1945; Subject matter: International trade and economic stability; Required actions: In considering the policies of the United States in foreign lending, the USED shall give careful consideration to progress made in reaching agreement among nations to reduce restrictions on international trade and promote international economic stability; Directed vote: No. 22; Law and date of enactment[B]: 22 U.S.C. 286s Oct. 7, 1980; Subject matter: Basic human needs and economic adjustment programs; Required actions: The USED shall recommend and work for changes in IMF guidelines to ensure the effectiveness of economic adjustment programs by considering the effect the program will have on issues such as jobs and investment. The USED shall also work toward improved coordination among the IMF, the World Bank, and other appropriate institutions in this area; Directed vote: No. 23; Law and date of enactment[B]: 22 U.S.C. 286u Oct. 7, 1980; Subject matter: Dollar-Special Drawing Rights substitution account; Required actions: Treasury shall encourage IMF member countries to negotiate a dollar-Special Drawing Rights substitution account in which equitable burden-sharing would exist among participants in the account; Directed vote: No. 24; Law and date of enactment[B]: 22 U.S.C. 286v Oct. 7, 1980; Subject matter: Membership for Taiwan in the IMF; Required actions: The USED shall notify the IMF that it is U.S. policy that Taiwan be granted appropriate membership in the IMF; Directed vote: No. 25; Law and date of enactment[B]: 22 U.S.C. 286w; Oct. 7, 1980; Subject matter: Denial of membership for the Palestinian Liberation Organization; Required actions: The USED shall notify the IMF that it is U.S. policy that the Palestinian Liberation Organization not be given membership or other status at the IMF; Directed vote: No. 26; Law and date of enactment[B]: 22 U.S.C. 286x Oct. 7, 1980; Subject matter: Assistance to private sector of El Salvador, Nicaragua, and other nations; Required actions: The USED shall promote the use of IMF programs to assist the private sector in any nation, though particularly El Salvador and Nicaragua, in creating an environment that will stabilize a nation's economy; Directed vote: No. 27; Law and date of enactment[B]: 22 U.S.C. 286y; Nov. 30, 1983; Subject matter: Exchange rate stability; Required actions: The USED shall work for adoption of policies in the IMF to promote exchange rate stability. Also, in determining a vote of assistance to any IMF borrower, the USED shall take into account whether the borrower's policies are consistent with certain IMF requirements; Directed vote: No. 28; Law and date of enactment[B]: 22 U.S.C. 286z; Nov. 30, 1983; Subject matter: Transparency; Required actions: Treasury shall instruct the USED to initiate discussions at the IMF and propose and vote for adoption of procedures to increase both the sharing of information among IMF members and the public dissemination of certain IMF information concerning international borrowing and lending; Directed vote: No. 29; Law and date of enactment[B]: 22 U.S.C. 286aa Nov. 30, 1983; Subject matter: Denial of lending to communist dictatorships; Required actions: Treasury shall instruct the USED to actively oppose any facility involving use of IMF credit by any communist dictatorship unless certain conditions are met; Directed vote: Yes. 30; Law and date of enactment[B]: 22 U.S.C. 286bb Nov. 30, 1983; Subject matter: Elimination of predatory agricultural export subsidies; : Required actions: Treasury shall instruct the USED to propose and work for the adoption of an IMF policy encouraging members to eliminate all predatory agricultural export subsidies that might result in the reduction of other member countries' exports; Directed vote: No. 31; Law and date of enactment[B]: 22 U.S.C. 286cc Nov. 30, 1983; Subject matter: Trade, bank solvency, and external debt servicing; Required actions: The USED shall recommend and shall work for changes in IMF guidelines and policies that encourage countries to formulate economic adjustment programs that deal with their balance-of-payment difficulties and external debt owed to private banks. The USED shall also oppose and vote against fund assistance for a country whose annual external debt services exceed 85 percent of its annual export earnings, unless Treasury can document why an exception should be given; Directed vote: Yes. 32; Law and date of enactment[B]: 22 U.S.C. 286dd Nov. 30, 1983; Subject matter: Bank bailouts and debt rescheduling; Required actions: Treasury shall instruct the USED to oppose and vote against any IMF drawing by a member country that would be used to repay loans imprudently made by banking institutions to a member country, and to ensure that the IMF encourages borrowing countries and banking institutions to renegotiate a rescheduling of debt that is consistent with safe and sound banking practices and the country's ability to pay; Directed vote: Yes. 33; Law and date of enactment[B]: 22 U.S.C. 286ee Nov. 30, 1983; Subject matter: International lending and external indebtedness; Required actions: Treasury shall instruct the USED to propose that the IMF adopt policies with respect to international lending, including a policy to examine the trend and volume of external indebtedness of private and public borrowers in Article IV consultations; Directed vote: No. 34; Law and date of enactment[B]: 22 U.S.C. 286ff Nov. 30, 1983; Subject matter: IMF interest rates; Required actions: Treasury shall instruct the USED to propose and work for the adoption of IMF policies regarding the rate of remuneration paid on use of members' quota subscriptions and the rate of charges on IMF drawings to bring those in line with market rates; Directed vote: No. 35; Law and date of enactment[B]: 22 U.S.C. 286gg Nov. 30, 1983; Subject matter: Elimination of trade and investment restrictions; Required actions: Treasury shall instruct the USED to consult with the IMF to reduce obstacles to and restrictions upon international trade and investment in goods and services, eliminate unfair trade and investment practices, and promote mutually advantageous economic relations. The USED shall also work to have the IMF obtain agreement with countries to eliminate certain unfair trade and investment practices and shall take a country's progress into account in formulating its position on requests for loans for periodic financial disbursements; Directed vote: No. 36; Law and date of enactment[B]: 22 U.S.C. 286kk Dec. 19, 1989; Subject matter: Impact of IMF programs on the poor and the environment; Required actions: Treasury shall instruct the USED to seek policy changes at the IMF that will result in a review of policy prescriptions implemented by the IMF to determine both if IMF objectives were met and the social and environmental impacts of such prescriptions and the establishment of procedures to ensure that policy options that reduce the potential adverse impact on the poor or the environment are included in future economic reform programs; Directed vote: No. 37; Law and date of enactment[B]: 22 U.S.C. 286ll Oct. 24, 1992; Subject matter: IMF policy concerning transparency, the poor, and the environment; Required actions: Treasury shall instruct the USED to promote regularly and vigorously in program and quota increase discussions a variety of policy proposals including a proposal designed to alleviate poverty, promote policy audits in the areas of poverty and the environment, and allow public access to certain IMF information; Directed vote: No. 38; Law and date of enactment[B]: 22 U.S.C. 286mm Oct. 24, 1992; Subject matter: Measures to reduce military spending; Required actions: The USED shall use his voice and vote to urge the IMF to continue to develop an economic methodology to measure the level of military spending by every developing country. The USED shall also urge the IMF to provide annual reports that estimate the level of military spending by each developing country and urge the IMF to include in every Article IV consultation with such countries an analysis on this issue; Directed vote: No. 39; Law and date of enactment[B]: 22 U.S.C. 286nn Nov. 29, 1999; Subject matter: Debt reduction; Required actions: Treasury is authorized to instruct the USED to vote to approve the sale of gold such that proceeds can be used toward debt reduction for the Heavily Indebted Poor Countries Initiative; Directed vote: No. 40; Law and date of enactment[B]: 22 U.S.C. 286oo Nov. 6, 2000; Subject matter: Short-and medium-term financing, misreporting, and premium pricing; Required actions: It is the policy of the United States to work to implement reforms in the IMF to achieve the following goals: primarily using short-term balance-of-payments financing, limiting the use of medium-term financing, introducing premium pricing for lending that is greater than 200 percent of a member's quota in the IMF, and redressing cases of misreporting of information in the context of IMF programs; Directed vote: No. 41; Law and date of enactment[B]: 22 U.S.C. 2225 Dec. 30, 1974; Subject matter: Integration of women; Required actions: Treasury is requested to instruct the USED to encourage and promote the integration of women into the national economies of IMF member countries and into professional positions within the IMF organization. In addition, Treasury is to take any progress or lack of progress into account when making contributions to the IMF; Directed vote: No. 42; Law and date of enactment[B]: 22 U.S.C. 2370a Apr. 30, 1994; Subject matter: Expropriation of U.S. property; Required actions: Treasury shall instruct the USED to vote against any use of IMF funds for the benefit of any country that has, after 1956, nationalized or expropriated U.S. property without compensation or adequate arbitration, unless the funds are directed to programs that serve the basic human needs of the citizens of that country, or the President waives this prohibition on the basis of U.S. national interests; Directed vote: Yes. 43; Law and date of enactment[B]: 22 U.S.C. 2656 note (P.L. 107-228, sec. 633, Sept. 30, 2002); Subject matter: East Timor; Required actions: Treasury shall instruct the USED to use the voice, vote, and influence of the United States to support economic and democratic development in East Timor; Directed vote: No. 44; Law and date of enactment[B]: 22 U.S.C. 2799aa-1; Apr. 30, 1994; Subject matter: Nuclear transfers and illegal exports; Required actions: The U.S. government shall oppose the extension of any IMF loan or financial or technical assistance to any country that the President determines either delivers nuclear reprocessing equipment, material, or technology to any country or receives such equipment, materials, or technology from another country, or is a nonnuclear state that exports from the United States illegally any material, equipment, or technology that would contribute significantly to its ability to manufacture a nuclear explosive device and will be used for such a device. The President may waive application of this section with respect to India and Pakistan under certain conditions. (See P.L. 106-79, sec. 9001.); Directed vote: Yes. 45; Law and date of enactment[B]: 22 U.S.C. 5605 Dec. 4, 1991; Subject matter: Sanctions against use of chemical and biological weapons; Required actions: The United States shall oppose, in accordance with 22 U.S.C. 262d, the extension of any loan or financial or technical assistance to any country that the President determines uses chemical or biological weapons either in violation of international law or against its own nationals. The President may waive application of this section under certain conditions; Directed vote: Yes. 46; Law and date of enactment[B]: 22 U.S.C. 6034; Mar. 12, 1996; Subject matter: Opposition to Cuban membership; Required actions: Treasury shall instruct the USED to use the voice and vote of the United States to oppose admission of Cuba as a member of the IMF until the President submits a determination that a democratically elected government is in power in Cuba; Directed vote: Yes. 47; Law and date of enactment[B]: 22 U.S.C. 6302 Apr. 30, 1994; Subject matter: Nuclear nonproliferation; Required actions: Treasury shall instruct the USED to use the voice and vote of the United States to oppose any use of IMF funds to promote the acquisition of unsafeguarded special nuclear material or the development, stockpiling, or use of any nuclear explosive device by any non-nuclear-weapon state; Directed vote: Yes. 48; Law and date of enactment[B]: 22 U.S.C. 6445 Oct. 27, 1998; Subject matter: Religious freedom; Required actions: The President shall instruct the USED to oppose and vote against loans primarily benefiting a foreign government, agency, instrumentality, or official determined by the President to be a violator of religious freedoms; Directed vote: Yes. 49; Law and date of enactment[B]: 22 U.S.C. 6713 Oct. 21, 1998; Subject matter: U.S. liability, confidential business information, and chemical weapons; Required actions: The United States shall oppose any IMF loan or financial or technical assistance to either a foreign government or any foreign person, officer, or employee of the Organization for the Prohibition of Chemical Weapons whose actions taken in the implementation of the Chemical Weapons Convention make the United States liable, or who knowingly divulge U.S. confidential business information, or in the case of a government, encourage or assist a person in making such disclosures; Directed vote: Yes. 50; Law and date of enactment[B]: 22 U.S.C. 6901 note (P.L. 107-228, sec. 616, Sep. 30, 2002); Subject matter: Tibet; Required actions: Treasury shall instruct the USED to use the voice and vote of the United States to support projects in Tibet, so long as the projects are designed in accordance with certain enumerated principles, such as that the project fosters self-sufficiency and self-reliance of Tibetans; Directed vote: No. 51; Law and date of enactment[B]: 22 U.S.C. 7107; Oct. 28, 2000; Subject matter: Combat trafficking in persons; Required actions: The President will instruct the USED to vote against, and to use his best efforts to deny, any loan or other use of IMF funds for the subsequent fiscal year to a country that fails to comply or is not making significant efforts to bring itself into compliance with the minimum standards for the elimination of trafficking in persons. If certain requirements are met, this mandate does not apply to humanitarian assistance, trade-related assistance, or development assistance and can be waived by the President if the continuation of assistance is in the national interest; Directed vote: Yes. 52; Law and date of enactment[B]: 50 U.S.C. 1701 note (P.L. 103-160, sec. 1511, Nov. 30, 1993 & P.L. 104-208, sec. 540, Feb. 12, 1996); Subject matter: Serbia or Montenegro; Required actions: Treasury shall instruct the USED to use the voice and vote of the United States to oppose any IMF assistance to the governments of Serbia or Montenegro, except for basic human needs or unless a proper waiver or certification is made; Directed vote: Yes. 53; Law and date of enactment[B]: P.L. 104-208, sec. 570, Sep. 30, 1996; Subject matter: Burma and human rights and democratic government; Required actions: Treasury shall instruct the USED to vote against any utilization of IMF funds for Burma until such time as the President certifies to Congress that Burma has made measurable and sustainable progress in improving human rights practices and implementing a democratic government in Burma, or the President waives the sanction by certifying to Congress that the sanction is contrary to U.S. national interests; Directed vote: Yes. 54; Law and date of enactment[B]: P.L.106-113, sec. 504, Nov. 29, 1999; : Subject matter: IMF Operational Budget; Required actions: Treasury shall instruct the USED to use the voice and vote and influence of the U.S. to urge vigorously the IMF both to publish the operational budgets of the IMF on a quarterly basis, not later than one year after the end of the period covered by the budget, and to continue to forgo reimbursements of the expenses incurred by the IMF in administering the Enhanced Structural Adjustment Facility, until the Heavily Indebted Poor Countries initiative is terminated; Directed vote: No. 55; Law and date of enactment[B]: P.L. 107-99, sec. 4, Dec. 21, 2001; Subject matter: Zimbabwe; Required actions: If the President certifies to the appropriate congressional committees that certain condition have been met in Zimbabwe, including the restoration of the rule of law and a commitment to equitable, legal, and transparent land reform, then the Treasury should direct the USED to propose to undertake financial and technical support for Zimbabwe, especially support that is intended to promote Zimbabwe's economic recovery and development, the stabilization of the Zimbabwean dollar, and the viability of Zimbabwe's democratic institutions. Until the President makes a certification, however, and except as may be required to meet basic human needs or for good governance, the Treasury shall instruct the USED to oppose and vote against any IMF loan, credit, or guarantee to the government of Zimbabwe or any cancellation or reduction of indebtedness owed by the government of Zimbabwe to the IMF; Directed vote: Yes. 56; Law and date of enactment[B]: P.L. 107-245, sec. 6, Oct. 21, 2002; : Subject matter: Sudan; Required actions: After April 10, 2003, and every 6 months thereafter, if the President certifies that the government of Sudan has not engaged in good faith negotiations to achieve a permanent and just peace agreement, or has unreasonably interfered with humanitarian efforts in Sudan, then the Treasury shall instruct the USED to continue to vote against, and actively oppose, any extension of any IMF loan, credit, or guarantee to the government of Sudan; Directed vote: Yes. 57; Law and date of enactment[B]: 50 U.S.C. 1701 note (P.L. 108-61, sec. 5, Jul. 28, 2003); Subject matter: Burmese Freedom and Democracy Act; Required actions: Treasury shall instruct the USED to oppose and vote against extending any IMF loan or financial or technical assistance to Burma until certain conditions are met, including that the SPDC has made substantial progress to end human rights violations, to implement a democratic government, and that Burma is not designated as a country that has failed demonstrably to adhere to its obligations under international counternarcotics agreements; Directed vote: Yes. 58; Law and date of enactment[B]: P.L. 108-11, sec. 1503, Apr. 16, 2003; Subject matter: Lifting of Iraqi Sanctions; Required actions: Provisions of law that direct the United States government to vote against or oppose loans or other use of funds, including for financial or technical assistance, in the IMF for Iraq shall not be construed as applying to Iraq; Directed vote: No. 59; Law and date of enactment[B]: P.L. 108-199, sec. 501, Jan. 23, 2004; Subject matter: Compensation for the USED; Required actions: No funds appropriated by the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2004, may be made as payment to the IMF while the USED is compensated by the IMF at a rate that, together with the compensation the USED receives from the United States, is in excess of the rate provided for an individual occupying a position at level IV of the Executive Schedule under 5 U.S.C. 5315, or while the alternate U.S. Director is compensated by the IMF at a rate in excess of the rate provided for an individual occupying a position at level V of the Executive Schedule under 5 U.S.C. 5316; Directed vote: No. 60; Law and date of enactment[B]: P.L. 108-199, sec. 514, Jan. 23, 2004; Subject matter: Trade, mining, and surplus commodities; Required actions: Treasury shall instruct the USED to use the voice and vote of the United States to oppose any IMF assistance for the production or extraction of any commodity or mineral for export, if it is in surplus on world markets and if the assistance will cause substantial injury to the U.S. producers of the same, similar, or competing commodity; Directed vote: Yes. 61; Law and date of enactment[B]: P.L. 108-199, sec. 531, Jan. 23, 2004; Subject matter: Burma; Required actions: Treasury shall instruct the USED to oppose and vote against extending IMF loans or financial or technical assistance or any other utilization of IMF funds to and for Burma; Directed vote: Yes. 62; Law and date of enactment[B]: P.L. 108-199, sec. 557, Jan. 23, 2004; Subject matter: Zimbabwe; Required actions: Treasury shall instruct the USED to vote against any extension of any IMF loans to the government of Zimbabwe, except to meet basic human needs or to promote democracy, unless the Secretary of State determines and certifies to the Committees on Appropriations that the rule of law has been restored in Zimbabwe, including respect for ownership and title to property and freedom of speech and association; Directed vote: Yes. 63; Law and date of enactment[B]: P.L. 108-199, sec. 558, Jan. 23, 2004; Subject matter: Tibet; Required actions: Treasury shall instruct the USED to use the voice and vote of the United States to support projects in Tibet, if the projects do not provide incentives for migration and settlement of non- Tibetans into Tibet or facilitate the transfer of ownership of Tibetan land and natural resources to non- Tibetans; are based on a thorough needs assessment; foster self- sufficiency of the Tibetan people and respect for Tibetan culture and traditions; and are subject to effective monitoring; Directed vote: No. 64; Law and date of enactment[B]: P.L. 108-199, sec. 561, Jan. 23, 2004; Subject matter: Cambodia; Required actions: Treasury should instruct the USED to use the voice and vote of the United States to oppose loans to the central government of Cambodia, except loans to support basic human needs; Directed vote: Yes. 65; Law and date of enactment[B]: P.L. 108-199, sec. 570, Jan. 23, 2004; Subject matter: Countries providing sanctuary to indicted war criminals; Required actions: Treasury shall instruct the USED to vote against any new project involving the extension of financial or technical assistance to any country whose authorities have failed, as determined by the Secretary of State, to take necessary and significant steps to apprehend and transfer to the International Criminal Tribunal for the former Yugoslavia all persons indicted by the Tribunal and to otherwise cooperate with the Tribunal. This section does not apply to humanitarian assistance and assistance for democratization; Directed vote: Yes. 66; Law and date of enactment[B]: P.L. 108-199, sec. 571, Jan. 23, 2004; Subject matter: User fees; Required actions: Treasury shall instruct the USED to oppose any loan, grant, strategy, or policy of the IMF that would require user fees or service charges on poor people for primary education or primary healthcare, including prevention and treatment efforts for Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome, malaria, tuberculosis, and infant, child and maternal well-being, in connection with the IMF's financing program; Directed vote: Yes. 67; Law and date of enactment[B]: P.L. 108-199, sec. 572, Jan. 23, 2004; Subject matter: Serbia; Required actions: After March 31, 2004, Treasury should instruct the USED to support loans and assistance to the Yugoslavian government subject to certain conditions, including that the Yugoslavian government is taking steps consistent with the Dayton Peace Accord to end financial, political, security, and other support that served to maintain separate Republika Srpska institutions. With respect to such loans, 22 U.S.C. 262k-1, which requires transparency of military budgets, shall not apply; Directed vote: Yes. Source: GAO. Notes: The information shown in this enclosure is based on a GAO analysis of policy and directed vote legislative mandates concerning the IMF. Mandates shown in bold represent mandates that were enacted since our last report in February 2003 and simply replace older mandates that had expired. Mandates shown in bold with a shaded background represent new mandates that were added in recent legislation since our February 2003 report. Mandates contained in FY 2004 Appropriations Acts remain in effect through January 31, 2004, under a continuing resolution (P.L. 108-35, Making Further Continuing Appropriations for the Fiscal Year 2004, and For Other Purposes). [A] Treasury puts mandates in three broad categories: "policy," "directed vote," and "reporting". Policy mandates direct the United States to foster or urge a certain policy at the IMF. Directed vote mandates instruct the United States to "oppose" or "vote against" loans or other IMF assistance. Reporting mandates are outside the scope of this report. [B] This column reports the original date of enactment. However, many of these mandates were amended subsequent to this date. [End of table] Enclosure II: Examples of Broad Policies that Are Addressed in Multiple Laws[A]: Broad policy objective: Administrative and personnel matters; Law: 22 U.S.C. 2225 (Dec. 30, 1974); 22 U.S.C 262e (Oct. 3, 1977); 22 U.S.C. 262t (Dec. 19, 1989); 22 U.S.C. 262p-4n (Nov. 5, 1990); P.L. 108-199, sec. 501 (Jan. 23, 2004). Broad policy objective: Banking; Law: 22 U.S.C. 286cc (Nov. 30, 1983); 22 U.S.C. 286dd (Nov. 30, 1983); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Burma; Law: P.L. 104-208, sec. 570 (Sep. 30, 1996); 50 U.S.C. 1701 note (P.L. 108-61, sec. 5 (July 28, 2003)); P.L. 108-199, sec. 531 (Jan. 23, 2004). Broad policy objective: Debt; Law: 22 U.S.C. 286e-8 (Oct. 10, 1978); 22 U.S.C. 286cc (Nov. 30, 1983); 22 U.S.C. 286dd (Nov. 30, 1983); 22 U.S.C. 286ee (Nov. 30, 1983); 22 U.S.C. 262o-2 (Oct. 21, 1998); 22 U.S.C. 286nn (Nov. 29, 1999); 22 U.S.C. 262p-6 (Nov. 29, 1999). Broad policy objective: Employment; Law: 22 U.S.C. 2225 (Dec. 30, 1974); 22 U.S.C. 286e-9 (Oct. 10, 1978). Broad policy objective: Environment; Law: 22 U.S.C. 286kk (Dec. 19, 1989); 22 U.S.C. 286ll (Oct. 24, 1992); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Exchange rate stability; Law: 22 U.S.C. 286y (Nov. 30, 1983); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Governance; Law: 22 U.S.C. 262o-1 (Aug. 23, 1994); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Human rights; Law: 22 U.S.C. 262d (Oct. 3, 1977); 22 U.S.C. 262p-4o (Aug. 23, 1994); P.L. 104-208, Sec. 570 (Sept. 30, 1996). Broad policy objective: Investment; Law: 22 U.S.C. 286e-9 (Oct. 10, 1978); 22 U.S.C. 286s (Oct. 7, 1980); 22 U.S.C. 286gg (Nov. 30, 1983). Broad policy objective: Labor; Law: 22 U.S.C. 262p-4p (Aug. 23, 1994); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Poverty alleviation and education; Law: 22 U.S.C. 286kk (Dec. 19, 1989); 22 U.S.C. 286ll (Oct. 24, 1992); 22 U.S.C. 262o-2 (Oct. 21, 1998); 22 U.S.C. 262p-7 (Nov. 29, 1999); P.L. 108-199, sec. 571 (Jan. 23, 2004). Broad policy objective: Military spending and military audit; Law: 22 U.S.C. 286mm (Oct. 24, 1992); 22 U.S.C. 262o-1 (Aug. 23, 1994); 22 U.S.C. 262k-1 (Sept. 30, 1996); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Nuclear and chemical nonproliferation; Law: 22 U.S.C. 2799aa-1 (Apr. 30, 1994); 22 U.S.C. 6302 (Apr. 30, 1994); 22 U.S.C. 6713 (Oct. 21, 1998); 22 U.S.C. 5605 (Dec. 4, 1991). Broad policy objective: Religious freedom; Law: 22 U.S.C. 262d (Oct. 3, 1977); 22 U.S.C. 6445 (Oct. 27, 1998). Broad policy objective: Serbia; Law: 50 U.S.C. 1701 note (P.L. 103-160, sec. 1511 (Nov. 30, 1993) & P.L. 104-208, sec. 540 (Feb. 12, 1996)); P.L. 108-199, sec. 572 (Jan. 23, 2004). Broad policy objective: Terrorism; Law: 22 U.S.C. 262d (Oct. 3, 1977); 22 U.S.C. 286e-11 (Oct. 10, 1978); 22 U.S.C. 262p-4q (Apr. 24, 1996); 22 U.S.C. 262p-4r (Oct. 26, 2001). Broad policy objective: Tibet; Law: 22 U.S.C. 6901 note (P.L. 107-228, sec. 616 (Sep. 30, 2002)); P.L. 108-199, sec. 558 (Jan. 23, 2004). Broad policy objective: Trade; Law: 22 U.S.C. 286k (July 31, 1945); 22 U.S.C. 286bb (Nov. 30, 1983); 22 U.S.C. 286cc (Nov. 30, 1983); 22 U.S.C. 286gg (Nov. 30, 1983); 22 U.S.C. 262k (Aug. 15, 1985); 22 U.S.C. 262h (Oct. 15, 1986); 22 U.S.C. 262n-3 (Oct. 21, 1998); 22 U.S.C. 262o-2 (Oct. 21, 1998); P.L. 108-199, sec. 514 (Jan. 23, 2004). Broad policy objective: Transparency; Law: 22 U.S.C. 286z (Nov. 30, 1983); 22 U.S.C. 286ll (Oct. 24, 1992); 22 U.S.C. 262o-2 (Oct. 21, 1998). Broad policy objective: Use of IMF resources; Law: 22 U.S.C. 286u (Oct. 7, 1980); 22 U.S.C. 286ff (Nov. 30, 1983); 22 U.S.C. 286oo (Nov. 6, 2000). Broad policy objective: Women's issues; Law: 22 U.S.C. 2225 (Dec. 30, 1974); 22 U.S.C. 262k-2 (Sept. 30, 1996). Broad policy objective: Zimbabwe; Law: P.L. 107-99, sec. 4 (Dec. 21, 2001); P.L. 108-199, sec. 557 (Jan. 23, 2004). Source: GAO. Notes: The information shown in this enclosure is based on a GAO analysis of policy and directed vote legislative mandates concerning the IMF. Mandates shown in bold represent mandates that were enacted since our last report in February 2003. Some of these mandates simply replace older mandates that had expired, while other mandates cover new topics. [A] Treasury puts mandates in three broad categories: "policy," "directed vote," and "reporting". Policy mandates direct the United States to foster or urge a certain policy at the IMF. Directed vote mandates instruct the United States to "oppose" or "vote against" loans or other IMF assistance. Reporting mandates are outside the scope of this report. [End of table] Enclosure III: Comments from the Department of the Treasury: DEPARTMENT OF THE TREASURY: WASHINGTON, D.C. UNDER SECRETARY: July 2, 2004: Mr. Joseph A. Christoff: Director, International Affairs and Trade Issues: General Accounting Office: 441 G Street, N.W. Washington, DC 20548: Dear Mr. Christoff, Thank you for your letter of June 29, 2004, and the opportunity to review the draft report, "Treasury Continues its Formal Process to Promote U.S. Policies at the International Monetary Fund." The draft report accurately reflects the process which Treasury has in place to advance U.S. policies at the IMF, as set out in legislation. The report recognizes, in particular, the effectiveness of our internal task force which ensures that issues related to legislative mandates in the IMF are systematically addressed on a proactive basis. The report concludes that the impact of the mandates is uncertain, since it is "difficult to attribute the adoption of a policy within the Fund to the efforts of any one member ..." As noted in Treasury's response to previous audits on this topic, we remain concerned that the extensive mandates have the potential to undermine our effectiveness in influencing the institution and we plan to propose a reduction and consolidation of legislative mandates to remove unnecessary provisions. Sincerely, John B. Taylor: Secretary for International Affairs: [End of section] (320275): FOOTNOTES [1] The Executive Board oversees the day-to-day business of the Fund. The Board is comprised of 24 executive directors who are appointed or elected by member countries or by groups of member countries. The President appoints, with the advice and consent of the Senate, the U.S. Executive Director to represent the United States on the Board. [2] P.L. 106-113 sec. 504 (e). [3] See U.S. General Accounting Office, International Monetary Fund: Efforts to Advance U.S. Policies at the Fund, GAO-01-214 (Washington, D.C.: Jan. 29, 2001) and U.S. General Accounting Office, Treasury Maintains a Formal Process to Advance U.S. Policies at the International Monetary Fund, GAO-03-401R (Washington, D.C.: Feb. 7, 2003). [4] Reporting mandates, which require Treasury to report to Congress on various issues related to U.S. participation in the Fund, constitute a third category of legislative mandates. This report does not cover reporting mandates because they generally are not related to advancing U.S. policy goals at the Fund. [5] GAO-01-214; GAO-03-401R. [6] Although the task force helps facilitate coordination between Treasury officials and the U.S. Executive Director, it is not the final arbiter for determining the U.S. policy position toward the IMF on any given issue. The task force is not a review or approval mechanism to give Treasury sanction to pursue individual mandates. [7] Within enclosures I and II, mandates shown in bold represent mandates added since our last report in February 2003. Some of these mandates simply replace older mandates that had expired, while others cover new topics.