Taiwan Non-Discrimination Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6974 To require the Secretary of the Treasury to pursue more equitable treatment of Taiwan at the international financial institutions, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 22, 2020 Mr. GONZALEZ of Ohio introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the Secretary of the Treasury to pursue more equitable treatment of Taiwan at the international finan- cial institutions, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Taiwan Non-Discrimi- 4 nation Act of 2020’’. 5 SEC. 2. FINDINGS. 6 The Congress finds as follows: 7 (1) As enshrined in its Articles of Agreement, 8 the International Monetary Fund (IMF) is devoted 9 to promoting international monetary cooperation, fa- 10 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 6974 IH cilitating the expansion and balanced growth of 1 international trade, encouraging exchange stability, 2 and avoiding competitive exchange depreciation. 3 (2) Taiwan is the 22nd largest economy in the 4 world and the 10th largest goods trading partner of 5 the United States. 6 (3) Although Taiwan is not an IMF member, it 7 is a member of the World Trade Organization, the 8 Asian Development Bank, and the Asia-Pacific Eco- 9 nomic Cooperation forum. 10 (4) According to the January 2020 Report on 11 Macroeconomic and Foreign Exchange Policies of 12 Major Trading Partners of the United States, pub- 13 lished by the Department of the Treasury, Taiwan 14 held $471,900,000,000 in foreign exchange reserves, 15 more than major economies such as India, South 16 Korea, and Brazil. 17 (5) According to section 4(d) of the Taiwan Re- 18 lations Act (Public Law 96–8), enacted on April 10, 19 1979, ‘‘Nothing in this Act may be construed as a 20 basis for supporting the exclusion or expulsion of 21 Taiwan from continued membership in any inter- 22 national financial institution or any other inter- 23 national organization.’’. 24 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 6974 IH (6) Taiwan held membership in the IMF for 9 1 years following the recognition of the People’s Re- 2 public of China (PRC) by the United Nations, and 3 16 Taiwan staff members at the Fund were allowed 4 to continue their employment after the PRC was 5 seated at the IMF in 1980. As James M. Boughton 6 has noted in his Silent Revolution: The International 7 Monetary Fund 1979–1989, even as the PRC was 8 seated, the United States Executive Director to the 9 IMF, Sam Y. Cross, expressed support on behalf of 10 the United States government for ‘‘some kind of as- 11 sociation between Taiwan and the Fund’’. 12 (7) On September 27, 1994, in testimony be- 13 fore the Senate Committee on Foreign Relations re- 14 garding the 1994 Taiwan Policy Review, then-As- 15 sistant Secretary of State for East Asian and Pacific 16 Affairs Winston Lord stated: ‘‘Recognizing Taiwan’s 17 important role in transnational issues, we will sup- 18 port its membership in organizations where state- 19 hood is not a prerequisite, and we will support op- 20 portunities for Taiwan’s voice to be heard in organi- 21 zations where its membership is not possible.’’. 22 (8) The Congress has repeatedly reaffirmed 23 support for this policy, including in Public Laws 24 107–10, 107–158, 108–28, 108–235, 113–17, and 25 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 6974 IH 114–139, and the unanimous House and Senate 1 passage of the Taiwan Allies International Protec- 2 tion and Enhancement Initiative (TAIPEI) Act of 3 2019. 4 (9) In its fact sheet, entitled ‘‘U.S. Relations 5 with Taiwan’’, published on August 31, 2018, the 6 Department of State asserts: ‘‘The United States 7 supports Taiwan’s membership in international orga- 8 nizations that do not require statehood as a condi- 9 tion of membership and encourages Taiwan’s mean- 10 ingful participation in international organizations 11 where its membership is not possible.’’. 12 (10) According to the Articles of Agreement of 13 the IMF, ‘‘membership shall be open to other coun- 14 tries’’, subject to conditions prescribed by the Board 15 of Governors of the IMF. 16 (11) In the IMF publication ‘‘Membership and 17 Nonmembership in the International Monetary 18 Fund: A Study in International Law and Organiza- 19 tion’’, Joseph Gold, the then-General Counsel and 20 Director of the Legal Department of the IMF, elabo- 21 rated on the differences between the terms ‘‘coun- 22 tries’’ and ‘‘states’’, noting that ‘‘the word ‘country’ 23 may have been adopted because of the absence of 24 agreement on the definition of a ‘state’ ’’ and, with 25 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 6974 IH respect to the use of ‘‘countries’’ and applications 1 for IMF membership, ‘‘the absence of any adjective 2 in the Articles emphasizes the breadth of the discre- 3 tion that the Fund may exercise in admitting coun- 4 tries to membership’’. According to Mr. Gold, ‘‘the 5 desire to give the Fund flexibility in dealing with ap- 6 plications may explain not only the absence of any 7 adjective that qualifies ‘countries’ but also the choice 8 of that word itself’’. 9 (12) In his IMF study, Mr. Gold further ob- 10 serves, ‘‘in the practice of the Fund the concepts of 11 independence and sovereignty have been avoided on 12 the whole as a mode of expressing a criterion for 13 membership in the Fund’’. He continues, ‘‘Although 14 the Fund usually takes into account the recognition 15 or nonrecognition of an entity as a state, there are 16 no rules or even informal understandings on the ex- 17 tent to which an applicant must have been recog- 18 nized by members or other international organiza- 19 tions before the Fund will regard it as eligible for 20 membership.’’. In fact, when considering an applica- 21 tion for membership where the status of an appli- 22 cant may not be resolved, Mr. Gold writes ‘‘there 23 have been occasions on which the Fund has made a 24 finding before decisions had been taken by the 25 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 6974 IH United Nations or by most members or by members 1 with a majority of the total voting power.’’ Mr. Gold 2 concludes, ‘‘the Fund makes its own findings on 3 whether an applicant is a ‘country’, and makes them 4 solely for its own purposes.’’. 5 (13) Although not a member state of the 6 United Nations, the Republic of Kosovo is a member 7 of both the IMF and the World Bank, having joined 8 both organizations on June 29, 2009. 9 SEC. 3. SENSE OF THE CONGRESS. 10 It is the sense of the Congress that— 11 (1) the size, significance, and connectedness of 12 the Taiwan economy highlight the importance of 13 greater participation by Taiwan in the International 14 Monetary Fund, given the purposes of the Fund ar- 15 ticulated in its Articles of Agreement; and 16 (2) the experience of Taiwan in developing a vi- 17 brant and advanced economy under democratic gov- 18 ernance and the rule of law should inform the work 19 of the international financial institutions, including 20 through increased participation by Taiwan in the in- 21 stitutions. 22 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 6974 IH SEC. 4. CONDITION ON IMF QUOTA INCREASE FOR THE 1 PEOPLE’S REPUBLIC OF CHINA. 2 (a) IN GENERAL.—The United States Governor of 3 the International Monetary Fund (in this section referred 4 to as the ‘‘Fund’’) shall use the voice and vote of the 5 United States to oppose, and may not consent to, an in- 6 crease in the quota of the People’s Republic of China in 7 the Fund, unless the Secretary of the Treasury reports 8 to the Congress that— 9 (1) the Board of Governors of the Fund is con- 10 sidering admission of Taiwan as a member of the 11 Fund, pursuant to the recommendation of the Board 12 of Executive Directors of the Fund; or 13 (2) Taiwan enjoys meaningful participation in 14 the Fund, including through— 15 (A) participation in regular surveillance ac- 16 tivities of the Fund with respect to the eco- 17 nomic and financial policies of Taiwan, con- 18 sistent with Article IV consultation procedures 19 of the Fund; 20 (B) employment opportunities for Taiwan 21 nationals, without regard to any consideration 22 that, in the determination of the Secretary, 23 does not generally restrict the employment of 24 nationals of member countries of the Fund; and 25 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 6974 IH (C) the ability to receive appropriate tech- 1 nical assistance and training by the Fund. 2 (b) WAIVER.—The Secretary of the Treasury may 3 waive subsection (a) of this section with respect to a pro- 4 posal on reporting to the Congress that providing the 5 waiver will substantially promote the objective of securing 6 more equitable treatment of Taiwan at each international 7 financial institution (as defined in section 1701(c)(2) of 8 the International Financial Institutions Act). 9 (c) SUNSET.—This section shall have no force or ef- 10 fect beginning with the date that is 7 years after the date 11 of the enactment of this Act. 12 SEC. 5. ENSURING NON-DISCRIMINATION WITH RESPECT 13 TO TRAVEL POLICIES AT THE INTER- 14 NATIONAL FINANCIAL INSTITUTIONS. 15 (a) IN GENERAL.—The Secretary shall instruct the 16 United States Executive Director at each international fi- 17 nancial institution to use the voice and vote of the United 18 States to ensure that the travel policies and procedures 19 of the respective institution with respect to Taiwan as a 20 destination or transit point do not impose any administra- 21 tive conditions, including through restrictions on logistical 22 arrangements or meeting participants, that do not gen- 23 erally apply to a member country of the institution as a 24 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 6974 IH destination or transit point, except as required temporarily 1 for reasons of public safety or public health. 2 (b) DEFINITIONS.—In this section: 3 (1) INTERNATIONAL FINANCIAL INSTITU- 4 TION.—The term ‘‘international financial institu- 5 tion’’ has the meaning given the term in section 6 1701(c)(2) of the International Financial Institu- 7 tions Act. 8 (2) SECRETARY.—The term ‘‘Secretary’’ means 9 the Secretary of the Treasury. 10 (c) WAIVER.—The Secretary may waive subsection 11 (a) with respect to an international financial institution 12 for up to 1 year at a time on reporting to the Congress 13 that providing the waiver— 14 (1) will substantially promote the objective of 15 securing more equitable treatment of Taiwan at the 16 international financial institution; or 17 (2) is in the national interest of the United 18 States, with a detailed explanation of the reasons 19 therefor. 20 (d) PROGRESS REPORT.—The Chairman of the Na- 21 tional Advisory Council on International Monetary and Fi- 22 nancial Policies shall submit to the Congress an annual 23 report that describes the progress made in advancing the 24 travel policies and procedures described in subsection (a), 25 VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 6974 IH and may consolidate that report with the annual report 1 required by section 1701 of the International Financial 2 Institutions Act or any other report required to be sub- 3 mitted to the Secretary. 4 (e) SUNSET.—This section shall have no force or ef- 5 fect beginning with the earlier of— 6 (1) the date that is 7 years after the date of the 7 enactment of this Act; or 8 (2) the date on which the Secretary reports to 9 the Congress that each international financial insti- 10 tution has adopted the travel policies and procedures 11 described in subsection (a). 12 SEC. 6. TESTIMONY REQUIREMENT. 13 In each of the next 7 years in which the Secretary 14 of the Treasury is required by section 1705(b) of the 15 International Financial Institutions Act to present testi- 16 mony, the Secretary shall include in the testimony a de- 17 scription of the efforts of the United States to support 18 the greatest participation practicable by Taiwan at each 19 international financial institution (as defined in section 20 1701(c)(2) of such Act). 21 Æ VerDate Sep 11 2014 04:11 Jun 14, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H6974.IH H6974 pbinns on DSKJLVW7X2PROD with BILLS