US to block financial support until Sri Lanka addresses Rights situation

[TamilNet, Thursday, 21 May 2009, 10:25 GMT]
In amendment 1169 to H.R. 2346, an Act making supplemental appropriations for the fiscal year ending September 30, 2009, U.S. Senators propose to "prohibit certain forms of financial support to Sri Lanka," unless certification is made by the Secretary of State that "Sri Lanka has taken certain steps to address the humanitarian situation in areas affected by the conflict in Sri Lanka," the text in the amendment said. The amendement, however, allows financial support for Balance of Payment needs, thereby, appears to provide a loophole to permit the IMF loan to proceed if the loan was to be used to address deteriorating "Balance of Payment," conditions.

The Leahy, Brown, Casey amendment has three sections:

The first, section (a) instructs the Secretary of State to instruct US officials to "vote against any loan, agreement, or other financial support except for basic human needs" unless Sri Lanka respects human rights of internally displaced, proper accounting of persons detained in the conflict, and access.

The third, section(c) mandates the Secretary of State to submit a report detailing "incidents during the conflict in Sri Lanka that may constitute violations of international humanitarian law or crimes against humanity, and, to the extent practicable, identifying the parties responsible.

The Second, section (b), however, contains text intended to allow the IMF loan to go through if the loan is to address balance of payment needs. The section (b) in full, says: "The requirement under subsection (a) shall not apply to balance of payments support to the Central Bank of Sri Lanka if the Secretary of the Treasury certifies to the Committees of Appropriations that such payments are necessary to prevent significant and imminent hardship among the general population of Sri Lanka.

Section (b) of the amendment appears intended to override the policy goal set by the statutory language in 22 USC 262d and 22 USC 262d-1 to hold the IMF loans for strict humanitarian standards, under which a U.S. activist group filed a law suit in the district court of District of Columbia end of March.

The policy goal of statute 22 USC 262d is to "advance the cause of human rights" by mandating the assessment of human rights considerations when a United States government official or body uses its "voice and vote" to support multilateral assistance through international financial institutions to foreign governments.

As stated in subsection (a)(1), the statute was legislated with the intention of preventing U.S. support of multilateral assistance to governments which engage in "a pattern of gross violations of internationally recognized human rights, such as torture or cruel, inhumane, or degrading treatment or punishment, prolonged detention without charges, or other flagrant denial to life, liberty, and the security of person."

The international financial institutions to which the statute applies are listed as the International Bank for Reconstruction and Development, the International Development Association, the International Finance Corporation, the Inter-American Development Bank, the African Development Fund, the Asian Development Bank, the African Development Bank, the European Bank for Reconstruction and Development, and the International Monetary Fund.

22 USC 262d-1 is an exception clause to 22 USC 262d, allowing for US support of multilateral assistance through international financial institutions to governments where the President may determine "the cause of international human rights is served more effectively by actions other than voting against such assistance."

The statutory language of 22 USC 262d-1 lists all of the international financial institutions listed in 22 262d, but excludes the International Monetary Fund.

Therefore, 22 USC 262d and 22 USC 262d-1 together establish that Congressional intent of to ensure human rights conditionality be applied without exception to all instances where the United States would use its "voice and vote" when considering supporting multilateral assistance through the International Monetary Fund.

The Leahy, Brown, Casey amendment to HR 2346 is clearly a signal not to block the IMF loan if it is intended for Balance of Payment needs.

Related Articles:
31.03.09   Case filed to block US vote on IMF loan to Sri Lanka
28.03.09   US Group notifies IMF, US Treasury of filing complaint
22.03.09   US Group to file court action against US vote on IMF loan
21.03.09   US Tamils protest against IMF loan to Sri Lanka
19.03.09   US support to IMF's Sri Lanka loan illegal – Prof. Boyle
19.01.09   Sri Lanka denies FX crisis, banks on 'patriotic Diaspora'
10.10.08   Sri Lanka fiscally vulnerable, says World Bank

External Links:
US: U.S. Code collection - Title 22, Chapter 7
Guardian: IMF under pressure to delay Sri Lanka's $1.9bn aid loan
Reuters: US acts to delay IMF loan to Sri Lanka - officials
HRW: Letter to the International Monetary Fund (IMF) on Sri Lanka's Emergency Support Loan Request


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