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American Task Force Argentina Applauds Members of Congress for New Push to Hold Argentina Accountable for Outstanding Debts to Americans
Press Release
June 23, 2010

WASHINGTON American Task Force Argentina (ATFA), a coalition of 40 taxpayer, investor, educator, Latino and agriculture organizations, today commended Congressmen Michael McMahon and Russ Carnahan and other members of the U.S. House of Representatives for introducing H.R. 5564, the Judgment Evading Foreign States Accountability Act (JEFSA). The legislation would impose penalties on wealthy and middle-income countries that, like Argentina, deliberately ignore their financial and legal obligations to U.S. citizens.

"Representatives McMahon and Carnahan and their colleagues just took a giant step in the long journey to justice for U.S. taxpayers," ATFA Executive Director Robert Raben said. "Argentina has been ignoring its creditors and defaulting on court judgments for almost a decade. All three branches of the U.S. government are clearly on the record telling Argentina that enough is enough."

Raben continued, "We hope the Kirchner government will take the hint that members of Congress won't let up until Argentina negotiates in good faith with all U.S. creditors, and neither will ATFA. The current swap offer - a worse deal than 2005, constant deadline extensions and the goal of just 60 percent adhesion - doesn't come close to satisfying that test."

In 2001, Argentina defaulted on $81 billion in obligations to worldwide investors the largest sovereign debt default in history. In 2005, the government offered those bondholders a pennies-on-the-dollar settlement that was far lower than international norms for such debt restructurings. When half of all foreign lenders to Argentina rejected the offer, the Argentine government responded by unilaterally repudiating their obligations to those bondholders. Since then, in some 114 cases, U.S. judges and their counterparts in other countries' courts have held that Argentina is obliged to honor its obligations to these creditors. Argentina has rejected these rulings; and as a result has been unable to access international credit markets.

U.S. Secretary of State Hillary Clinton and U.S. Ambassador Vilma Martinez have both stated that resolving these debts is a priority for the United States.

JEFSA would hold Argentina accountable for its government's irresponsibility in this area. The bill would deny access to U.S. capital markets for the government of any nation in default of U.S. court judgments for amounts exceeding $100 million for more than two years. Further, JEFSA would discourage unsound borrowing practices by taking the following steps:

Require that the U.S. government consider the default status of countries in decisions to grant them aid;

Deny access to U.S. capital markets to the domestic corporations of judgment-evading foreign nations that remain in default for more than three years; and

Require that the Secretary of the Treasury issue annual reports naming those states and analyzing the impact of their behavior on the U.S. economy.

The legislation has been carefully drafted to protect low-income nations, including those eligible for International Development Association financing or relief through the World Bank's Heavily Indebted Poor Countries (HIPC) initiative or the Multilateral Debt Relief Initiative.

To view the full text of the legislation, click here.

Made up of an alliance of diverse organizations, ATFA's leadership includes Executive Director Robert Raben, a former Assistant Attorney General at the U.S. Department of Justice, and two co-chairs, The Honorable Robert J. Shapiro, former Under Secretary of Commerce for Economic Affairs in the Clinton Administration, and Ambassador Nancy Soderberg, Ambassador at the U.S. Mission to the United Nations in New York from 1997 to 2001.

For additional information on ATFA's activities, please visit www.atfa.org, or contact media@atfa.org, or +1-888-662-2382.

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