B-176281, JUL 26, 1972, 52 COMP GEN 54

B-176281: Jul 26, 1972

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AS AMENDED (22 U.S.C. 2196) - CURRENCIES THAT ARE GENERAL ASSETS OF THE UNITED STATES HELD IN THE ACCOUNTS OF THE TREASURY - AND THE INTEREST ACCRUED ON FOREIGN CURRENCY ACQUIRED IN THE ADMINISTRATION OF INSURANCE OR GUARANTY PORTFOLIOS AND HELD IN INTEREST BEARING DEPOSITORIES DESIGNATED BY THE TREASURER OF THE UNITED STATES PENDING THEIR SALE FOR DOLLARS NEED NOT BE DEPOSITED INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS PURSUANT TO 31 U.S.C. 484. 1972: REFERENCE IS MADE TO YOUR LETTER OF JUNE 16. SUBSECTION 234(C) WAS ADDED TO THE FOREIGN ASSISTANCE ACT OF 1961. SUCH FOREIGN CURRENCIES WHICH THE SECRETARY OF THE TREASURY MAY DETERMINE TO BE EXCESS TO THE NORMAL REQUIREMENTS OF THE UNITED STATES AND THE DIRECTOR OF THE BUREAU OF THE BUDGET MAY ALLOCATE) TO FIRMS PRIVATELY OWNED OR OF MIXED PRIVATE AND PUBLIC OWNERSHIP UPON SUCH TERMS AND CONDITIONS AS THE CORPORATION MAY DETERMINE.*** THE EXCESS CURRENCIES MADE AVAILABLE TO THE CORPORATION UNDER SUBSECTION 234(C) ARE GENERAL ASSETS OF THE UNITED STATES HELD IN ACCOUNTS IN THE TREASURY.

B-176281, JUL 26, 1972, 52 COMP GEN 54

FUNDS - FOREIGN - UNITED STATES OWNED CURRENCIES - INTEREST EARNED THE INTEREST ON LOANS OF EXCESS FOREIGN CURRENCIES MADE UNDER SECTION 234(C) OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED (22 U.S.C. 2196) - CURRENCIES THAT ARE GENERAL ASSETS OF THE UNITED STATES HELD IN THE ACCOUNTS OF THE TREASURY - AND THE INTEREST ACCRUED ON FOREIGN CURRENCY ACQUIRED IN THE ADMINISTRATION OF INSURANCE OR GUARANTY PORTFOLIOS AND HELD IN INTEREST BEARING DEPOSITORIES DESIGNATED BY THE TREASURER OF THE UNITED STATES PENDING THEIR SALE FOR DOLLARS NEED NOT BE DEPOSITED INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS PURSUANT TO 31 U.S.C. 484, BUT MAY BE RETAINED BY THE OVERSEAS PRIVATE INVESTMENT CORPORATION TO CARRY OUT ITS PURPOSES SINCE THE INTEREST CONSTITUTES "REVENUES AND INCOME TRANSFERRED TO OR EARNED BY THE CORPORATION FROM WHATEVER SOURCE DERIVED" WITHIN THE MEANING OF SECTION 236 OF THE ACT, WHICH AUTHORIZES THEIR RETENTION BY THE CORPORATION.

TO THE PRESIDENT, OVERSEAS PRIVATE INVESTMENT CORPORATION, JULY 26, 1972:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 16, 1972, IN WHICH YOU REQUEST A RULING ON TWO QUESTIONS AS FOLLOWS:

1. DOES THE OVERSEAS PRIVATE INVESTMENT CORPORATION RETAIN INTEREST ON LOANS OF EXCESS FOREIGN CURRENCIES MADE UNDER SECTION 234(C) OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, ("FAA");

2. DOES THE OVERSEAS PRIVATE INVESTMENT CORPORATION RETAIN THE INTEREST ACCRUED ON FOREIGN CURRENCY ACQUIRED IN THE ADMINISTRATION OF ITS INSURANCE OR GUARANTY PORTFOLIOS AND HELD IN INTEREST BEARING DEPOSITORIES.

IN THE ABSENCE OF LEGISLATION AUTHORIZING OTHERWISE, THE AMOUNTS INVOLVED WOULD BE FOR DEPOSITING INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS IN ACCORDANCE WITH SECTION 3617 OF THE REVISED STATUTES, CODIFIED IN 31 U.S.C. 484. THE QUESTIONS ARISE BECAUSE OF DOUBT AS TO WHETHER THOSE AMOUNTS CONSTITUTE "REVENUES AND INCOME TRANSFERRED TO OR EARNED BY THE CORPORATION FROM WHATEVER SOURCE DERIVED" WITHIN THE MEANING OF SECTION 236 OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, 22 U.S.C. 2196, WHICH AUTHORIZES THE OVERSEAS PRIVATE INVESTMENT CORPORATION TO RETAIN THEM.

WITH REFERENCE TO THE FIRST QUESTION, SUBSECTION 234(C) WAS ADDED TO THE FOREIGN ASSISTANCE ACT OF 1961, BY THAT PART OF THE FOREIGN ASSISTANCE ACT OF 1969, APPROVED DECEMBER 30, 1969, PUBLIC LAW 91-175, 83 STAT. 805, 22 U.S.C. 2162, WHICH CREATED THE OVERSEAS PRIVATE INVESTMENT CORPORATION. THAT SUBSECTION SPECIFICALLY AUTHORIZES THE CORPORATION -

TO MAKE LOANS IN UNITED STATES DOLLARS REPAYABLE IN DOLLARS OR LOANS IN FOREIGN CURRENCIES (INCLUDING WITHOUT REGARD TO SECTION 1415 OF THE SUPPLEMENTAL APPROPRIATION ACT, 1953, SUCH FOREIGN CURRENCIES WHICH THE SECRETARY OF THE TREASURY MAY DETERMINE TO BE EXCESS TO THE NORMAL REQUIREMENTS OF THE UNITED STATES AND THE DIRECTOR OF THE BUREAU OF THE BUDGET MAY ALLOCATE) TO FIRMS PRIVATELY OWNED OR OF MIXED PRIVATE AND PUBLIC OWNERSHIP UPON SUCH TERMS AND CONDITIONS AS THE CORPORATION MAY DETERMINE.***

THE EXCESS CURRENCIES MADE AVAILABLE TO THE CORPORATION UNDER SUBSECTION 234(C) ARE GENERAL ASSETS OF THE UNITED STATES HELD IN ACCOUNTS IN THE TREASURY. AS EXPLAINED IN ONE OF THE MEMORANDA OF LAW ATTACHED TO YOUR LETTER, THESE CURRENCIES ARE DERIVED FROM A VARIETY OF SOURCES INCLUDING REPAYMENT OF LOANS MADE UNDER THE MUTUAL SECURITY ACT OF 1954, AS AMENDED, THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, AND THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954, AS AMENDED (PUBLIC LAW 480). ADDITION TO OTHER RESTRICTIONS LOANS MADE WITH THESE CURRENCIES MAY BE RESTRICTED BY PROVISIONS IN THE ACTS UNDER WHICH THEY WERE FIRST ACCRUED. IT IS NOT SUGGESTED THAT RETENTION OF REPAYMENTS OF PRINCIPAL OF EXCESS CURRENCY LOANS IS AUTHORIZED AS THE RETENTION AUTHORITY OF SECTION 236 REFERS ONLY TO "REVENUES AND INCOME."

THE SECOND QUESTION, INVOLVING INTEREST ON FOREIGN CURRENCIES RECEIVED BY THE CORPORATION IN THE ADMINISTRATION OF ITS INSURANCE OR GUARANTEE PORTFOLIOS, RELATES TO CURRENCIES WHICH HAVE BEEN DEPOSITED INTO DEPOSITORIES DESIGNATED BY THE TREASURER OF THE UNITED STATES PENDING THEIR SALE FOR DOLLARS.

SECTION 236 OF THE FOREIGN ASSISTANCE ACT OF 1961 WAS ALSO INCLUDED IN THAT PART OF THE FOREIGN ASSISTANCE ACT OF 1969 APPROVED DECEMBER 30, 1969, PUBLIC LAW 91-175, 83 STAT. 805, WHICH CREATED THE OVERSEAS PRIVATE INVESTMENT CORPORATION. IT PROVIDES:

SEC. 236. 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.

DURING ITS LEGISLATIVE HISTORY, SECTION 236 WAS DESIGNATED AS SECTION 326 OF H.R. 14580. AS TO THAT SECTION, THE REPORT OF THE HOUSE COMMITTEE ON FOREIGN AFFAIRS IN HOUSE REPORT NO. 91-611, DATED NOVEMBER 6, 1969, AT PAGE 30 STATED:

THIS SECTION PROVIDES FOR THE USE OF REVENUES AND INCOME EARNED BY THE CORPORATION, INCLUDING FEES FROM INSURANCE AND GUARANTY PROGRAMS, INTEREST FROM LOANS, DIVIDENDS, AND OTHER RECEIPTS CHARACTERIZED AS INCOME. SUCH FUNDS SHALL BE AVAILABLE TO CARRY OUT THE CORPORATION'S PURPOSES, INCLUDING THE PAYMENT OF ALL OPERATING AND ADMINISTRATIVE EXPENSES INCURRED IN CONJUNCTION WITH THE CORPORATION'S ACTIVITIES. IN ADDITION, THE BOARD OF DIRECTORS MAY MAKE ALLOCATIONS FROM THIS ACCOUNT TO THE INSURANCE OR GUARANTY RESERVES, THE DIRECT INVESTMENT FUND, OR OTHER FUNDS OR RESERVES WHICH THE CORPORATION MAY ESTABLISH. THE CORPORATION WILL THEN PAY TO THE U.S. TREASURY DIVIDENDS CONSISTING OF ITS NET EARNINGS AFTER PAYMENT OF EXPENSES AND ALLOCATION TO RESERVES AND OTHER FUNDS.

SEE TO THE SAME EFFECT PAGE 16 OF THE COMMITTEE PRINT OF THE "SECTION BY- SECTION ANALYSIS OF THE PROPOSED FOREIGN ASSISTANCE ACT OF 1969" DATED JUNE 12, 1969, PREPARED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT FOR THE USE OF THE MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS AND OF THE HOUSE OF REPRESENTATIVES IN CONNECTION WITH H.R. 11792, AN EARLIER BILL WHICH INCLUDED A SIMILAR SECTION.

NEITHER SECTION 236 NOR ITS LEGISLATIVE HISTORY AS SET OUT ABOVE OR ELSEWHERE NOR ANY OTHER PROVISION THAT WE COULD FIND EXPRESSES A LEGISLATIVE INTENT DIRECTED TOWARD EXEMPTING THE SPECIFIC AMOUNTS IN QUESTION FROM THE REQUIREMENT OF BEING DEPOSITED INTO THE GENERAL FUND OF THE TREASURY AS MISCELLANEOUS RECEIPTS. NEVERTHELESS THERE IS NO DOUBT THAT THESE AMOUNTS ARE ACQUIRED AS THE RESULT OF THE ACTIVITIES OF THE CORPORATION. THE LANGUAGE OF SECTION 236 IS BROAD AND WE BELIEVE THAT USE OF THE WORDS "ALL REVENUES AND INCOME *** EARNED BY THE CORPORATION, FROM WHATEVER SOURCE DERIVED" APPEARING IN THAT SECTION JUSTIFIES THE CONCLUSION THAT THESE AMOUNTS BE HELD BY THE OVERSEAS PRIVATE INVESTMENT CORPORATION TO BE INCLUDED IN AMOUNTS AVAILABLE FOR CARRYING OUT ITS PURPOSES. IN VIEW THEREOF, THE QUESTIONS PRESENTED ARE ANSWERED IN THE AFFIRMATIVE.