Treasury Maintains a Formal Process to Advance U.S. Policies at the International Monetary Fund

GAO-03-401R: Feb 7, 2003

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Over the past 50 years, Congress has shown increasing interest in legislating U.S. policies concerning the International Monetary Fund (IMF or the Fund). In 2001, we reported that the United States had 60 legislative mandates prescribing U.S. policy goals at the Fund. These mandates covered a wide range of policies, including human rights, international trade, and weapons proliferation. Because the Fund is an international organization, it 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 of the Board of the Fund to pursue specific policies or vote in a particular way as part of his duties. 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 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 instituted a formal process in 1999 to systematically promote congressionally mandated policies at the Fund. We also found that while Treasury 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. In this report, we provide 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.

The U.S. Treasury continues to maintain a formal process for advancing U.S. policies at the Fund. A task force facilitates coordination between the Treasury and the U.S. Executive Director and identifies early opportunities to influence decisions of Fund members. Since our January 2001 report, the task force has continued to meet on a biweekly basis to identify opportunities to advance legislative mandates at the Fund. In addition, beginning in March 2001, the task force enhanced its efforts to monitor and promote mandates by focusing attention on countries that are not yet on the IMF Board's calendar but that may likely require Fund assistance in the future. We have identified 67 legislative mandates that prescribe U.S. policy goals at the IMF, an increase of 7 mandates since our January 2001 report. These additional mandates address policy issues such as international terrorism, rule of law and land reform concerning Zimbabwe, and humanitarian efforts concerning Sudan. Terrorism is a topic that is covered in prior mandates as well. The Treasury continues to notify the U.S. Executive Director about new mandates through instruction letters.