EXPORT-IMPORT BANK ACT-PROCEDURE FOR TRANSACTIONS WITH COMMUNIST COUNTRIES Export-Import Bank Act of 1945, provides that, in general, the Export-Import Bank shall not guarantee, insure, or extend credit in connection with the purchase or lease of a product from a Communist country or for use in or sale to a Communist country. 12 U.S.C. 635 (b) (2). An exception to this prohibition states that it shall not apply in the case of any transaction which the President determines would be in the national interest if he reports that determination to the Senate and House of Representatives within 30 days. The exception does not require that the President make a separate determination relating to each separate transaction. The Export-Import Bank has acted lawfully in following a practice of securing determinations by the President on a country by country basis and in notifying Congress of these determinations and their application to particular transactions. MARCH 21, 1974 THE PRESIDENT, MY DEAR MR. PRESIDENT:I have a letter of March 19, 1974, from Counsel to the President requesting, on your behalf, my opinion regarding a matter arising under the Export-Import Bank Act of 1945, 12 U.S.C. 635 ("the Act"). The Export-Import Bank ("the Bank") is an agency of the United States. It is authorized to do a general banking business in order to aid in financing and facilitating exports and imports between the United States and foreign countries. 12 U.S.C. 635 (a). Enclosed with your request are opinions of the General Counsel of the Bank and of the Comptroller General. The two opinions reflect a disagreement concerning the meaning of section 2(b) (2) of the Act, 12 U.S.C. 635 (b) (2). I understand that as a result of the Comptroller General's opinion various transactions have been suspended involving agree ments made with foreign countries. Because of the significant role that the Bank plays in this country's trade dealings with the U.S.S.R. and certain eastern European countries and because of the importance that this Nation attaches to honoring its international commitments (cf. 42 Op. A.G. 373), it is appropriate that I should undertake to resolve this conflict. In general, the provision in question states that the Bank shall not guarantee, insure, or extend credit in connection with the purchase or lease of a product from a Communist country or for use in or sale to a Communist country. 12 U.S.C. 635 (b) (2). At issue is the meaning of an exception to this prohibition. The exception, which appears at the end of section 2(b) (2), states that prohibition "shall not apply in the case of any transaction which the President determines would be in the national interest if he reports that determination to the Senate and House of Representatives within thirty days after making the same." The function of this provision is to keep the Congress apprised of transactions within the exception. The Comptroller General takes the position that this provision requires a determination from the President for each separate transaction that the Bank engages in that involves trade with a Communist country as described in section 2(b) (2). His opinion was not addressed to the Bank nor did it make any demand of the Bank. However, a member of the Senate requested the opinion and sent it to the Bank, in his individual capacity, together with a request that it be followed. Thus, it is not clear to us what authority should be accorded this opinion. I find it unnecessary, however, to reach the question of the Comptroller General's authority in this matter. The General Counsel of the Bank has demonstrated that the Bank has acted lawfully in following a practice of securing determinations by the President on a country by country basis under section 2 (b) (2) of the Act, and in notifying the Congress both of these determinations and their application to particular transac tions. For the reasons set forth below I concur with his conclusion. What is now section 2(b) (2) of the Act had its origin in a series of riders to appropriations acts beginning in 1964. The original provision prohibited the use of funds available to the Bank to guarantee any obligation incurred by a Communist country or to participate in any way in the extension of credit to a Communist country unless the President determined that the guarantee would be in the national interest. The main thrust of the Comptroller General's opinion is that a statement by Senator Mundt 2 and a brief remark in the House debate on the 1964 rider determine the meaning of section 2(b)(2), added to the Act four years later in 1968. 3 I cannot accept this premise. Reliance on congressional debates is, of course, justified where it shows common agreement as to the purpose of legislation. E.g., United States v. City and County of San Francisco, 310 U.S. 16, 22 (1940), and cases collected therein. Here, however, there is no basic for concluding that any such common 1 "None of the funds made available because of the provisions of this Title shall be used by the Export-Import Bank to either guarantee the payment of any obligation hereafter incurred by any Communist country (as defined in section 620 (f) of the Foreign Assistance Act of 1961, as amended) or any agency or national thereof, or in any other way to participate in the extension of credit to any such country, agency, or national, in connection with the purchase of any product by such country, agency, or national, except when the President determines that such guarantees would be in the national interest and reports each such determination to the House of Representatives and the Senate within 30 days after such determination." Foreign Aid and Related Agencies Appropriation Act, 1964, approved January 6, 1964, 77 Stat. 857, 863. 2 "The compromise language which we finally developed in the conference report and which has been adopted by the House is a significant and important policy recommendation by Congress and a firm expression of congressional intent. It contains the same specific prohibition against extension and guarantees of credit to the Communist nations contained in S. 2310 but it provides an escape clause to be used by the President of the United States only-and I repeat only when he himself finds in the case of each proposed credit transaction that he believes it to be in the national interest * * "I am confident there are many in Congress and throughout the country-and I include myself among them-who will want to scrutinize each such transaction most intently and carefully if it should actually eventuate and be authorized." 109 Cong. Rec. 25618. 3 "Of course, the gentleman realizes that a new determination has to be made with each transaction under the terms of this amendment?" Id. at 25418 (Rep. Rhodes). A comment of Representative Passman is also cited, 109 Cong. Rec. 25417. However, it is not as specific. |