Monday, May 14, 2012
Last Friday, U.S. Sen. Dick Lugar (R-IN) introduced S.Res.457, which expresses the sense of the Congress that the Republic of Argentina’s membership in the G20 should be conditioned on its “adherence to international norms of economic relations and commitment to the rule of law.”
“Argentina has failed to respect the property and rights of U.S. and other foreign investors. It has failed to respect judgments against it by U.S. courts and international arbitral tribunals, refused standard IMF inspections, and expropriated property from investors. As long as this “outlaw behavior” continues, Argentina does not deserve membership in the G-20,” Lugar said.
“The G-20 is for nations that respect the rule of law, and Argentina clearly has not. As a nation that mocks the law and declines to respect the property and interests of foreign investors, Argentina should not have a world leadership role in the G-20. Argentina’s behavior is unique in the world today. Unlike countries facing genuine challenges, Argentina has a productive economy and over $45 billion in reserves. It could easily live by the rules and pay its bills—but the current government chooses otherwise,” Lugar continued.
“No people are hurt more by this behavior than the Argentines themselves. If Argentina’s government were to do the right thing, Argentina would benefit through lower interest rates, a surge in foreign investment, and renewed respect from the international community. By introducing this resolution, and advancing a debate over Argentina’s continued role in the G-20, I hope to encourage Argentina to make the right choice. The international system is weakened when disrespect for the law is tolerated. The US government must take a firm stand against Argentina’s serial evasion of its obligations, and refusal to follow international rules and standards,” Lugar concluded.
The S. Res. 457 cites several of Argentina’s violations of the spirit and letter of G20 declarations, including:
- Expropriating the property of foreign investors; Argentina recently seized YPF SA from the Spanish energy company Repsol YPF SA.
- Evading the judgments of United States courts; Argentina has refused to honor over 100 court judgments ordering it to fulfill obligations to U.S. creditors.
- Disregarding claims brought by the United States and other countries before the International Center for Settlement of Investment Disputes (ICSID), which is administered by the World Bank; Argentina accounts for 78 percent of such cases.
- Refusing to submit to an International Monetary Fund review in violation of Article IV of the IMF Charter; Argentina is the only G20 member to do so, and one of just four countries worldwide making such refusals.
- Failing to comply with 47 of 49 recommendations to combat terrorist financing and money laundering; Argentina’s evaluation is the worst of any G20 nation.
S.Res.457 has been referred to the Senate Foreign Relations Committee.