§ 5342. — Requirement of national treatment in underwriting government debt instruments.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC5342]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 62--INTERNATIONAL FINANCIAL POLICY
SUBCHAPTER III--PRIMARY DEALERS
Sec. 5342. Requirement of national treatment in underwriting
government debt instruments
(a) Findings
The Congress finds that--
(1) United States companies can successfully compete in foreign
markets if they are given fair access to such markets;
(2) a trade surplus in services could offset the deficit in
manufactured goods and help lower the overall trade deficit
significantly;
(3) in contrast to the barriers faced by United States firms in
Japan, Japanese firms generally have enjoyed access to United States
financial markets on the same terms as United States firms; and
(4) United States firms seeking to compete in Japan face or have
faced a variety of discriminatory barriers effectively precluding
such firms from fairly competing for Japanese business, including--
(A) limitations on membership on the Tokyo Stock Exchange;
(B) high fixed commission rates (ranging as high as 80
percent) which must be paid to members of the exchange by
nonmembers for executing trades;
(C) unequal opportunities to participate in and act as lead
manager for equity and bond underwritings;
(D) restrictions on access to automated teller machines;
(E) arbitrarily applied employment requirements for opening
branch offices;
(F) long delays in processing applications and granting
approvals for licenses to operate; and
(G) restrictions on foreign institutions' participation in
Ministry of Finance policy advisory councils.
(b) Designation of certain persons as primary dealers prohibited
(1) General rule
Neither the Board of Governors of the Federal Reserve System nor
the Federal Reserve Bank of New York may designate, or permit the
continuation of any prior designation of, any person of a foreign
country as a primary dealer in government debt instruments if such
foreign country does not accord to United States companies the same
competitive opportunities in the underwriting and distribution of
government debt instruments issued by such country as such country
accords to domestic companies of such country.
(2) Certain prior acquisitions excepted
Paragraph (1) shall not apply to the continuation of the prior
designation of a company as a primary dealer in government debt
instruments if--
(A) such designation occurred before July 31, 1987; and
(B) before July 31, 1987--
(i) control of such company was acquired from a person
(other than a person of a foreign country) by a person of a
foreign country; or
(ii) in conjunction with a person of a foreign country,
such company informed the Federal Reserve Bank of New York
of the intention of such person to acquire control of such
company.
(c) Exception for countries having or negotiating bilateral agreements
with United States
Subsection (b) of this section shall not apply to any person of a
foreign country if--
(1) that country, as of January 1, 1987, was negotiating a
bilateral agreement with the United States under the authority of
section 2112(b)(4)(A) of title 19; or
(2) that country has a bilateral free trade area agreement with
the United States which entered into force before January 1, 1987.
(d) ``Person of a foreign country'' defined
For purposes of this section, a person is a ``person of a foreign
country'' if that person, or any other person which directly or
indirectly owns or controls that person, is a resident of that country,
is organized under the laws of that country, or has its principal place
of business in that country.
(e) Effective date
This section shall take effect 12 months after August 23, 1988.
(Pub. L. 100-418, title III, Sec. 3502, Aug. 23, 1988, 102 Stat. 1386.)
Section Referred to in Other Sections
This section is referred to in title 10 section 2500.
